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Accounting Short Question and answers

Q.No.1:What is sunk cost?
ANS: a cost in which money has already spent and permanently lost and can not be
recovered by any means.

Q.No.2 :what is pert?

Ans: A project management tool that provides a graphical representation of a

project's timeline.

Q.No.3:Write different kinds of bonds?

Ans: The 4 main types of bonds are 1. Government Bonds 2. Municipal Bonds 3. Corporate Bonds 4.
Zero-coupon Bonds
Q.No.4:WHAT IS AMORTIZATION?
ANS: The deduction of capital expenses over a specific period of time (usually

over the asset's life). More specifically, this method measures the consumption
of the value of intangible assets, such as a patent or a copyright.
Q.No.5:What is depletion?
Ans: An accounting method used by mining, oil, or other natural resource companies to write
off natural resource assets such as oil, gas, precious metals, or minerals as they are withdrawn
from the ground.
Q.No.6:Intangible assets?
Ans: The assets you cannot touch or see but that have value. Intangible assets include
franchise rights, goodwill, non-compete agreements and patents, among others.
Q.No.7:What is working capital?
Ans: the capital of a business which is used in its day-to-day trading operations, calculated as
the current assets minus the current liabilities.
Q.No.8:What is cost of sales?
Ans: Cost of sales means the price paid for the product, plus any additional costs required getting
the goods into stock and ready for sale.
Q.No.9:What is original cost?

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Ans: The total costs associated with the purchase of an asset, for accounting purposes.

Q.No.10:What is cash equivalent?

Ans: it Consists of cash and cash-like items such as short-term investments that can be quickly
converted to cash.
Q.No.11:What is subsidiary company?
Ans:a company whose more then 50% equity shares are controlled by other company is called
subsidiary company.
Q.No.12:What is Holding company?
Ans:a company which acquires either all or ore than 50 5 equity shares of other company is
called parent or holding company.
Q.No.13: What is consolidated Balance sheet?
Ans:a balance sheet in which assets and liabilities of a parent company and iots controlled
subsidiaries are combined is called consolidated balance sheet.
Q .No.14 what are contingent liabilities?
Ans: a liability that a company may have to pay ,but only if a certain future event occurs.
Q.No.15: define cost of control?
Ans; if the price paid for shares in the subsidiary company is more than the intrinsic value then
the difference is termed as good will or cost of control/
Q.No.16: What are the methods of calculating goodwill?
Ans: Yield basis Net Asset Capitalization basis.
Q.No.17:Define joint product?
Ans: products manufactured simultaneously by a common process.

Q.No.18 What is purchase consideration?

ANs: : the amount paid by purchasing company in purchasing other company.
Q.No.19:What are wyas to pay purchase consideration?
Ans: lump sum, Net Asset Basis, Payment per share, and Based on value of both companys shares.
Q.No.20:Quantittes of inventories are ascertained by which methods?
Ans: : Periodic System and Perpetual Inventory System.

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Q.No.21: what is fob shipping?
Ans: Title passes to buyer with the loading of goods at point of shipment.

Q.No.22: Define reconstruction of company?

ANs:When a business of company is unsuccessful usual is required to reconstruction the company
process of doing is called reconstruction company.

Q.No.23: What is the intrinsic value of shares?

Ans: Valuation of shares based on net assets of business according to last Balance Sheet
Q.No.24:What is amalgamation?
Ans: The combination of one or more companies into a new entity.

Q.No.25:Define Goodwill?
Ans: the established reputation of a business regarded as a quantifiable asset and calculated
as part of its value when it is sold.
Q.No.26:What is minority interest?
Ans: A non-current liability that can be found on a parent company's balance
sheet that represents the proportion of its subsidiaries owned by minority
shareholders.

Q.No.27:What is matching principle?

Ans: In accrual accounting, the matching principle states that expenses should be recorded during the
period in which they are incurred, regardless of when the transfer of cash occurs.
Q.No.28:Define bonus shares?
Ans: Bonus shares are additional shares given to the current shareholders without any additional

cost, based upon the number of shares that a shareholder owns. These are company's accumulated
earnings which are not given out in the form of dividends, but are converted into free shares.
Q.No.29:What is accrued liabilities?
Ans: Accrued liabilities are liabilities that reflect expenses on the income statement that have occurred
but not been paid yet or logged under accounts payable during an accounting period.
Q.No.30:Define stock dividend?
Ans: A dividend payment made in the form of additional shares, rather than a

cash When a company issues a stock dividend, rather than cash, there usually are not tax

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consequences until the shares are sold.

Q.No.31:What is markup
Ans: The difference between the lowest current offering price among dealers and the
higher price that a dealer charges to a customer.
Q.No.32:Define trend ratios?

Ans

The comparison of the successive values of each ratio for a single firm over a number of years.

Q.No.33: Define common size income statement?

Ans: An income statement in which each account is expressed as a percentage of
the value of sales.
Q.No.34:BOND YIELD?
ANS: The percentage return that the investor will receive.
Q.No.35: What is equity financing?
Ans:The process of raising capital through the sale of shares in an enterprise.
Q.No.36:Redemption of bond?
Ans: Repayment of bonds or other debt securities on or before their maturity date.
Q.No.38:WHAT IS right shares?
Ans: A security giving stockholders entitlement to purchase new shares issued by
the corporation at a predetermined price (normally at a discount to the current
market price) in proportion to the number of shares already owned. Rights are
issued only for a short period of time, after which they expire.
Q.No.39:What is stock split?
Ans: A corporate action in which a company divides its existing shares into
multiple shares.
Q.No.40:What is paid up capital?
Ans: The amount of a company's capital that has been funded by shareholders.
Q.No.41:Define cost of goods sold?
Ans: The direct costs attributable to the production of the goods sold by a
company. This amount includes the cost of the materials used in creating the
good along with the direct labor costs used to produce the good.
Q.No.42 :What is bond?
Ans:
A debt investment in which an investor loans money to an entity (corporate or
governmental) that borrows the funds for a defined period of time at a fixed
interest rate.
Q.No.43:WHAT are methods of calculating good will?
Ans: Yield basis Net Asset Capitalization basis.
Q.No.44:WHAT IS CEILING VALUE?
ANS: The maximum price a seller is allowed to charge for a product or service
Q.No.45:what is indenture:?
ans: A legal and binding contract between a bond issuer and the bondholders.