NTA UGC NET/JRF Exam, Dec. 2019 Commerce (Evening-Shift)

Public limited company:-
-A public limited company is a voluntary association of members that are incorporated and, therefore has a separate legal existence and the liability of whose members is limited.
- Public limited company are listed on the stock exchange where it's share/ stock are traded publicly.
- The whole process of company formation may be divided into the following four stages:
(C) Preliminary expenditures
↓
(B) Firm incorporation
↓
(D) Issue of equity share to promoters of the company
↓
(A) Public Issue of shares (IPO)

Tax deducted at source -
-TDS stand for 'Tax deducted at source'
-It was introduced to collect tax at the source from where an individuals income generated.
The government uses TDS as a tool to collect tax in order to minimize tax evasion by taxing the income (Partially or wholly) at the time it is generated rather than at a later date. The following are the correct statements about TDS certificates:

1- form 16: form 1b is your salary TDS certificate
2- form 16A- is also TDS certificate while from 16 is for only salary income, form 16 A is applicable for TDS on Income other than salary.
3-Form 16B- Form 16 B for tax deduction at source verifies the volume of tax deduction at source when Making a property purchase.
-In a nutshell, this is a TDS certificate for all TDS deducted upon property sale.
4- Form 16 C:- form 16 C is the TDS certificate to be issued by the deductor (Tenant of property) to the deductee (landlord of property) in respect of the tax deducted and deposited as TDS on rent under sec. 194- IB of the Income -tax act 1961.

The following are the explanation for the correct match :

(A) Pay-back period method simply projects incoming cash flows from given project and identifies the break-even point between profit and paying back invested money for a given process.

(B) The pay-back period refers to the amount of time it takes to recover the cost of an investment.

-Shorter pay-backs mean more attractive investment.
-Therefore, The payback period method concerns more with the recovery of the cost than profitability.

(C) The NPV technique measures the present value of the future cash flows that a project will produce. -A positive NPV means that the investment should increase the value of the firm and lead to maximizing share hold wealth.

-Thus, using NPV as a guideline for capital investment decision is consistent with the goal of Creating wealth.

(D) Accounting rate of return (ARR) is a formula that reflects the percentage rate of return expected on an investment, or asset. compared to the initial investments cost  -

ARR does not consider the time value of money or cash flows. Which can be an integral part of maintaining a business.

Maximization of firm's growth rate subject to managerial and financial Constraints as one of the important alternative objectives of the especially large business corporations was pleaded by Robin marris.
-Robin marris suggested an alternative objective of
'Maximization of firm's growth rate.'
-According to marris, managers have their own goals other than profit maximization, which is the goal of shareholders on owners.

Treasury Bill are the main instrument of short term Borrowing these are popularity known as T.Bill
- Bill issued by the government of the country.
T. Bill is a specific type of promissory notes issued by government to pay a specific sum after a specified period of time on behalf of government, these bill are sold by the central bank.

Features- Highly liquid short term instrument. T.Bill are issued by RBI with different maturity period such as 91 day, 182 days, and 364 days treasury Bill.
- T. Bill Quality to include in SLR
- Issued in multiple of 25000
-Subsequently 91 Day To bills were introduced on an auction basis in January 1993. --

-When the 91 days ad-hoc To Bills were discontinued in April 1997, to enable finer cash management of the government and to provide an avenue for state governments and some foreign central banks to invest surplus funds. 14 day To Bill were introduced in April 1997. 

The following are the explanation for the correct Match:

Cheque (Sec-6)'A cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of truncated cheque and a cheque in the electronic form.

Parties:-
Drawer:- The person or entity whose transaction on account is to be drawn usually, the drawers name and account is preprinted on the cheque, and the drawer is usually the signatory
Payee :- The person or entity who is to be paid the amount.
Drawee:- The bank or other financial Instruction where the cheque can be presented for payment.
This is usually preprinted on the cheque.

According to Gerstenberg " capital structure refers to the makeup of a firm's capitalization" in other words it represents a mix of different source of longterm founds.
In general, the exports in finance define the term capital structure to include only long-term debt and total stockholders' Investment.
-NET Operating Income (NOI) Approach:- This approach is propounded by Durand.
- According to this approach the overall cost of Capital value of the firm is independent of capital structure decisions and a change in the degree of financial leverage does not bring about and change in the value of the firm and cost of capital.
-The net operating income approach says that the value of a firm depends on operating income and associated business risk.

Income- tax (Double taxation relief) (ADEN)Rules, 1953- - In exercise of the powers available under section 49A of the 1922 Act, the Government of India had issued a Notification dated 24/03/1953 called the Income- tax (Double Taxation relief) (Aden) Rules 1953 Providing for grant of relief in respect of income on which tax has been paid both in India and Aden.