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Account10

Capital: The term capital refers to the total investment of company in money, tangible and intangible assets. It is the total wealth of a company.
Capitalization: It is the sum of the par value of stocks and bonds out standings.
Over capitalization: When a business is unable to earn fair rate on its outstanding securities.
Under capitalization: When a business is able to earn fair rate or over rate on it is outstanding securities.
Capital gearing: The term capital gearing refers to the relationship between equity and long term debt.
Cost of capital: It means the minimum rate of return expected by its investment.
Cash dividend: The payment of dividend in cash
Define the term accrual: Recognition of revenues and costs as they are earned or incurred. It includes recognition of transaction relating to assets and liabilities as they occur irrespective of the actual receipts or payments.
Accrued expenses: An expense which has been incurred in an accounting period but for which no enforceable claim has become due in what period against the enterprises.
Accrued revenue: Revenue which has been earned is an earned is an accounting period but in respect of which no enforceable claim has become due to in that period by the enterprise.
Accrued liability: A developing but not yet enforceable claim by another person which accumulates with the passage of time or the receipt of service or otherwise. It may rise from the purchase of services which at the date of accounting have been only partly performed and are not yet billable.
Convention of Full disclosure: According to this convention, all accounting statements should be honestly prepared and to that end full disclosure of all significant information will be made.
Convention of consistency: According to this convention it is essential that accounting practices and methods remain unchanged from one year to another.
Define the term preliminary expenses: Expenditure relating to the formation of an enterprise. There include legal accounting and share issue expenses incurred for formation of the enterprise.
Meaning of Charge: charge means it is a obligation to secure an indebt ness. It may be fixed charge and floating charge.
Appropriation: It is application of profit towards Reserves and Dividends.
Absorption costing: A method where by the cost is determine so as to include the appropriate share of both variable and fixed costs.
Marginal Cost: Marginal cost is the additional cost to produce an additional unit of a product. It is also called variable cost.
What are the ex-ordinary items in the P&L a/c:
The transaction which is not related to the business is
termed as ex-ordinary transactions or ex-ordinary items.
Egg:- profit or losses on the sale of fixed assets, interest
received from other company investments, profit or loss
on foreign exchange, unexpected dividend received.
Share premium: The excess of issue of price of shares over their face value. It will be showed with the allotment entry in the journal; it will be adjusted in the balance sheet on the liabilities side under the head of “reserves & surplus”.
Accumulated Depreciation: The total to date of the periodic depreciation charges on depreciable assets.
Investment: Expenditure on assets held to earn interest, income, profit or other benefits.
Capital: Generally refers to the amount invested in an enterprise by its owner. Ex; paid up share capital in corporate enterprise.
Capital Work In Progress: Expenditure on capital assets which are in the process of construction as completion.
Convertible Debenture: A debenture which gives the holder a right to conversion wholly or partly in shares in accordance with term of issues.
Redeemable Preference Share: The preference share that is repayable either after a fixed (or) determinable period (or) at any time dividend by the management.
Cumulative preference shares: A class of preference shares entitled to payment of emulates dividends. Preference shares are always deemed to be cumulative unless they are expressly made non-cumulative preference shares.
Debenture redemption reserve: A reserve created for the redemption of debentures at a future date.
Cumulative dividend: A dividend payable as cumulative preference shares which it unpaid Emulates as a claim against the earnings of a corporate before any distribution is made to the other shareholders.
Dividend Equalization reserve: A reserve created to maintain the rate of dividend in future years.
Opening Stock: The term ‘opening stock’ means goods lying unsold with the businessman in the beginning of the accounting year. This is shown on the debit side of the trading account.
Closing Stock: The term ‘Closing Stock’ includes goods lying unsold with the businessman at the end of the accounting year. The amount of closing stock is shown on the credit side of the trading account and as an asset in the balance sheet.
Valuation of closing stock: The closing stock is valued on the basis of “Cost or Market prices whichever is less” principle.
Contingency: A condition (or) situation the ultimate out comes of which gain or loss will be known as determined only as the occurrence or non occurrence of one or more uncertain future events.
Contingent Asset: An asset the existence ownership or value of which may be known or determined only on the occurrence or non occurrence of one more uncertain future event.
Contingent liability: An obligation to an existing condition or situation which may arise in future depending on the occurrence of one or more uncertain future events.
Deficiency: The excess of liabilities over assets of an enterprise at a given date is called deficiency.
Deficit: The debit balance in the profit and loss a/c is called deficit.
Surplus: Credit balance in the profit & loss statement after providing for proposed appropriation & dividend, reserves.
Appropriation Assets: An account sometimes included as a separate section of the profit and loss statement showing application of profits towards dividends, reserves.

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