YAM TUITION POINT

COURSE: B.COM GENERAL (II SEM)

SUBJECTS:-
BUSINESS LAW
FINANCIAL ACCOUNTING.
BANKING AND FINANCIAL SERVICES.

PREPARED BY:
MIR MUSTAFA ALI ABEDI (M.com).
CONTACT NO: 9703556057;6300110659.

BEST OF LUCK
 YAM TUTION POINT
Subject: Business law
LONG QUESTIONS
1Q) Define Contract and Essential Elements of Valid Contract.
Ans) Contract: A contract is a agreement between two or more parties which will be enforceable by law as
per sec2 of Indian contract act.
Definition: An agreement enforceable by law is a contract.
Essential Elements of Valid Contract
1. Offer and Acceptance: The contract in order to become an agreement must be made between two parties
one should make an offer and the other has to accept the agreement.
2. Legal Relationship: The parties of an agreement should have an intention to establish a legal
relationship between them.
3. Lawful Consideration: An agreement can by enforceable by law only when it has consideration in it.
4. Capacity of Parties Competency: The parties of an agreement should be capable to enter into a valid
contract according to court of law.
5. Free Consent: In order to make a valid contract there should be free consent between both the parties.
6. Lawful Object: A contract is said to be a valid contract only if the object of agreement is lawful.
7. Writing and Registration: A contract must be in a written form and it must be registered as per Indian
contract act.
8. Certainity: The agreement should be clear and certain in order to form a valid contract.
9. Performance: The contract can be valid if it is performed as per Indian contract act.
10. Not Expressly Declared Void: The agreement should not be declared void directly by law enforced in
country

2Q) Explain Discharge of Contract and the Modes of Discharge of Contract

Ans) Discharge of Contract: Discharge of contract refers to ending up contractual relationship that exist
between two parties when the rights and obligations of contract is terminated then it is known as discharge
of contract.
Modes of Discharge of Contract
1. By Performance: The contract can be discharge when both the parties of agreement fails to accomplish
their objectives in the agreement.
2. Agreement: When the agreement which is made between the parties is not working then the contract
must be discharged.
3. Impossibility of Performance: If the agreement involve terms which are impossible to perform then the
contract must be discharged.
4. Lapse of Time: A contract must be performed within a specific time period then it is known as period of
limitation. If the contract is not performed in that ti,me then it is known as lapse of time.
5. Operation of Law: A contract can also be discharged by the will of the parties by operation of law. It
involves death and insolvency.
6. Breach of Contract: When an obligation involved in a contract is broken then it is termed as breach of
contract it is of two types they are Actual breach and Anticipatory or constructive breach of contract.

3Q) Explain Intellectual Property Rights.

Ans. Intellectual Property Rights: A tangible property is created by writers, inventors and artist by
transforming their idea that is regarded as intellectual property rights.
Types of Intellectual Property Rights
1. Trademark/Service Mark: A trade mark is a word, name, symbol, device, logo that is used to identify
and differentiate a product or service from the other.
2. Copy Rights: Copy right is a form of protection provided to the original works by giving ownership to
the individuals or business. Copy right exist when the original work is created. It includes books, poetry,
play, short stories etc.
3. Patents: Patent is a right that is provided to the owner by the government in order to prevent others from
making using or selling his inventories for a limited time.
4. Trade Secrets: A trade secret is a valuable and confidential information of the business which helps in
gaining competitive advantages over the rivals.
5. Geographical Indications: Geographical indications refer to a sign that is used on goods which is
originate from a Particular area and possess certain qualities to its place of origin.

4Q) Define Directors and Qualifications, Disqualifications and Duties of Director.

Ans: Director: Director is a person who is appointed to perform the duties and functions of the company
according to the provisions of companies act, 2013. Director occupy a pivotal position in the structure of the
company, he take quick decisions in the organizations.
Qualifications of Director
1. Minimum share application must be disclosed in the prospectus.
2. Each director is entitled to attain his allotted shares within a period of two months after his appointment.
3. Director must hold only those shares whose notional value should not exceeded Rs.5000.
4. A person may be qualified as director if he is B.com graduate.
5. A director must be a person of sound minded.
Disqualifications of Director
1. An unsound mind person.
2. He is insolvent person.
3. He has been convicted by court of any offence.
4. He has failed to acquire a director identification number.
5. If any order has been passed disqualifying him of being appointed as director by court or tribunal.
Duties of Director
1. The primary duty of director is to work as per the articles of company.
2. Directors must act as honesty to promote the objects of the company.
3. Directors must carry out duties with carefully in an organization.
4. The company directors should not try to attain any undue profits from an organization.
5. It is the duty of director to issue share certificated to the allotted shareholders.
6. Company director needs to sign the prospectus before submitting to registrar.

5Q) Define Winding Up and Various Modes of Winding up of the Company

Ans. Winding Up: Winding up is a process of dissolution of company. It is mainly carried out by the
company liquidator. During the winding up process the company dissolves the assets of the organizations.
Modes of Winding up a Company
1. Winding up by the tribunal/Compulsory winding up: When the company is wound up by an order of
tribunal, it is referred as compulsory winding up of the company or winding up by tribunal.
Grounds of Compulsory Winding up
1. When the company is not in a position to pay its debts.
2. If the company proves that it is unable to pay debts
3. When the company has performed the activities that are against the interest and sovereignty of India then
it declares winding up of company.
4. The tribunal may order for winding up if it find that there is total deadlock in management.
2. Voluntary Winding Up: Voluntary winding up is another method of winding up of company either by
creditors or the members. It is further classified into two types namely members voluntary winding up and
creditors voluntary winding up.
Conditions for Voluntary winding up
1. Declaration of Solvency: When the company decides to wind up voluntarily then director must give
declaration of solvency.
2. Resolution of General Meeting: When the company is made by the director, company can pass the
resolution within 5 weeks for voluntary winding up.
3. Resolution of Creditors meeting: The Company must call a meeting of creditors and the notice of such
meeting must be send through registered post to creditors with notice of company meeting relating to
voluntary winding up.
4. Delivery of Declaration and Resolution to Registrar: Company must deliver declaration of voluntary
winding up to the registrar within 5 weeks and 10 days respectively.
5. Publication of Resolution: Company must give notice of resolution through advertisement in official
gazette and in newspaper within 14 days of its passing.

