Category: Interview Questions

1. 1. What Is A Thermocouple?

   • A Thermocouple is a sensor used to measure temperature. Thermocouples consist of two wire legs made from different metals. The wires legs are welded together at one end, creating a junction. This junction is where the temperature is measured. When the junction experiences a change in temperature, a voltage is created. The voltage can then be interpreted using thermocouple reference tables (linked) to calculate the temperature.
   • There are many types of thermocouples, each with its own unique characteristics in terms of temperature range, durability, vibration resistance, chemical resistance, and application compatibility. Type J, K, T, & E are “Base Metal” thermocouples, the most common types of thermocouples. Type R, S, and B thermocouples are “Noble Metal” thermocouples, which are used in high temperature applications (see thermocouple temperature ranges (linked) for details).
   • Thermocouples are used in many industrial, scientific, and OEM applications. They can be found in nearly all industrial markets: Power Generation, Oil/Gas, Pharmaceutical, BioTech, Cement, Paper & Pulp, etc. Thermocouples are also used in everyday appliances like stoves, furnaces, and toasters.
   • Thermocouples are typically selected because of their low cost, high temperature limits, wide temperature ranges, and durable nature.

2. 2. What Is A Cold (reference) Junction For Thermocouples?

   Cold, or reference junction, is the end of a thermocouple that provides a reference point.

   Thermocouples measure the difference in temperature between two junctions. They do NOT measure actual temperature. The sensing junction is where the thermocouple wires are welded (or otherwise connected) together, and located at a point where the temperature is desired. The other junction is typically located where it is connected to instrumentation (measuring device or transmitter). This is known as the cold or reference junction. Thermocouple millivolt tables and mathematical formulas are based on a cold junction temperature of 0°C. To determine actual temperature, the instrumentation must “adjust” for the difference between ambient temperature and 0°C. This adjustment is known as cold junction compensation.

Programmable Logic Controller (PLC) Interview Questions

3. 3. What Is The Difference Between A Thermocouple And Rtd?

   Temperature Range: 
   First, consider the difference in temperature ranges. Noble Metal Thermocouples can reach 3,100 F, while standard RTDs have a limit of 600 F and extended range RTDs have a limit of 1,100 F.

   Cost: 
   A plain stem thermocouple is 2 to 3 times less expensive than a plain stem RTD. A thermocouple head assembly is roughly 50% less expensive than an equivalent RTD head assembly.

   Accuracy, Linearity, & Stability: 
   As a general rule, RTDs are more accurate than thermocouples. This is especially true at lower temperature ranges. RTDs are also more stable and have better linearity than thermocouples. If accuracy, linearity, and stability are your primary concerns and your application is within an RTD’s temperature limits, go with the RTD.

   Durability: 
   In the sensors industry, RTDs are widely regarded as a less durable sensor when compared to thermocouples. However, REOTEMP has developed manufacturing techniques that have greatly improved the durability of our RTD sensors. These techniques make REOTEMP’s RTDs nearly equivalent to thermocouples in terms of durability.

   Response Time: 
   RTDs cannot be grounded. For this reason, they have a slower response time than grounded thermocouples. Also, thermocouples can be placed inside a smaller diameter sheath than RTDs. A smaller sheath diameter will increase response time. For example, a grounded thermocouple inside a 1/16” dia. sheath will have a faster response time than a RTD inside a ¼” dia. sheath.

4. 4. What Are The Thermocouple Junction Types?

   Grounded Thermocouples:
   This is the most common junction style. A thermocouple is grounded when both thermocouple wires and the sheath are all welded together to form one junction at the probe tip. Grounded thermocouples have a very good response time because the thermocouple is making direct contact with the sheath, allowing heat to transfer easily. A drawback of the grounded thermocouple is that the thermocouple is more susceptible to electrical interference. This is because the sheath often comes into contact with the surrounding area, providing a path for interference.

   Ungrounded Thermocouples (Or Ungrounded Common Thermocouples):
   A thermocouple is ungrounded when the thermocouple wires are welded together but they are insulated from the sheath. The wires are often separated by mineral insulation.

   Exposed Thermocouples (or “bare wire thermocouples”):
   A thermocouple is exposed when the thermocouple wires are welded together and directly inserted into the process. The response time is very quick, but exposed thermocouple wires are more prone to corrosion and degradation. Unless your application requires exposed junctions, this style is not recommended.

   Ungrounded Uncommon:
   An ungrounded uncommon thermocouple consists of a dual thermocouple that is insulated from the sheath and each of the elements are insulated from one other.

Power Electronics Tutorial

5. 5. What Is M.i. Cable?

   M.I. (Mineral Insulated) cable is used to insulate thermocouple wires from one another and from the metal sheath that surrounds them. MI Cable has two (or four when duplex) thermocouple wires running down the middle of the tube. The tube is then filled with magnesium oxide powder and compacted to ensure the wires are properly insulated and separated. MI cable helps to protect the thermocouple wire from corrosion and electrical interference.

Electrical Engineering

6. 6. How Are The Thermocouple Sheaths Different?

   316SS (stainless steel):
   This is the most common sheath material. It is relatively corrosion resistant and is cost effective.

   304SS:
   This sheath is not as corrosion resistant as 316SS. The cost difference between 316SS and 304SS is nominal.

   Inconel (registered trademark) 600:
   This material is recommended for highly corrosive environments.

7. 7. What Do Thermocouple Wire Colors Indicate?

   A thermocouple can be identified by the color of its wire insulation. For example, in the United States a type J thermocouple grade wire has one red wire and one white wire, typically with a brown over jacket. A type J extension grade wire also has one red wire and one white wire, but it has a black over jacket. As a general rule the red wire of a thermocouple or extension wire is negative and the positive wire is color coded according to the type of thermocouple. Different countries use different color codes.

Instrumentational Engineering

8. 8. What Is The Difference Between Thermocouple Wire Cable And Extension Grade Wire?

   Thermocouple grade wire is used to manufacture thermocouple probes. Thermocouple grade wire is normally used for the junction and inside the stem sheath. This is because the thermocouple grade wire has a better accuracy specification than extension grade wire.

   Extension grade wire is a less expensive, lower grade wire. It is used to extend the signal from the thermocouple probe to the control system or digital display. Extension grade wire is more economical due to a lesser grade metal being used. Extension grade wire should not be used in the process itself and should not see the temperature extremes & temperature cycling as standard grade wire.

9. 9. What Is Seebeck Effect?

   When two wires of different metals or metal alloys (thermo wires) are joined together in one end (hot junction), a thermocouple is formed. If there is a temperature difference between the hot junction and the open ends, a thermal electromotive force (a thermal voltage) is created in the thermocouple. This is also called the Seebeck effect.

Power Electronics

10. 10. What Is Cjc?

    A thermocouple measurement always needs information from joined wire end (hot junction) and open wire end (cold junction). The cold junction is also called reference point. Variations of reference point temperature are compensated with CJC measuring (Cold Junction Compensation). Temperature transmitters CJC measuring can be an internal function or a measuring resistor integrated in connectors. If the reference point is far away from the transmitter, a separate temperature measuring of that point has to be implemented and wired to transmitter as compensation signal.

11. 11. What Is Compensating Cable And Extension Cable?

    Compensating cable is a thermocouple measuring circuit cable, which is identified by the letter C (e.g. for type K cable KC). Wires of the compensating cable have the same electrical features, but not the same materials, as the thermo wires of the TC sensor. Compensating cable is a more cost effective solution than extension cable, but the maximum ambient temperature allowed is lower, approximately 100…200 °C depending on the insulation material.

    Extension cable is a thermocouple cable which is identified by the letter X (e.g. for type K cable KX). Wires of the extension cable are of exactly the same materials as the thermo wires of the TC sensor. These cables can achieve even the same ambient temperatures as the thermocouple can.

PLC/Microcontrollers/Microprocessors

12. 12. What Is Trace Heating / Sensor?

    Trace heating is a term usually used for keeping pipelines and attached devices unfrozen. The important function of trace heating is maintaining stable temperature and flow rate of the materials flowing through the pipeline. The most common implementation of trace heating is electrical, which offers good adjustability. However, for accurate process control and adjustment also precise temperature data is needed. For these applications we have designed our high quality trace heating sensors, which already have been available for years, also for Ex applications.

Programmable Logic Controller (PLC) Interview Questions

13. 13. What Size Thermowell Is Appropriate For My Application?

    Based on the design of your system you need to know:

    • Operating temperature (°C)
    • Operating pressure (bar), Specific volume (m3/kg)
    • Velocity (m/s)

    Once those are established then you’re ready to consult ASME standard PTC 19.3 TW-2010 Thermowell section, which goes through the calculation for the design of the well.

14. 14. Explain Pyrometer And Its Working?

    A Pyrometer is a non-contacting device that intercepts and measures thermal radiations. Without making any contact with the radiating body and the process is known as pyrometry. This device is useful for determining the temperature of an object’s surface.

    Pyrometer strictly works on the principle of black body radiation. Here emissivity of the target plays an important role, as it governs how bright the target appears to the pyrometer. Due to its high accuracy, speed, economy and specific advantages, it is widely being used as a standard procedure in many industrial applications.

    Working:

    • An optical system gathers the visible and infrared energy from an object and focuses it to the detector.
    • The detector receives the photon energy from the optical system and converts it to an electric signal to drive a temperature display or control unit.

15. 15. Explain Thermocouples Measuring Junction?

    An exposed (measuring) junction is recommended for the measurement of flowing or static non-corrosive gas temperature when the greatest sensitivity and quickest response is required.

    An insulated junction is more suitable for corrosive media although the thermal response is slower. In some applications where more than one thermocouple connects to the associated instrumentation,insulation may be essential to avoid spurious signals occurring in the measuring circuits. If not specified, this is the standard.

    An earthed (grounded) junction is also suitable for corrosive media and for high pressure applications. It provides faster response than the insulated junction and protection not offered by the exposed junction.

    Thermocouple Standards

    • ASTM E 235:
      Standard Specification for Thermocouples, Sheathed, Type K and Type N for Nuclear or for other High-Reliability Applications.
    • ASTM E 839:
      Standard Test Methods for Sheathed Thermocouples and Sheathed Thermocouple Materials.
    • ASTM E 220:
      Test Methods for Calibration of Thermocouples by Comparison Techniques
    • ASTM E 230:
      Specification and Temperature-EMF Tables for Standardized Thermocouples.
    • ASTM E 585:
      Standard specification for compacted MI, MS, base metal thermocouple cables.
    • ASTM E 608:
      Standard specification for compacted MI, MS, base metal thermocouples.
    • ASTM E 696:
      Standard specifications for tungsten – rhenium alloy thermocouple wire.
    • ASTM E 1652:
      Standard specification for Magnesium oxide & Alumina oxide powder & crushable insulators used in metal sheathed PRT’s, base metal thermocouples & noble metal thermocouple.
    • IS 12579:
      Specification for Base Metal Mineral Insulated Thermocouple Cables and Thermocouples.
    • GB/T 1598- 2010: Chinese standard for platinum thermocouples.
    • IEC 584:
      International standard for thermocouples.

Power Transmission

16. 16. What Are The Applications Of Thermowells?

    Thermowells provide protection for temperature probes against unfavorable operating conditions such as corrosive media, physical impact (e.g. clinker in furnaces) and high pressure gas or liquid. Their use also permits quick and easy probe interchanging without the need to “open-up” the process.

    The main application areas are:

    • Protection tube are used in thermocouples
    • Insures integrity in high pressure applications
    • Smaller wells are used in low pressure applications
    • Straight wells are used in corrosive and erosive environment
    • For applications where a quick response to changes in temperature is required, fabricated pockets may be fitted with a reduced tip.
    • One-piece Thermowells are suited to the highest process loads, depending on their design. Thus in the petrochemical industry, one-piece thermocouples are now used almost exclusively.

17. 17. What Are The Types Of Thermocouple Constructions?

    There are two types of thermocouple construction used most commonly.These are Mineral Insulated (M.I.) Thermocouples & Non M.I. Thermocouples.

    Mineral Insulated Thermocouples:

    • Magnesium Oxide insulated thermocouples, are used in many process and laboratory applications. They are rugged in nature and bendable, and their fairly high temperature ratings make MgO thermocouples a popular choice for a multitude of temperature measuring applications.
    • MgO sensors are constructed by placing an element or elements into a sheath of a suitable material and size, insulating the elements from themselves and the sheath with loose filled or crushable Magnesium Oxide powder or insulators, and then swaging or drawing the filled sheath down to its final reduced size. The swaging process produces an element with highly compacted MgO insulation and provides high dielectric strength insulation between the elements themselves and their sheath.
    • Mineral insulated Thermocouples consist of thermocouple wire embedded in a densely packed refractory oxide powder insulate all enclosed in a seamless, drawn metal sheath (usually stainless steel).
    • At one end cores and sheath are welded from a “hot” junction. At the other end, the thermocouple is connected to a “transition” of extension wires, connecting head or connector.

    Non M.I. Thermocouples:

    • In Non-M.I. thermocouples, thermocouple wires are either insulated with ceramic beads or after insulation of ceramic, covered by a metal sheath (usually stainless steel) and some form of termination (extension lead, connecting head or connector for example) is provided. In this type of construction thermocouple wires are protected from the measuring environment when a sheath protection is provided. The sheath material is dependent on the measuring environment usually stainless steel is used. According to the corrosive environment sheath selection is changed.
    • This construction does not provide flexibility & not found in small sizes. Not too good mechanical strength.
    • In Non M.I. construction sheath may be of ceramic or metal as per suitability.
    • Exposed, Grounded and Ungrounded all types of junctions are formed in both the M.I, & Non M.I. construction.

