COLLECTIVE INVESTMENT SCHEME (CIS)
When the funds available with various investors are pooled together for investment, this is done through Collective Investment Schemes to share the returns.
According to Section 11AA of the SEBI Act, CIS is any scheme or arrangement, which satisfies the following conditions:
– the contributions, or payments made by the investors, by whatever name called, are pooled and utilized solely for the purposes of the scheme or arrangement;
– the contributions or payments are made to such scheme or arrangement by the investors with a view to receive profits, income, produce or property, whether movable or immovable, from such scheme or arrangement;
– the property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors;
– the investors do not have day to day control over the management and operation of the scheme or arrangement.
This type of funds are created to lower the costs of raising funds by achieving the economies of scale. The pooled funds are grouped into Master trust account under the control of the bank, which acts as trustee, guardian, executor or administrator.
Here is a quiz to clear the various aspects related to Collective Investment Scheme (CIS). Take the quiz to check your Knowledge on collective Investment Scheme (CIS).
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- Question 1 of 10
Production account comprises ofCorrect
Production account is prepared in three parts. The first part gives the cost of production, the second part gives the cost of goods
sold and the third part shows cost of sales or total cost for the period.Incorrect
- Question 2 of 10
Maintaining separate cost accounts under Unit Costing System is not necessary.Correct
Unit costing is suited for concerns producing a single product.Cost per unit in that case can be calculated by dividing the total expenditure incurred by the number of units produced.Incorrect
- Question 3 of 10
If the details of cost sheet or production statement are shown in the form of a ledger account, it is known as production accountCorrect
If the details of cost sheet or production statement are shown in the form of a ledger account, it is known as production account.Incorrect
- Question 4 of 10
Cost unit can be understood asCorrect
Cost unit can be understood as unit of product or services in relation to which costs are ascertained.Incorrect
- Question 5 of 10
Cost sheet is aCorrect
Cost sheet is prepared as a statement.Incorrect
- Question 6 of 10
Basic method of costing is/areCorrect
Basic methods of costing are Continuous operation/Process costing and Specific order/Job costing .Incorrect
- Question 7 of 10
Unit costing system is preferable forCorrect
Unit costing system is best suited for industries which have homogeneous products. Above industries are example of such industries.Incorrect
- Question 8 of 10
Net Income before Interest and tax is also calledCorrect
Net Income before Interest and tax is also called Operating Income/Profit.Incorrect
- Question 9 of 10
Production Account is based onCorrect
Production Account is based on actual figures.Incorrect
- Question 10 of 10
An account giving details of cost of production, cost of sales and profit made during a particular period is calledCorrect
An account giving details of cost of production, cost of sales and profit made during a particular period is called production account.Incorrect