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Contingent Liability
Why it is necessary to create contingent liability? How this liability helps the banker to relieve from the future liability due to default in payment by the concerned party?
vasudeo007
- Oct 6th, 2008
It is not necessary to create contingent liabilities.If any such liability exists then it must be shown in the balance sheet. But you don't have to create any for the heck of it.Moreover it does n...
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Letters of Credit
If Irrevocable Letter of Credit is backed by a CD. How do you account for it? Will it be on Balance Sheet or is it just a Footnote item?
vasudeo007
- Oct 6th, 2008
Letter of credit is always backed by Fixed Deposit. Bank does not issue letter of credit unless and until it has tangible securities provided by you pledged in bank's favour.Moreover bank charges ...
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What is Capital Budget?
vasudeo007
- Oct 6th, 2008
The word budget means financial planning activity.Capital Budgeting means financial planning for long term capital expenses.A company may think of diversification, backwardation, forwardation, merger ...
thrilldhill
- Jun 1st, 2007
Capital Budgeting is a way to justify capital expenditures. It's done to see if the added benefit of a capital purchase, ie increased revenue or decreased expense, exceeds the cost of capital.
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Expenses in Inventory Stock
What are the documents require for the payment?What are the expenses are made in inventory stock?
vasudeo007
- Oct 6th, 2008
In making payment for buying stock/goods we need invoice/bill and lorry receipt or bill of lading. If the goods are brought via air transport then airway bill or whatever name it is called by.And then...
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Annual Turnover
Calculation of turnover in construction comapanies? What is the use of turnover? If turnover was not announced annualy, what are the problems arised?
sathyapidugu
- Oct 6th, 2008
In general context turnover means volume of sales in case of Construction compay turnover means Projects complted in a particular period . with the hepl of turnover one can assess the efficiency and profitabllity of the company
vasudeo007
- Oct 6th, 2008
Turnover means total sales from strict accounting sense.Few liberals would also say that turnover means total purchase + total sales.It really depends on your viewpoint. But for a construction company...
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MIS Monthly and Form 16A
What is meant by MIS-Monthly?What is meant by Form 16A ?
sathyapidugu
- Oct 7th, 2008
The word MIS means Management Information System it is an comprehensive statement differs from Industry to Indsutry or Organisation to Oraganaisation in general contex Montlhy MIS of any concern aims ...
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M men agreed to purchase a gift for $D. If 3men drop out, how much more will each have to contribute toward the purchase of the gift
vasudeo007
- Oct 12th, 2008
I am exactly not a mathematician. But I tried following thing:d/(m-3) -d/m = 3d/m^2-3mSo the answer is that each of them will have to contribute $ 3d/m^2-3mTell me if I am wrong.
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Double Entry System
Who invented double entry system?
vasudeo007
- Oct 12th, 2008
It is not really known but the one who is credited for the same is LUCA DE BARGO PACIOLIhe was calss mate of Leonardo da Vinci.book Summa de arithmetica in 1494 was wrote by himThis book mentions doub...
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Ordinary shares and Preference shares
What is the difference between ordinary shares and Preference share?
vasudeo007
- Oct 12th, 2008
Ordinary shares better knows as Equity shares have following characteritics:a. They can participate in Annual General Meeting and voteb. They do not have any fixed rate of return (dividend)c. Th...
vinodkumarsmay1979
- Sep 25th, 2007
Preference shares have the preference over ordinary shares when it comes to dividend and repayment of capital
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Minority Interest
What is minority interest?
vasudeo007
- Oct 12th, 2008
Minority means lower than 50%.Minority interest means the amount invested by minority.Generally minority interest is never calculated. It is calculated only when one company takes other company over. ...
cashflow
- Jan 27th, 2008
Minority interest in business is an accounting concept that refers to ownership of a company (subsidiary) that is less than 50% of outstanding shares.
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Debt Securities
What are debt securities?
vasudeo007
- Oct 12th, 2008
Debt securities are the securities which are debt in nature.There are 2 kinds of funds raised by any company or government. 1st is called equity and 2nd is called debt. A company can raise both while ...
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Miscellaneous expenses
What is miscellaneous expenses & why they carry forward every year
vasudeo007
- Oct 12th, 2008
Miscellaneous expenses are those expenses which are very minor/small in nature.Any expense which cannot be debited to any expense account is debited to misc exp a/c. Examples: donations given to someo...
Rekha yadav
- Dec 18th, 2007
Miscellaneous expenses are the petty expenses, which every business incurr in their day to day transaction, these could be refreshment expenses, conveyance, postage etc. for accounting these expenses ...
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Control Account
What is a Control Account? How will you create a control account?
ajspalia
- Nov 12th, 2008
A control account in GL is a summary of sub ledger accounts that can not be represented individually in GL because of thier huge numbers e.g. the number of vendors for a company can be numerous and it...
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Development of credit policies.
Why is the development of credit policies critical to the organization?
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How is working capital arrived?
venkat_ca
- Nov 20th, 2008
Working capital can be classified into two types gross working capital and net working capital. The total of current assets is known as gross working capital and the difference between the current ass...
Nishi Kanti Dey
- Oct 30th, 2008
Working Capital is?measure of?both a?company's efficiency and its short-term financial health. Working capital also gives investors an idea of the company's underlying operational efficiency.WC=CA-CL.
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Inventory Pricing Procedure
In which inventory pricing procedure the oldest costs incurred rarely have an effect on the end inventory valuation?
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