DC motor

18. 18. What Are The Principal Factors That Affect The Life Of A Thermocouple?

    Temperature:
    Thermocouple life decreases by about 50% when an increase of 50 °C occurs.

    Diameter:
    By doubling the diameter of the wire, the life increases by 2-3 times.

    Thermic cycling:
    When thermocouples are exposed to thermic cycling from room temperature to above 500°C, their life decreases by about 50% compared to a thermocouple used continuously at the same temperature.

    Protection:
    When thermocouples are covered by a protective sheath and placed into ceramic insulators, their life is considerably extended.

Electrical Engineering

19. 19. How To Choose A Thermocouple ?

    Because a thermocouple measures in wide temperature ranges and can be relatively rugged, thermocouples are very often used in industry.

    The following criteria are used in selecting a thermocouple:

    • Temperature range
    • Chemical resistance of the thermocouple or sheath material
    • Abrasion and vibration resistance
    • Installation requirements (may need to be compatible with existing equipment; existing holes may determine probe diameter).

20. 20. What Is The Response Time Of A Thermocouple?

    A time constant has been defined as the time required by a sensor to reach 63.2% of a step change in temperature under a specified set of conditions. Five time constants are required for the sensor to approach 100% of the step change value. An exposed junction thermocouple offers the fastest response. Also, the smaller the probe sheath diameter, the faster the response, but the maximum temperature may be lower. Be aware, however, that sometimes the probe sheath cannot withstand the full temperature range of the thermocouple type.

Induction Motors

21. 21. How Do We Know Which Junction Type To Choose?

    Sheathed thermocouple probes are available with one of three junction types: grounded, ungrounded or exposed. At the tip of a grounded junction probe, the thermocouple wires are physically attached to the inside of the probe wall. This results in good heat transfer from the outside, through the probe wall to the thermocouple junction. In an ungrounded probe, the thermocouple junction is detached from the probe wall. Response time is slower than the grounded style, but the ungrounded offers electrical isolation.

22. 22. How To Choose Between Thermocouples, Resistance Temperature Detectors (rtd’s), Thermistors And Infrared Devices?

    You have to consider the characteristics and costs of the various sensors as well as the available instrumentation. In addition, Thermocouples generally can measure temperatures over wide temperature ranges, inexpensively, and are very rugged, but they are not as accurate or stable as RTD’s and thermistors. RTD’s are stable and have a fairly wide temperature range, but are not as rugged and inexpensive as thermocouples. Since they require the use of electric current to make measurements, RTD’s are subject to inaccuracies from self-heating. Thermistors tend to be more accurate than RTD’s or thermocouples, but they have a much more limited temperature range. They are also subject to selfheating. Infrared Sensors can be used to measure temperatures higher than any of the other devices and do so without direct contact with the surfaces being measured. However, they are generally not as accurate and are sensitive to surface radiation efficiency (or more precisely, surface emissivity). Using fiber optic cables, they can measure surfaces that are not within a direct line of sight.

23. 23. What Are The Thermocouple Types ?

    Thermocouples are available in different combinations of metals or calibrations. The most common are the “Base Metal” thermocouples known as Types J, K, T, E and N. There are also high temperature calibrations – als known as Noble Metal thermocouples – Types R, S, C and GB.

    K Type Thermocouples are known as general purpose thermocouple due to its low cost and temperature range.

    This high temperature wire/thermocouple is produced using a wide range of materials, and is available with PVC, FEP, TFE, PFA, Fiberglass, and Ceramaflex insulation. However, if you see it referenced by “type” on a spec sheet, the description is referring to the kind of metal alloy used for the wire’s conductor.

    • Type E = Chromel/Constantan
    • Type J = Iron/Constantan
    • Type K = Chromel/Alumel
    • Type N = Nicrosil/Nisil
    • Type T = Copper/Constantan

    When an “X” follows the letter indicating which alloy was used in the cable, the cable is extension grade. In these cases, the types of cable are listed as Type EX, Type JX, Type KX, Type NX, or Type TX.

Control Valves

24. 24. What Is The Difference Between Thermocouple Grade Wire And Extension Grade Wire?

    Thermocouple grade wire is wire that is used to make the sensing point of the instrument, where extension grade wire is only used to extend a thermocouple signal from a probe back to the instrument reading the signal.

Instrumentational Engineering

25. 25. Explain Thermocouple Material Selection ?

    The various sheath materials are dependent upon the application. The following list will help you make the best selection:

    304 SS

    Maximum temperature of 1650°F (900°C) and is the most widely used low temperature sheath material. It offers good corrosion resistance but is subject to carbide precipitation in the 900°F to 1600°F (480 to 870°C) range.

    310 SS

    Maximum temperature of 2100°F (1150°C) and offers good mechanical and corrosion resistance similar to 304 SS. Very good heat resistance. Not as ductile as 304 SS.

    316 S

    Maximum temperature of 1650°F (900°C) and has the best corrosion resistance of the austenitic stainless steels. Subject to carbide precipitation in the 900°F to 1600°F (480 to 870°C)

    Inconel®

    Maximum temperature 2150°F (1175°C) and is the most widely used thermocouple sheath material. Good high temperature strength, corrosion resistance and is resistant to chloride-ion stress corrosion, cracking and oxidation. Do not use in sulfur bearing environments.

    Hastelloy X

    Maximum temperature 2200°F (1205°C) widely used in aerospace applications. Resistant to oxidizing, reducing and neutral atmospheric conditions. Excellent high temperature strength.

Q1. Give An Example Of Creating Button In Xaml ?

In XAML, a button can be created as in the following example:

Example:

Click Here

Q2. Explain Silverlight Architecture?

Silverlight is a plugin that is provided by the Microsoft. Silverlight architecture includes the functionality from core .NET framework, Ajax and having some of its own functionality such as animation, media etc. The architecture consists of four blocks:

.NET framework components:
WPF is .NET framework, used in Silverlight. 

Presentation core:
core presentation framework includes the display options such as images, vector animations etc.

Other technologies:
Ajax and JavaScript technologies are used to interact with Silverlight framework.

Hosting:
Silver-light animations run under the browser environment and it also provides lots of other application hosting programs.

Q3. How To Change The Default Page Of Silver Light Application?

To change the default page of silver light application, you need to set the Root Visual property inside the Application_Startup event of App.xaml file.

Example:

private void Application_Startup(object sender,StartupEventArgs e)
 {
this.RootVisual = new YourPage();
 }

Q4. What Happens If We Press F5 In Visual Studio To Run A Silverlight Application?

The following happens if we press F5 in Visual Studio to run a Silverlight Application.

a)A new folder is created in website project.(It happens only first time)
b)The name of the folder is Clientbin.
c)The folder contains the packages with .xap extension.

Q5. What Is The Real Advantage Of Using Excel/word Files Or Local Database In Silverlight?

The real advantage of using Excel or World files or any local database in Silverlight is that it provides easy to manage features for store and fetching the data, which are frequently used by the applications. It doesn’t rely much on WCF services to provide the properties for data communication. The data is automatically fetched and saved in excel or word sheets for future references.

Q6. Does Silverlight Application Supports Desktop Implementation?

Yes, Silverlight supports desktop implementation. Newer version of Silverlight provides out-of-browser facility, by using this feature it can be physically deployed on the local machine. Silverlight 4.0 supports OOB facility that enhances the communication with other applications like Word, Excel etc. and with the local database like MS Access etc.

Q7. What Is Storyboard?

Storyboard is a Silverlight class with controls animations with a timeline, and provides object and property targeting information for its child animations 

Given XAML below Code:

Q8. What Is Easing Functions In Silverlight?

Easing functions is used in Silverlight to utilise custom mathematical formulas to animations. For example,if we want an object to oscillate we could use we can use a corresponding mathmetical function to accurately depict this motion.

Q9. Can We Add The Reference Of A Class Library Project In Silverlight Application Project?

No, You can’t add the reference of a Class library inside the Silverlight application project. You can only add the reference of another Silverlight application project inside a Silverlight application project.

However, you can add the reference of a Web Service or WCF services.

Q10. How Can Be A Silverlight Application Shown In Full-screen Mode?

You can show the silverlight application in full-screen mode by using the following command:

Application.Current.Host.Content.IsFullScreen = true;

Q11. What Is Silverlight Run Time?

Silver light run time is a plug-in for browsers to support silver-light enabled applications. If silver light run time is not installed, browsers will not be able to run silver light elements in the browser. We can setup the silver light tags such a way that your browser will automatically prompts the user to download and install the silver light plug-in when your application is launched in the browser.

Q12. What Are The Advantages Of Extensible Application Markup Language (xaml) Over C# Or Vb.net?

XAML is the language which is used with Silverlight. It is one of the growing languages that has lots of features and properties. The advantages of it over C# or VB.NET are that:

C# or VB.NET provide development by using coding whereas, XAML provides codeless development and provides lots of features to create complex user interface controls etc. It can also define an instance of class which is being already defined by C# or VB.NET.

Q13. What Is .xap File?

.xap file is a silver light based application package that is generated when the silver light project is built.Once we have created the .xap file, the silverlight plug-in downloads the file and runs it in a separate workspace.

Q14. Can You Provide A List Of Layout Management Panels And When You Will Use Them?

Canvas Panel:
Use the canvas for simple layouts and when there is no need to re-size panel. Controls can overlap each other when resizing the panel.

Stack Panel:
Use this for grouping controls in a stack (horizontal/vertical). Controls do not overlap.

Grid Panel:
Most flexible, multi rows/columns layouts. Similar to a HTML table.

Q15. Can You Name Built-in Layout Panels You Have Been Using With Silverlight?

You are looking for Canvas, StackPanel and Grid.

Q16. What Is The Difference Between Wpf And Silverlight?

Silverlight uses a particular implementation of a XAML parser, with that parser being part of the Silverlight core install. In some cases, the parsing behavior differs from the parsing behavior in Windows Presentation Foundation (WPF), which also has a particular implementation.

Q17. What Are The Restrictions Of Web Service Accessing In Silverlight?

Silverlight provides and supports lots of features but there are some restrictions as well, such as WS-Security and WS-Addressing are not supported. When working with the languages such as ASMX/JAVA/PHP, you need to see that you have SOAP 1.1 and WS-I Basic Profile 1.@Silverlight only support GET and POST actions, others are not supported. It doesn’t have full http features also.

Q18. What Is The Use Of Clientbin Folder?

ClientBin folder is used to place the .xap file of Silverlight application. You can keep this anywhere in your web application but this is the default that is used by the Silverlight.

Q19. Can We Add The Reference Of Class Library Project In Silver Light Application Project?

No, we can’t add the reference of class library inside the silver light application project. We can only add the reference of another silver light application project inside the silver light application project.However, we can add the reference of Web Service or WCF Service.

Q20. What Are The Steps Will Followed When Consuming Wcf In Silver Light?

4 simple steps to consume WCF service using Silver light

• Create the WCF service
• Enable Cross Domain for your WCF service
• Add the WCF service reference
• Call the Service

Q21. What Type Of Applications Can Be Developed Using Silverlight?

Silverlight is a plug-in, which can be used to develop web based or mobile based applications. Silverlight is used in those applications where you need to represent the graphics or the output should be in graphical format. Silverlight can be used in various types of Line-of-Business applications such as: Healthcare, Insurance, Logistics etc. One of the good example of its application is healthcare application.

Q22. What Is Silverlight.js File?

Silverlight.js is a helper file which enables Web sites to create advanced Silverlight installation and instantiation experiences.

Q23. What Is Name Scope In Silverlight?

Name scope in Silverlight stores the relationship between XAML and the objects which are being defined by the XAML, with their instance equivalents. Whenever, you create a new object, a new name scope will automatically be created. But, there is a problem in this, when name scope is being created for the dynamic objects, sometimes it causes an exception to occur or some kind of error.

Q24. What Is .xap File In Context Of Silverlight?

The .xap file is a compressed output file for the Silverlight application. This file includes AppManifest.xaml, compiled output assembly of the Silverlight project (.dll) and other resource files referred by the Silverlight application.

Q25. What Is Story Board In Silverlight?

A Storyboard in the Silverlight is a container where we can put animation objects. We need to make the Storyboard a resource that is available to the objects that we want to animate.

Q26. What Is Xaml ?

Extensible Application Markup Language (XAML, pronounced zammel) is a declarative XML-based language created by Microsoft which is used to initialize structured values and objects.

Q27. What Browsers And Platforms Are Supported By Silverlight Version 2?

Silverlight version 2 supports all popular browsers like Internet Explorer,Firefox,Safari on Both Mac OS and windows OS.

Q28. What Are The Controls Provided In Silverlight For Line-of-business (lob) Applications?

Silverlight provides lots of applications for Line-of-Business (LOB) to have better communication among the elements and also to enrich the properties of the application. The controls which are being provided by the Silverlight are as follows:

Data Grid:
The representation of data in a grid form

Data Form:
Representation of data in a form 

Chart controls:
Representation of data in chart forms and has additional functionality to display the controls for customization.

Q29. How Can Be The Default Page Settings Changed For A Silverlight Page ?

You can change the default page settings of a silverlight page.

This can be done by setting the RootVisual property in the Application_Startup event of the App.xaml file.

