lhat s joint Stock company,explain its featuses, mesis

and de mesitS
are

heavy ancl ladge industSies

Foo levelopin9 economy,

teured
undes Toint stock Campany line
This can be Setup
esouSCesthe e n t e amout
ePa eit be
Even tecquires losge Coapita
Each poat encon os a
shose
divided into Small pots.
Tre pesson caho holds tte shase is knoton
oS a hose holde

Deainition As pes indian Companies fct 15 6, t is an association af

Creoted by au, raving ontiouow existence and Cormm
petsons,

Sect

feotus-es

Associerton oa pesons
reoted by la
contiruou enstente
Conmmon Seal

oeq atration s Cornpul sory

linted tiability

mesits
emebi
irancial Sousces
) mooe
fooma tiGn a length psoce
Conl3ol
)Umited liabilky u hiqh Govenment
t) Contiruous exis tence n) Deloy in decaions.

Poomotes savinq hobit wNepotism and favourtism

Expansion lack of oitiation

l a c k offo:tiation
PusinesS qsooth and
vi) rofes siond managenment eqal psocedue to Stad alompar
Vi)
vi)to Stort any Compary much legal
public Contidence
nal: ti e Should be follotocd
vii)Social henitit
(D

C
(D C

BO

re ce cion
Touah os depseiof
n h s oge GDPte in come employment sote toill folll doo
The distsisurtion onatioal nome
The
Charqes
feactuses
trmorne ts in economic ctivrty trade cucle is a wave, moving
a

in economie atvittes cotth

apar d and doonooad skcams
pesiodica mOmentsto ornplele atsade ,a tsadecycle pesiodit
talees - 1R yeass pe8(od
3 SLsternatie mannes tgade Cucle phases ust be rove
to Sustermatc manner .e ane aftes onne
diffes ent pases Evesy eoth diffesent ot
economy movin
proses T secove boom peaB, etiysi60 tough stops
5Oncertainity to busness me n
basiner s pessen Cc poe dict
No
about the stoaes n tsade
cyel e too rrany Yeass cell eiat fos
each and
eve6y stoge f tcte cyde a n ' t b e psodicted

Deire accountingeiplain its

and Conveti Conceps
ors
AccoArting ndsinty been tesrm ed os the larquage o businesf
he sic Junctio ota (arguage ' to sesve as a mean o
COmmuni Cation
Accounting as0 Seove t+hia -functon J t Communicates the

esult 6fbusiness opesati ons to voooug posties oo a e sorre

Stcake m busine $s via. pso p i e t o , Cse ditooS, i nvestorS, 0vesnment

and othes aencies

Accaunting concepts
Se pasate enti ty Concept
)oinq Concer Concet
3) Mone y mea sugement Conc ept

) Cost Concept
s)pua
SDual Aspect Concept
hS eiad
6) Accountinq Pesioo ondepi ontept
 Pesiodic metching d cost ard Tevenue Concoqt
Realition Concopt
1.
Sepesct entitu Concopt
Jn accountirg busin esS
Consides ed o be asepagate entity fsom
the poo peie tod
Amay e a ppeas lud csoS ttat ae
pesc6N Con sell qoods -to himself
bu th'u Concept u
etsemeyhelpful
stsietly fsee fso m -tre effect of
in
keepinq busines affass
ps'ivate ffaus of the
P6operietors
Goind Concesn Concept.
AccoBAiNG to this Concept a 9SUned that the
fos busine soif ntinue
a
foisly longtime to
come
hese s herthes tre intention no te
porticulao ineis ventuse
necetty-to quidate tho
in. tre
fose seeable futuse.
Oo account of thg
onepttre accountat cohle val uirg asserts,
doesnot lake into oCount tre forted Sole yoalue o
Teentes Psile Coil not be Constdesed o cuseh
t has ore ito liq,ui dolbn o6 1E aPin9 Concesn Ldken
ras belome
icolue nt
3Money meosusemerrt Gncept

Accounting decT dt onty monetay hyonsotiong .Events ot

rangocti on Cuhieh cannot be erpresd in money olo fot
toce in kmol OccoO n thoughthey may be very ugeful
fobudiness
Ths helps in ndestandr t e state o adfal ss of Eaness in
a rnuch betteT Oay

Cost oncopt
Closel selated to 9oing Conces ndapl

a a n assegt odinaity e ntere d n tre Occoutirng ecosds

at poice poie to acqice i t nd
 tha Cost is tre isis for call
aSsefs
StubsequeH Occaunticq
accountirq for
fo6 the
ihe

