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DIFFERENT TYPES OF PREFERENCE SHARES PREFERENCE SHARES Preference shares are those which carry the following two preferential rights: They have a right to receive dividend at a fixed rate before any dividend is paid on the equity shares. When the company is wound up, they have a right to the return of capital before that…
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The brief description of Capital Reserve and Reserve Capital is as follows: RESERVE CAPITAL It is a part of the subscribed capital remaining uncalled that a company resolves, by a Special Resolution, not to call except in the event of winding up of the company. Where a company has passed a resolution for Reserves Capital,…
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The description of stock and shares is as follows: SHARE The total capital of the company is divided into units of small denominations. Each such unit is called ‘share.’ Shares are numbered so that they can be identified. EXAMPLE If the total capital of the company is ₹10,00,000 divided into 1,00,000 units of ₹10 each,…
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MEANING Sweat Equity Shares are the shares issued by the company to its employees or directors at a discount or for consideration other than cash. These shares are issued as a reward to the directors and shareholders. ACCORDING TO COMPANIES ACT 2013 “Sweat equity shares” means such equity shares, which are issued by a Company…
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LAW OF VARIABLE PROPORTIONS Law of Variable Proportions states that the use of more and more units of variable factor of production along with specific number of units of fixed factor results in changes in total product in variable proportions. ACCORDING TO LEFTWITCH “The law of variable proportions states that if the input of one…
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SHORT RUN VS LONG RUN Production Function: SHORT PERIOD PRODUCTION FUNCTIONS: The time period in which some factors of production are fixed while some factors of production are variable, is known as short period. It explains the technical relationship between outputs and inputs in the short run. The fixed factor is land and the variable…
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MEANING Production Function expresses the functional relationship between output of a commodity and various inputs used in to produce that commodity. It can be expressed as: Q= f (L,K) It means the output is the function of a fixed factor ‘Land (L)’ and a variable factor ‘Capital (K)’. ACCORDING TO KOUTSOYIANNIS “The production function is…
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PRICE ELASTICITY OF DEMAND Price Elasticity of demand is the rate at which quantity purchased changes with the change in price. It is the ratio of percentage change in quantity demanded to percentage change in the price of the commodity, other Factors affecting Price Elasticity of Demand remaining the same. Ed= (-) Percentage change in quantity demanded/…
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Before understanding the difference between Law of Demand vs Elasticity of Demand, both concepts should be clear: LAW OF DEMAND Law of demand explains the relationship between price of the commodity and its demand. The law states that there is inverse or negative relationship between the demand and price of the commodity, ceteris paribus i.e….
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BENEFITS OF IFRS IFRS stands for International Financial reporting Standards. These are the standards issued by the International Accounting Standard Board. It also covers the wide range of International Accounting Standards issued by the International Accounting Standard Committee. IFRS has replaced the GAAP (Generally Accepted Accounting Principles). These standards are to be used by the…
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