Definition: Reverse Merger when a listed public company with no business is acquired by an unlisted private company with a viable business. Another term for the reverse merger is: Reverse Takeover (RTO) Reverse Initial Public Offering. What is Merger? A merger is when a large company subsumes a small company. Also, it involves the exchange of cash and shares. But, … [Read more...] about Reverse Merger
Audit Report
Definition: Audit Report is the formal written opinion about the entity’s financial statements. The auditor conveys the report to the management at the end of the audit. Apart from the opinion on the statements, it also includes factual information. It is a medium of communication of the views of the auditor to the company’s management. Hence, he submits the report created … [Read more...] about Audit Report
Audit Evidence
Definition: Audit evidence refers to the information gathered or recorded by the auditor while performing the audit work to form a conclusion on each element, on which the opinion is based. For obtaining audit evidence, a number of audit procedures are applied by the auditor. It is the duty of the auditor to give an opinion on the financial statements presented by the … [Read more...] about Audit Evidence
Store Management
Definition: Stores Management deals with undertaking the right type of materials in sufficient quantity, in a prompt manner whenever needed, to keep it safe against any sort of damage, pilferage, or theft. It is a part of material management. It involves actual material handling which is received held and issued. Based on the store size the store manager, general manager, or … [Read more...] about Store Management
Public Deposits
Definition: Public Deposit can be described as a form of short-term financing, often unsecured in which the company invites deposits from the general public to fulfill its working capital requirements. In this, the general public, deposits money with non-banking companies. It is just like a loan raised by the company from the public. Here, the word public is an umbrella term … [Read more...] about Public Deposits
Discount
Definition: Discount implies a concession or deduction allowed at a specified rate from the price of the goods given by the seller to the buyer or by the creditor to the debtor. It is given to lure customers and promote sales. The amount of discount must be received or paid with regard to the terms of the sales agreement. Here, it is to be noted that discount is always … [Read more...] about Discount
Shell Company
Definition: Shell Company implies a fictitious company with no active business operations. These companies are formed with an aim of achieving specific business objectives which may or may not be legitimate. Such companies do not have a physical existence, as they exist only on paper. Meaning that it has no office, no staff, no assets, but just a bank account, to carry out … [Read more...] about Shell Company
Dishonor of Negotiable Instrument
Definition: Dishonor of Negotiable Instrument refers to the state when the party who has to pay the sum in an instrument fails to honor it. In other words, it implies the loss of honor for the instrument indicating the unsuitability of the instrument to realize funds. Types of Dishonour On the dishonor of the negotiable instrument, the holder of the instrument must issue a … [Read more...] about Dishonor of Negotiable Instrument
Right Shares
Definition: Right Shares or Right Issue implies an invitation to the company's existing shareholders to buy additional new shares through a Letter of Offer. These shares are introduced, at a discounted price, i.e. the price at which the company's existing shareholders will buy the shares is lower in comparison to the market price of the shares. In general, the company brings … [Read more...] about Right Shares
Bonus Shares
Definition: Bonus Shares imply the free additional shares given to the existing shareholders, depending on the number of shares held by them. Bonus shares are the accumulated earnings of the company which are not given as dividends, rather they are transformed into free shares. It occurs when the company does not distribute profits, in the form of dividends, rather than it … [Read more...] about Bonus Shares