This is done as follows:

Private void Application_StartUp(object sender, StartupEventArgs e)

{

   this.RootVisual = new MainPage();

}

Q30. What Is A .xap File?

xap file is a Silverlight-based application package (.xap) that is generated when the Silverlight project is built.

Q31. Which Types Of Video Files Can Silverlight Support?

Silverlight can support many types of video files.
This platform can support MP3, Windows Media Audio format (wma, wmv7-9), and also VC-1 formats.

Q32. Can You Use Any Specific Patterns In Silverlight Programming?

Yes, you can use any specific patterns in Silverlight programming, as it provides Model-View or View-Model approach. This approach provides the provision to create loosely coupled application where the code is completely isolated from XAML. Prism which is a set of classes provided for development of such applications can also be used to provide more flexibility.

Q33. Explain Deep Zoom In Silverlight?

• Deep Zoom is one of the features of silverlight.
• This Deep Zoom function is to zoom in and zoom out the application.
• The main advantage of this zooming is that, it will not affect the performance of the application.

Q34. What Is The Use Of Client Bin Folder?

Client Bin folder is used to place the .xap file of silver light application. We can keep this anywhere in our web application but this is the default that is used by silver light.

Q35. Give The Reasons How Ajax Is Better Than A Java Applet?

• As we know that, the applications with Ajax runs faster when compared to Java applet.
• This is because, Java applets load big sized libraries.
• But in Ajax, code resides on the web server where, only the required event in the user interface is posted back to the server.

Q36. What Is The Parent Xaml Tag Of Silverlight Page?

UserControl is the parent xaml tag of the Silverlight page. All other tags are placed under UserControl tag.

     xmlns=”http://schemas.microsoft.com/winfx/2006/xaml/presentation” 
    xmlns:x=”http://schemas.microsoft.com/winfx/2006/xaml” 
    Width=”400″ Height=”300″>

 
   

Q37. What Is The Relationship Between Silver Light, Wpf And Xaml?

Silverlight is used to read and render the user interface (UI) elements. XAML is a XML file that defines the user interface elements. This file is being read by the WPF framework. Microsoft developed WPF framework and then extended it to WPF/e, which helped the application to render user interface in the browser. Silverlight is being officially launched by Microsoft.

Q38. How Can You Change The Startup Page Of Silevrlight Application?

Open the App.xaml.cs file
In the Application_Startup event handler, set the RootVisual property to the instance of the particular SilverlIght class

example:
if we have a file known as MainPage.xaml, a class known as MainPage will be there in MainPage.xaml.cs.

private void Application_Startup(object sender, StartupEventArgs e)

{

this.RootVisual = new MainPage();

}

Q39. Where Is The Silverlight Application Present?

Silverlight application resides on the host computer where the ASP.NET is installed. It resides in the ASP.NET webpage, but it can be hosted on other HTML pages too, by using the extension .xap. Silverlight application is made available to the browser when a user makes a HTTP request to ASP.NET page.

Q40. What Is Isolated Storage?

Silver light uses isolated storage as a virtual file system to store data in a hidden folder on your machine. It breaks up the data into two separate sections:

Section #1 contains the administrative information such as disk quota

Section #2 contains the actual data.

Each silver light application is allocated its own portion of the storage with the current quota set to be 1 MB per application.

 

Q41. What Types Of Security Measures Are Provided With Silverlight?

Silverlight is Microsoft based technology and it come up with some security features, to make it secure to use and implement. For secure communication its applications makes use of WCF services and uses WCF security features. SSL (Secure Socket Layer) can be used for security mechanism to give the trport layer security.

1. 1. What Is A Bug?

   A computer bug is an error, flaw, mistake, failure, or fault in a computer program that prevents it from working correctly or produces an incorrect result.

2. 2. What Is A Test Case?

   Test case is set of input values, execution preconditions, expected results and execution Post conditions, developed for a particular objective or test conditions, such as to exercise a particular program path or to verify compliance with a specific requirement.

LoadRunner Interview Questions

3. 3. What Is The Purpose Of Test Plan In Your Project?

   Test plan document is prepared by the test lead, it contains the contents like introduction, objectives, test strategy, scope, test items, program modules user procedures, features to be tested features not to tested approach, pass or fail criteria, testing process, test deliverables, testing, tasks, responsibilities, resources, schedule, environmental requirements, risks & contingencies, change management procedures, plan approvals, etc all these things help a test manager understand the testing he should do & what he should follow for testing that particular project.

4. 4. When The Relationships Occur Between Tester And Developer?

   Developer is the one who sends the application to the tester by doing all the necessary code in the application and sends the marshal id to the tester. The tester is the one who gives all the input/output and checks whether he is getting required output or not. A developer is the one who works on inside interfacing where as the tester is the one who works on outside interfacing.

LoadRunner Tutorial

5. 5. When Testing Will Starts In A Project?

   The testing is not getting started after the coding. After release the build the testers perform the smoke test. Smoke test is the first test which is done by the testing team. This is according to the testing team. But, before the releasing of a build the developers will perform the unit testing.

QTP

6. 6. If A Bug Has High Severity Then Usually That Is Treated As High Priority, Then Why Do Priority Given By Test Engineers/project Managers And Severity Given By Testers?

   High severity bugs affects the end users .testers tests an application with the users point of view, hence it is given as high severity. High priority is given to the bugs which affects the production. Project managers assign a high priority based on production point of view.

7. 7. What Is The Difference Between Functional Testing And Regression Testing?

   Functional testing is a testing process where we test the functionality/behaviour of each functional component of the application. i.e. minimize button, transfer button, links etc.i.e we check what is each component doing in that application.

   Regression testing is the testing the behaviour of the application of the unchanged areas when there is a change in the build.i.e we check whether the changed requirement has altered the behaviour of the unchanged areas. The impacted area may be the whole of the application or Some part of the application.

QTP Tutorial
Agile Testing

8. 8. Do U Know About Integration Testing, How Does U Integrate Different Modules?

   Integration testing means testing an application to verify the data flows between the modules. For example, when you are testing a bank application, in account balance it shows the 100$as the available balance. but in database it shows the 120$. Main thing is “integration done by the developers and integration testing done by the testers.”

9. 9. How You Test Database And Explain The Procedure?

   Database Testing is purely done based on the requirements. You may generalize a few features but they won’t be complete. In general we look at:
   1. Data Correctness (Defaults).
   2. Data Storage/Retrieval.
   3. Database Connectivity (across multiple platforms).
   4. Database Indexing.
   5. Data Integrity.
   6. Data Security.

Manual Testing

10. 10. What Are The Contents Of Frs?

    F-Function Behaviours.
    R-Requirements (Outputs) of the System that is defined.
    S-Specification (How, What, When, Where, and Way it behavior’s).
    FRS : Function Requirement Specification.
    This is a Document which contains the Functional behavior of the system or a feature. This document is also known as EBS External Behaviour Specification – Document. Or EFS External Function Specification.

Agile Testing Tutorial

11. 11. What Is Meant By Priority And Severity?

    Priority means “Importance of the defect w.r.t customer requirement.”
    Severity means “Seriousness of the defect w.r.t functionality.”

Quality Management

12. 12. Differentiate Between Qa And Qc?

    QA:
    It is process oriented.
    It evolves in entire process of software development.
    Preventing oriented.

    QC:
    It is product oriented.
    Work to examine the quality of product.
    Deduction oriented.

LoadRunner Interview Questions

13. 13. Explain V-model For Testing?

    Typical “V” shows Development Phases on the Left hand side and Testing Phases on the Right hand side.
    1. SRS/BRS User Acceptance. 
    2. Analysis/Design System Testing. 
    3. HLD Integration Testing.
    4. LLD Unit Testing. 
    5. Coding.

Quality Management Tutorial

14. 14. Define Priority& Severity?

    Severity: It is the impact of the bug on the application. Severity level should be set by tester. The Severity levels are: Low, Medium, and high, very high and Urgent. It is set by the tester and it can not be changed.
    1. Bug causes system crash or data loss.
    2. Bug causes major functionality or other severe problems; product crashes in obscure cases.
    3. Bug causes minor functionality problems, may affect “fit and finish”.
    4. Bug contains types, unclear wording or error messages in low visibility fields.

    Priority: How important is it to fix the bug is priority. Priority levels are set by the team lead or test manager and it can be changed as required.
    1. Must fix as soon as possible. Bug is blocking further progress in this area.
    2. Should fix soon, before product release.
    3. Fix if time; some what trivial. May be postponed.

15. 15. What’s The Value Of Doing Regression Testing?

    Regression testing is initiated after a programmer has attempted to fix a recognized problem or has added source code to a program that may have inadvertently introduced errors. It is a quality control measure to ensure that the newly modified code still complies with its specified requirements and that unmodified code has not been affected by the maintenance activity.

Quality Control

16. 16. Define Regression Testing?

    The selective retesting of a software system that has been modified to ensure that any bugs have been fixed and that no other previously working functions have failed as a result of the reparations and that newly added features have not created problems with previous versions of the software. Regression is also referred to as verification testing.

Selenium Tutorial

17. 17. What Are Two Benefits Of Manual Testing?

    First, since there is no such an automated test tool could replace mankind intelligence, we need to use manual testing to cover the part that automated testing can’t cover. Second, before the stable version comes out, manual testing is more effective than automated testing because automated testing may not be completed for system instability, crash for example.

Selenium

18. 18. What Are Two Benefits Of Automated Testing?

    First, with high speed and efficiency, automated testing can release the manpower from the complicated and repeated daily tests to spare consumption and time. Second, with high accuracy, automated testing will never make a mistake just like mankind does under tiredness after long time testing.

QTP

19. 19. How Much Testing Is ‘enough’?

    Testing work is unlimited, especially in large applications. The relatively enough testing is just to make application match product requirements and specifications very well, including functionality, usability, stability, performance and so on.

Qlik View Tutorial

20. 20. How Do You Know When To Stop Testing?

    Its hard to make a decision. Most of the modern applications are very complex and run in an interdependent circumstance, so the complete testing will never be done. However, there are some common factors for me to know when to stop testing, which are deadlines, test cases completed with certain percentage passed, test budget used up, coverage of functionality and requirements reaches a specified point, bug rate falls below the specified level, milestone testing ends and so on.

Qlik View

21. 21. What Is Trm?

    TRM means Test Responsibility Matrix. This is a vital reference document to ensure all the requirements are covered by at least one test case.It indicates mapping between test factors and development stages.

    Test factors like
    : Ease of use, reliability, portability, authorization, access control, audit trail, ease of operates, maintainable etc.
    Development stages like
    : Requirement gathering, Analysis, design, coding, testing, and maintenance.

22. 22. What Makes A Good Test Engineer?

    A good test engineer has a test to break attitude, an ability to take the point of view of the customer, a strong desire for quality, and an attention to detail. Tact and diplomacy are useful in maintaining a cooperative relationship with developers, and an ability to communicate with both.

Bugzilla Bug Tracking System Tutorial

23. 23. What Is The Software Life Cycle?

    The life cycle begins when an application is first conceived and ends when it is no longer in use. It includes aspects such as initial concept, requirements analysis, functional design, internal design, documentation planning, test planning, coding, document preparation, integration, testing, maintenance, updates, retesting, phase-out, and other aspects.

Bugzilla Bug Tracking System

24. 24. What Is Good Code?

    Good code is code that works, is bug free, and is readable and maintainable. Some organizations have coding standards that all developers are supposed to adhere to, but everyone has different ideas about whats best, or what is too many or too few rules. There are also various theories and metrics, such as Mccabe Complexity metrics. It should be kept in mind that excessive use of standards and rules can stifle productivity and creativity. Peer reviews, buddy checks code analysis tools, etc. can be used to check for problems and enforce standards.

Agile Testing

25. 25. What Is Software Quality?

    Quality software is reasonably bug-free, delivered on time and within budget, meets requirements and/or expectations, and is maintainable.

Software testing Tutorial

26. 26. What Are 5 Common Problems In The Software Development Process?

    a). Poor requirements – if requirements are unclear, incomplete, too general, or not testable, there will be problems.
    b). Unrealistic schedule – if too much work is crammed in too little time, problems are inevitable.
    c). Inadequate testing – no one will know whether or not the program is any good until the customer complains or systems crash.
    d). Futurities – requests to pile on new features after development is underway; extremely common.
    e). Miscommunication – if developers dont know whats needed or customers have erroneous expectations, problems are guaranteed.

Software testing

27. 27. What Is An Inspection?

    Inspection is more formalized than a walkthrough, typically with 3-8 people including a moderator, reader, and a recorder to take notes. The subject of the inspection is typically a document such as a requirements spec or a test plan, and the purpose is to find problems and see whats missing, not to fix anything. Attendees should prepare for this type of meeting by reading through the document; most problems will be found during this preparation. The result of the inspection meeting should be a written report. Thorough preparation for inspections is difficult, painstaking work, but is one of the most cost effective methods of ensuring quality. Employees who are most skilled at inspections are like the eldest brother in the parable in Why is it often hard for management to get serious about quality assurance.

Manual Testing

28. 28. What Is A Walkthrough?

    A walkthrough is an informal meeting for evaluation or informational purposes. Little or no preparation is usually required.

Mantis Bug Tracking Tutorial

29. 29. What Is Verification And Validation?

    Verification:
    typically involves reviews and meetings to evaluate documents, plans, code, requirements, and specifications. This can be done with checklists, issues lists, walkthroughs, and inspection meetings.
    Validation:
    typically involves actual testing and takes place after verifications are completed. The term IV & V refers to Independent Verification and Validation.

