Commerce Students
Formation of Contract of Sale – CA Foundation Business Law Study Material Question 1.What is a contract of sale? What are the essentials of a valid contract of sale?Answer:According to Section 4(1) of the Sale of Goods Act, 1930, “a contract whereby the seller transfers or agrees to transfer the property in the goods to […]
Contingent & Quasi Contracts – CA Foundation Business Law Study Material Question 1.Define a contingent contract and explain its essentials.Answer:“A contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen” – [Section 31]. Contracts of insurance, indemnity and guarantee are examples […]
Performance of a Contract – CA Foundation Business Law Study Material Question 1.What is meant by tender of performance? What are the essentials of valid tender of performance? What is the effect of refusal by the promisee to accept a valid tender of performance in respect of goods and money?Answer:Attempted Performance or Tender / When […]
Consideration – CA Foundation Business Law Question 1.Define consideration. What are the legal rules/essentials regarding consideration? (C.A. Foundation MTP May 2019)Answer:Section 2(d) of the Contract Act define consideration as follows:(a) “When, at the desire of the promisor,(b) the promisee or any other person,(c) has done or abstained from doing, or does or abstains from doing, […]
Nature of Contract – CA Foundation Business Law Study Material Question 1.All contracts are agreements but all agreements are not contracts. Comment.Answer:As per section 2(h) of the Indian Contract Act, 1872, an agreement enforceable by law is a contract. Thus an agreement backed by enforceability by law i.e. the intention to create legal relations is […]
Depreciation – CA Foundation Accounts Question 1.Meaning of depreciation.Answer:Meaning of depreciation:An expenditure which results into enduring benefit (long-term benefit) are treated as capital expenditure/fixed assets. Fixed assets are those assets which are held for use in the business and not for sale or consumption in the course of production. Fixed assets which have a limited […]
Inventory Valuation – CA Foundation Accounts Question 1.Periodic inventory systemAnswer:Periodic/Physical inventory system No records of inventory are maintained. Inventory is ascertained by physical counting at the end of the year and then valued. It is simple and commonly followed by small organisations. Unless otherwise specified, we can always assume that inventory/closing stock for […]
Bank Reconciliation Statement – CA Foundation Accounts Question 1.Meaning of Bank Reconciliation StatementAnswer:Meaning of Bank Reconciliation Statement:A bank a/ c or bank book is maintained by us to record the transactions with bank. Similarly Bank maintains our a/c in their books. A copy of which is given to us known as Bank statement or passbook. […]
Accounting Process (Journal, Ledger, Trial Balance, Cash Book, Subsidiary Books) Question 1.Double Entry System.Answer:Double Entry System: This system was invented by an Italian merchant named Fra Luco Pacioli in 1494 A.D. According to this system, every transaction has got a two-fold aspect (dual aspect), i.e. one party giving the benefit and the other receiving the […]
Accounting Standards – CA Foundation Accounts Question 1.Need of Accounting StandardsAnswer:Need of Accounting Standards: Accounts gives information to various groups. The financial statement can serve the interest of different interest groups only if there is uniformity and full disclosure of relevant information. There are various alternatives regarding accounting treatment and valuation norms which may be […]