Showing posts from March, 2017

Difference between Perpetual and Periodic Inventory System

In Perpetual Inventory System, we regularly update the value of inventory when inventory are sold, while in periodic inventory system, we don’t adjust the value of inventory when inventory are sold. Instead, we adjust the value a…

Methods of Costing

The methods of costing are as follows:  1.   Job Costing: The job costing methods are applicable where the unit of manufacture is one and complete in itself. They include printers, job foundries, tool manufactures, and contracto…

Techniques or Types of Costing

Techniques of Costing:  The types and techniques of costing are as follows:  1. Historical Costing: ‘ The ascertainment of costs after they have been incurred’ is called Historical costing. Such costs are, therefore, ‘postmortem’…

Steps in Installation of a Costing System

The costing system of an organization should be carefully planned in order to achieve its objectives. The important steps for the installation of a costing system are discussed below: 1. Determination of objectives: The first st…

Holding Company - Meaning, Purpose, Advantages and Disadvantages

Introduction:  An important development of recent times in the business world is the combining of independent business units into a group or an economic unit. A company may acquire either the whole or majority of shares of anothe…

Buy Back of Shares

Introduction:  The provisions regulating buy back of shares are contained in Section 77A, 77AA and 77B of the Companies Act, 1956. These were inserted by the Companies (Amendment) Act, 1999. The Securities and Exchange Board of I…

Redemption of Debentures

Meaning of Redemption:  Redemption of debenture is the discharge of debenture liability. It can be done either by repaying the money to debenture holders or converting the debenture into shares. The conditions of redemption are c…

Debentures - Meaning, Features and Types

Meaning of Debentures:  According to Sec. 2 (12) of the companies Act, 1956, debentures include “debenture stock, bonds and any other securities of a company”. Debentures are debt instruments issued by a joint stock company. Amou…

United Kingdom (UK) Food and Drink Industry

Global Industry Overview:  The first quarter of 2013 was largely a good one for the global food and drink industry. Improving sentiment across parts of the developed world, particularly the United States, as well as in crucial gr…

SWOT Analysis of Canara Bank

Strengths  •  Boasts an unbroken record of profits since its inception. •  Comfortable capital adequacy ratio. •  Expanded its branch and ATM network during the 2012 fiscal year. •  Recently consolidated its business position by …

Conditions for Redemption of Preference Shares

Conditions for redemption of Preference Shares:  Under section 80 of the Companies Act, 1956, a company should have to follow the conditions:  1.  There must be a provision in the Articles of Association regarding the redemption …

Types of Preference Shares

Preference shares may be classified according to the rights attached to them as follows: 1. Cumulative and Non-cumulative Preference   shares Cumulative preference shares enjoy the right to receive the dividend in arrears for the…

Issue of Bonus Shares

Introduction:  The undistributed profits, after the necessary provisions for taxation, are the property of the equity shareholders and the same may be used by the company for distribution as dividends to them. But the sound finan…

Cost of Living Indec Number (CLI)

Cost of living index numbers generally represent the average change in prices over a period of time, paid by a consumer for a fixed set of goods and services. It measure the relative changes over time in the cost level require to…

Forfeiture of Shares and Reissue of Forfeited Shares

Forfeiture of Shares:  A company has no inherent power to forfeit shares. The power to forfeit shares must be contained in the articles. Where a share holder fail to pay the amount due on any call, the directors may, if so author…

Calls-in-Arrears and Calls-in-Advance

Calls-in-Arrears: It often happens that some shareholders fail to pay the amount on allotment and or calls due on the shares held by them. The total of the unpaid amounts on account of one or more installments is known as ‘Calls-…

Capital Reserve vs. Reserve Capital

1. Capital reserve is created out of capital profits (profit due to reevaluation of assets) and therefore it is not available for distribution as dividend to the shareholders, while reserve capital is that part of authorized capi…

Issue of Shares at Premium and Discount

At Premium:  If Shares are issued at a price, which is more than the face value of shares, it is said that the shares have been issued at a premium. The Company Act 1956 does not place any restriction on issue of shares at a prem…

Share Capital and Types of Share Capital

Share Capital:  The capital of a joint stock company is divided into shares which are collectively called ‘Share Capital’. Share capital refers to the amount that a company can raise or has raised by the issue of shares. Types of…

Shares and Types of Shares - Equity and Preference Shares

Share:  A share is the interest of a shareholder in a definite portion of the capital. It expresses a proprietary relationship between the company and the shareholder. A shareholder is the proportionate owner of the company. Sect…

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