Test Cases

30. 30. Why Does Software Have Bugs?

    • Miscommunication or no communication – as to specifics of what an application should or shouldn’t do (the applications requirements).
    • Software complexity – the complexity of current software applications can be difficult to comprehend for anyone without experience in modern-day software development. Windows-type interfaces, client-server and distributed applications, data communications, enormous relational databases, and sheer size of applications have all contributed to the exponential growth in software/system complexity. And the use of object-oriented techniques can complicate instead of simplify a project unless it is well-engineered.
    • Programming errors – programmers, like anyone else, can make mistakes.
    • Changing requirements (whether documented or undocumented) – the customer may not understand the effects of changes, or may understand and request them anyway – redesign, rescheduling of engineers, effects on other projects, work already completed that may have to be redone or thrown out, hardware requirements that may be affected, etc. If there are many minor changes or any major changes, known and unknown dependencies among parts of the project are likely to interact and cause problems, and the complexity of coordinating changes may result in errors.
    • Time pressures – scheduling of software projects is difficult at best, often requiring a lot of guesswork. When deadlines loom and the crunch comes, mistakes will be made.
    • Poorly documented code – its tough to maintain and modify code that is badly written or poorly documented; the result is bugs. In many organizations management provides no incentive for programmers to document their code or write clear, understandable, maintainable code. In fact, its usually the opposite they get points mostly for quickly turning out code, and there is job security if nobody else can understand it (if it was hard to write, it should be hard to read).

31. 31. What Is Software Quality Assurance?

    Software QA involves the entire software development PROCESS – monitoring and improving the process, making sure that any agreed-upon standards and procedures are followed, and ensuring that problems are found and dealt with. It is oriented to prevention.

32. 32. What Is Software Testing?

    Software Testing can be defines as under:-
    • Testing involves operation of a system or application under controlled conditions and evaluating the results (eg, if the user is in interface A of the application while using hardware B, and does C, then D should happen). The controlled conditions should include both normal and abnormal conditions. Testing should intentionally attempt to make things go wrong to determine if things happen when they shouldnt or things dont happen when they should. It is oriented to detection.
    • Organizations vary considerably in how they assign responsibility for QA and testing. Sometimes they are the combined responsibility of one group or individual. Also common are project teams that include a mix of testers and developers who work closely together, with overall QA processes monitored by project managers. It will depend on what best fits an organizations size and business structure.

Performance Testing

33. 33. How Do You Introduce A New Software Qa Process?

    It depends on the size of the organization and the risks involved. For large organizations with high-risk projects, a serious management buy-in is required and a formalized QA process is necessary. For medium size organizations with lower risk projects, management and organizational buy-in and a slower, step-by-step process is required. Generally speaking, QA processes should be balanced with productivity, in order to keep any bureaucracy from getting out of hand. For smaller groups or projects, an ad-hoc process is more appropriate. A lot depends on team leads and managers, feedback to developers and good communication is essential among customers, managers, developers, test engineers and testers. Regardless the size of the company, the greatest value for effort is in managing requirement processes, where the goal is requirements that are clear, complete and testable.

Quality Management

34. 34. What Is The Role Of Documentation In Qa?

    Documentation plays a critical role in QA. QA practices should be documented, so that they are repeatable. Specifications, designs, business rules, inspection reports, configurations, code changes, test plans, test cases, bug reports, user manuals should all be documented. Ideally, there should be a system for easily finding and obtaining of documents and determining what document will have a particular piece of information. Use documentation change management, if possible.

35. 35. What Is A Test Plan?

    A software project test plan is a document that describes the objectives, scope, approach and focus of a software testing effort. The process of preparing a test plan is a useful way to think through the efforts needed to validate the acceptability of a software product. The completed document will help people outside the test group understand the why and how of product validation. It should be thorough enough to be useful, but not so thorough that none outside the test group will be able to read it.

36. 36. What Should Be Done After A Bug Is Found?

    When a bug is found, it needs to be communicated and assigned to developers that can fix it. After the problem is resolved, fixes should be re-tested. Additionally, determinations should be made regarding requirements, software, hardware, safety impact, etc., for regression testing to check the fixes didn’t create other problems elsewhere. If a problem-tracking system is in place, it should encapsulate these determinations. A variety of commercial, problem-tracking/management software tools are available. These tools, with the detailed input of software test engineers, will give the team complete information so developers can understand the bug, get an idea of its severity, reproduce it and fix it.

Quality Control

37. 37. What Is Extreme Programming And What’s It Got To Do With Testing?

    Extreme Programming (XP) is a software development approach for small teams on risk-prone projects with unstable requirements. It was created by Kent Beck who described the approach in his book ‘Extreme Programming Explained’ .Testing (‘extreme testing’) is a core aspect of Extreme Programming. Programmers are expected to write unit and functional test code first – before the application is developed. Test code is under source control along with the rest of the code. Customers are expected to be an integral part of the project team and to help develope scenarios for acceptance/black box testing. Acceptance tests are preferably automated, and are modified and rerun for each of the frequent development iterations. QA and test personnel are also required to be an integral part of the project team. Detailed requirements documentation is not used, and frequent re-scheduling, re-estimating, and re-prioritizing is expected.

38. 38. How Can World Wide Web Sites Be Tested?

    Web sites are essentially client/server applications – with web servers and ‘browser’ clients. Consideration should be given to the interactions between html pages, TCP/IP communications, Internet connections, firewalls, applications that run in web pages (such as applets, javascript, plug-in applications), and applications that run on the server side (such as cgi scripts, database interfaces, logging applications, dynamic page generators, asp, etc.). Additionally, there are a wide variety of servers and browsers, various versions of each, small but sometimes significant differences between them, variations in connection speeds, rapidly changing technologies, and multiple standards and protocols. The end result is that testing for web sites can become a major ongoing effort.

39. 39. How Does A Client/server Environment Affect Testing?

    Client/server applications can be quite complex due to the multiple dependencies among clients, data communications, hardware, and servers. Thus testing requirements can be extensive. When time is limited (as it usually is) the focus should be on integration and system testing. Additionally, load/stress/performance testing may be useful in determining client/server application limitations and capabilities. There are commercial tools to assist with such testing.

40. 40. What If An Organization Is Growing So Fast That Fixed Qa Processes Are Impossible

    • This is a common problem in the software industry, especially in new technology areas. There is no easy solution in this situation, other than.
    • Hire good people.
    • Management should ‘ruthlessly prioritize’ quality issues and maintain focus on the customer.
    • Everyone in the organization should be clear on what ‘quality’ means to the customer.

Selenium

41. 41. How Can Qa Processes Be Implemented Without Stifling Productivity?

    By implementing QA processes slowly over time, using consensus to reach agreement on processes, and adjusting and experimenting as an organization grows and matures, productivity will be improved instead of stifled. Problem prevention will lessen the need for problem detection, panics and burn-out will decrease, and there will be improved focus and less wasted effort. At the same time, attempts should be made to keep processes simple and efficient, minimize paperwork, promote computer-based processes and automated tracking and reporting, minimize time required in meetings, and promote training as part of the QA process. However, no one – especially talented technical types – likes rules or bureacracy, and in the short run things may slow down a bit. A typical scenario would be that more days of planning and development will be needed, but less time will be required for late-night bug-fixing and calming of irate customers.

42. 42. What If The Application Has Functionality That Wasn’t In The Requirements?

    It may take serious effort to determine if an application has significant unexpected or hidden functionality, and it would indicate deeper problems in the software development process. If the functionality isn’t necessary to the purpose of the application, it should be removed, as it may have unknown impacts or dependencies that were not taken into account by the designer or the customer. If not removed, design information will be needed to determine added testing needs or regression testing needs. Management should be made aware of any significant added risks as a result of the unexpected functionality. If the functionality only effects areas such as minor improvements in the user interface, for example, it may not be a significant risk.

Qlik View

43. 43. What Can Be Done If Requirements Are Changing Continuously?

    • A common problem and a major headache
    • Work with the project’s stakeholders early on to understand how requirements might change so that alternate test plans and strategies can be worked out in advance, if possible.
    • It’s helpful if the application’s initial design allows for some adaptability so that later changes do not require redoing the application from scratch.
    • If the code is well-commented and well-documented this makes changes easier for the developers.
    • Use rapid prototyping whenever possible to help customers feel sure of their requirements and minimize changes.
    • The project’s initial schedule should allow for some extra time commensurate with the possibility of changes.
    • Try to move new requirements to a ‘Phase 2’ version of an application, while using the original requirements for the ‘Phase 1’ version.
    • Negotiate to allow only easily-implemented new requirements into the project, while moving more difficult new requirements into future versions of the application.
    • Be sure that customers and management understand the scheduling impacts, inherent risks, and costs of significant requirements changes. Then let management or the customers (not the developers or testers) decide if the changes are warranted – after all, that’s their job.
    • Balance the effort put into setting up automated testing with the expected effort required to re-do them to deal with changes.
    • Try to design some flexibility into automated test scripts.
    • Focus initial automated testing on application aspects that are most likely to remain unchanged.
    • Devote appropriate effort to risk analysis of changes to minimize regression testing needs.
    • Design some flexibility into test cases (this is not easily done, the best bet might be to minimize the detail in the test cases, or set up only higher-level generic-type test plans).
    • Focus less on detailed test plans and test cases and more on ad hoc testing (with an understanding of the added risk that this entails).

44. 44. What If The Project Isn’t Big Enough To Justify Extensive Testing?

    Consider the impact of project errors, not the size of the project. However, if extensive testing is still not justified, risk analysis is again needed and the same considerations as described previously in ‘What if there isn’t enough time for thorough testing apply. The tester might then do ad hoc testing, or write up a limited test plan based on the risk analysis.

45. 45. How Can It Be Known When To Stop Testing?

    This can be difficult to determine. Many modern software applications are so complex, and run in such an interdependent environment, that complete testing can never be done. Common factors in deciding when to stop are:

    • Deadlines (release deadlines, testing deadlines, etc.).
    • Test cases completed with certain percentage passed.
    • Test budget depleted.
    • Coverage of code/functionality/requirements reaches a specified point .
    • Bug rate falls below a certain level.
    • Beta or alpha testing period ends.

46. 46. What If The Software Is So Buggy It Can’t Really Be Tested At All?

    The best bet in this situation is for the testers to go through the process of reporting whatever bugs or blocking-type problems initially show up, with the focus being on critical bugs. Since this type of problem can severely affect schedules, and indicates deeper problems in the software development process (such as insufficient unit testing or insufficient integration testing, poor design, improper build or release procedures, etc.) managers should be notified, and provided with some documentation as evidence of the problem.

47. 47. What Are The Levels Of Classified Access?

    The levels of classified access are confidential, secret, top secret, and sensitive compartmented information, of which top secret is the highest.

48. 48. What Is Security Clearance?

    Security clearance is a process of determining your trustworthiness and reliability before granting you access to national security information.

49. 49. How Do You Create A Test Strategy?

    The test strategy is a formal description of how a software product will be tested. A test strategy is developed for all levels of testing, as required. The test team analyzes the requirements, writes the test strategy and reviews the plan with the project team. The test plan may include test cases, conditions, the test environment, a list of related tasks, pass/fail criteria and risk assessment.
    Inputs for this process:

    • A description of the required hardware and software components, including test tools. This information comes from the test environment, including test tool data.
    • A description of roles and responsibilities of the resources required for the test and schedule constraints. This information comes from man-hours and schedules.
    • Testing methodology. This is based on known standards.
    • Functional and technical requirements of the application. This information comes from requirements, change request, technical and functional design documents.
    • Requirements that the system can not provide, e.g. system limitations.

    Outputs for this process:

    • An approved and signed off test strategy document, test plan, including test cases.
    • Testing issues requiring resolution. Usually this requires additional negotiation at the project management level.

50. 50. What Is The General Testing Process?

    The general testing process is the creation of a test strategy (which sometimes includes the creation of test cases), creation of a test plan/design (which usually includes test cases and test procedures) and the execution of tests.

51. 51. What Is Software Testing Methodology?

    One software testing methodology is the use a three step process of:

    1. Creating a test strategy.
    2. Creating a test plan/design and.
    3. Executing tests.

    This methodology can be used and molded to your organization’s needs. Rob Davis believes that using this methodology is important in the development and ongoing maintenance of his clients’ applications.

52. 52. What Is A Test Schedule?

    The test schedule is a schedule that identifies all tasks required for a successful testing effort, a schedule of all test activities and resource requirements.

53. 53. What Is A Test Configuration Manager?

    Test Configuration Managers maintain test environments, scripts, software and test data. Depending on the project, one person may wear more than one hat. For instance, Test Engineers may also wear the hat of a Test Configuration Manager.

54. 54. What Is A Technical Analyst?

    Technical Analysts perform test assessments and validate system/functional test requirements. Depending on the project, one person may wear more than one hat. For instance, Test Engineers may also wear the hat of a Technical Analyst.

55. 55. What Is A Database Administrator?

    Test Build Managers, System Administrators and Database Administrators deliver current software versions to the test environment, install the application’s software and apply software patches, to both the application and the operating system, set-up, maintain and back up test environment hardware. Depending on the project, one person may wear more than one hat. For instance, a Test Engineer may also wear the hat of a Database Administrator.

56. 56. What Is A System Administrator?

    Test Build Managers, System Administrators, Database Administrators deliver current software versions to the test environment, install the application’s software and apply software patches, to both the application and the operating system, set-up, maintain and back up test environment hardware.Depending on the project, one person may wear more than one hat. For instance, a Test Engineer may also wear the hat of a System Administrator.

