Company Accounts - I & II
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the primary objective of preparing financial statements for a company?
Financial statements aim to provide a true and fair view of the company's financial position, performance, and cash flows to stakeholders including shareholders, creditors, and regulators.
What is the difference between equity shares and preference shares?
Preference shares carry fixed dividends and priority over equity shares.
Under the Companies Act 2013, which Schedule prescribes the format of financial statements for companies?
Schedule III of the Companies Act 2013 prescribes the format for the Balance Sheet and Statement of Profit and Loss for companies other than banking and insurance companies.
What is meant by 'reserve capital' in company law?
Reserve capital is uncalled capital reserved for liquidation purposes only.
What is the distinction between a Trading Account and a Profit and Loss Account?
A Trading Account shows gross profit or loss from core trading activities (sales minus cost of goods sold), while the Profit and Loss Account shows net profit or loss after deducting all operating and non-operating expenses from gross profit.
What are the components of shareholders' funds in a company balance sheet?
Share capital, reserves and surplus form shareholders' funds.
What does the term 'capital reserve' mean in company accounts?
Capital reserve is a reserve created from capital profits such as profit on revaluation of assets, profit on forfeiture of shares, or profit prior to incorporation; it is not available for distribution as dividend.
How is the profit on reissue of forfeited shares transferred?
Profit on reissue of forfeited shares is transferred to Capital Reserve.
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