Accounting & Economics For Business 5 November IiPresentation Transcript
ACCOUNTING & ECONOMICS FOR BUSINESS AFTERSCHO☺OL – DEVELOPING CHANGE MAKERS CENTRE FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME – World’ Most Comprehensive programme in social entrepreneurship & spiritual entrepreneurship OPEN FOR ALL FREE FOR ALL
ACCOUNTING & ECONOMICS FOR BUSINESS Dr. T.K. Jain. AFTERSCHO☺OL Centre for social entrepreneurship Bikaner M: 9414430763 [email_address] www.afterschool.tk , www.afterschoool.tk
What is contingent liability ?
These are not liabilities, but may become liabilities in the near future due to some or other reason – for example a pending case against a company.
Where do you show contingent liabilities?
As a footnote attached to balance sheet.
What do you understand from marshalling balance sheet?
How do you arrange the items in balance sheet? It may be liquidity order (starting from the most liquid assets) or vice versa. This is called marshalling the balance sheet.
Solve the following:
Arrange the following assets in order of their liquidity:
Furniture, Goodwill, Stock in trade, Unexpired insurance, Cash in hand , Trade debtors, Readily saleable investments, Cash at bank, Land, Buildings, Machinery, Bills receivable.
Solution: Cash in hand, Cash at bank, Saleable investments, Bills receivable, Trade debtors, Stock in trade, Prepaid insurance, Furniture, Machinery,Buildings, Land, Goodwill
Mention 5 differences in double entry system and incomplete record system?
All the accounts are maintained
It is maintained by all business persons and is very systematic and popular method
Chances of errors are much less (comparatively)
Only cash, and personal accounts are maintained
It is generally followed by small traders
How can you apportion indirect expenses?
Salary, carriage outward, insurance, bad debts, depreciation, repairs etc. are indirect expenses. They can be apportioned on reasonable basis. For example, depreciation can be apportioned on the basis of value of assets. Bad debts can be apportioned on the basis of sales. Etc.
You have to appoint an underwriter, how much commission will you give, what rules will you follow and (what will be the penalty in case of default)?
5% commission in case of shares (max.) and 2.5% in case of debentures (max.) and provisions of Sec. 76 and articles have to be followed. Mention these in prospectus also. Penalty : Rs. 5000.
What is firm underwriting?
The underwriter undertakes to buy some shares (in any case, he has to buy it).
What will be the closing stock?
M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of Rs. 200 Iakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation. The objection of the auditor is justified because
Change in the method of depreciation should be done only with the consent of the auditor
Depreciation method can be changed only from WDV to SLM and not vice versa
Change in the method of deprecation should be done only if it is required by some statute and change would result in appropriate presentation of financial statement.
Goti Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 01, 2004 and the company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2006, the amount shown as “interest accrued but not due” in the Balance Sheet will be (a) Rs.70,000 shown along with Debentures (b) Rs.2,10,000 under current liabilities (c) Rs.1 ,40,000 shown along with Debentures (d) Rs.2,80,000 under current liabilities
Interest for 3 months : 70,000 as outstanding
P Ltd. issued 5,000, 12% debentures of Rs.100 each at a premium of 10%, which are redeemable after 10 years at a premium of 20%. The amount of loss on redemption of debentures to be written off every year is
(d) Rs. 8,000
What is perfect market?
There are very large number of buyers and sellers
Prices are determined purely based on demand and supply
There is complete information
Market has complete knowledge
Free entry and free exit
How is price determined in perfect market?
Purely based on market demand and supply
No individual firm can influence the price
Prices are always fluctuating to reflect the current demand and supply
Firm is only a price taker – and not the price maker.
When does the firm reach equilibrium ?
When MR = MC, the firm is in equilibrium
When the marginal cost is equal to marginal price, the firm is in equilibrium
The firm may have profit or loss in the short run, but in long run, it cannot have loss or abnormal profit (just economic profit – the minimum profit required to sustain the firm – which is when MR = MC).
How is perfect market different from imperfect market?
There are three types of markets in imperfect markets:
1. monopoly (single seller)
2. oligopoly (2 or a few sellers)
3. monopolistic competition (a few sellers)
How are prices determined in monopolistic competition?
Prices are determined purely based on demand and supply – but here each firm can decide its own price.
Goods are differentiated
Every firm has its own pricing curve
Every firm can change price to suit its revenue model .
How is prices determined in oligopoly?