57. 57. What Is A Test Build Manager?

    Test Build Managers deliver current software versions to the test environment, install the application’s software and apply software patches, to both the application and the operating system, set-up, maintain and back up test environment hardware.Depending on the project, one person may wear more than one hat. For instance, a Test Engineer may also wear the hat of a Test Build Manager.

58. 58. What Is A Test Engineer?

    We, test engineers, are engineers who specialize in testing. We, test engineers, create test cases, procedures, scripts and generate data. We execute test procedures and scripts, analyze standards of measurements, evaluate results of system/integration/regression testing. We also:

    • Speed up the work of the development staff.
    • Reduce your organization’s risk of legal liability.
    • Give you the evidence that your software is correct and operates properly.
    • Improve problem tracking and reporting.
    • Maximize the value of your software.
    • Maximize the value of the devices that use it;
    • Assure the successful launch of your product by discovering bugs and design flaws, before users get discouraged, before shareholders loose their cool and before employees get bogged down.
    • Help the work of your development staff, so the development team can devote its time to build up your product.
    • Promote continual improvement.
    • Provide documentation required by FDA, FAA, other regulatory agencies and your customers.
    • Save money by discovering defects ‘early’ in the design process, before failures occur in production, or in the field.
    • Save the reputation of your company by discovering bugs and design flaws before bugs and design flaws damage the reputation of your company.

59. 59. What Testing Roles Are Standard On Most Testing Projects?

    Depending on the organization, the following roles are more or less standard on most testing projects: Testers, Test Engineers, Test/QA Team Lead, Test/QA Manager, System Administrator, Database Administrator, Technical Analyst, Test Build Manager and Test Configuration Manager.

60. 60. What Is A Test/qa Team Lead?

    The Test/QA Team Lead coordinates the testing activity, communicates testing status to management and manages the test team.

61. 61. What Is Beta Testing?

    Beta testing is testing an application when development and testing are essentially completed and final bugs and problems need to be found before the final release. Beta testing is typically performed by end-users or others, not programmers, software engineers, or test engineers.

62. 62. What Is Alpha Testing?

    Alpha testing is testing of an application when development is nearing completion. Minor design changes can still be made as a result of alpha testing. Alpha testing is typically performed by a group that is independent of the design team, but still within the company, e.g. in-house software test engineers, or software QA engineers.

63. 63. What Is Acceptance Testing?

    Acceptance testing is black box testing that gives the client/customer/project manager the opportunity to verify the system functionality and usability prior to the system being released to production.

    The acceptance test is the responsibility of the client/customer or project manager, however, it is conducted with the full support of the project team. The test team also works with the client/customer/project manager to develop the acceptance criteria.

64. 64. What Is Comparison Testing?

    Comparison testing is testing that compares software weaknesses and strengths to those of competitors products.

65. 65. What Is Compatibility Testing?

    Compatibility testing is testing how well software performs in a particular hardware, software, operating system, or network

66. 66. What Is Recovery/error Testing?

    Recovery/error testing is testing how well a system recovers from crashes, hardware failures, or other catastrophic problems.

67. 67. What Is Security/penetration Testing?

    Security/penetration testing is testing how well the system is protected against unauthorized internal or external access, or willful damage.This type of testing usually requires sophisticated testing techniques.

68. 68. What Is Installation Testing?

    Installation testing is testing full, partial, upgrade, or install/uninstall processes. The installation test for a release is conducted with the objective of demonstrating production readiness.
    This test includes the inventory of configuration items, performed by the application’s System Administration, the evaluation of data readiness, and dynamic tests focused on basic system functionality. When necessary, a sanity test is performed, following installation testing.

69. 69. What Is Load Testing?

    Load testing is testing an application under heavy loads, such as the testing of a web site under a range of loads to determine at what point the system response time will degrade or fail.

70. 70. What Is Performance Testing?

    Although performance testing is described as a part of system testing, it can be regarded as a distinct level of testing. Performance testing verifies loads, volumes and response times, as defined by requirements.

71. 71. What Is Sanity Testing?

    Sanity testing is performed whenever cursory testing is sufficient to prove the application is functioning according to specifications. This level of testing is a subset of regression testing.It normally includes a set of core tests of basic GUI functionality to demonstrate connectivity to the database, application servers, printers, etc.

72. 72. What Is Regression Testing?

    The objective of regression testing is to ensure the software remains intact. A baseline set of data and scripts is maintained and executed to verify changes introduced during the release have not “undone” any previous code. Expected results from the baseline are compared to results of the software under test. All discrepancies are highlighted and accounted for, before testing proceeds to the next level.

73. 73. What Is End-to-end Testing?

    Similar to system testing, the macro end of the test scale is testing a complete application in a situation that mimics real world use, such as interacting with a database, using network communication, or interacting with other hardware, application, or system.

74. 74. What Is System Testing?

    System testing is black box testing, performed by the Test Team, and at the start of the system testing the complete system is configured in a controlled environment.The purpose of system testing is to validate an application’s accuracy and completeness in performing the functions as designed.System testing simulates real life scenarios that occur in a “simulated real life” test environment and test all functions of the system that are required in real life.System testing is deemed complete when actual results and expected results are either in line or differences are explainable or acceptable, based on client input.

75. 75. What Is Integration Testing?

    Upon completion of unit testing, integration testing begins. Integration testing is black box testing. The purpose of integration testing is to ensure distinct components of the application still work in accordance to customer requirements.Test cases are developed with the express purpose of exercising the interfaces between the components. This activity is carried out by the test team.Integration testing is considered complete, when actual results and expected results are either in line or differences are explainable/acceptable based on client input.

76. 76. What Is Parallel/audit Testing?

    Parallel/audit testing is testing where the user reconciles the output of the new system to the output of the current system to verify the new system performs the operations correctly.

77. 77. What Is Incremental Integration Testing?

    Incremental integration testing is continuous testing of an application as new functionality is recommended. This may require that various aspects of an application’s functionality are independent enough to work separately, before all parts of the program are completed, or that test drivers are developed as needed.Incremental testing may be performed by programmers, software engineers, or test engineers.

78. 78. What Is Usability Testing?

    Usability testing is testing for ‘user-friendliness’. Clearly this is subjective and depends on the targeted end-user or customer. User interviews, surveys, video recording of user sessions and other techniques can be used. Programmers and developers are usually not appropriate as usability testers.

79. 79. What Is Functional Testing?

    Functional testing is black-box type of testing geared to functional requirements of an application. Test engineers should perform functional testing.

80. 80. What Is Unit Testing?

    Unit testing is the first level of dynamic testing and is first the responsibility of developers and then that of the test engineers.Unit testing is performed after the expected test results are met or differences are explainable/acceptable.

81. 81. What Is White Box Testing?

    White box testing is based on knowledge of the internal logic of an application’s code. Tests are based on coverage of code statements, branches, paths and conditions.

82. 82. What Is Black Box Testing?

    Black box testing is functional testing, not based on any knowledge of internal software design or code. Black box testing are based on requirements and functionality.

83. 83. What Is Quality Assurance?

    Quality Assurance ensures all parties concerned with the project adhere to the process and procedures, standards and templates and test readiness reviews.

84. 84. How Is Testing Affected By Object-oriented Designs?

    A well-engineered object-oriented design can make it easier to trace from code to internal design to functional design to requirements. While there will be little affect on black box testing (where an understanding of the internal design of the application is unnecessary), white-box testing can be oriented to the application’s objects. If the application was well designed this can simplify test design.

85. 85. Why Do You Recommend That We Test During The Design Phase?

    Because testing during the design phase can prevent defects later on. We recommend verifying three things:

    1. Verify the design is good, efficient, compact, testable and maintainable.
    2. Verify the design meets the requirements and is complete (specifies all relationships between modules, how to pass data, what happens in exceptional circumstances, starting state of each module and how to guarantee the state of each module).
    3. Verify the design incorporates enough memory, I/O devices and quick enough runtime for the final product.

86. 86. What If The Organization Is Growing So Fast That Fixed Qa Processes Are Impossible?

    This is a common problem in the software industry, especially in new technology areas. There is no easy solution in this situation, other than:

    1. Hire good people.
    2. Ruthlessly prioritize quality issues and maintain focus on the customer.
    3. Everyone in the organization should be clear on what quality means to the customer.

87. 87. How Can Software Qa Processes Be Implemented Without Stifling Productivity?

    Implement QA processes slowly over time. Use consensus to reach agreement on processes and adjust and experiment as an organization grows and matures. Productivity will be improved instead of stifled. Problem prevention will lessen the need for problem detection. Panics and burnout will decrease and there will be improved focus and less wasted effort.

    At the same time, attempts should be made to keep processes simple and efficient, minimize paperwork, promote computer-based processes and automated tracking and reporting, minimize time required in meetings and promote training as part of the QA process.

    However, no one, especially talented technical types, like bureaucracy and in the short run things may slow down a bit. A typical scenario would be that more days of planning and development will be needed, but less time will be required for late-night bug fixing and calming of irate customers.

88. 88. What Is Acceptance Testing?

    Testing conducted to enable a user/customer to determine whether to accept a software product. Normally performed to validate the software meets a set of agreed acceptance criteria.

89. 89. What Is Accessibility Testing?

    Verifying a product is accessible to the people having disabilities (deaf, blind, mentally disabled etc.).

90. 90. What Is Ad Hoc Testing?

    A testing phase where the tester tries to ‘break’ the system by randomly trying the system’s functionality. Can include negative testing as well.

91. 91. What Is Agile Testing?

    Testing practice for projects using agile methodologies, treating development as the customer of testing and emphasizing a test-first design paradigm. See also Test Driven Development.

92. 92. What Is Application Binary Interface (abi)?

    A specification defining requirements for portability of applications in binary forms across different system platforms and environments.

93. 93. What Is Application Programming Interface (api)?

    A formalized set of software calls and routines that can be referenced by an application program in order to access supporting system or network services.

94. 94. What Is Automated Software Quality (asq)?

    The use of software tools, such as automated testing tools, to improve software quality.

95. 95. What Is Automated Testing?

    Testing employing software tools which execute tests without manual intervention. Can be applied in GUI, performance, API, etc. testing. The use of software to control the execution of tests, the comparison of actual outcomes to predicted outcomes, the setting up of test preconditions, and other test control and test reporting functions.

96. 96. What Is Backus-naur Form?

    A metalanguage used to formally describe the syntax of a language.

97. 97. What Is Basic Block?

    A sequence of one or more consecutive, executable statements containing no branches.

98. 98. What Is Basis Path Testing?

    A white box test case design technique that uses the algorithmic flow of the program to design tests.

99. 99. What Is Basis Set?

    The set of tests derived using basis path testing.

100. 100. What Is Baseline?

     The point at which some deliverable produced during the software engineering process is put under formal change control.

101. 101. What Is Binary Portability Testing?

     Testing an executable application for portability across system platforms and environments, usually for conformation to an ABI specification.

102. 102. What Is Bottom Up Testing?

     An approach to integration testing where the lowest level components are tested first, then used to facilitate the testing of higher level components. The process is repeated until the component at the top of the hierarchy is tested.

103. 103. What Is Boundary Testing?

     Test which focus on the boundary or limit conditions of the software being tested. (Some of these tests are stress tests).

104. 104. What Is Defect?

     If software misses some feature or function from what is there in requirement it is called as defect.

105. 105. What Is Boundary Value Analysis?

     BVA is similar to Equivalence Partitioning but focuses on “corner cases” or values that are usually out of range as defined by the specification. his means that if a function expects all values in range of negative 100 to positive 1000, test inputs would include negative 101 and positive 1001.

106. 106. What Is Branch Testing?

     Testing in which all branches in the program source code are tested at least once.

107. 107. What Is Breadth Testing?

     A test suite that exercises the full functionality of a product but does not test features in detail.

108. 108. What Is Cast?

     Computer Aided Software Testing.

109. 109. What Is Capture/replay Tool?

     A test tool that records test input as it is sent to the software under test. The input cases stored can then be used to reproduce the test at a later time. Most commonly applied to GUI test tools.

110. 110. What Is Cmm?

     The Capability Maturity Model for Software (CMM or SW-CMM) is a model for judging the maturity of the software processes of an organization and for identifying the key practices that are required to increase the maturity of these processes.

111. 111. What Is Cause Effect Graph?

     A graphical representation of inputs and the associated outputs effects which can be used to design test cases.

112. 112. What Is Code Complete?

     Phase of development where functionality is implemented in entirety bug fixes are all that are left. All functions found in the Functional Specifications have been implemented.

113. 113. What Is Code Coverage?

     An analysis method that determines which parts of the software have been executed (covered) by the test case suite and which parts have not been executed and therefore may require additional attention.

114. 114. What Is Code Inspection?

     A formal testing technique where the programmer reviews source code with a group who ask questions analyzing the program logic, analyzing the code with respect to a checklist of historically common programming errors, and analyzing its compliance with coding standards.

115. 115. What Is Code Walkthrough?

     A formal testing technique where source code is traced by a group with a small set of test cases, while the state of program variables is manually monitored, to analyze the programmer’s logic and assumptions.

116. 116. What Is Coding?

     The generation of source code.

117. 117. What Is Component?

     A minimal software item for which a separate specification is available.

118. 118. What Is Component Testing?

     Testing of individual software components (Unit Testing).

119. 119. What Is Concurrency Testing?

