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Any claim for money against the assets of a business firm is called liability. Liability is a financial obligation of an enterprise other than owner’fund.  Liabilities is a legal debits of the firm. It means that the firm has to settle the liability either after paying money or render services or to transfer the goods to another person or persons …

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When some money is deposited with any third person for some specific purpose that is called deposits in business terms. The security may be deposited for the following purposes in a business firm:- 1. Security deposits for electricity. 2  Security deposits for water 3. Security deposits for telephone. 4. Security deposits for sales tax. 5. Security deposits with suppliers. 6. …

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When a business firm gives any loan to its employees or to its sister concerns or to its directors then this loan is shown in asset side of the balance sheet because it is recoverable in future as per the terms of conditions of loans given. Normally, a company other than finance company should avoid of giving the loans. Of …

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When a company needs some funds for its working capital or to purchase some fixed assets or for some other purposes,  it has an option to take loan from open market. But the person who gives the loan to a company, would like to have some written proof regarding the interest rate, date of payment of interest and repayment of …

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Any profit that arises in a company in special circumstances is called capital reserves. In other words, any profit or gain that arises other than routine business activities is treated as capital reserves. Following are the example of capital reserves:- Profit prior to incorporation of company:- Every limited company is legal and independent entity and does not come in to …


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