6Q) Explain Contract of Sale and the Elements of Contract of Sale?

Ans) Contract of Sale: A contract of sale refers to a contract through which the seller transfers or agrees to
transfer the property of goods to the buyer for price. There are two types of contract of sale there are as
follows.
a) Conditional Contract of Sale: Conditional contract of sale is a contract of sale which is based on
conditions.
b) Absolute Contract of Sale: Absolute contact of sale is a contract of sale which is made without
conditions.
Essential Elements of Contract of Sale
1. Two Parties: The contract of sale should have two different parties I,e buyer ans seller.
2. Goods: The contract of sale should include goods so that the property in goods can be transferred from
seller and buyer.
3. Transfer of General Property: Transfer of general property is one of the essential elements of contract
of sale. Contract of sale should be for transfer of general property in goods.
4. Price: In contract of sale price refers to the money consideration for the sale of goods. Thus it is
necessary that every property must have price in contract of sale.

7Q) Rights and Duties of Unpaid Seller

Ans: Unpaid Seller: When the seller is left unpaid for the goods which he sold to customers is known as
unpaid seller.
Rights of Unpaid Seller
1. Right to Lein: A right to lein is the right to keep hold the possession of goods unless and until the price
is paid for the goods.
2. Right to Resale: Unpaid seller can resale the goods when the goods are perishable in nature and when
the buyers refuses to make the payment of goods.
3. Right of Stoppage in Transit: The unpaid seller has a right to stop the goods in transit before reaching
to buyer.
4. Right to Claim Damages: If the buyer does not accept the delivery of goods and refuse to make
payment then the unpaid seller can claim damages from the buyer.
5. Right to Sue Buyer for Interest: Unpaid seller has the right to collect interest amount from the buyer
from the date when the payment is due.

8Q) Explain Company Liquidator

Ans) Company Liquidator: A company liquidator is a person who is appointed from the panel of
professionals chartered accountants decided by central Government. Company liquidator is appointed by
tribunal in case of winding up of company. He is appointed to take over the control of company in the form
of realization of assets and distribution of surplus among members. The company liquidator act as the
representative of the company in winding up proceedings. Hence he is referred as officer of the company.
Powers of Company Liquidator
1. The company liquidator shall carryout all the directions given by the resolution of the creditors or
contributors at any general meeting.
2. The company liquidator can apply to the court for the orders which are essential for company winding up.
3. To sell the complete undertakings of the company as a running business.
4. To settle the claims of the employees and creditors and to distribute the proceeds based on the priorities
established by the law.
5. To protect the company assets and fulfill the obligations and responsibilities, the company liquidator can
obtain the professional assistance from any person.
9Q. Explain the Consumer Protection Act 1986.
Ans: Consumer Protection Act 1986: The consumer protection act 1986 was enacted by the Government
of India to protect the interest of the consumers. Consumer protection is a type of protection which is
provided to the consumers against the effect of the marketers and firms and the social evils such as
corruption, ill treatment, injurious manufacturers.
Features of Consumer Protection Act 1986
1. It covers various laws concerned with consumer protection.
2. Its area comes under the department of consumer affairs, under the ministry of consumer affairs, food and
public distribution.
3. It is enacted for safeguarding the rights of consumers.
4. It helps to safeguard the interest of the consumers.
5. It helps in setting up of consumer protection councils.
6. It helps in educating the general consumer in India.
7. It provided detailed definitions of various elements of consumer protection, which includes defining the
terms of consumer, complaint, defect, deficiency etc.
8. It covers all the goods and serviced, unless specially expressed buy the central Government through a
notification.
9. It calls for the establishment of consumer councils, and other authorities for the settlement of consumer
disputes and for all the settlement matters of the consumers.
10. It provides Quasi-judicial Government at the district, state and national level; to address the grievaness
of the consumers.

10Q. Explain Consideration and its Essentials?

Ans: Consideration: Consideration is an essential element of Contract and it is regarded as backbone of the
contract. It enables in creating the legal rights between two parties.
Essential Elements of Consideration.
1. Desire of the Promisor: Consideration must move as per the desire of the promisor. If promise has done
something at the desire of the third party it will not be valid consideration between promisor and promise.
2. Past, Present and Future: If a consideration by a party for current promise was given in the past or
before the date of the promise it is known as past Consideration. A present consideration takes place when
consideration is provided along with the promise. A Future consideration takes place when consideration
from one party to another party pass simultaneously.
3. Consideration Must be real: A consideration must be real, competent and also of certain value in the
eyes of law.
4. Consideration must be Lawful: The consideration given for an agreement must not be Unlawful,
immoral or opposed to public policy.
5. Consideration may be in any Form: Consideration may be in the form of money, delivery of goods,
rendering some service, doing something, making profit etc.
6. Consideration may be in positive or negative: The consideration may be doing something ( Positive)
or abstained for something ( Negative) both considerations are valid.

11Q. Explain the Information Technology Act 2000.

