Question

. Define the following terms: (20 marks)

a. Current assets (2 marks)

b. Non current assets (2 marks)

c. Current liabilities (2 marks)

d. Non current liabilities (2 marks)

e. Share capital (2 marks)

f. Preference shares (2 marks)

g. Redeemable preference shares (2 marks)

h. Participating preference shares (2 marks)

i. Retained earnings (2 marks)

j. Depreciation (2 marks)

Answer 1

Assets a current that can in the the osent on the Assels - Current Assets are those assets be Consurred (or) sold within one your normal course of business. assets are wholly presented Pinet company's balance sheet and are arranged in the order of ther Liquidity. Exemples of i) cash and ii) Temporary i) Accounts in inventory current Assets: cash Equivalents investments receivable ~) papouid popol experoser 6 plon current Assele A nen current asset is an asset that the company acquire con investras , but the volue of investment does not recur within on accounting Year. There type of investments Lasts for long and connot be easily liquidoled into cash Con generate Economic benefits to the compere for more than a year. Examples. :) Investments Claszterm) ill) Intangible ii) property, assets. plant and equipment and con generate

c) Curssent liabilities: - Current liability is a that a company needs to incurring it by wing properly classified ce Prancia obligation pay within a of existing resource current assets . Exempleo i) Accounts potable 1) neales tox pelable u) sellase Accrued 1) sbort term obligation in eo concorned revenues liabilities Cinterest) d) alon current liabilities - Non current liabilities are those obligations not due for Settlement within one year Non current liabilities, also known as long-term liabilities. These are just opposite to current liabilites. Ecomples i) long term debt poyable is) long term bond payable i wong term loans payable ) Deferred tox teabities.

& share capital ! store copitol refers to the componi racce in exchange for intered in the compny in the General types of shore coptol Common stock and preferred kinds of share i) Authorized 11) issued copitel il funds that a issuing an ownership form of chores whach ore. stock. copil! subscribed in colled up opita? I capito! a copital & uncotled capital vil paid up copitel will reserve copikes f) preference shares :- preference shores are those store on which there it is preference right to clain dividend during the life ofrere of the company, and to claim repoyement of copitel on the coinding up. to preference shares are a kind of Equity store that do not have the same rolling righte as ordinary quite shorer s perference shares combine features of Equity and debt, then Corry Equilt risk as the principal " not secured and they give aut dividend Rimibr to an interest.

g) Redeemtable The aftes a preferent shores? preference shores, which specific period (60) of Comprar, are colled can be redeemed the discretion redeemohle preference shores. 6 porticipating preference shores! The holders of porticipling preference shore receive stipulated rate of divided ond oko participate in the additional Cornige of the compone along with the Equity share holder. At the time of winding up in addition to t their shores, the shore holder have a right to participate in the surplus of assets, which remaine after payment to the Equity shore hodeas. 1) Retained boring profits generated by a Copony that are not distributed to stock holders as dividende but are either re-invested in the business orl kept ao resene for specific objectives. retainen Eorning is the sum of tooll profits retained since the company's inception

The formula for ending Begining retained Dividad - retained Forning of Ending Earning is? poolits/ Lossel - retained forringe (J) Depreciation ! cost that as expense shown in Depreciation is has been for the the income the amount allocated period Cie, staterment. of on asset's and reported year, month.) 00) Depreciation expenses assed that has current period . to gradually fixed assets as is that portion of a fixed been considered consumed in the The intent of this charge is reduce the corrying amount of their volue is consumed overtime