Accounting

Question 1

What is Balance Sheet?

Answer 1

A snapshot of a company at a given point
comparison of assets vs liabilities

Question 2

What are the current assets

Answer 2

Attaest that can be liquified in a short period of time ( Less than year)

Question 3

What is a Profit and Loss account

Answer 3

Prepare for particular time ( one year )
show the transaction / Operation happens over the year
shows earnings or loss

Question 4

Capital Work in Progress

Answer 4

Capital Work In Progress
Example: 90 days payment until the payment made
asset to the contractor
Liability to Employer

Question 5

What does it mean by shareholders equity?

Answer 5

Capital finance through common and preferred shares

Question 6

What is the use of financial ratios & what does it mean by ratio analysis?

Answer 6

Industry uses this ratio to evaluate the financial stability of the companies.
Use in the prequalification stage.

Question 7

What does it mean by the current ratio?

Answer 7

Current assets/ Current liability
best practice is 2.5 : 1

Question 8

What does it mean by the current ratio?

Answer 8

Quick Ratio(Acidity Ratio) = (Current Assets- Stocks)/ Current Liabilities
This ratio indicates how quickly assets can be converted into cash/money (Best Practise 1:1)

Question 9

Gearing Reato

Answer 9

Company finance debt vs how much finance by Equity

Question 10

Name 3 types of ratios

Answer 10

1. Liquid ratio: the ability to pay the debts
2. Profitability ratio: to assess the ability to generate profit
3. Gearing: compare capital with its debts