In oligopoly, the firms cannot change the price, - because – if they will reduce the price, the competitor will also reduce the price – thus the gain will be nill. If they increase the price - the competitor may not increase and as a result the customers will shift to competitor’s products.
2 or 3 companies are selling similar products / services in oligopoly
How is prices determined in monopoly
Monopolist can earn extraordinary profit in long run.
Prices are determined as per availability of supply.
MR = MC is the point of equilibrium.
Profit =Quantity *( AR – AC )or TR – TC
Monopolist can earn super profit in short run and long run both.
Afterschoool conducts three year integrated PGPSE (after class 12 th along with IAS / CA / CS ) and 18 month PGPSE (Post Graduate Programme in Social Entrepreneurship) along with preparation for CS / CFP / CFA /CMA / FRM . This course is also available online also. It also conducts workshops on social entrepreneurship in schools and colleges all over India – start social entrepreneurship club in your institution today with the help from afterschoool and help us in developing society.
Why such a programme?
To promote people to take up entrepreneurship and help develop the society
To enable people to take up franchising and other such options to start a business / social development project
To enable people to take up social development as their mission
To enable people to promote spirituality and positive thinking in the world
Who are our supporters?
Afterschoolians, our past beneficiaries, entrepreneurs and social entrepreneurs are supporting us.
You can also support us – not necessarily by money – but by being promotor of our concept and our ideas.
About AFTERSCHO☺OL PGPSE – the best programme for developing great entrepreneurs
Most flexible, adaptive but rigorous programme
Available in distance learning mode
Case study focused- latest cases
Industry oriented practical curriculum
Designed to make you entrepreneurs – not just an employee
Option to take up part time job – so earn while you learn
The only absolutely free course on internet
Workshops from AFTERSCHO☺OL
ICSI Hyderabad Branch
Gyan Vihar, Jaipur
Apex Institute of Management, Jaipur
Aravali Institute of Management, Jodhpur
Xavier Institute of Management, Bhubaneshwar
Pacific Institute, Udaipur
Engineering College, Hyderabad
Spiritualising business and society
Rural development and transformation
HRD and Education, Social Development
NGO and voluntary work
Investment analysis,microfinance and inclusion
Retail sector, BPO, KPO
Accounting & Information system (with CA / CS /CMA)
Hospital management and Health care
Hospitality sector and culture and heritage
Other sectors of high growth, high technology and social relevance
The only programme of its kind (in the whole world)
No publicity and low profile course
For those who want to achieve success in life – not just a degree
Flexible – you may stay for a month and continue the rest of the education by distance mode. / you may attend weekend classes
Scholarships for those from poor economic background
Latest and constantly changing curriculum – keeping pace with the time
Placement for those who are interested
Admissions open throughout the year
Latest and most advanced technologies, books and study material
Pedagogy curriculum and approach based on IIM Ahmedabad and ISB Hyderabad (the founder is alumnus from IIMA & ISB Hyderabad)
Meditation, spiritualisation, and self development
EsGotitial softwares for business
Business plan, Research projects
Participation in conferences / seminars
Workshops on leadership, team building etc.
Written submissions of research projects/articles / papers
Interview of entrepreneurs, writing biographies of entrepreneurs
Editing of journals / newsletters
Consultancy / research projects
Assignments, communication skill workshops
Participation in conferences and seminars
Group discussions, mock interviews, self development diaryng
Mind Power Training & writing workshop (by Dr. T.K.Jain)
Articles from Harvard Business Review
Quiz, seminars, workshops, games,
Visits to entrepreneurs and industrial visits
PreGotitations, Latest audio-visuals
Group discussions and group projects
Periodic self assessment
Mentoring and counselling
Study exchange programme (with institutions out of India)
Rural development / Social welfare projects
AFTERSCHO☺OL will shortly open its branches in important cities in India including Delhi, Kota, Mumbai, Gurgaon and other important cities. Afterschooolians will be responsible for managing and developing these branches – and for promoting social entrepreneurs.
We want to write case studies on social entrepreneurs, first generation entrepreneurs, ethical entrepreneurs. Please help us in this process. Help us to be in touch with entrepreneurs, so that we may develop entrepreneurs.
Basic values at AFTERSCHO☺OL
Share to learn more
Interact to develop yourself
Fear is your worst enemy
Make mistakes to learn
Study & discuss in a group
Criticism is the healthy route to mutual support and help
Ask fundamental questions : why, when, how & where?
Embrace change – and compete with yourself only
www.afterschoool.tk social entrepreneurship for better society