     Multi-user testing geared towards determining the effects of accessing the same application code, module or database records. Identifies and measures the level of locking, deadlocking and use of single-threaded code and locking semaphores.

120. 120. What Is Conformance Testing?

     The process of testing that an implementation conforms to the specification on which it is based. Usually applied to testing conformance to a formal standard.

121. 121. What Is Context Driven Testing?

     The context-driven school of software testing is flavor of Agile Testing that advocates continuous and creative evaluation of testing opportunities in light of the potential information revealed and the value of that information to the organization right now.

122. 122. What Is Conversion Testing?

     Testing of programs or procedures used to convert data from existing systems for use in replacement systems.

123. 123. What Is Cyclomatic Complexity?

     A measure of the logical complexity of an algorithm, used in white-box testing.

124. 124. What Is Data Dictionary?

     A database that contains definitions of all data items defined during analysis.

125. 125. What Is Data Flow Diagram?

     A modeling notation that represents a functional decomposition of a system.

126. 126. What Is Data Driven Testing?

     Testing in which the action of a test case is parameterized by externally defined data values, maintained as a file or spreadsheet. A common technique in Automated Testing.

127. 127. What Is Debugging?

     The process of finding and removing the causes of software failures.

128. 128. What Is Dependency Testing?

     Examines an application’s requirements for pre-existing software, initial states and configuration in order to maintain proper functionality.

129. 129. What Is Depth Testing?

     A test that exercises a feature of a product in full detail.

130. 130. What Is Dynamic Testing?

     Testing software through executing it.

131. 131. What Is Emulator?

     A device, computer program, or system that accepts the same inputs and produces the same outputs as a given system.

132. 132. What Is Endurance Testing?

     Checks for memory leaks or other problems that may occur with prolonged execution.

133. 133. What Is Equivalence Class?

     A portion of a component’s input or output domains for which the component’s behaviour is assumed to be the same from the component’s specification.

134. 134. What Is Equivalence Partitioning?

     A test case design technique for a component in which test cases are designed to execute representatives from equivalence classes.

135. 135. What Is Exhaustive Testing?

     Testing which covers all combinations of input values and preconditions for an element of the software under test.

136. 136. What Is Functional Decomposition?

     A technique used during planning, analysis and design creates a functional hierarchy for the software.

137. 137. What Is Functional Specification?

     A document that describes in detail the characteristics of the product with regard to its intended features.

138. 138. What Is Glass Box Testing?

     Glass Box Testing is also known as “White Box Testing” or “Open Box Testing”.

     It is used to test the external behavior of the Program.This testing is done to test the functinality of the application.

139. 139. What Is Gorilla Testing?

     Testing one particular module, functionality heavily.

140. 140. What Is Gray Box Testing?

     A combination of Black Box and White Box testing methodologies testing a piece of software against its specification but using some knowledge of its internal workings.

141. 141. What Is High Order Tests?

     Black-box tests conducted once the software has been integrated.

142. 142. What Is Independent Test Group (itg)?

     A group of people whose primary responsibility is software testing.

143. 143. What Is Inspection?

     A group review quality improvement process for written material. It consists of two aspects product (document itself) improvement and process improvement (of both document production and inspection).

144. 144. What Is Localization Testing?

     This term refers to making software specifically designed for a specific locality.

145. 145. What Is Loop Testing?

     A white box testing technique that exercises program loops.

146. 146. What Is Metric?

     A standard of measurement. Software metrics are the statistics describing the structure or content of a program. A metric should be a real objective measurement of something such as number of bugs per lines of code.

147. 147. What Is Monkey Testing?

     Testing a system or an Application on the fly, i.e just few tests here and there to ensure the system or an application does not crash out.

148. 148. What Is Negative Testing?

     Testing aimed at showing software does not work. Also known as “test to fail”. See also Positive Testing.

149. 149. What Is Path Testing?

     Testing in which all paths in the program source code are tested at least once.

150. 150. What Is Positive Testing?

     Testing aimed at showing software works. Also known as “test to pass”.

151. 151. What Is Quality Audit?

     A systematic and independent examination to determine whether quality activities and related results comply with planned arrangements and whether these arrangements are implemented effectively and are suitable to achieve objectives.

152. 152. What Is Quality Circle?

     A group of individuals with related interests that meet at regular intervals to consider problems or other matters related to the quality of outputs of a process and to the correction of problems or to the improvement of quality.

153. 153. What Is Quality Control?

     The operational techniques and the activities used to fulfill and verify requirements of quality.

154. 154. What Is Quality Management?

     That aspect of the overall management function that determines and implements the quality policy.

155. 155. What Is Quality Policy?

     The overall intentions and direction of an organization as regards quality as formally expressed by top management.

156. 156. What Is Quality System?

     The organizational structure, responsibilities, procedures, processes, and resources for implementing quality management.

157. 157. What Is Race Condition?

     A cause of concurrency problems. Multiple accesses to a shared resource, at least one of which is a write, with no mechanism used by either to moderate simultaneous access.

158. 158. What Is Ramp Testing?

     Continuously raising an input signal until the system breaks down.

159. 159. What Is Recovery Testing?

     Confirms that the program recovers from expected or unexpected events without loss of data or functionality. Events can include shortage of disk space, unexpected loss of communication, or power out conditions.

160. 160. What Is Release Candidate?

     A pre-release version, which contains the desired functionality of the final version, but which needs to be tested for bugs (which ideally should be removed before the final version is released).

161. 161. What Is Scalability Testing?

     Performance testing focused on ensuring the application under test gracefully handles increases in work load.

162. 162. What Is Security Testing?

     Testing which confirms that the program can restrict access to authorized personnel and that the authorized personnel can access the functions available to their security level.

163. 163. What Is Smoke Testing?

     A quick-and-dirty test that the major functions of a piece of software work. Originated in the hardware testing practice of turning on a new piece of hardware for the first time and considering it a success if it does not catch on fire.

164. 164. What Is Soak Testing?

     Running a system at high load for a prolonged period of time. For example, running several times more transactions in an entire day (or night) than would be expected in a busy day, to identify and performance problems that appear after a large number of transactions have been executed.

165. 165. What Is Software Requirements Specification?

     A deliverable that describes all data, functional and behavioral requirements, all constraints, and all validation requirements for software

166. 166. What Is Static Analysis?

     Analysis of a program carried out without executing the program. A tool that carries out static analysis.

167. 167. What Is Static Analyzer?

     A tool that carries out static analysis.

168. 168. What Is Static Testing?

     Analysis of a program carried out without executing the program.

169. 169. What Is Storage Testing?

     Testing that verifies the program under test stores data files in the correct directories and that it reserves sufficient space to prevent unexpected termination resulting from lack of space. This is external storage as opposed to internal storage.

170. 170. What Is Stress Testing?

     Testing conducted to evaluate a system or component at or beyond the limits of its specified requirements to determine the load under which it fails and how. Often this is performance testing using a very high level of simulated load.

171. 171. What Is Structural Testing?

     Testing based on an analysis of internal workings and structure of a piece of software.

172. 172. What Is Testability?

     The degree to which a system or component facilitates the establishment of test criteria and the performance of tests to determine whether those criteria have been met.

173. 173. What Is Testing?

     The process of exercising software to verify that it satisfies specified requirements and to detect errors. The process of analyzing a software item to detect the differences between existing and required conditions (that is, bugs), and to evaluate the features of the software item . The process of operating a system or component under specified conditions, observing or recording the results, and making an evaluation of some aspect of the system or component.

174. 174. What Is Test Bed?

     An execution environment configured for testing. May consist of specific hardware, OS, network topology, configuration of the product under test, other application or system software, etc. The Test Plan for a project should enumerated the test beds(s) to be used.

175. 175. What Is Test Case?

     Test Case is a commonly used term for a specific test. This is usually the smallest unit of testing. A Test Case will consist of information such as requirements testing, test steps, verification steps, prerequisites, outputs, test environment, etc. A set of inputs, execution preconditions, and expected outcomes developed for a particular objective, such as to exercise a particular program path or to verify compliance with a specific requirement. Test Driven Development Testing methodology associated with Agile Programming in which every chunk of code is covered by unit tests, which must all pass all the time, in an effort to eliminate unit-level and regression bugs during development. Practitioners of TDD write a lot of tests, i.e. an equal number of lines of test code to the size of the production code.

176. 176. What Is Test Driver?

     A program or test tool used to execute a tests. Also known as a Test Harness.

177. 177. What Is Test Environment?

     The hardware and software environment in which tests will be run, and any other software with which the software under test interacts when under test including stubs and test drivers.

178. 178. What Is Test First Design?

     Test-first design is one of the mandatory practices of Extreme Programming (XP).It requires that programmers do not write any production code until they have first written a unit test.

179. 179. What Is Test Harness?

     A program or test tool used to execute a tests. Also known as a Test Driver.

180. 180. What Is Test Plan?

     A document describing the scope, approach, resources, and schedule of intended testing activities. It identifies test items, the features to be tested, the testing tasks, who will do each task, and any risks requiring contingency planning.

181. 181. What Is Test Procedure?

     A document providing detailed instructions for the execution of one or more test cases.

182. 182. What Is Test Script?

     Commonly used to refer to the instructions for a particular test that will be carried out by an automated test tool.

183. 183. What Is Test Specification?

     A document specifying the test approach for a software feature or combination or features and the inputs, predicted results and execution conditions for the associated tests.

184. 184. What Is Test Suite?

     A collection of tests used to validate the behavior of a product. The scope of a Test Suite varies from organization to organization. There may be several Test Suites for a particular product for example. In most cases however a Test Suite is a high level concept, grouping together hundreds or thousands of tests related by what they are intended to test.

185. 185. What Is Test Tools?

     Computer programs used in the testing of a system, a component of the system, or its documentation.

186. 186. What Is Thread Testing?

     A variation of top-down testing where the progressive integration of components follows the implementation of subsets of the requirements, as opposed to the integration of components by successively lower levels.

187. 187. What Is Top Down Testing?

     An approach to integration testing where the component at the top of the component hierarchy is tested first, with lower level components being simulated by stubs. Tested components are then used to test lower level components. The process is repeated until the lowest level components have been tested.

188. 188. What Is Total Quality Management?

     A company commitment to develop a process that achieves high quality product and customer satisfaction.

189. 189. What Is Traceability Matrix?

     A document showing the relationship between Test Requirements and Test Cases.

190. 190. What Is Use Case?

     The specification of tests that are conducted from the end-user perspective. Use cases tend to focus on operating software as an end-user would conduct their day-to-day activities.

191. 191. What Is Validation?

     The process of evaluating software at the end of the software development process to ensure compliance with software requirements. The techniques for validation is testing, inspection and reviewing.

192. 192. What Are The Major Differences Between Stress Testing,load Testing,volume Testing?

     Stress testing means increasing the load ,and checking the performance at each level. Load testing means at a time giving more load by the expectation and checking the performance at that level. Volume testing means first we have to apply initial.

193. 193. What Is Memory Leaks And Buffer Overflows ?

     Memory leaks means incomplete deallocation – are bugs that happen very often. Buffer overflow means data sent as input to the server that overflows the boundaries of the input area, thus causing the server to misbehave. Buffer overflows can be used.

194. 194. What Is The Difference Between Quality Assurance And Testing?

     Quality assurance involves the entire software development process and testing involves operation of a system or application to evaluate the results under certain conditions. QA is oriented to prevention and Testing is oriented to detection.

195. 195. How Do We Test For Severe Memory Leakages ?

     By using Endurance Testing . Endurance Testing means checking for memory leaks or other problems that may occur with prolonged execution.

196. 196. How Testing Is Proceeded When Srs Or Any Other Document Is Not Given?

     If SRS is not there we can perform Exploratory testing. In Exploratory testing the basic module is executed and depending on its results, the next plan is executed.

197. 197. How To Test The Web Applications?

     The basic difference in webtesting is here we have to test for URL’s coverage and links coverage. Using WinRunner we can conduct webtesting. But we have to make sure that Webtest option is selected in “Add in Manager”. Using WR we cannot test XML objects.

198. 198. What Is ‘configuration Management’?

     Configuration management is a process to control and document any changes made during the life of a project. Revision control, Change Control, and Release Control are important aspects of Configuration Management.

199. 199. Can We Perform The Test Of Single Application At The Same Time Using Different Tools On The Same Machine?

     No. The Testing Tools will be in the ambiguity to determine which browser is opened by which tool.

200. 200. How Will You Evaluate The Fields In The Application Under Test Using Automation Tool?

     We can use Verification points(rational Robot) to validate the fields .Ex.Using objectdata,objectdata properties VP we can validate fields.

201. 201. How Will You Test The Field That Generates Auto Numbers Of Aut When We Click The Button ‘new’ In The Application?

     We can create a textfile in a certain location, and update the auto generated value each time we run the test and compare the currently generated value with the previous one will be one solution.

202. 202. How To Find That Tools Work Well With Your Existing System?

     To find this, select the suite of tests which are most important for your application. First run them with automated tool. Next subject the same tests to careful manual testing. If the results are coinciding you can say your testing tool has been performing.

203. 203. What Testing Activities You May Want To Automate In A Project?

     Testing tools can be used for :

     • Sanity tests(which is repeated on every build).
     • stress/Load tests(U simulate a large no of users,which is manually impossible).
     • Regression tests(which are done after every code change).

204. 204. What Are The Main Attributes Of Test Automation?

     Maintainability, Reliability, Flexibility, Efficiency, Portability, Robustness, and Usability – these are the main attributes in test automation.

