Accounting and Finance Questions

Compounding interest means interest accrues on the interest charged and the principal amount each period the interest is charged.

Compound interest is calculated by multiplying the principal amount by one plus the annual interest rate raised to the number of compound periods minus one.The total initial amount of the loan is then subtracted from the resulting value.

The formula for calculating compound interest is:

[P (1 + i)n] – P

= P [(1 + i)n – 1]

(Where P = Principal, i = nominal annual interest rate in percentage terms, and n = number of compounding periods.)

Take a three-year loan of Rs. 10,000 at an interest rate of 5% that compounds annually. What would be the amount of interest? In this case, it would be:

Rs. 10,000 [(1 + 0.05)3] – 1

= 10,000 [1.157625 – 1]

= Rs. 1,576.25.

How it grows ::

Credit Management is the process of managing the outstanding receivables of the organistion as per the policies adopted by the organisation. Companies might the approach of categorising the B/R by their ageing and provision for the same would be taken into account while preparing the financial statements for an organisation.

Assets minus liabilities equals Equity.

Selling the rights to the amounts owing by debtors to a finance company for an agreed amount (which is less than the figure at which they are recorded in the accounting books because the finance company needs to be paid for providing the service).

1. Collection of attendance / collation of attendance

2. Scrutunizing the received attendance 

3. Calculating the salary as per the attendance, based on LOP received

4. Once the Payroll Processing is over, the gross salary should be checked with Master Data of salary.

5. Netpay has to request for bank transfers / cheque 

6. Need to take care of statutories like PF / ESI / PT / Income Tax

7. While processing salary, statutory deductions like PF / ESIC / PT and income tax calculations tobe taken care.

8. Arriving the salary structure for New Joiners

9. F&F tobe done for resigned employees

10. PF & ESI Nomination has to take care for the new joiners

11. PF Settlement / PF transfer has to take care for the resigned employees after 60days from the date of resignation.

The job cost sheets constitute the subsidiary ledger for the Work in Process Inventory Account.

A job cost sheet is a form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job. Companies keep a separate job cost sheet for each job.

Accounts Receivable means the amount which comes in to the business. Eg: If the trader made sales to the customer then obviously the trader will received the amount for the sales made. So here the amount which comes in is said to be accouts receivable.

Repo Rate is the rate at which the commercial banks borrows money from the central bank of a country i.e, RBI in India.

Reverse Repo Rate is the rate at which the central bank of a country, in case of India it is RBI borrows money from the commercial banks in the country.