Class 12th accounts short type questions
Sanjeev Edupoint
With the help of these NCERT Solutions you can easily grasp basic concepts better and faster.
Accounts short type Questions and Answers
1. What are debentures? Discuss the various types of debentures?
Ans: It is a document issued by a company under its common seal acknowledging the debt and also contains the term of repayment of debt and payment of interest at a specified rate. The various types of debentures are:
From the Point of view of Security
· Secured Debentures: Secured debentures are that kind of debentures
where a charge is being established on the properties or assets of the
enterprise for the purpose of any payment. The charge might be either floating
or fixed. A fixed charge is established on a particular asset whereas a
floating charge is on the general assets of the enterprise.
·
Unsecured Debentures: They do not have a particular charge on the
assets of the enterprise. However, a floating charge may be established on
these debentures by default. Usually, these types of debentures are not
circulated.
2)
From the Point of view of Tenure
· Redeemable Debentures: These debentures are those debentures that are
due on the cessation of the time frame either in a lump-sum or in installments during the lifetime of the enterprise. Debentures can be reclaimed either at a
premium or at par.
· Irredeemable Debentures: These debentures are also called as Perpetual
Debentures as the company doesn’t give any attempt for the repayment of money
acquired or borrowed by circulating such debentures. These debentures are
repayable on the closing up of an enterprise or on the expiry (cessation) of a
long period.
3) From the Point of view
of Convertibility
· Convertible Debentures: Debentures which are changeable to
equity shares or in any other security either at the choice of the enterprise
or the debenture holders are called convertible debentures. These debentures
are either entirely convertible or partly changeable.
· Non-Convertible Debentures: The debentures which can’t be changed into
shares or in other securities are called Non-Convertible Debentures. Most
debentures circulated by enterprises fall in this class.
4) From Coupon Rate Point
of view
· Specific Coupon Rate Debentures: Such debentures are circulated with a
mentioned rate of interest, and it is known as the coupon rate.
· Zero-Coupon Rate Debentures: These debentures don’t normally carry a
particular rate of interest. In order to restore the investors, such types of
debentures are circulated at a considerable discount and the difference between
the nominal value and the circulated price is treated as the amount of interest
associated to the duration of the debentures.
5) From the view Point of
Registration
· Registered Debentures: These debentures are such debentures within
which all details comprising addresses, names and particulars of holding of the
debenture holders are filed in a register kept by the enterprise. Such
debentures can be moved only by performing a normal transfer deed.
· Bearer Debentures: These debentures are debentures which can be
transferred by way of delivery and the company does not keep any record of the
debenture holders Interest on debentures is paid to a person who produces the
interest coupon attached to such debentures.
2. What are non cash expenses?
Ans: these are those expenses that are recorded in the income statement but do not involve an actual cash transaction. For example: depreciation and amortization
3. What is cash and cash equivalents?
Ans: Cash comprises cash in hand and demand deposits with bank
Cash equivalents are
short term, highly liquid investment that are readily convertible into known
amount of cash and which are subject to an insignificant risk of change in the
value. For example bank overdraft
4. What is share?
Ans: Share is a unit into which capital of a company is divided. A share value may be 10 or 100.
For example: total
capital of firm is 500000 and share value is 10
Then no. of shares
=500000/10=50000
5. What is revaluation account?
Ans: It is a nominal account and prepared to find out profits/loss arising from revaluation of assets and liabilities. The net effect of revaluation of assets and liabilities is either profit or loss which is transferred to old partner’s capital account in old ratio
6. What is financial statement analysis?
Ans: it is a systematic process of studying the relationship among the various financial factors contained in the financial statements to have a better understanding of the working and financial position of a business.
7. Explain financing activities?
Ans: These are those activities that results in the changes in size and composition of the owner’s capital and borrowings of the business firm
Cash flows from financing activities can ascertained by
analyzing the charge in equity share capital, preference share capital,
debentures and other long term borrowings.
8. What are preliminary expenses?
Ans: these are the expenses which are incurred by the company in connection with the formation of company.
For example: cost of
printing prospectus
9. What are Non-operating expenses?
Ans: These are expenses which are incidental or indirect to the main operations of the business, they include interest on loan, charities and donations
10. What is gaining ratio?
Ans: it is the ratio in which the remaining partners have acquired the share from the outgoing partner
Gaining ratio= new ratio – old ratio
11. What is cash flow statement?
Ans: it is the statement that shows flow of cash and cash equivalents during the period under report. Also it is the statement setting out the flow of cash under distinct heads of sources of funds and their utilization to determine the requirement of cash during the given period and to prepare for its adequate provision.
12. What are operative activities?
Ans: they are the main revenue generating activities of a business firm. These are those transactions and events whose cash flows affect the net profit or loss of a business firm.
For example: cash
receipts and cash payments
13. What is partnership?
Ans: it is the relation between two or more persons, who have agreed to share the profits of the business carried on by all or any of them acting for all.
14. What do you mean by fluctuating capitals?
Ans: Fluctuating capital is a type of capital account which changes/fluctuates every time there is addition in capital or when capital is withdrawn. Interest on capital, profit, salary, commission all appears on the credit side and interest on drawings, drawings appears on the debit side.
15. Define securities premium?
Ans: when share are issued at a price higher than face value, the excess amount received is called securities premium. It is a gain to company
16. Describe three objectives of cash flow statement?
Ans: Three objectives of cash flow statement are:
· To
ascertain how much cash or cash equivalents have been generated or used in
different activities
· To
ascertain the net changes in cash and cash equivalents.
· To assess
the causes of difference between actual cash & cash equivalent and related
net earnings.
17. What is call in advance?
Ans: it is amount which defaulter shareholders have not paid on the amount called up by the company. Calls in arrears may be recovered in future. But when it is not received shares may be forfeited.
18. What is issue of share at par?
Ans: this means shares are issued at face value. When a company issue its share at the face value. It is known as issue of shares at par.
19. What is retirement of a partner?
Ans: it means ceasing to be partner of the firm. It is one of the modes of reconstitution of a firm under which an old partnership comes to end and a new partnership between the continuing partners comes into existence
20. What is partnership deed?
Ans: it is the relation between two or more persons who have agreed to share profits of the business, which is carried on by all or any of them acting all.
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