51.
Capital receipts: Capital receipts may be defined as “non-recurring
receipts from the owner of the business or lender of the money crating a
liability to either of them.
52.
Revenue receipts: Revenue receipts may defined as “A recurring
receipts against sale of goods in the
normal course of business and which generally the result of the trading activities”.
53.
Meaning of Company: A company is an association of many persons who
contribute money or money’s worth to common stock and employs it for a common
purpose. The
common stock so contributed is denoted in money and
is the capital of the company.
54. Types
of a company:
1.Statutory companies
2.government company
3.foreign company
4.Registered companies:
a. Companies limited by shares
b. Companies limited by guarantee
c. Unlimited companies
d. private company
e public company
55.
Private company: A private co. is which by its
AOA: Restricts the right of the members to transfer
of shares Limits the no. Of members 50.
Prohibits any Invitation to the public to subscribe for its shares or
debentures.
56.
Public company: A company, the articles of association of which
does not contain the requisite restrictions to make it a private limited
company, is called a public company.
57.
Characteristics of a company:
Voluntary association
Separate legal entity
Free transfer of shares
Limited liability
Common seal
Perpetual existence.
58.
Formation of company:
A)
Promotion
B
)Incorporation
C)
Commencement of business
59.
Equity share capital: The total sum of equity shares is called equity
share capital.
60.
Authorized share capital: It is the maximum amount of the share capital,
which a company can raise for the time being.
61.
Issued capital: It is that part of the authorized capital, which
has been allotted to the public for
subscriptions.
62.
Subscribed capital: It is the part of the issued capital, which has
been allotted to the public
63.
Called up capital: It has been portion of the subscribed capital
which has been called up by the company.
64. Paid
up capital: It is
the portion of the called up capital against which payment has been received.
65.
Debentures: Debenture is a certificate issued by a company
under its seal acknowledging a debt
due by it to its holder.
66. Cash
profit: cash
profit is the profit it is occurred from the cash sales.
67.
Deemed public Ltd. Company: A private company is a subsidiary company to
public company it satisfies the following terms/conditions Sec 3(1)3:
1.Having minimum share capital 5 lakh’s
2.Accepting investments from the public
3.No
restriction of the transferable of shares
4.No
restriction of no. of members.
5.Accepting deposits from the investors
68.
Secret reserves: secret reserves are reserves the existence of
which does not appear on the face of
balance sheet. In such a situation, net assets position of the business is
stronger than that disclosed by the balance sheet. These reserves are crated
by:
1.Excessive dep.of an asset, excessive
over-valuation of a liability.
2.Complete elimination of an asset, or under
valuation of an asset.
69.
Provision:
provision usually means any amount written off or retained by way of providing
depreciation, renewals or diminutions in the value of assets or retained by way
of providing for any known liability of which the amount can not be
determinedwith substantial accuracy.
70.
Reserve: The
provision in excess of the amount considered necessary for the purpose it was
originally made is also considered as reserve Provision is charge against
profits while reserves is an
appropriation of profits Creation of reserve increase proprietor’s fund while
creation of provisions decreases his funds in the business.
