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Sia ? 4 years, 7 months ago
The times interest earned (TIE) ratio is a measure of a company's ability to meet its debt obligations based on its current income. The result is a number that shows how many times a company could cover its interest charges with its pretax earnings.
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Raman Dhillon 5 years, 3 months ago
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Yogita Ingle 5 years, 3 months ago
Capital receipts do not have a nature of recurrence and do not occur again and again but once in the accounting year and also, they are mentioned on the balance sheet in the liability corner. The non-operating sources generating the income are capital receipts, and they have a long-term effect.
Revenue receipts are just like a part of normal and common business operations that is why they occur again and again contrary to the capital receipts but have the short-term benefits.
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Yogita Ingle 5 years, 3 months ago
A capital reserve is the type of reserve that is created from capital profits. The purpose for which a capital reserve is created is for preparing the company for sudden events like inflation, business expansion, funds for a new project.
A capital reserve is created from capital profit earned through sales of capital assets such as the sale of fixed assets, profit on the sale of shares.
The special property of capital reserve is that these are permanently invested and cannot be used for any other purpose apart from which it is created.
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Yogita Ingle 5 years, 4 months ago
Partnership Deed: It is a document which contains the terms and conditions of partnership agreement.
A firm should have a partnership deed because:
(i)It regulates the rights, duties and liabilities of the partners.
(ii)It avoids disputes in future by acting as a proof.
Aaiman Farhin 5 years, 4 months ago
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Meghna Thapar 5 years, 3 months ago
Super profit is the method in which an excess of average profits over normal profits. Under this method, goodwill is estimated on the basis of super-profits. Calculate Super Profit as follows: Super Profit = Maintainable Average profits – Normal Profits. Calculate goodwill by multiplying super profit by the number of year's purchase. Super profit is the excess of average profits over normal profits. Under this method, goodwill is calculated on the basis of super profits. Normal rate of return on the capital employed is compared with the actual average profits to find out the super profits.
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