205. 205. Describe Some Problem That You Had With Automating Testing Tool

     1. The inability of winrunner to identify the third party control like infragistics controls.
     2. The change of the location of the table object will cause object not found error.
     3. The inability of the winrunner to execute the script against multiple langauges.

206. 206. What Skills Needed To Be A Good Test Automator?

     1.Good Logic for programming.
     2. Analytical skills.
     3.Pessimestic in Nature.

207. 207. What Are The Limitations Of Automating Software Testing?

     Hard-to-create environments like “out of memory”, “invalid input/reply”, and “corrupt registry entries” make applications behave poorly and existing automated tools can’t force these condition – they simply test your application in “normal” environment.

208. 208. Can The Activities Of Test Case Design Be Automated?

     As I know it, test case design is about formulating the steps to be carried out to verify something about the application under test. And this cannot be automated. However, I agree that the process of putting the test results into the excel sheet.

209. 209. What Tools Are Available For Support Of Testing During Software Development Life Cycle?

     Testing tools for regression and load/stress testing for regression testing like, QTP, load runner, rational robot, winrunner, silk, test complete, Astra are available in the market. For defect tracking BugZilla, Test Runner are available.

210. 210. What Are Principles Of Good Testing Scripts For Automation?

     1. Proper code guiding standards.
     2. Standard format for defining functions, exception handler etc.
     3. Comments for functions.
     4. Proper errorhandling mechanisms.
     5. The appropriate synchronization techniques.

211. 211. What Types Of Scripting Techniques For Test Automation Do You Know?

     5 types of scripting techniques:

     • Linear
     • Structured
     • Shared
     • Data Driven
     • Key Driven

212. 212. Describe Common Problems Of Test Automation.

     The common problems are:
     1. Maintenance of the old script when there is a feature change or enhancement.
     2. The change in technology of the application will affect the old scripts.

213. 213. What Testing Activities You May Want To Automate?

     Automate all the high priority test cases which needs to be executed as a part of regression testing for each build cycle.

214. 214. How You Will Describe Testing Activities?

     Testing activities start from the elaboration phase. The various testing activities are preparing the test plan, Preparing test cases, Execute the test case, Log the bug, validate the bug & take appropriate action for the bug, Automate the test cases.

215. 215. What Could Go Wrong With Test Automation?

     1. The choice of automation tool for certain technologies.
     2. Wrong set of test automated.

216. 216. What Are Main Benefits Of Test Automation?

     FAST ,RELIABLE,COMPREHENSIVE,REUSABLE.

217. 217. How You Will Evaluate The Tool For Test Automation?

     We need to concentrate on the features of the tools and how this could be beneficial for our project. The additional new features and the enhancements of the features will also help.

218. 218. How Will You Choose A Tool For Test Automation?

     choosing of a tool defends on many things .
     1. Application to be tested.
     2. Test environment.
     3. Scope and limitation of the tool.
     4. Feature of the tool.
     5. Cost of the tool.
     6. Whether the tool is compatible with your application which means tool should be able to interact with your application.
     7. Ease of use.

219. 219. Does Automation Replace Manual Testing?

     There can be some functionality which cannot be tested in an automated tool so we may have to do it manually. therefore manual testing can never be replaced. (We can write the scripts for negative testing also but it is hectic task).When we talk about real environment we do negative testing manually.

220. 220. How Do You Plan Test Automation?

     1. Prepare the automation Test plan
     2. Identify the scenario
     3. Record the scenario
     4. Enhance the scripts by inserting check points and Conditional Loops
     5. Incorporated Error Handler
     6. Debug the script
     7. Fix the issue
     8. Rerun the script and report the result.

221. 221. What Are The Table Contents In Testplans And Test Cases?

     Test Plan is a document which is prepared with the details of the testing priority. A test Plan generally includes:

     1. Objective of Testing
     2. Scope of Testing
     3. Reason for testing
     4. Timeframe
     5. Environment
     6. Entrance and exit criteria
     7. Risk factors involved
     8. Deliverables.

222. 222. What Are The Tables In Testplans And Testcases?

     Test plan is a document that contains the scope, approach, test design and test strategies. It includes the following:
     1. Test case identifier.
     2. Scope.
     3. Features to be tested.
     4. Features not to be tested.
     5. Test strategy.
     6. Test Approach.
     7. Test Deliverables.
     8. Responsibilities.
     9 . Staffing and Training.
     10. Risk and Contingencies.
     11.  Approval.

     While A test case is a noted/documented set of steps/activities that are carried out or executed on the software in order to confirm its functionality/behavior to certain set of inputs.

223. 223. What Is Rad Testing Model?

     Rapid Application Development (RAD) is an incremental software development process model that emphasizes a very short development cycle [typically 60-90 days]. The RAD model, is a very high-speed adaptation of the waterfall model, where the result of each cycle a fully functional system.

224. 224. What Is Rapid Application Development(rad) Data Modeling?

     The information flow defined as part of the business modeling phase is refined into a set of data objects that are needed to support the business. The characteristics (called attributes) of each object are identified and the relationships between these objects are defined.

225. 225. What Is Rapid Application Development (rad) Process Modeling?

     The data objects defined in the data-modeling phase are transformed to achieve the information flow necessary to implement a business function. Processing descriptions are created for adding, modifying, deleting, or retrieving a data object.

226. 226. What Is Rapid Application Development (rad) Application Generation?

     RAD assumes the use of the RAD fourth generation techniques and tools like VB, VC++, Delphi etc rather than creating software using conventional third generation programming languages. The RAD works to reuse existing program components (when possible) or create reusable components (when necessary). In all cases, automated tools are used to facilitate construction of the software.

227. 227. What Is Rapid Application Development (rad) Testing And Turnover?

     Since the RAD process emphasizes reuse, many of the program components have already been tested. This minimizes the testing and development time.

228. 228. Explain Disadvantages Of Rapid Application Development (rad)

     • For Large (but scalable) projects, RAD requires sufficient resources to create the right number of RAD teams.
     • RAD projects will fail if there is no commitment by the developers or the clients to ‘rapid-fire’ activities necessary to get a system complete in a much abbreviated time frame.
     • If a system cannot be properly modularized, building components for RAD will be problematic.
     • RAD is not appropriate when technical risks are high, e.g. this occurs when a new application makes heavy use of new technology.

229. 229. What S Spiral Model?

     In the Spiral Model, a cyclical and prototyping view of software development is shown. Test are explicitly mentioned (risk analysis, validation of requirements and of the development) and the test phase is divided into stages. The test activities include module, integration and acceptance tests. However, in this model the testing also follows the coding. The exception to this is that the test plan should be constructed after the design of the system. The spiral model also identifies no activities associated with the removal of defects.

230. 230. Explain Top-down And Bottom-up Design?

     Top-down and bottom-up are strategies of information processing and knowledge ordering, mostly involving software, but also other humanistic and scientific theories. In practice, they can be seen as a style of thinking and teaching. In many cases top-down is used as a synonym of analysis or decomposition, and bottom-up of synthesis.

231. 231. Explain Waterfall Model?

     The waterfall model is a sequential software development process, in which progress is seen as flowing steadily downwards (like a waterfall) through the phases of Conception, Initiation, Analysis, Design (validation), Construction, Testing and Maintenance.

232. 232. What Is V Model?

     Many of the process models currently used can be more generally connected by the ‘V’ model where the ‘V’ describes the graphical arrangement of the individual phases. The ‘V’ is also a synonym for Verification and Validation.
     By the ordering of activities in time sequence and with abstraction levels the connection between development and test activities becomes clear. Oppositely laying activities complement one another (i.e.) server as a base for test activities. For example, the system test is carried out on the basis of the results specification phase.

233. 233. What Is W Model?

     From the testing point of view, all of the models are deficient in various ways:

     • The Test activities first start after the implementation. The connection between the various test stages and the basis for the test is not clear.
     • The tight link between test, debug and change tasks during the test phase is not clear.

234. 234. Explain Butterfly Model Of Test Development?

     Butterflies are composed of three pieces — two wings and a body. Each part represents a piece of software testing, as under.

     • Test Analysis.
     • Test Design.
     • Test Execution.

235. 235. What Is The Waterfall Model?

     The waterfall model derives its name due to the cascading effect from one phase to the other. In this model each phase well defined starting and ending point, with identifiable deliveries to the next phase.

236. 236. Explain The Waterfall Model Phases?

     The waterfall model phases are followed in order:
     1. Requirements specification. 
     2. Design. 
     3. Construction (AKA implementation or coding). 
     4. Integration. 
     5. Testing and debugging (AKA Validation). 
     6. Installation. 
     7. Maintenance.

237. 237. Explain Waterfall Model Supporting Arguments?

     Time spent early in the software production cycle can lead to greater economy at later stages. It has been shown that a bug found in the early stages (such as requirements specification or design) is cheaper in terms of money, effort and time, to fix than the same bug found later on in the process. ([McConnell 1996], p. 72, estimates that a requirements defect that is left undetected until construction or maintenance will cost 50 to 200 times as much to fix as it would have cost to fix at requirements time.) To take an extreme example, if a program design turns out to be impossible to implement, it is easier to fix the design at the design stage than to realize months later, when program components are being integrated, that all the work done so far has to be scrapped because of a broken design.

238. 238. Explain Some Advantages Of Waterfall Model?

     • Testing is inherent to every phase of the waterfall model.
     • It is an enforced disciplined approach.
     • It is documentation driven, that is, documentation is produced at every stage.

239. 239. Explain Disadvantages Of Waterfall Model?

     • The waterfall model is the oldest and the most widely used paradigm.
     • However, many projects rarely follow its sequential flow. This is due to the inherent problems associated with its rigid format, Namely.
     • It only incorporates iteration indirectly, thus changes may cause considerable confusion as the project progresses.
     • As The client usually only has a vague idea of exactly what is required from the software product, this WM has difficulty accommodating the natural uncertainty that exists at the beginning of the project.
     • The customer only sees a working version of the product after it has been coded. This may result in disaster if any undetected problems are precipitated to this stage.

1. 1. What Is Tibco Hawk?

   TIBCO Hawk is network monitoring and management software for distributed systems and applications in the enterprise. It is designed using the concept of an independent smart agent that runs on each node in the network to monitor local conditions, so there is no need for a centralized monitoring console or frequent pooling across the network that can consume more bandwidth or cause network traffic.

   One of the advantages of using TIBCO Hawk is that it uses less bandwidth while monitoring every machine in the network. It is because TIBCO Hawk distributes the monitoring load to each machine that has locally installed Hawk agents in order to conserve system resources and network bandwidth. The system administrator has now the capability to monitor the operating system, the application parameters and behaviors of each machine in the network using only less bandwidth. Another great advantage of TIBCO Hawk is that, in case of network failure, the Hawk agents will continue to perform local tasks because each agent operates independently from the other.

   One of the benefits of using TIBCO Hawk is that it reduces sudden or unexpected system outages and slowdowns. TIBCO Hawk has this capability to automatically repair failures and slowdowns within seconds of detection and it also allows problems to be found and fixed before any slowdowns and failures can occur.

2. 2. Tibco Hawk System Architecture?

   There are two major components that make up the TIBCO Hawk System: the Agents and the Console Applications. Agents reside on each computer in the network and perform monitoring and managing duties. It uses rule bases as a monitoring policy and micro agents to extract monitoring information and to carry-out specified tasks.

   The Console Applications, on the other hand, can be further divided into three subcomponents: the TIBCO Hawk Display that provides the interface to monitor and manage agent behavior in your network, the Event Service that records and logs all the activities of the agent, and the bridges to other management systems.

Soap Tool Interview Questions

3. 3. Features Of Tibco Hawk Display?

   The TIBCO Hawk Display is a local window for all the activities in the network, which provides a graphical user interface used for viewing active agents in the network. It displays container icons that are created for each agent and arranged in clusters. These agent icons are, by default, clustered according to subnets. It also allows you to customize container icons and to convey added information that can be useful for your monitoring. Menus and dialogs are provided for you to create, modify and distribute rule bases to any agent present in the network. You can also invoke a micro agent method that allows you to view the results immediately.

4. 4. Features Of Tibco Hawk Event Service?

   The TIBCO Hawk Event Service does not only record the activity of TIBCO Hawk agents but it also logs and subscribes to all TIBCO Hawk system events such as agent activation and expiration, micro agent and rule base changes, alerts and clears. The external applications must be saved on a data file in order for them to access the logs. If ever there is an expired or non-communicating agent in the network, the Event Service provides the use of a user-supplied script to notify the system administrator.

Adv Java Tutorial

5. 5. How Tibco Hawk Agent Does Operate?

   The Hawk agent uses micro agents as an object to represent and interact with the managed object in your local machine. Then, the agent loads the rule bases as monitoring policies to monitor your system or your applications. It uses RV Messaging to communicate with the micro agents, and uses EMS or RV messaging to communicate with other agents, Event Service and Hawk Display. It also communicates using instances of TIBCO Hawk Display but it works independently with the Display and other agents.

Adv Java

6. 6. What Is The Difference Between The Hawk Micro Agent (hma) And Application Micro Agents?

   HMA or Hawk Micro agents are default micro agents residing on your local machine to monitor system’s health and statistics. HMA can be a platform-specific or platform-independent micro agent. It means that every platform has its own specific micro agent or it has micro agents that are default to any platform.

   The Application Micro agents, on the other hand, are micro agents that are specifically created or coded to monitor the application statistics. Only those applications that use AMI are dynamically discovered by the Hawk System and represented by micro agents that enable those applications to be managed and monitored.

