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Impact on the companys balance sheet is:
Retained earning n the accumulated profits of the company decreases & the share capital with the same amount increases.
The entry passed is
Retaned earning/ Accumulated profits a/c Dr.
To Equity share capital
It is merely transferring the amount from accu profits to the equity cap a/c n not increase in any amount or cash with the company.
What else can I help you with?
Define or describe the phrase 'red Flags explain the impact of red flags identified by auditors on each major phase of an audit?
Red flags are associated with a fraudulent item referenced on a financial statement. It could represent an accounting issue, unusual increase in financial growth or rapid financial decline.
Why bonus issue is not included in the cash flow statement?
As no cash is received, like when the first time a company goes IPO or issues rights shares.
What are the components of a problem statement?
A problem statement typically includes a description of the current situation or issue, the objectives or goals to be achieved, the scope or boundaries of the problem, and the significance or impact of solving the problem.
Can you use revaluation reserve to issue share capital?
yes, for a bonus issue
Can a company issue free shares?
Yes it is possible and is called a bonus issue, the company must still fund the issue of the shares out of distributable reserves. Check for treatment on a bonus issue to ensure you use the correct treatment!
What is the effect of a bonus issue on the share capital and share premium account?
Bonus shares increases the share capital while reduces the share premium account because amount of share premium is used to issue bonus shares.
How is cost accounting impact in financial accounting?
Cost accounting mainly becomes a decision making issue. However, it does impact financial accounting with regards to the inventory account on the balance sheet statement and cost of goods sold on the income statement. It is used in manufacturing firms in order to cost there inventory which is not as easy as a retail firm that really justs costs products at the purchase price. While your countries accounting board regulates the method (generally absorption costing) there is significant debate in accounting theory as to which method (variable or absorption) is a better costing method.
What is the disadvantages of bonus issue?
papio ki jai boli
What are bonus shares?
Concept: When a company has accumulated large reserves which cannot be disrtibuted as dividents in cash either due to legal restrictions or accounting principle f prudence, it converts this surplus capital & divides the capital among the existing shareholders according to the share capital held by issuing fully paid bonus shares. NOTEWORTHY POINTS: 1. The share of bonus shares soes not constitute a source of income to the company or the financial position of the company remains the same. 2. Issue of bonus shares is not for sistribution of profits among the shareholders and hence not for income tax purpose. 3. Are not a gift. 4. The issue of bonus share does not improve the well being or financial position of the shareholders even though no cash is paid by them to acwire these shares...
What is the job of external auditor?
Job of external auditor is to examine the books of accounts of company and issue a clearance letter regarding the true and fair nature of financial statement.
What does this statement mean issue date balance paid date?
The statement "issue date balance paid date" typically refers to a financial document, such as a bill or invoice. The "issue date" indicates when the document was generated, the "balance" represents the total amount owed at that time, and the "paid date" signifies when the payment was made. Together, these elements help track the timing of the transaction and the status of the payment.
What are bonues?
Concept: When a company has accumulated large reserves which cannot be disrtibuted as dividents in cash either due to legal restrictions or accounting principle f prudence, it converts this surplus capital & divides the capital among the existing shareholders according to the share capital held by issuing fully paid bonus shares. NOTEWORTHY POINTS: 1. The share of bonus shares soes not constitute a source of income to the company or the financial position of the company remains the same. 2. Issue of bonus shares is not for sistribution of profits among the shareholders and hence not for income tax purpose. 3. Are not a gift. 4. The issue of bonus share does not improve the well being or financial position of the shareholders even though no cash is paid by them to acwire these shares...
