Equity vs Debentures

Equity Shares :

1. Owners
2. Have voting rights and control
3. No fixed dividend rate
4. Dividend is an appropriation of profits
5. Non convertible
6. Shares are a part of Shareholders' funds in Balance Sheet
7. Only on liquidation
8. Maybe forfeited
9. Paid after all other liabilities settled

Debentures:

1. Lenders
2. No voting rights and control
3. Fixed interest rate
4. Interest is a charge against profits
5. Convertible
6. Debentures are a part of Long Term Borrowings
7. Are redeemable
8. Cannot be forfeited
9. Paid first on liquidation

Effect of Admission of new partner

Admission of new partner has following implications in Partnership Accounting:

New & Sacrificing Ratio

Share of Goodwill

Revaluation of Assets and Liabilities

Accumulated Profits and Losses

 Guiding principle is new partner should not get past earned profit. Hence existing partners share accumulated profit or loss till date. Profit includes not only Reserves but also appreciation or reduction in the value of assets. Goodwill or Reputation is also valued and shared with existing partners.

Sec71 Finder of Goods

Responsibility of finder of goods.—A person who finds goods belonging to another, and takes them into his custody, is subject to the same responsibility as a bailee.

Duties of Finder of Goods:

1.Proper Care as if own good

2.Not to use it

3.Return to the owner, When traced.

Rights of Finder of Goods:

1.Perishable goods

2.Expense exceeding ⅔ rd of the Goods value.Right to retain

MCQ Weekly Question- Feb2015- CPT Exam, CS Foundation Exam, CMS Foundation Exam

1.Ram earned a profit of Rs.1,40,000 for the year 2008-09. But at the time of, audit, the auditor found that Ram purchased a scooter on 1.4.08 for Rs.20,000 and charged it as revenue expenses. The auditor advised him to rectify the error now and to charge depreciation @ 15% on scooter. The correct profit after rectification will be:

(a) Rs.1,57,000
(b) Rs.1,60,000
(c) Rs.1,40,000
(d) Rs.1,17,000.

2.A trial balance will not balance if

(a) A correct entry is posted twice
(b) Rs.5,000 received from Harish is posted in the credit side of Hari
(c) Sales on credit basis is credited to sales account and debited in cash account.
(d) Goods of Rs.2,500 returned to Ram is added into the purchases

3.A new machine was purchased for 1,00,000 but the amount was wrongly posted to Furniture account as 10,000 and cash received from debtors 11,200 was omitted to be posted to ledger. The difference in Trial balance due to such error will be:

(a) 90,000
(b) 78,800
(c) 1,01,200
(d) 1,11,200

4.Goods worth 750 were purchased from S & Co. but while posting wrong debit was given to R & Co. The total of credit side of the trial balance was 43,750. Assuming that this is the only error, the total of the debit side of the trial balance was

(a) 43,750
(b) 44,500
(c) 43,000
(d) 45,250

Take Chapterwise Quiz-http://www.meraskill.com/cpt-question-paper

Answer:1a,2d,3b,4d