Accounting and Finance Questions

For material/Goods Purchases, the Po is required. In the Po, QTY, Product Name, Where is delivery price, Terms and Conditions. In the po there is no matter of final amount. It is just the approximate amount.

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.

Capital expenditures are capitalized because of the timing of their estimated benefits – the lemonade stand will benefit the firm for many years. The employees’ work, on the other hand, benefits the period in which the wages are generated only and should be expensed then. This is what differentiates an asset from an expense.

 Accounts receivables help small businesses by providing quick-time period liquidity. Additionally continued sales on credit provide the  much-needed continuity for small companies.

Debenture holder are those who provides long term loan at specific interest rate in term of cash and creditor provides only short term credit in term of cash for purchasing of goods.

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.

You should have recorded in your cash books all amounts you?ve actually received and payments you?ve actually made. However, the cash books may be incomplete as your bank may have put extra transactions through your account, such as:

bank fees or interest charges
direct debits (payments) and direct credits (receipts).
Doing a regular bank reconciliation will allow you to:

take into account any extra transactions your bank puts through your account, and
check and record any errors or omissions.
By regularly doing a bank reconciliation (say monthly) you can be more confident that your records contain all the information you need to prepare your income tax return and activity statements.

reconciliation- This is a statement prepared to find the reason for difference in any two balance.
eg 1)bank reconciliation is prepared to find the reason of difference between the passbook & cash book balance
2)Stock reconciliation is prepared to the reason of difference between the physical balance & book balance or to find the stock balance as on certain date.
etc