A scrip issue is an offer of free shares to current owners of a company's stock.

It’s a
way for firms to save cash but still provide an income to shareholders as an alternative
to paying a dividend.

Also known as a capitalisation issue or bonus issue, a scrip is a type of secondary

issue that increases the number of shares in circulation to boost liquidity in the market.

The nominal value, or book value, of a share, is usually assigned when the stock is issued. Also
called the face value or par value, the nominal value of the stock is its redemption price and is
normally stated on the front of that security.

A rights issue is an invitation to existing shareholders to purchase additional new shares in the
company. This type of issue gives existing shareholders securities called rights. With the rights,
the shareholder can purchase new shares at a discount to the market price on a stated future
date. The company is giving shareholders a chance to increase their exposure to the stock at a
discount price.

There are five commonplace approaches to financial statement analysis: horizontal analysis,

vertical analysis, ratio analysis, trend analysis and cost-volume profit analysis. Each technique
allows the building of a more detailed and nuanced financial profile.

Accounting period concept is based on the theory that all accounting transactions of a business
should be divided into equal time periods, which are referred to as accounting periods.
The purpose of such a time period is that financial statements can be prepared and presented to the
investors and also help in comparing performance of the business with each time period.
By preparing financial statements within a particular time period, a company is able to determine the
profit and loss that occurred during the period for the business.
The lack of a proper accounting period will result in variation of results and makes it difficult to
determine the financial position of the company at that time.
Generally an accounting period is of 12 months (1 year). While the time period is fixed, the month
can vary from company to company.
Types of Accounting Period in Accounting
The following types of accounting period can be seen in accounting:
1. Calendar Year
2. Fiscal Year
Calendar Year: The companies that follow the calendar year, their accounting period starts from 1st
January to 31st December of the same year.
Fiscal Year: For companies that follow the fiscal year, the accounting period starts from the first day
of any other month apart from January.

Advantages of Accounting period concept

Following are some of the advantages of the accounting period concept
1. It is helpful in preparing financial statements that show the financial position of the business for a
fixed time period.
2. Financial data pertaining to two accounting periods can be compared.
3. Investors can check the progress or decline of the company by referring to the trends of financial
data over time periods.

Disadvantages of Accounting period concept

Following are a few disadvantages of the accounting period concept:
1. For different tax periods, there is a need for maintaining two separate accounts.
2.Comparison of two financial periods does not take into account the factual reasons that are behind
the observed differences between the periods.
This concludes the topic of Accounting Period Concept, which is an important topic of Accountancy
for Commerce students. For more such interesting articles, stay tuned to BYJU’S.

Matching principle is especially important in the concept of accrual accounting.

Matching principle states that business should match related revenues and
expenses in the same period. They do this in order to link the costs of an asset or
revenue to its benefits.

Example of Matching Principle

The expense must relate to the period in which the expense occurs rather than on
the period of actually paying invoices. For example, if a business pays a 10%
commission to sale
what are Cumulative Preference Shares? Cumulative
preference shares give shareholders the right to receive
cumulative dividend payouts from the company even if they are
not profitable. These dividends will be counted as arrears in
years when the company is not profitable

participating preferred stock is a type of preferred stock that

gives the holder the right to receive dividends equal to the
customarily specified rate that preferred dividends are paid to
preferred shareholders, as well as an additional dividend based
on some predetermined condition.

Noncumulative preference shares are those shares that provide

the shareholder a fixed dividend amount each year from the
company's net profit. Still, if the company fails to pay the
dividend on such preference shares to the shareholder in any
year, then such dividend cannot be claimed by the shareholder
in the future.