Important Definitions Chapter Company Account - 2nd Year I.Com

Important Definitions Chapter Company Account - 2nd Year I.Com

1. Define joint stock company.

 Ans: A comics an artificial person recognized by law, having separate legal entity, common seal and share with limited liability.

2. Define the term promoters.

Ans: Promoters are those person who take responsibility of bringing a company.

3. What is certificate of incorporation.

Ans: If the registrar is satisfied in all matters about company, After that a certificate issued this is called certificate of incorporation.

4. Define preliminary expenses.

Ans: The expenses are incurred in the formation of the company, is known as preliminary expenses.

5. Define Memorandum of association.

Ans: A document defining the constitution of the company is called Memorandum of association.

6. Define Article of association.

Ans: A document containing the rules and regulations of the company is called Article of association.

7. Define underwriter.

Ans: Underwriters are those person who give the guarantee to sale the shares of a public company to general public on commission.

8. What is prospectus.

Ans: A document consist on inviting offers to the public to subscribe for the shares is termed as prospectus.

9. What is Authorized capital.

Ans: The total amount of share capital which is registered by a company is called Authorized capital.

10. What is chartered company.

Ans:  The company which is incorporated by Royal order is called chartered company.

11. Define the term Debentures.

Ans:  A certificate issued by a company under its seal or acknowledgement of a debt are known as debentures.

12. Define the term Shares.

Ans:  The total amount of capital of a company is divided into smaller units. These units are called shares.

13. What is collateral security.

Ans:  When company take a loan from bank and give debentures to the bank as additional security against loan is called collateral security.

14. What is Goodwill.

Ans:  A good reputation of a business is called Goodwill.

15. Define public limited company.

Ans:  The company which issues shares to the public and is formed under companies ordinance 1984, is called public limited company.

16. Define private limited company.

Ans:  The company is formed with at least two members and maximum of fifty members. It cannot issue shares to general public.

17. Who are directors.

Ans:  In company some peoples elect by the share holders to run the management of the company, these persons are called directors.

18. Who is Vendor.

A vendor means a seller. To vend means to sell. Any retailer of goods or commodity can be called a vendor.

19. What is reserve capital.

Ans:  A reserve which is created out of the capital profit is known as capital reserve.