SSC CGL Exam  >  SSC CGL Videos  >  SSC CGL Tier 2 - Study Material, Online Tests, Previous Year  >  Income, Expenditure and Balance Sheet

Income, Expenditure and Balance Sheet Video Lecture | SSC CGL Tier 2 - Study Material, Online Tests, Previous Year

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FAQs on Income, Expenditure and Balance Sheet Video Lecture - SSC CGL Tier 2 - Study Material, Online Tests, Previous Year

1. What is income and how is it calculated?
Ans. Income refers to the money earned by an individual or a company through various sources such as wages, salaries, investments, or business activities. It is calculated by adding up all the revenue generated during a specific period.
2. What is expenditure and how is it categorized in a balance sheet?
Ans. Expenditure refers to the money spent by an individual or a company on various expenses such as salaries, utilities, rent, or raw materials. In a balance sheet, expenditure is categorized into two main categories: operating expenditure and non-operating expenditure. Operating expenditure includes expenses directly related to the core business activities, while non-operating expenditure includes expenses that are not directly related to the core business.
3. How is a balance sheet prepared and what does it represent?
Ans. A balance sheet is prepared by listing all the assets, liabilities, and owner's equity of a company at a specific point in time. It represents the financial position of the company by showing the relationship between its assets (what it owns), liabilities (what it owes), and owner's equity (the owner's investment in the company).
4. What is the importance of maintaining a balance between income and expenditure?
Ans. Maintaining a balance between income and expenditure is crucial for financial stability. If expenses exceed income, it leads to a deficit and may result in financial difficulties. On the other hand, if income exceeds expenditure, it creates a surplus that can be used for savings or investments. Balancing income and expenditure helps in managing cash flow, meeting financial obligations, and achieving long-term financial goals.
5. How can an individual or a company improve its balance sheet position?
Ans. An individual or a company can improve its balance sheet position by taking the following steps: - Increasing income through various sources such as expanding business activities, investing in income-generating assets, or finding additional sources of revenue. - Reducing unnecessary or non-essential expenses to lower the overall expenditure. - Managing liabilities by paying off high-interest debt, negotiating better loan terms, or refinancing existing debts. - Increasing owner's equity by retaining profits and reinvesting them back into the business or personal investments. - Regularly reviewing and updating the balance sheet to track progress and make necessary adjustments.
1375 videos|1309 docs|994 tests
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