Accounting and Finance Questions

The advantage of equity finance for a company – raising money by selling shares – is that this money does not have to be repaid. However, new shareholders usually get to have a say in how the company is run. Despite these rights, equity is often seen as a risky choice for investors as they will lose all their money if the company doesn’t prosper. If it does well, on the other hand, they may see their stake multiply in value many times over.

Debt finance – money raised through loans – must be repaid eventually by a company, usually with interest, but lenders won’t be able to exert as much influence as shareholders over how the company does business. The debt of a reliable company is usually seen as a safe investment, but fixed repayment schedules means that there are few opportunities for large returns.

Value is the monetary worth of something, in this case, it is an item.

In option A, since it is talking about capital which is measured in monetary terms.

The value of an item is determined by its quality and its age. Often antiques with good quality are sold in the market with a high value and are sometimes auctioned.

‘Endorsing cheque’ ensures that the cheque get deposited into your account only. It minimizes the risk of theft. Normally, in endorsing cheque, the cashier will ask you to sign at the back of the cheque. The signature should match the payee. The image over here shows the endorsed cheque.

Foreign draft is an alternative to foreign currency; it is generally used to send money to a foreign country. It can be purchased from the commercial banks, and they will charge according to their banks rules and norms. People opt for ‘foreign draft’ for sending money as this method of sending money is cheaper and safer. It also enables receiver to access the funds quicker than a cheque or cash transfer.

In accounting, the Three-way Match refers to a procedure used when processing an invoice received from a vendor or supplier. The three-way match is an important step in safeguarding an organization's assets. The purpose of the three-way match is to avoid paying incorrect and perhaps fraudulent invoices.

Here Three-way refers to the three documents involved :

* Vendor's invoice which was received and will become part of an organization's accounts        payable if approved.

* Purchase order that was prepared by the organization.

* Receiving report that was prepared by the organization.

And Match refers to the comparison of the quantities, price per unit, terms, etc. appearing on the vendor's invoice to the information on the purchase order and to the quantities actually received.

After the vendor's invoice has been validated by the three-way match, it can be further processed for payment.

 From the customer point of view, credit is the amount which is deposited into her or his account. And debit refers to that amount which is taken from the account of the customer.

The financial statements should be prepared in the following order:

Income statement - Statement of retained earnings - Balance sheet

1. Income statement reports revenues and expenses and calculates net income or net loss for the time period.

2. Statement of retained earnings show how retained earnings changed during the period due to net income or net loss and dividends.

3. Balance sheet reports assets, liabilities, and stockholders’ equity as of the last day of the period.

Liabilities are what all u owe from the bank on notes payable or in other words it is:

Liability=Asset-Owners equity

what company owes that is liability. liability = Asset-capital