Ans: Information Technology Act 2000: The Information Act 2000 is established to regulate the
information technology of India. Information Technology act 2000 in India to boost and encourage
Electronic Commerce. Information act 2000 helps the Government to prevent the misuse arising through the
use of electronic mediums.
Objectives of Information Act 2000
1. To provide legal recognition to all the E-commerce transactions.
2. To encourage and facilitate E-Governance.
3. To encourage and facilitate E-Commerce.
4. To manage national and international level cybercrimes.
5. To provide legal sanction for transferring of funds.
6. To Facilitate Government departments in electronic filling of documents.
7. To make the amendments in Indian Penal Code, The Reserve Bank of India act etc.
8. It provide protection of data of companies if the data is hacked, copied or destroyed.
9. It helps business organizations to maintain proper business records electronically instead of paper work.
10. It helps in controlling, regulating and protecting the online business transactions

12Q. Write the Differences between Patents, Trademarks, Copyrights and Trade secret

Basis Patents Copyrights Trademark Trade secret

1.Definition Patents is a right Copyright is a Trademark is a Trade secret is a
that is provided form of word, symbol, valuable and
to the owner of protection design, logo or confidential
the product by provided to the name that is used information of a
government to original works by to identify and business firm
prevent others giving ownership differentiate the which helps in
from making to the individuals product of gaining
using or selling or business. service from the competitive
his inventions for others advantages over
a limited period the rivals.
of time.
2.Protectable The items that The items that The items The items
Matter are included are included in included under included under
under patents for copyrights are trademarks are trade secret are
protection are books, symbol, name, marketing plans,
machines, photographs, logo, device etc. firm strategies
compositions, music recordings etc.
plants etc. etc.
3. Registration. Registration of Registration of Registration of Registration of
patents is copyright is not Trademarks is trade secret is not
necessary and required for not necessary. necessary.
mandatory. protection .
4.Examples Digital camera, Microsoft Kingfisher logo Paracetamol
chemical windows and name, formula and
fertilizer, box computer advertising many others.
shaped guitar, program, slogan etc.
biological computer
equipments. program, famous
writers books
5.Types Utility patents, Trademark,
design patents service mark,
and plant patents. _____ collective mark _____
and certification
mark
6.Acts or Patents can be Copyrights can Trademarks can Trade secrets can
Legislation exercised and be exercised and be exercised be exercised and
maintained under maintained under under trademark maintained under
patent law. Copyright Act of law and Lanham Uniform Trade
1976, 1909 Act. Secrets Act 1985.
&1999.
7. Governance Patents are Copyrights laws Trademarks are Trade Secrets are
regulated by are regulated by regulated by regulated by
Federal Courts. Federal courts State and Federal State and Federal
courts courts
 SHORT ANSWERS
1Q) Define the Concept of Offer and Acceptance?
Ans: Offer: An offer is a proposal made by one party to another party in order to establish a legal agreement
between them.
Procedure to make an Offer:
1. Expressed Offer: If the offer is made by expressing words then it is known as expressed offer.
2. Implied Offer: If the offer is assumed from the behaviour of person then it is known as implied offer.
3. The person who makes an offer is known as offeror and the person to whom the offer is made is known
as offeree and the person who accepts the offer is known as acceptor.
Acceptance: Acceptance occurs when an offeree agrees to be mutually bound to the terms of contract by
giving consideration like money to seal the deal.
Cases of Acceptance:
1. In Case of Specific Offer: If the offer is made to the specific group of member then it is known as
specific offer.
2. In case of General Offer. If the offer is made for general public then it is known as general offer.

2Q) Explain the Breach of Contract?

Ans) Breach of Contract: When an obligation involved in the contract is broken then it is termed as Breach
of Contract. It is of two types.
1. Actual Breach of Contract: Actual breach of contact may take place at the time when performance is
due and during the performance of contract.
2. Anticipatory or Constructive Breach of Contract: Anticipatory breach of contract takes place when
one party of contract informs other party the he /she will not be performing the promise then it is known as
anticipatory breach of contract.

3Q) Explain Annual General Meeting ( AGM)

Ans) Annual General Meeting: Annual general meeting is a general meeting which is compulsory for
every company to conduct every year. It helps in protecting the rights of shareholders of the company.
Provisions of Annual General Meeting
1. The first AGM of the company must be conducted within 9months of closing date of first financial year.
2. AGM must be conducted within working hours only on any day except national holidays.
3. AGM notice must include all the general contents of meeting.
4. Board of every company is responsible to conduct AGM for its members.
5. The duration between two successive AGM must not be more than 15months.

4Q) Explain Roll Call?

Ans) Roll Call: Roll call refers to the activity or process of taking attendance at the begining of a meeting
by calling out names of the attendees one by one to ensure their presence. Roll call should be conducted by
the chair person at the commencement of meeting. Each director is required to provide the following details.
1. Name of the director.
2. Current location of the director.
3. Confirmation about that he received the agenda of meeting.
4. Ensure that the proceedings of the meeting are kept confidential.

5Q) Define Corporate Governance

Ans. Corporate Governance: Corporate governance is defined as the way in which a company organise
and manages itself to ensure that all the financial stakeholders receive their fair share of company earnings
and assets.
1. It defines the responsibilities and duties imposed on each director.
2. It organizes and clarifies various activities in an organizations
3. It helps in taking quick decisions making process by directors.
4. It successfully builds the confidence among investors of the company
5. It ensures that all the operations involved in managing the firm must be performed in fair and transparent
manner.

6Q) Explain Company Liquidator

Ans. Company Liquidator: A company liquidator is a person who is appointed from the panel of
professionals chartered accountants decided by central Government. Company liquidator is appointed by
tribunal in case of winding up of company. He is appointed to take over the control of company in the form
of realization of assets and distribution of surplus among members. The company liquidator act as the
representative of the company in winding up proceedings. Hence he is referred as officer of the company.

