1.
Define non-trading concern.
2.
State any four characteristics of a non-trading concern.
3.
What is a receipts and payments account?
4.
What is an income and expenditure account?
5.
Describe the main points involved in converting a receipts and payments account into an income and expenditure account?
6.
What is a capital fund?
7.
How do accountants treat new assets?
8.
In accounting, what is a legacy?
9.
What is the accounting treatment of deficits?
10.
What is a special subscription?
Non-Trading Concerns Q&A FAQs
Non-trading is an accounting term used to describe a company's activities that do not result in the generation of income or the incurrence of expenses. In other words, non-trading means that a company is not conducting any business operations. Non-trading can be caused by several factors, such as a company being in the process of being sold or being wound up.
There are a few benefits to non-trading, including the following: First, it can help a company's Cash Flow position by preventing it from incurring any expenses. It can make it easier for a company to be sold or wound up. It can help a company's Financial Statements from being clouded by irrelevant activity. Lastly, it can help to improve a company's financial position by reducing its liabilities and increasing its assets.
There are a few drawbacks to non-trading, including the following: First, it can lead to a company becoming dormant, which can have negative consequences such as a loss of tax exemptions. It can make it more difficult for a company to raise capital. It can impact a company's ability to compete in the market. It can make it more difficult for a company to attract and retain employees. It can lead to a decrease in the value of a company's shares. It can result in a company being sued by its creditors. Lastly, it can result in a company being investigated by the authorities.
There is no definitive answer to this question as it will depend on the specific circumstances of each case. However, it is generally recommended that a company should try to move out of non-trading as soon as possible to avoid any negative consequences.
A company can be in non-trading and trading at the same time, but this would be rare. Normally, if a company is conducting any business activities, it will be considered to be trading and not non-trading.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.
