Which of the following is the capital reserve of a company?
Accumulated depreciation
Retained profit
Share premium
Loss on forfeited shares
Correct answer is B
Capital reserve is made out of capital profits earned due to the sale of fixed assets at a price greater than its cost or profit on the reissue of forfeited shares. So Capital reserve is Created when there is capital profit i.e. profit on sale of assets or upward revaluation of assets. Retained capital is a capital reserve.
The documents that provide instant information to firms on their tranactions with banks are
Bank statement and debit note
Cheque book and cashbook
Cheque stub and deposit slip
Payslip and credit invoice
Correct answer is A
Bank statement is a printed record of the balance in a bank account and the amounts that have been paid into it and withdrawn from it, issued periodically to the holder of the account.
A debit note is a document sent by a buyer to seller or in other words a purchaser to a vendor notifying that a debit has been made to their accounts. A debit memo on a company's bank statement refers to a deduction by the bankfrom the company's bank account. In other words, a bank debit memo reduces the bank account balance similar to a check drawn on the bank account.
An item in the balance sheet of a limited liability company is
Accrued expenses
Lighting and heating
Salaries and wages
General expenses
Correct answer is A
Accrued expense is expense which has been incurred but not yet paid. Expense must be recorded in the accounting period in which it is incurred. Therefore, accrued expense must be recognized in the accounting period in which it occurs rather than in the following period in which it will be paid.
It can be found on the liabilities part of a balance sheet of a limited liability company
The instrument used in analysis and interpretation of financial statement is the
Accounting ratios
Income and expenditure extract
Balance sheet extract
Found accounting
Correct answer is A
Accounting ratio is the comparison of two or more financial data which are used for analyzing the financial statements of companies. It is an effective tool used by the shareholders, creditors and all kinds of stakeholders to understand the profitability, strength and financial status of companies.
Return on capital employed
Gross profit margin
Net profit margin
Return on equity
Correct answer is A
Return on capital employed or ROCE is a profitability ratio that measures how efficiently a company can generate profits from its capital employed by comparing net operating profit to capital employed.