7Q) Explain Digital Signature

Ans) Digital Signature: Digital Signature is one of the method of encryption used to provide authentication.
The main idea of the digital signature is very popular in the world of networking security. The digital
signature scheme provides two algorithms, one is for signing and the other is for verifying signatures which
requires the user public key.

8Q. Explain Caveat Emptor.

Ans: Caveat Emptor: Doctrine of Caveat Emptor is a Latin Word which means “Let the buyer be aware”. It
means it is not the duty of the seller to highlight the faults in the goods instead the buyer should be aware of
the goods in terms of quality, fitness and should carefully exam, in the goods before purchasing. In general it
means that the buyer should be aware of the goods he purchases and cannot avoid the contract.

9Q. Explain Proxy?

Ans: Proxy: According to the Section 105 of companies act, 2013. Proxy means a person appointed to
represent and who can vote on behalf of that member or shareholder in his absence. Basically the proxy is an
instrument through which a person is appointed. The rights of the proxy are as follows
1.Under Section 109, a proxy can be deemed to poll his /her vote.
2. Proxy can vote only on a poll.
3. Proxy can use his votes in different ways.

10Q. Explain Quorum?

Ans: Quorum : Quorum implies minimum number of members required to conduct and validate a meeting.
Presence of Quorum is necessary to validly transact business at a meeting. If it is not present, then
proceedings of the meeting are said to be null and void. According to Section 103 of Companies act,
2013,Quorum required for any other company is minimum of two members. Whereas under Articles it is
prescribe a Quorum shall be more than one.

11Q. Explain Auction Sale.

Ans: Auction Sale: An Auction sale refers to a public sale where in various interested people who want to
buy the auctioned goods carry out bidding. Each bidder tries to bide more price than the other bidders.
Finally, the goods are sold to that person who bids the highest price. A person who sells the goods by auction
is known as auctioneer and he acts as agent of the actual owner of the goods.
 YAM TUTION POINT
SUBJECT: BUSINESS LAW
IMPORTANT QUESTIONS
LONG QUESTIONS
1. Define Contract and Elements of Contract?
2. Explain Discharge of Contract and Modes?
3. Explain Various Types of Intellectual Property Rights?
4. Explain the Qualifications, Disqualifications and Duties of Director?
5. Define Winding Up and Various Modes of Winding Up of the Company?
6. Explain Contract of Sale and Various Conditions of Contract of Sale?
7. Explain Unpaid Seller and Rights of Unpaid Seller.
8. Explain Company Liquidator
9. Explain the Consumer Protection Act 1986.
10. Explain the Elements of Consideration?
SHORT QUESTIONS
1. Define the Concept of Offer and Acceptance?
2. Explain Breach of Contract?
3. Explain Annual General Meeting?
4. Explain Recall?
5. Explain Company Liquidator?
6. Explain the Elements of Consideration?
7. Define Corporate Governance?
8. Define Digital Signature?
9. Explain Trade Marks and Patents?
10. Explain Copy Rights, Trade Secrets and trademarks?
11.Explain the Information Technology Act 2000.
12.Explain Caveat Emptor.
13.Explain Auction Sale.
14.Explain Proxy.
15.Explain Quorum.

**BEST OF LUCK**
 YAM TUTION POINT
SUBJECT: FINANCIAL ACCOUNTING

1Q) Explain Bills of Exchange? Features and parties involve in bills of exchange?
Ans) Bills of Exchange: Bill of exchange is one of the negotiable instruments. It includes three parties
namely Drawer, Drawee and the Payee.
Drawer: Drawer is an individual who orders to pay and he is one who creates the bills of exchange.
Drawee : Drawee is an individual who accepts the bills of exchange.
Payee : Payee is an individual to whom the payment of bills of exchange is to be made.
Characteristics of Bills of Exchange
1. It is essential that bills of exchange must be in a written form.
2. It must necessarily include an order to pay.
3. The order should be unconditional in nature.
4. The bills of exchange Include three parties namely the drawer, drawee and the payee.
5. All the parties performing bills of exchange should be certain.
6. If the bill of exchange is not signed by the drawer then it would be invalid.
7. The sum payable of bills of exchange should be certain.
8. A bill must essentially have a stamp according to an act.
Conditions for the bill to be accepted
1. The drawer should accept the bill by signing his name on the front or backside of the bill.
2. In order to make a valid bill it should be duly signed by the drawee.
3. The bill must be handed over to the holder after making the acceptance.
4. It is mandatory for drawee to sign the bill of exchange.

2Q. Explain Promissory Note?

Ans: Promissory Note: “A promissory note is an instrument in writing containing an unconditional
undertaking, signed by the maker to pay a certain amount only to or the order of a certain person or to the
bearer of the instrument.”
1. Promissory note should be always in writing.
2. Promissory note includes an express promise to pay.
3. In promissory note, the promise should be definite and unconditional in nature.
4. The promissory note of an instrument must be duly signed by the maker.
5. The promissory instrument must clearly highlight and explain about as to who the maker is and who the
payee is.
6 The payment which is to be made under the instrument should be in money only.

3Q. Explain Account Sales and Del Credere Commission

Ans: Account Sales: Account sales is the final statement provided by the consignee to consignor. It
contains information related to sales expenses incurred, commission due to consignee and amount due to
consignor. Based on this statement, consignor prepares his accounting books comprising information of the
goods consigned.
Delcredere Commission: When the goods are sold on credit, there will be chances that such credit sales
results in bad debts. Usually the loss incurred from the bad debts is to be borne by the consignor. Therefore,
in order to protect himself from the loss of bad debts l, the consignor offers some extra commission to the
consignee for making sure that all debts are cleared by the debtors. This extra commission is called
Delcredere Commission.

