ACCOUNTS ANSWER IN ONE SENTENCE

31. What is an ‘Endowment Fund’?
Ans. A fund created by ‘Not for profit’ concern from the gift or donation given by the donor, the income of which is used or devoted for specific purpose is called endowment fund.

32. What is ‘Life Membership Fee’?
Ans. The fee paid by a person who desired to become a member of the organisation for his whole life is called as ‘Life Membership Fee’.

33. What do you mean by Single Entry System?
Ans. A book – keeping system that only records one aspect of each business transaction. i.e. either debit or credit is called single entry system.

34. Which accounts are normally kept under the single entry system?
Ans. Generally, the personal accounts relating to debtors and creditors and cash – book are kept under the single entry system.

35. Which statement is prepared under the single entry system to ascertain the capital?
Ans. Statement of Affairs is prepared under the single entry system to ascertain the capital.

36. What is Statement of Affairs?
Ans. A statement which is prepared under the single entry system on the basis of estimated balances of various assets and liabilities is called ‘Statement of Affairs’.

37. Which statement is prepared under the single entry system to ascertain profit?
Ans. Statement of Profit or Loss is prepared under the single entry system to ascertain profit.


38. What do you mean by qualified acceptance?
Ans. If the drawee of a bill of exchange accepts it on condition that the time or amount of the bill be changed or adds some other conditions to the bill,  his acceptance is called a qualified acceptance.

39. What is the term of the bill of exchange?
Ans. The period for which the bill of exchange is drawn and accepted is called the term of the bill of exchange.

40. What is bill of exchange?

According to Section 5 of the Negotiable Instrument Act, 1881, "A Bill of Exchange is an instrument in writing and containing an unconditional order, signed by the maker, directing a certain person to pay on demand or at a future date a certain sum of money only, to the order of a certain person or to the bearer of the instrument".

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