Mundrisoft Solutions Interview Questions and Answers

Journal entry for prepaid rent paid at beginning and end of month affecting net worth.

• Debit prepaid rent account for the full amount paid at the beginning of the month

• Credit cash account for the same amount

• At the end of the month, debit rent expense account for the portion of rent used during the month

• Credit prepaid rent account for the same amount

• The entry at the end of the month affects the net worth as it reduces the prepaid rent asset and increases the rent expense

• Example...read more

The entry for share purchased today credited into demat on T+2 is a debit to the cash account and a credit to the demat account.

• Debit cash account

• Credit demat account

• Occurs on T+2

• Reflects purchase of shares

The share price has an impact on the issue of dividends as it affects the dividend yield and the amount of cash paid out to shareholders.

• Share price affects the dividend yield, which is calculated by dividing the annual dividend per share by the share price.

• A higher share price reduces the dividend yield, making the stock less attractive to income-seeking investors.

• Share price also affects the amount of cash paid out as dividends. A higher share price may result in a lower di...read more

The technical term for bond interest is coupon rate.

• Coupon rate is the fixed annual interest rate paid on a bond.

• It is expressed as a percentage of the bond's face value.

• For example, a bond with a face value of $1000 and a coupon rate of 5% will pay $50 in interest annually.

• Coupon payments are usually made semi-annually or quarterly.

RBI increases Repo rate to control inflation by reducing money supply and increasing cost of borrowing.

• Repo rate is the rate at which RBI lends money to commercial banks.

• When RBI increases Repo rate, it becomes expensive for banks to borrow money from RBI.

• Banks then increase their lending rates to customers, which reduces borrowing and spending.

• This reduces money supply in the economy, which helps in controlling inflation.

• For example, if inflation is high, RBI may increase Re...read more