4Q Explain Normal Loss and Abnormal Loss?

Ans: Normal Loss: The loss which takes place due to natural reasons like evaporation, drying, breaking I
bulk are referred as Normal Losses. Normal losses do not need any distinct adjustment. They are the part of
cost of trade. Therefore, at the time of computing the unsold stock value, normal loss is being compensated
by increasing the cost of consignment.
Abnormal Loss: The losses which takes place due to accidents, thefts and so on are called Abnormal loss.
The abnormal loss is to be determined and must be added to the profit and loss account and not to the
consignment account. The abnormal loss must be evaluated in the same manner like that of the unsold stock
of consignment.

5Q. Write the differences between Bills of Exchange and Promissory note?
Bills of Exchange Promissory Note
1. The parties involved in bills of exchange 1. The parties involved in promissory note
are drawer, drawee and payee. are maker and the payee.
2. Bills of Exchange are payable to the 2. Promissory Note is payable to the bearer.
bearer.
3. Dishonour notice is supposed to be given 3. No such notice is used to be given to the
to person who are liable to pay under bills. maker.
4. Under bills of exchange the drawer of a 4. Under promissory note the maker of note
bill is creditor. is a debtor.
5. Under bills of exchange the drawer has 5. Under promissory note the maker has
immediate3 relation with the acceptor only. immediate relation with the payee.

6Q. Write the differences between Consignment and Sale?

Consignment Sale
1. Ownership of the goods always remains 1. Ownership of the goods gets transferred
with consignor even after transferring the immediately from seller to buyer after the
goods to consignee. sale being made.
2. Consignor gives commission to the 2. Seller does not give any commission to
consignee for selling goods. the buyer, but he provides discounts.
3. Consignor will bear all the risks involved 3. Risks will be transferred from seller to
with goods. buyer once ownership is transferred.
4. Consignor and consignee relationship 4. Buyer and seller relationship will be
will be principal and agent. debtor and creditor.
5. Consignor is responsible for expenses 5. Once goods are sold all expenses belong
incurred during consignment. to buyer.

7Q Write the differences between Joint Venture and Consignment

Joint Venture Consignment
1. The parties in joint venture are known as 1. The parties in the consignment are known
Co- ventures. as consignor and consignee.
2. Co-ventures treat each other as partners. 2. The relationship of consignor and
consignee is like that of the principal and
agent.
3. The partnership act govern the joint 3. The law of agency governs consignment.
venture.
4. Co-ventures share profits and losses of 4. Consignee does not share profit and
the business. losses. He receives his commission for
completing his job.
8Q. Explain Joint Venture and its Features?
Ans: Joint Venture: Joint venture is an agreement between two or more parties joining together for some
business purpose on a temporary basis. They together share the profit and loss of the business. Individuals,
sole traders, partnership firms or any combination of these acts as the joint venture participants.
Features of Joint Venture
1. Joint venture is a temporary association of two or more parties.
2. It is essential for carrying out special tasks.
3. No specific name is given to the joint venture.
4. The joint venture business comes to an end on the termination of the venture.
5. Determining of profits is easy in joint venture.
6. The Co-ventures receive the assets in cash and pays all the liabilities in cash.
7. Each Co-ventures contribute funds, stock and skills.
8. Joint venture is not permanent partnership.

9Q. Explain Noting Charges?

Ans: Noting Charges: The procedure followed when a bill dishonoured due to non-acceptance or non-
payment is known as Noting. The noting a bill refers to representation of a bill by a notary public to the
drawee in order to avail legal proof of dishonour. The notary public maintains record of a bill, its represents
and the reasons for non-payment of bill in regular and notarial ticket. Notary public charge some amount for
doing this, which is referred as noting charges. Noting charges should be borne by the drawee as they are
legally recoverable.

10Q. Explain Single Entry System

Ans: Single Entry System: Single entry system is actually an incomplete record of double entry system. It
is also known as incomplete records system.
1. This system is economical to small business entities with few assets and liabilities and limited
transactions.
2. Some businessman intentionally use this system to avoid taxation.
3. Using this system it is easier to determine profit and loss.
4. This system does not require practical knowledge of the principals of book keeping.
5. Accounting records can easily maintain in this single entry system.
6. Frauds can be easily committed due to the absence of control and check.
7. Under this system financial position of the business cannot be ascertained because of the absence of real
accounts.
8. Single entry system does not record debit and credit aspects of every transaction.

11Q. Explain Double Entry System?

Ans: Double Entry System: Double entry system is the accounting system which records all the
transactions of the business in a correct manner.
1. It provides complete record of all the transactions as it records both aspects.
2. It provides the most reliable information from day to day transactions.
3. It facilitates references to the details of any account if information is required regarding any set or series
of transactions.
4. There are chances of occurrence of accounting errors in double entry system.
5. It checks only the arithmetical accuracy of accounts by preparing trial balance.
12Q. Write the differences between Single Entry and Double entry system?
Single Entry System Double Entry System
1. Under this system only personal and cash 1. Under this system all accounts are
accounts are prepared. prepared..
2. It is suitable for accounting assumptions. 2. It is suitable for all kinds of business.
3. It is difficult to prepare trial balance from 3. Trial balance can be easily prepared from
incomplete records. double entry system.
4. This system cannot consider adjustment 4. This system considered all types of
while preparing accounts. adjustment while preparing accounts.

