Question { Bank Of America, 25295 }

what is management?

Answer

Management is managing MEN, MONEY AND MATERIALS effectively
and efficiently to attain the objectives of the Company.

Question { TCS, 28696 }

What is Balance Sheet?

Answer

Balance sheet is a financial statement containing assets
and liabilities of a company as on a particular date say
31st March. The position will differ on 1st April.

The difference between P&L A/c and Balance sheet is

P&L A/c is the working results of income and expenditure
for the one year period i.e., 1st April to 31st March,
whereas balance sheet financial position only on a
particular date.

I welcome questions in finance, accounts, financial
analysis etc., and i will try to answer the questions as
far as possible.

email: sbalu1955@yahoo.co.in

Question { 5908 }

Can anybody tell me the placement of the following ledgers
in the Trial Balance
1.Loans and Advances
2.Interest on Capital
3.Customer Deposit
4.Preliminery expenses
5.Insurance claim

Answer

The general principle is all incomes and liabilities will
come under credit side of the trial balance.

All assets and expenditure will appear under debit side of
the trial balance.

Question { ADP, 6703 }

When inflation was high also the recession was high how
these two contradictory things occur at a same time

Answer

When the inflation is high, prices go up and money value is
depreciated. What paid earlier for which you have to pay
more for getting the commodities. Purchasing power of
people is coming down, which in turn reduced demand.

Due to reduced demand Industry cannot use its full capacity
and with less production recession starts. With onset of
recession, again liquidity in the market is tightened.

It is all chain of events. If liquidity is good, people
will mind for paying more. Example is Real estate boom
which we witnessed earlier. With high inflation and
recession, money circulation is reduced and people are not
able to commit for long term.

That is the main reason, RBI has injected money into the
market by reducing the interest rates and also cutting down
the CRR etc.

Question { State Bank Of India SBI, 36081 }

what is debt recovery tribunal ?

Answer

Govt. of India formed DRT (Debt Recovery Tribunal) to speed
up the recovery in the case of Non-performing assets of
Banks, Financial Institutions etc.

It took much time to clear the cases by Court earlier. As
the NPA stake of Banks/FIs went up sharply without any
resolution, DRT was formed to deal with such cases. They
will issue Recovery Certificate once the case is disposed.

Question { 5211 }

WHAT IS MAT? PL. DON'T GIVE BRIEF NOTE.

Answer

Minimum Alternate Tax (MAT).

Question { 6169 }

current depriciation rates for fixed assets

Answer

The depreciation rates are given under Schedule XIV of the
Companies Act for various machinery/equipments for both wdv
and slm for different shifts of working.

Another schedule of rates are given under Income tax act,
which is used for arriving taxable profit.

Any item less than Rs.5,000/- is to be provided 100%
depreciation.

Even any equipment is used for one day, the depreciation is
to be provided.

Depn is a non-cash flow expenditure and it is provided for
wear and tear of the machine. Depreciation amount is added
to net profit after tax to arrive the net cash flows to the
company, which is useful to find out liqudity of the
company.

Question { 40041 }

Why we Deduct TDS?

Answer

Under Income tax act, the Employer is responsible to deduct
TDS on salary of the employees etc. otherwise he is
liable. The tax is to be evened out during the year and
you cannot deduct TDS at the end of the year. In the
beginning itself, one has to assess the Income tax of the
employee after getting other details such as savings,
eligible deductions etc., and accordingly you have to
proportion out TDS every month.

It is direct income to Government.

Question { 12892 }

Difference between material in transit and capital work in
progress

Answer

Material in transit will not be accounted unless u have
clear title and transfer in your (company's name) name. It
will not be taken as inventory.

Whereas Capital work in progress, where the project is
under implementation, due to progress in work and
implementation, the half-finished work will be treated as
Capital work in progress and added to your Fixed Assets in
the Balance sheet. No depreciation will be provided on
Work in progress value. On completion, the amount will be
capitalised and added to the concerned Asset value like
Buildings, plant & machinery, Electrical items etc.

Question { 7330 }

Respected Sir,
I want to know that what is Deriatives? How it works?

Answer

Derivatives are used in the Stock exchange, Commodity market
etc. It derives from another on the expectation of either
rise or fall in its values. In Stock market, both options
and futures are derivative instruments. In futures, the
stock exchanges fix the market lot and for particular
market lot, the investor can buy futures for a contract
period of 1-month. In case the price of particular stock
goes up, either the investor can sell for a higher price or
take delivery based on the booked price on the expiry date
i.e., last Thursday of any month. The investor need not
pay entire amount as in Cash segment in Futures. He needs
to pay the margin money of 14 to 18% of the stock value as
prescribed for a lot fixed and at the time of taking
delivery, he needs to pay the full amount. At the time of
taking delivery, the amount would be in lakhs due to heavy
lot. In case the price goes lower for any particular
stock, the investor needs to maintain the margin amount
accordingly and he bears the loss also. He can carry
foward the future by paying more margin money to the next
cycle also. In futures, either he can sell it or necessary
to take delivery on the expiry period.
In option, one can buy or sell either call option or put
uption, in bullish or bearish market. He cannot extend the
option beyond a month and either he can sell or exercise
the option for buying the shares at the strike price.

One has to experiment the Futures and Option trading and do
it cautiosly. Both gains and losses are unlimited.