A promissory note is an instrument,bank reconciliation statement.,A non-cash expense is an expense

A promissory note is an instrument in writing, not being a bank note or a currency note, containing an unconditional undertaking signed by the maker to pay a certain person. Under Section 31(2) of the Reserve Bank of India Act, a promissory note cannot be made payable to bearer.

Generally a statement is prepared to show the effect on unpresented and uncredited cheques. Such statement is known as bank reconciliation statement.

Generally a statement is prepared to show the effect on unpresented and uncredited cheques. Such statement is known as bank reconciliation statement.

A non-cash expense is an expense

 that is reported on the income statement of the current accounting period, but there was no related cash payment during the period. Depreciation is reduction in the value of a depreciable fixed assets due to usage, wear and tear and obsolescence. 

Fixed assets are used in productive work and on account of continuous use and effluxion of time, value of these assets (from efficiency point of view) starts declining and a time comes when these assets become useless/waste. 

Since fixed assets lose their value gradually with the effluxion of time and such lost value cannot be recovered. Depreciation is allocated so as to change fair proportion of depreciation (depreciable amount) in each accounting period during the expected life of assets. Depreciation is an expired portion of the cost of the assets due to usage or wear and tear. The reason it is non-cash expenses for the period is that because it is an a mortised cost of something already paid for in the past. preference share.

Redemption of Preference Shares:

company limited by shares may issue redeemable preterence shares to be.redeemed at a fixed date or after a certain period. For redemption of preference shares following conditions as per provisions of Section 80 of the Companies Act, 1956 (as amended in 1988) are to be complied with: 

U. The articles of association of the company must provide for the issue of redeemable preference shares. 

2. There shares may be redeemed only out of the profits available for dividend or out of the proceeds of a fresh issue of shares (equity or preference) made for the purpose of redemption. )

 3. These shares must be fully paid before redemption

 (4. If shares are redeemable at a premium, it (premium on redemption) must have been provided for out of share or security premium account or out of profits.) 

5. Where shares are redeemable out of the profits available for dividend a sum equal to the nominal amount of the preference shares redeemed shall be transferred out of profits to the capital redemption reserve account. This reserve cannot be used for any purpose except for issuing fully paid bonus shares to company's members. It means capital redemption reserve is to be or will the treated as paid up capital. 

6. The redemption of preference share by a company shall not be taken as reducing the amount of its authorised share capital. )

 7. If new shares are issued for the purpose of redemption of preference shares. It will not be treated as increase of capital but replacement of capital. 

(8. For redemption, no fixed asset should be sold for arranging cash required. Vissue of Irredeemable Preference Shares : 

Earlier companies could issue irredeemable preference shares also. However after the Companies (Amendment) Act, 1988, no company can issue irredeemable preference shares or redeemable preference shares which are redeemable after 20 years of its issue. Objectives : 

There seems to be two objectives of the provision that preference shares may either be redeemed out of divisible profits or out of the proceeds of fresh issue: (a) To Maintain Liquidity in the Company : 

When fresh shares are issued for the purpose of redemption, liquid funds of company are not reduced.Cash paid to preference shareholders is compensated by the amount of cash received on fresh issue of share further.)If redemption is made

out of the profits, profits is block by transferring to capital redemption reserve value of assets presenting profits is permanently retained in the business, since, capital, redemption reserve may be used only for issuing fully paid bonus shares. To Protect the Interest-of Creditors Above provision also protects the interest of creditors) If redemption is allowed through issue of debentures or by sale of assets, asset coverage for creditors will be reduced.IBut when shares are issued for the purpose of redemption, or redemption is made out of the divisible profits assets available for creditors are not diluted redemption by conversion. If preference share are to be redeemed by converting them into some other type of shares, 

preference shareholders will be issued shares : 

Pref. shareholders A/c Dr. To Share capital

 Such conversion will not require any transfer of resume or profits to capital redemptions ressume. Also no issue will be required.

 VProceeds' of the IssueAccording to Section 80 of the Companies Act, 1956, preference shares may be redeemed out of the proceeds of the fresh issue of shares. The literal meaning of the word 'proceeds' implies total receipts of the issue including premium But if pre the proceeds, it will contravene the provisions of Section 78 oř the Companies Act, 1956. Section 78 specifically provides to the uses to which share premium may be put to.These provisions do not include redemption of preference shares, Therefore, while computing'the amount of fresh issué, the amount of share premium should be excluded But when shares are issued at discount, the proceed will be excluding discount of net of if any discount, if shares are issued against payment in instalments, proceed will be amount received upto allotment of shares. Divisible Profits According to Section 80 of the Companies Act, 1956 one of the sources of redemption of preference shares is profit which is otherwise available for dividend Therefore, while transferring profit to capital redemption reserve, case should be taken to distinguish the divisible is also included in profit from other profits.