13Q. Write the differences between Receipts and Payments and Income and Expenditure Account?
Receipts &Payments Account Income &Expenditure Account.
1. It is real in nature. 1. It is nominal account.
2.Its structure is mainly summarized cash 2. Its structure is same as profit and loss
book account.
3. All the amounts received are debited. 3. All expenses and losses are debited.
4. All the payments made are credited to 4. All the incomes are credited to this
this account. account.
5. Closing balance is carried forward to 5. Closing balance is transferred to capital
next period In the same account. fund in the balance sheet.

YAM TUTION POINT

SUBJECT: FINANCIAL ACCOUNTING
IMPORTANT QUESTIONS
1Q. Explain Bills of Exchange? Features and parties involve in bills of exchange?
2Q. Explain Promissory Note?
3Q. Explain Account Sales and Del Credere Commission
4Q Explain Normal Loss and Abnormal Loss?
5Q. Write the differences between Bills of Exchange and Promissory note?
6Q. Write the differences between Consignment and Sale?
7Q Write the differences between Joint Venture and Consignment
8Q. Explain Joint Venture and its Features?
9Q. Explain Noting Charges?
10Q. Explain Single Entry System
11Q. Explain Double Entry System?
12Q. Write the differences between Single Entry and Double entry system?
13Q. Write the differences between Receipts and Payments and Income and Expenditure Account?

**BEST OF LUCK**
 YAM TUTION POINT
SUBJECT: BANKING AND FINANCIAL SERVICES.
1Q) Explain the various Functions of Commercial Banks in India?
Ans. Commercial Banks: Commercial Banks are business enterprises which are involved in finances
and provide financial services for a price which may be in the form of Interest, commission, discount
etc. Generally commercial banks accept deposits from the public and lend that money to the needy
people.
Functions of Commercial Banks
1. Deposits: Banks accepts deposit in the following forms they are as follows
a) Current Account: These accounts are opened by the business man. The amount cannot be easily
withdrawn under these accounts.
b) Savings Account: The main aim of these accounts is to encourage the savings habit among the
people of the country.
c) Fixed Deposit: Under these accounts the amount cannot be withdrawn before the maturity period. It
is also known as term deposit.
d) Recurring Deposit: Under these accounts the amount is deposited in monthly installments for a
fixed period.
2. Lending: Banks lends money in the following forms
a) Cash Credit: Cash credit is granted by a bank to its customers.
b) Loans: A specifies amount sanctioned by bank to its customers is called a loan.
c) Overdraft: When withdrawal is more than the deposit then it is known as overdraft. Banks provide
this facility to its customers.
3. Agency Functions:
a) To Banker Act: To act as executor bank and attorney for customer will.
b) To Banker Work: To work as banker correspondents in the country.
C) Collection of Dividends and Shares: Banks collect the dividends and interest of shares on behalf of
their customers.
d) Purchase and Sale of Securities: Bank purchase and sale different types of securities on behalf of
their customers such as shares, bonds, debentures etc.
4) General Utility Services:
a) Safe Custody: Bank provides safe custody lockers to its customers for keeping their securities.
b) Foreign Exchange: Banks accepts and collects foreign bills of exchange.
c) Letter of Credit: Bank issue letter of credit, if the importer request the exporter for letter of credit.
d) Bills of Exchange: Banks accepts the bills of exchange for internal and external trade on behalf of
their customers.

2Q) Explain the Powers and Functions of Reserve Bank of India?

Ans. Reserve Bank of India: Reserve Bank of India act as a banker bank in the country. It is the
controller of credit of all the banks in India. Reserve Bank of India issues the notes to all the banks of
the country
Powers of Reserve Bank of India
1. License: Reserve Bank of India has the right to issue the license to different bank of India.
2. Inspection: Reserve bank of India has the power to supervise and inspect the banks of India.
3. Controlling: Reserve bank of India control the establishment of new branches of banks.
4. Sanction: It can sanction the amount to arrangement of schemes.
5. Suggest: It can suggest the liquidation of banking companies which have become weak.
Functions of Reserve Bank of India
1. Bank of Issue: Reserve bank of India has the right to issue bank notes of all denominations .It issue
notes coins all over the banks of the country
2. Banker to the Government: Reserve bank of India is related to the central government fund. It
makes temporary advance to the Government.
3. Bankers Bank: The Reserve bank of India acts as the bankers bank. It is the head of all banks in
India.
4. Controller of Credit: It has the power to influence the volume of credit created by banks in India.
5. Custodian of Foreign Exchange: It has the responsibility to maintain the official rate of exchange.

3Q) Explain KYC (Know Your Customer) Objectives and Guidelines of KYC issued by RBI?
Ans. KYC (Know Your Customer): Now a days the customers are making more transactions through
banking system as banks are providing different kinds of services to their customers. This has increased
the possibility of frauds. Hence the Reserve Bank of India has suggested the banks with a great facility
to the banks to know the nature of the customer .This facility is known as KYC.
Objectives of KYC:
1. It aim is to prevent money laundering.
2. It aim is to check frauds and identify theft.
3. It aim is to build relationship with customer.
4. It aim is to enable the bank about customers
Guidelines issued by Reserve Bank of India.
1. Customer Acceptance Policy:
a) Account should not be opened in fictitious manner. .
b) All essential documents must be collected from the customer.
c) Before opening an account banks should examine the identity of the customer.
2. Customer Identification Procedure:
Under this process, the banks identify the customer and verify the personality by using sufficient
photograph, documents, address and other identification details.
3. Monitoring of Transactions: The banks need to monitor the transactions of the customers on a
continuous basis.
4. Employee Training: Staff members must be trained according to KYC procedures.
5. Customer Education: The banks must prepare pamphlets or literature in order to educate the
customer about objective of KYC.