Dua aspect Concept

occo6ckirg to -tha oncopt eve busine cs tsargo ction hos a
danl effect
eyuities Pssel (o)
Liabilttes 4 Co pi tal Assets
The equrtion Con be technicolly stered os tosery debit
here u auivalent Credit ".As a mnater of tocd tto entire
Sysfem double erts hook- eeping ' bosed on hu lon copt
6 Acceunting pesiod Concept
T Pe of ousiness is dvided into appoopoiale Seamonks for
Sudying e eul4s hoo by bosiness oftes each SeamCnt
dying
p e c a s e though he 1ife of i n e ss Consideved to be

nde finie,the measusement oinCome & studjingthe tinan ca

pes tion

peeodi matching CosfS and sevenue oncopt

b o s e d on tre ac cauntirg pesiod concept The pammaunt

ob
objert e o G u r 9 a husines tuaing a pesiod t

ereksary 4rot 'vevenue

s pesiod shoul el hemot hed
e col o ebiod
Peol afro ( eA
te u s roisod e n o ole u m S
4 oe
 ACcotrtirng Comvertions
Corse5votion: einital cfages o ac
ountirq, cootain
tich pated psofits cohich e ecosded dd nat rnatesiaise
TR esul ted ir tess
accept-ai ty couhti nq tiguse
by end-usets
- On ac cout of ths e atcoutants fo
ut
lGoantiipcte no pof
poovide-fotall possi be l6sses, ohtle
secosctin
business tsans actor

Full disctosuse
Accosctng-to ths Gnventton accau rirg eparLs chould dore
fuy and -aisty the
infos matior tey puc post
-the Conventton a
aaining r
tovepseent
busineSes ave rur by eim portanco be auce most ke
joint ctoc k Componi e s Corese
ones ship ckuovded 6om
mranaqement
3Consstency

Convention ac couting pro.ctices Shoulo

Acco6cling to this
gemain unchonqec fsom one pesiod to andos

fed Ssets
accoting to
3depseciation charged on

he di mins hinq olance method, it should e done yepo

after tecs
This is necesscTY tosthe pus poses of Compasison ffotoeve,
onsiste n y b e s not meap inflei bi lty

tMg tesiat
Accosfing' to this conventio n h e ac courtant hould attach
inpootance to matesial details and qn oe insiqnificant delaiu.

hoc be noled tha t aCcounting s CCman macto cad cles qcd

to hetp man in ochieving Ceotain Objective

Moseover, an itern nay e n a teöia | f

r anotheed
os one udpdse (ohile
i n mate vial
LCohart s atio eaploin s clossitication
Rafion aralysis quantitatve method of
a
goining irsighnt
insight into a CompanyS iauid opesa ti onal eticency,
and pro fita bi lity by Studyinq its inancial Stote ments
Such o balance sheet and incorme Staterne nt
iuicitY tios- are sed to measure tte ftsm's abilty to
tneet Cu6Tent Obliqations
Solvency oatios-show the poo postion of debt and equity ''n

tina ncing the tism's assets

ctiv ity Ttiosoe veflet the tom's effciency n utilig ing the
aSSels
P.
Rofftability otiosmeasuGe te Gesall pestoomance and efleetive-

ness of thevm

ttio AnalySu types

iouidity eofito bitty solvency Tusnoves Eosnng

tio atio Catto tatio
nent Euity tied osset oft
Ssoss fotit
CuGcent Gaio, ,Fatio Tusnoves vatio Caonins
Cotio xtio
ntesest dnentor y
uicH ation opeaiting
psofit atio, Co vesae tcrtio T ecning
Pet
Net Shase:
PeceivaHe
PoRt 6otio TR
Petutn on oita
Cployed:,
i c l y tios Cusent saitioi CuGoent Assels Cussert liablties
esveney satios pe t Potio total debt | Tctolpsset
EfftienCGatos Cle b otiio lotal de l lotal asset

Bofitn bility Catios let Mogin tNel Incomel Sales

 oftabilHy Rttios oamula

Gros soti motcin GsoSs Rofit yin

J
Sales

scifing
OPe
peofit mo opesating poofit (O0
Coles
Net poofit iosgin Net intorne
- xtoo
Sales

Retusn on asets Net income xtoo

Acsets

Retum on tuy lel Jrcome

Shoseholdess Equity

SCefine Capital
udgefinaexplain e
Siqnifcance
Capitalbudeeting
Capirtal budqeting uhe
pso ceys of mokng investment decision
in long-ter m o Ssets 05 Cou 6Ses actioo.

Copital e pe ndit use incuss ed today

epected o bsing t
cenitts oves a pesiod of tine
-tese ependituge s are elated to the acqustion impovemet
o firves asets

Significonce:
Capital hodgtin9 e Planing expendituse and ne
enefrtcohieh Spread dves a
no Yea6S
3t he psoces of decdinq ohethe 06 not of invest ina

reticuloe pomjec t, os the investment oossii Tities troy not

be CCum tdirq
The roanagee hag to chooce a 0 e c l w h i c h qives a rate o

dus, cohich nose ihan te

osto tinancinq the ptojet
FOoths manaqe as to
ealua te tte sosth d
tto oosth
n-tess o Cost and bene toe poojecia
pojecla
fits.
The benc i s are e
epected Choshhth-ocos torme
tre psoet
p6jet
ich e disCounted
against astardoad ene
COital seythe Cost