BASIC ACCOUNTING & FINANCE INTERVIEW SHORT QUESTIONS (101-110)

101. Share capital: The sum total of the nominal value of the shares of a company is called share capital.

102. Funds flow statement:  It is the statement deals with the financial resources for running business activities.  It explains how the funds obtained and how they used. 

103. Sources of funds:  There are two sources of funds Internal sources and external sources.

Internal source: Funds from operations is the only internal sources of funds and some important points add to it they do not result in the outflow of funds

(a)Depreciation on fixed assets (b) Preliminary expenses or goodwill written off, Loss on sale of fixed assets

Deduct the following items as they do not increase the funds:

Profit on sale of fixed assets, profit on revaluation of fixed assets

External sources: (a) Funds from long term loans (b) Sale of fixed assets (c) Funds from increase in share capital

104. Application of funds: (a) Purchase of fixed assets (b) Payment of dividend (c)Payment of tax liability (d) Payment of fixed liability

105. ICD (Inter corporate deposits):  Companies can borrow funds for a short period. For example 6 months or less from another company which have surplus liquidity.  Such deposits made by one company in another company are called ICD.

106. Certificate of deposits:  The   CD is a document of title similar to a fixed deposit receipt issued by banks there is no prescribed interest rate on such CDs it is based on the prevailing market conditions.

107. Public deposits:  It is very important source of short term and medium term finance.  The company can accept PD from members of the public and shareholders.   It has the maturity period of 6 months to 3 years.

108.Euro issues:  The euro issues means that the issues is listed on a European stock Exchange.  The subscription can come from any part of the world except India.

109.GDR (Global depository receipts):  A depository receipt is basically a negotiable certificate , dominated in us dollars that represents a non-US company publicly traded in local currency equity shares.

110. ADR (American depository receipts):  Depository receipt issued by a company in the USA are known as ADRs.  Such receipts are to be issued in accordance with the provisions stipulated by the securities Exchange commission (SEC) of USA like SEBI in India.