4Q) Explain Negotiable Instruments? Features and Parties involved in Negotiable Instruments?
Ans. Negotiable Instruments: Negotiable Instruments are those instruments which can be transferable
from one person to another person. Some of the documents are being used for carrying out the business.
Features of Negotiable Instrument:
1. Negotiable instruments can be easily transferable from one person is to another person.
2. It is capable of providing proof and special rules of evidence.
3. It is normally payable by order.
4. Negotiable Instruments must be in a written form.
Parties Involved in Negotiable Instruments:
1. Drawer: A person drawing bills of exchange is known as drawer.
2. Maker: A person who makes a promissory note is known as Drawee.
3. Drawee: A drawee is a person on whose name bills of exchange is drawn.
4. Payee. A person whose name is given in bills of exchange is known as payee.
5. Endorsor: Endorsor is a person who endorses bills of exchange.
6. Endorsee: Endorsee is a person to whom the bills of exchange is endorsed by endorser.
7. Holder: The person who is holds the bills of exchange and promissory note as Holder.
5Q) Explain Financial Services? Features and Components of Financial Services
Ans. Financial Services: The term financial services include all the activities of financial nature .It is
also called as financial intermediation. All the services offered by financial companies are called
financial services.
Features of financial services:
1. Financial services are intangible in nature.
2. Financial services developed the financial products by studying the needs of customers.
3. Production and supply of financial services is simultaneous process.
4. Financial services are dynamic nature.
5. Financial services can’t be produced or stored, it is perishable.
Components of Financial Services:
1. Financial Institutions: Financial institutions are the institutions that mobilises the savings of
investors and general public. It is classified into two components. Banking and non- banking and term
finance institutions
2. Financial Markets: Financial market is a place where dealings of financial claims can take place. It
is divided in two types.
a) Capital Market: Capital market is a market which deals with long term finance, shares, securities
etc.
b) Money Market: Money market is a market which deals with short term finance and also deals with
credit instruments like treasury bills, commercial paper etc.
3. Financial Instruments: Financial Instruments are the negotiable instruments which are borrowed
against a person for a payment of certain amount of money.
4. Financial Services: Financial services means mobilization and allocation of funds or savings. It
helps in expansion of the business.

6Q) Explain Merchant Banking. Features, Functions/ Services of Merchant banking

Ans. Merchant Banking: Merchant Banking is an institution that covers a broad range of activities like
management of customer services.
Features of Merchant Banking
1. Issue management business is one of the business in which merchant bankers are mostly engaged.
2. Merchant Bankers provide various services such as selling and buying of securities.
3. Merchant Bankers act as a manager consultant advisor in relation to issue management.
4. Specialist services provided by merchant bankers are bills of exchange and underwriting.
5. Merchant banking possess quick decision process.
Functions/Services of Merchant Banking
1. Corporate Counselling: Corporate counseling covers all the financial activities of a merchant banker
2. Project Counselling : Project counseling is related to the project finance. It includes project reports
of an organization.
3. Credit Syndication: Credit syndicate function covers loan and project financing through syndicates.
It helps in estimating the total cost of the project.
4. Underwriting: Merchant bankers also function as underwriter and helps in raising funds through
external resources.
5. Portfolio Management: Portfolio Management refers to the management of investment in different
kinds of securities of different companies.

7Q) Explain Capital Market

Ans. Capital Market: Capital market is a market where long term finance is provided to the business
firms through sale of securities.
Features of Capital Market
1. It deals with long term finance.
2. The instruments of capital market enjoy low liquidity.
3. It deals with shares, debentures, bonds and Government securities.
4. The major players under capital market are merchant bankers and financial institutions.
5. It is regulated by SEBI.
6. It maintains stability and minimizes the changes in price.
7. It helps in minimizing the unproductive activities and speculation.
8. It assembles the resources from surplus areas to deficit areas, to enhance the economic growth and
productivity level of the country.
9. It regulates the transactions at the stock exchange in a fair and efficient manner.
10. It provides effective advice for the managing the investment in securities of industries.

8Q. Explain Money Market:

Ans. Money Market: “A collective name given to the various firms and institutions that deals with
various grades of near-money”.
Features of Money Market
1. A money market deals with long term finance.
2. The instruments of money market enjoy high liquidity.
3. It deals with credit instruments like treasury bill and commercial bills.
4. The major players are RBI, LIC etc.
5. It is regulated by RBI.
6. It promotes savings habit among the people.
7. It helps in development of trade and commerce through issue of bills.
8. It helps the central bank in managing stability of interest rates in the country.
9. It gives precise and valuable information to the savers and investors.
10. It enables the transactions between savers and investors of the fund.

9Q Explain the Types of Lease?

