FREE Bachelor of Commerce: Financial Accounting Questions and Answers
According to the Companies Act, the underwriting commission for debentures should not be more than .
According to the Companies Act, the underwriting commission for debentures should not be more than 2.5% of the price at which debentures are issued. This provision aims to regulate and control the amount of commission paid to underwriters for their role in ensuring the subscription of debentures. It helps prevent excessive commission that could impact the financial interests of the company and its shareholders.
When the cash available for competing liabilities of the same class is insufficient, pro-rata payment is applicable.
Pro-rata payment is applicable when the cash available for competing liabilities of the same class is insufficient. When there are multiple creditors within the same class and the available funds are not enough to fully satisfy all the claims, pro-rata payment ensures that each creditor receives a proportional share of the available funds based on the amount of their respective claims. This equitable distribution helps address the situation where the available cash is inadequate to cover all liabilities of the same class.
Regulations governing the buyback of equity shares are found in the Companies Act
Regulations governing the buyback of equity shares are found in the Companies Act under Section 68. Section 68 of the Companies Act, 2013, outlines the provisions and procedures related to the buyback of shares by a company. This section sets forth the rules and conditions that a company must adhere to when repurchasing its own shares from its shareholders. It covers various aspects of the buyback process, including the authorization, sources of funds, timing, and other requirements.
Indirectly, the number of partners is limited by ______ .
Indirectly, the number of partners in a partnership firm can also be limited by the Companies Act. While the Companies Act primarily governs the formation, management, and operations of companies, it can indirectly impact partnerships as well. In some cases, individuals who would otherwise become partners in a partnership firm might choose to incorporate a company instead due to the potential benefits offered by company structures. Therefore, the Companies Act can indirectly influence the number of partners in a partnership firm based on business decisions and considerations.
Changes in the rate of the preference dividend due in the future without a change in the capital are referred to as .
Changes in the rate of the preference dividend due in the future without a change in the capital are referred to as variation of shareholders' rights. This refers to situations where the terms and conditions associated with a company's shares, including preference shares, are altered without changing the overall capital structure of the company. Such variations might involve adjustments in dividend rates, voting rights, or other privileges attached to the shares, as determined by the company's board of directors and approved by the shareholders.
A characteristic that exists in every merger situation __________ .
A characteristic that exists in every merger situation is the purchase of one company by another company. In a merger, two or more companies come together to combine their operations, assets, and liabilities into a single entity. One common type of merger involves one company acquiring another company by purchasing its assets, stocks, or ownership interests. This acquisition results in the merging of the two companies' operations and resources under a single organizational structure.
The first external liabilities to be paid in a piecemeal transfer of cash are ______
The first external liabilities to be paid in a piecemeal transfer of cash are secured creditors. Secured creditors have a legal claim on specific assets of the debtor as collateral for the debt they are owed. In the event of a liquidation or transfer of cash, secured creditors are typically given priority in receiving payments from the available funds. This priority is due to the security interest they hold in the debtor's assets, which helps ensure that they are repaid before other creditors.
The ________ prescribes Accounting Standard 11 (AS 11).
The Institute of Chartered Accountants of India (ICAI) prescribes Accounting Standard 11 (AS 11). AS 11 is a standard issued by the ICAI that deals with the effects of changes in foreign exchange rates. It provides guidelines for accounting treatment and reporting of foreign exchange transactions and the translation of financial statements from a foreign currency to the reporting currency. AS 11 ensures consistency and transparency in how companies handle foreign exchange transactions and their impact on financial statements.
R LTD. issued a 100-rupee debenture at 90 rupees apiece. On __________, the underwriting commission will be paid.
R Ltd. issued a 100-rupee debenture at 90 rupees apiece. On Rs.90, the underwriting commission will be paid. In this context, the underwriting commission is typically calculated on the basis of the subscription price of the debenture, which is the price at which it is issued to the public. Since the debenture was issued at 90 rupees apiece, the underwriting commission would be calculated based on that subscription price.
Under the, a partnership firm is created.
Under the Indian Partnership Act, 1932, a partnership firm is created. The Indian Partnership Act provides the legal framework for creating and operating partnership firms in India. It defines the rights, duties, and responsibilities of partners, as well as the rules for the formation, management, and dissolution of partnership firms. This Act governs various aspects of partnership law, including the relationship between partners, profit sharing, decision-making, liabilities, and other matters related to partnership businesses.
At year's end, foreign debts are listed on...
At year's end, foreign debts are typically listed on the balance sheet at the rate of exchange. When preparing financial statements, including the balance sheet, the value of foreign debts is converted into the reporting currency using the applicable exchange rate at the end of the accounting period. This practice ensures that the foreign debts are reflected accurately in the financial statements and provides a snapshot of the company's financial position in its reporting currency at the specific date.
When members voluntarily wind up, ____________ appoints a liquidator.
When members voluntarily wind up a company, the company in a general meeting appoints a liquidator. In the voluntary winding up of a company, the decision to wind up the company is made by the members (shareholders) in a general meeting. Subsequently, the members also have the authority to appoint a liquidator who will be responsible for managing the process of liquidating the company's assets, settling its liabilities, and distributing the remaining assets to the shareholders in accordance with the legal requirements and priorities.
Consideration for purchases can be determined by...
Consideration for purchases can indeed be determined by the net assets method. The net assets method is a valuation approach used to determine the consideration for purchasing a business or company. It involves calculating the net value of the assets and liabilities of the target business and then arriving at a purchase price based on that net value. This method takes into account the fair market value of the assets and liabilities to determine the price that the acquiring party should pay for the business.
The most partners who can be accepted into a firm as partners are...
The maximum number of partners who can be accepted into a firm as partners, as per the provisions of the Indian Partnership Act, 1932, is 20. According to the Act, a partnership firm can have up to 20 partners in the case of a non-banking business and up to 10 partners in the case of a banking business. This limitation is in place to ensure manageable and effective governance within the partnership structure.
A limited company's members are liable for...
In a limited company, the members' liability is generally limited to the extent of their investment or the amount they have agreed to contribute to the company. This characteristic is a key feature of limited liability companies, where the personal assets of the company's shareholders or members are not at risk beyond their invested capital. If the company faces financial difficulties or liabilities, the members are typically not personally liable beyond their initial investment in the company. This limited liability protection is one of the primary advantages of forming a limited company.
PQR & Co.'s operating company is taken over by ABC & Co. It is known as...
PQR & Co.'s operating company being taken over by ABC & Co. is known as absorption. In business and corporate contexts, absorption refers to the process where one company (ABC & Co. in this case) acquires and integrates another company's (PQR & Co.'s) operations and assets into its own operations. This often involves the merging of business activities, resources, and functions to create a unified and more efficient entity.