Ans. Leasing: Leasing is an agreement which is made between two parties I,e the leasing company
(lessor) and the user (lessee).
Types of Lease
1. Financial Lease: The financial lease covers the complete economic life of the asset. During the lease
period, the lessor receives the lease rental to recover the full cost of the asset and also reasonable return
on the funds. It is also known as Capital Lease.
2. Operating Lease: An operating lease is an agreement where in the lessee obtains the use of an asset
on a particular time. It is a lease arrangement for a period which is usually shorter than the life of an
asset. An asset can may be leased by the lessor to the different lessees one after the other.
3. Direct Lease: A cross border is one of the type of finance lease where in lessor purchases the asset
and transfer itr to the lessee. Under this lease agreement, a manufacturer can also act as lessor and
deliver the assets to the lessee.
4. Cross Border Lease: A cross border lease refers to a situation when a lessor leases an equipment to a
who does not come under the jurisdiction of the lessor territory.
5. Leveraged Lease: When the lessor borrows a part of the purchase price from any lending institution
then such a lease is known as leveraged lease.
10Q. Explain SIDBI
Ans: SIDBI: Small Industries Development Bank of India (SIDBI) was started by Government of India
under industrial development Act 1989 as a wholly owned Industries Development Bank of India
(IDBI).
Objectives of SIDBI
1. To undertake the initiative in developing and updating the existing technology and improving the sick
units.
2. To enlarge the network of channels for promoting the products of Small scale unit i9n both domestic
and international market.
3. To promote the industries which provide employment opportunities mainly in semi-urban areas.
4. To initiate and taking up new projects.
5. To improve the infrastructure for SSI( Small Scale Industries) Units
6. To promote the export of products and services.
7. To extends financial support to small industries of the state for scarce raw materials for marketing.
8. It upgrades small scale industries on semi urban regions for generating more employment
opportunities.
9. It permits direct support and refund for exporting small scale sectors.
10. It provides financial assistance to integrate infrastructure development centres schemes of union
ministry of small scale industries.

SHORT ANSWERS
1Q) Explain Unit Banking, E-banking and Core Banking
Ans. Unit Banking: Unit banking is one of the banking system in which banking operations are usually
subjected to have a single office. Usually unit banks provided services through a single bank and do not
have any branches. Under the unit banking system different unit of banks perform their functions
independently.
E-banking: E-banking is also known as internet banking. E-banking is a procedure that allows
individuals to perform banking activities from home using internet connection. Online banking enables
the customers to perform all routine transactions such as account transfers and balance enquiries .It
works for 24x7 week.
Core Banking: Core banking is a banking service provided by group of networked bank branches
where customers may access their bank agent and perform basic transactions from any time of member
branch offices. It includes saving bank account, current account etc.

2Q) Explain OMBUDSMAN.

Ans) OMBUDSMAN: Banking OMBUDSMAN refers to a person appointed by Reserve Bank of
India to redress consumer complaints against any bank of India. He act as an official judge who has the
responsibility of redressing the complaints by banking customers. Banking ombudsman files complain
related to non -payment of cheques and drafts related to banks who are not working as per the
guidelines of RBI.

3Q) Explain Bills of Exchange?

Ans. 1. It is essential that a bills of exchange should be in a written form.
2. It must necessarily include an order to pay.
3. The order should be unconditional in nature.
4. All the parties performing bill of exchange should be certain.
5. The bills of exchange include three parties namely drawer, drawee and the payee.
6. If bills of exchange is not signed by the drawer then it is treated as invalid.

4Q) Explain Venture Capital?

Ans. Venture Capital: Venture capital means provided by Professionals who invest their money in
young management and rapidly growing companies that have potential to develop the organization.
Importance of Venture Capital:
1. It is required to enable the startup phase through finance.
2. It is required to increase the motivation of the company through profits.
3. It is emerged to help SSIs of India through initial finances.
4. It is required to develop the entrepreneurial skills and talents of young people.
5. It is required to create new business opportunities for entrepreneurs.

5Q) Explain Leasing.

Ans. Leasing: Leasing is an agreement which is made between two parties I,e the leasing company
(lessor) and the user (lessee).
Importance of Leasing:
1. It is an easy source of raising finance for providing fixed assets.
2. It facilitates flexibility in getting finance.
3. It helps the company in acquiring tax benefits.
4. The term of lease agreement is known as lease period.
5. Leasing agreement involves two parties lessor and the lessor which plays an important role in leasing
agreement.

6Q) Explain Bill Discounting

Ans. Bill Discounting: Bill discounting is a discount which a bank takes from the seller to release funds
before the credit period ends. Bills discounting is mostly applicable in scenario when a buyer buys
goods from the seller and the payment is to be made through letter of credit.
Features of Bills Discounting
1. Bills discounting helps to improve cash flow position in business.
2. It helps the business man to sell goods on credit.
3. It access the funds quickly required by the organization.
4. It reduces profit margin of an organization.
5. Banks provide bill discounting services only to the existing customers not to new business man.

8Q. Explain the Functions of NABARD?

Ans: NABARD: National bank for agricultural and rural development was established in the year 1982.
Functions of NABARD
1. Apex Bank: It works as an apex bank to look after the credit needs of the rural sector.
2. Short Term Credit: It provides short term credit to the state Co- operative banks &regional rural
banks.
3. Medium Term Credit: It provides medium term credit to SCB’s and RRB’s for approved
agricultural operations.
4. Long Term Credit: It provides long term credit to SCR’S, RRB’s, land development banks for
investment in agriculture.
5. Help to State Government: It provides credit to the state Government in terms of financial crisis.
 YAM TUTION POINT
SUBJECT: Banking and Financial Services.
LONG QUESTIONS
1. Explain the various Functions of Commercial Banks in India?
2. Explain the Powers and Functions of Reserve Bank of India?
3. Explain KYC (know your customer) Its Objectives and guidelines?
4. Explain the Features and Components of Financial Services?
5. Explain the Features and Parties involved in Negotiable instruments?
6. Explain the Features and Functions of Merchant Banking?
7. Explain Capital Market?
8. Explain Money Market?
9. Explain the Types of Lease?
10. Explain SIDBI

SHORT ANSWERS
1. Explain Unit and Core banking?
2. Explain E-banking ?
3. Explain OMBUDSMAN?
4. Explain Bills of Exchange??
5. Explain Venture Capital?
6. Explain Leasing?
7. Explain Bill Discounting?
8. Explain Negotiable Instruments?
9. Explain Merchant Banking?
10. Explain the Functions Of NABARD?

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