7. 7. What Is Ami Or Application Management Interface?

   Application Management Interface (AMI) is a gateway between the external applications and Hawk System that uses RV Messaging to communicate. It is used as a protocol in incrementing an application with a management interface that allows the application to be monitored and controlled by exposing internal application methods to the TIBCO Hawk system.

JSP Tutorial
JSP

8. 8. Tibco Hawk Agents Operate By Loading Rule Bases. So, What Are Rule Bases?

   Rule base refers to a collection of rules that controls the monitoring conducted by the agents, which can be created or modified using the rule base editor in the TIBCO HAWK Display. It uses a micro agent method as a data source to create one or more tests. These tests use If/else construct to check the conditions and includes action if the condition evaluates to true. An action, can be sending an alert or notification messages, execute an OS command, creating post condition, or invoking another micro gent method.

9. 9. What Are Alert Messages?

   Alert messages originate from a rule base that implements the monitoring policy or logic. When a specified condition occurs, the agent publishes an alert message to the TIBCO Hawk Display and presents it by colors to show the severity of the alert. It uses colors such as red for high alert, orange for medium alert, yellow for low alert, cyan if it’s recovering, green if it’s ok and purple for no heartbeat. These colors are default to the Hawk Display but it also allows you to change them based on your own preference. You can also suspend an alert message that will be temporarily neutralized to prevent it from interfering with other monitoring tasks. If ever a condition ceases, these alerts will be cleared or removed in the Display.

TIBCO

10. 10. What Is A Rule Base Scheduling?

    Rule base scheduling allows you to create a schedule that defines when a rule base, rule, test or action is active or not. These schedules can be imposed on the rule base to control the monitoring activity and performing corrective tasks. You can define and assign a schedule using the TIBCO Hawk Display, which must be saved on a file so that it can be assigned later on to one or more agents and can be applied to any rule base objects.

    In creating a schedule, you can also specify inclusion and exclusion periods. For example, you can set a rule base to be activated only during office hours and be deactivated during holidays. For the inclusion period, you can use Mondays to Fridays from 8 AM to 5PM and for the exclusion period you can include holidays such as Christmas and New Year.

11. 11. What Are The Hawk Group Operations?

    • There are three Hawk Group operations:
      the Network Query, Network Query with test and Network Action. These group operations allow you to detect and solve problems in the network. If you want to research and test on how to build rules, these Hawk Group operations can be used as an interactive tool.
    • Network Query, from the name itself, queries one or more agents in the network to detect the location where such specified condition exists. It is such a powerful feature that allows you to communicate with multiple TIBCO Hawk agents at one time. As an individual agent, you can ask or query multiple agents in your network.
    • The Network Query with test, on the other hand, is where you apply a test based on the results of the network query. You can use these tests to filter the result set, but these tests are optional and only one test per query is allowed.
    • Lastly, the Network Action specifies an action to be performed on any agent in the network but you can only specify an action one at a time.
    • Both the Network query and Network Action allow you to combine common and identical tasks which can be executed in a single operation and can be performed on each agent in the network.

Tibco BW

12. 12. What Are The Monitoring Best Practices?

    Using TIBCO Hawk, you can have these practices to achieve an efficient and effective way of monitoring your system and your applications.

    • Create a rule base based on the process existence. This is to check or test whether there are not enough or too many process instances that are running or you can use this rule base to automatically restart a failed process.
    • Creating a rule base that monitors the process resource utilization. This is to make sure that the use of the resources such as the memory and the CPU don’t get too big overtime, which might affect the system’s performance. Create a rule base for your Logfiles or Event Log Monitoring. Through this, you can make or define another rule based on the entries of those activities logged on which you’ll be able to perform necessary actions.
    • Checking for the existence of an Application Micro agent also needs to be monitored. This is useful in a situation where you want to detect if the application that you are monitoring is not responding or not communicating with the agents.

    After studying and configuring TIBCO Hawk System, you will see that it is such a powerful monitoring tool. It can help system administrator to guarantee and improve software performance and availability. With the solutions provided by TIBCO Hawk, monitoring can now be implemented in the network without worrying much of the use of the bandwidth and the network traffic.

Soap Tool Interview Questions

13. 13. What Are Tibco Hawk Agent And What Role It Plays In Hawk Monitoring?

    HAWK agent is a key part of TIBCO HAWK Product Suit and it does all the required monitoring by using the rules defined in the Rule base file. HAWK agent runs on each such machine where hawk rule base monitoring is needed.

14. 14. What Is Hawk Rule Base?

    Hawk Rule base is a set of rules which are used for monitoring applications and system’s behavior. Rules defined in a rule base include rule conditions and associated actions which need to be performed. HAWK agent utilizes rule base file for monitoring purposes.

15. 15. What Are Types Of Actions Which Can Be Performed For A Certain Rule Condition?

    For any rule defined in TIBCO HAWK, we can have any of the following types of action performed:

    • Alert (Generating Alert Messages)
    • Execute (to execute certain commands or scripts)
    • Notification (To send action notifications)
    • Method (To execute some micro agent method as an action)
    • Email (to send an email as an action)

Soap UI

16. 16. What Is Purpose Of Tibco Hawk Display?

    Hawk Display is a graphical tool which is used to view active agents in the network and allows creation of new rule bases or addition of rules in an existing rule base.

17. 17. What Are Benefits Of Using Tibco Hawk For Monitoring?

    TIBCO HAWK based monitoring of systems and applications in a distributed environment helps in dealing with any unexpected or unwanted situations and enables operational teams to take any required measures to avoid any major losses in terms of data and revenue.

    TIBCO HAWK works on distributed rule based monitoring principles with low network traffic and optimized use of network bandwidth.

Spotfire (TIBCO)

18. 18. Describe An Example Scenario For Defining Hawk Rule Based Monitoring?

    Depending on your business flows and business criticality of your applications; hawk rules can be defined for different scenarios. One example scenario can be to create rules for System memory utilization and generate necessary alerts (e.g. Email notifications) when memory usage exceeds a certain threshold.

Adv Java

19. 19. How We Can Check Hawk Alerts In Tibco Administrator?

    TIBCO Administrator provides Monitoring Management module which can be used to view all alerts as well as all features of HAWK Console including its micro agents and their methods.

20. 20. What Are Hawk Micro Agents? Describe Micro Agent Methods?

    TIBCO Hawk Micro Agents are objects that acts as data source and supports various methods for each type of micro agent which can be used to monitor application and services behavior.

    Micro agents communicate with different types of managed objects through its methods to get required information for monitoring purposes. This includes operating system objects, files objects etc.

Tibco Ems

21. 21. What Is The Usage Of Tibco Hawk Event Source?

    TIBCO Hawk Event Service is a console API based application which can be used to record the activities reported by hawk agents in log files. HAWK Event Source can also be configured to take rule based action in response to different hawk events.

1. 1. What Is International Trade?

   International trade is the exchange of capital, goods, and services across international borders or territories. … In most countries, such trade represents a significant share of gross domestic product (GDP).

2. 2. What Is The Definition Of Global Trade?

   Global trade, also known as international trade, is simply the import and export of goods and services across international boundaries. Goods and services that enter into a country for sale are called imports.

Forex Management Interview Questions

3. 3. What Is The Theory Of International Trade?

   International trade theories are simply different theories to explain international trade. Trade is the concept of exchanging goods and services between two people or entities. International trade is then the concept of this exchange between people or entities in two different countries.

4. 4. Who Benefits From Trade?

   Free trade means that countries can import and export goods without any tariff barriers or other non-tariff barriers to trade. Essentially, free trade enables lower prices for consumers, increased exports, benefits from economies of scale and a greater choice of goods.

Forex Management Tutorial

5. 5. How Important Is Intuition When Trading?

   Intuition is one element among several others which make a person a successful trader . Its presence increases the chances of one’s success manifold but presence of other elements, which may include professional knowledge, marketing / sales tricks, presence in the right market, purchase & sale at a right time, know how of related commercial rules / norms. is deeply connected with intuition.

Business Development

6. 6. Why International Trade Is So Important?

   Because of International Trade the trading partners gets goods cheaper than otherwise. Because every country produce those goods in the production of which it has to occur less comparative cost.

7. 7. What Are The Characteristics Of International Trade?

   1. Territorial specialization:
       International trade takes place basically due to geographical specialisation. Every country specialises in the production of goods and services in which it has a specific advantage.For example, India has specific advantage in the production of jute and tea. Therefore, India exports these commodities to U.K. India imports steel from U.K. which U.K. can produce at a lower cost than India.
   2. International competition: 
      Producers from many countries complete with another to sell their products. Therefore, there is intense competition in international trade. Here the quality, design, packing, price, advertisement, etc., all play a significant role in deciding the winner in the market.
   3. Separation of sellers from buyers:
       In international trade sellers and buyers belong to different countries. They may have no chance of ever meeting one another. Therefore, they have to depend upon middlemen for transactions.
   4. Long chain of middlemen:
       The procedure of international trade is very long and complex. It is very difficult for buyers and sellers to perform all the formalities themselves. They require the services of expert middlemen such as, indent houses, forwarding agents, clearing agents, foreign exchange banks, etc.
   5. Mutually acceptable currency: 
      The currencies of importing and exporting countries generally are different. Therefore, it is necessary to find out a mutually acceptable currency. Generally, dollar and pound sterling are selected. These currencies are known as hard currencies because they are acceptable all over the world.
   6. International rules and regulations:
       Businessmen engaged in international trade require knowledge of international laws and trade restrictions.
   7. Government control:
       The government of every country exercises control over imports and exports for national interest.
   8. Several documents:
       A large number of documents are required in international trade.

Supply Chain Management Tutorial
Supply Chain Management

8. 8. What Are The Problems Or Difficulties In International Trade?

   International trade is characterised by the following special problems or difficulties.

   1. Distance: 
      Due to long distance between different countries, it is difficult to establish quick and close trade contacts between traders. Buyers and sellers rarely meet one another and personal contact is rarely possible. There is a great time lag between placement of order and receipt of goods from foreign countries. Distance creates higher costs of transportation and greater risks.
   2. Different languages: 
      Different languages are spoken and written in different countries. Price lists and catalogues are prepared in foreign languages. Advertisements and correspondence also are to be done in foreign languages.A trader wishing to buy or sell goods abroad must know the foreign language or employ somebody who knows that language.
   3. Difficulty in transportation and communication: 
      Dispatch and receipt of goods takes a longer time and involves considerable expenses. During the war and natural calamities, transpor­tation of goods becomes even more difficult. Similarly, the costs of sending or receiving informa­tion are very high.
   4. Risk in transit: 
      Foreign trade involves much greater risk than home trade. Goods have to be transported over long distances and they are exposed to perils of the sea. Many of these risks can be covered through marine insurance but increases the cost of goods.
   5. Lack of information about foreign businessmen: 
      In the absence of direct and close relationship between buyers and sellers, special steps are necessary to verify the creditworthiness of foreign buyers. It is difficult to obtain reliable information concerning the financial position and business standing of the foreign traders. Therefore, credit risk is high.
   6. Import and export restrictions: 
      Every country charges customs duties on imports to protect its home industries. Similarly, tariff rates are put on exports of raw materials. Importers and exporters have to face tariff restrictions.They are required to fulfil several customs formalities and rules. Foreign trade policy, procedures, rules and regulations differ from country to country and keep on changing from time to time.
   7. Documentation: 
      Both exporters and importers have to prepare several documents which involve expenditure of time and money.
   8. Study of foreign markets:
       Every foreign market has its own characteristics. It has require­ments, customs, weights and measures, marketing methods, etc., of its own. An extensive study of foreign markets is essential for success in foreign trade. It is very difficult to collect accurate and up to date information about foreign markets.
   9. Problems in payments: 
      Every country has its own currency and the rate at which one currency can be exchanged for another (called exchange rate) keeps on fluctuating change in exchange rate create additional risk.Remittance of money for payments in foreign trade involves much time and expense. Due to wide time gap between dispatch of goods and receipt of payment, there is greater risk of bad debts.
   10.  Frequent market changes: 
       It is difficult to anticipate changes in demand and supply conditions abroad. Prices in international markets may change frequently. Such changes are due to entry of new competitors, changes in buyers’ preferences, changes in import duties and freight rates, fluctuations in exchange rates, etc.
   11. Investment for longer period: 
       There is longer time gap between supply of goods and receipt of payment. Therefore, the exporter’s capital remains locked up over a longer period.
   12. Intense competition: 
       Traders who want to sell goods abroad have to face severe competition from different countries. Considerable market research is necessary to ensure suitability of product in foreign markets. Heavy expenditure on advertising and sales promotion may be necessary.

9. 9. Is There A Need For A Separate Theory Of International Trade?

   On this question, there are two views: (i) the classical view and (ii) Ohlin’s view.

   Classical View :

   Classical economists believed that there was a fundamental difference between home trade and foreign trade. They pointed out that, labour and capital move freely within a country but not between different countries.

   Thus, international immobility of factors was the basic criterion accepted by the classical economists for the emergence of international trade. Moreover, different national policies, different political units, different monetary systems, and artificial barriers like tariffs and exchange controls involved in international trade distinguish it from domestic trade.

   Ohlin’s View :

   Bertil Ohlin, the Swedish economist, however, challenged the traditionally accepted notion on international trade by advocating that there is no need for a separate theory of international trade. In his view “international trade is but a special case of inter-local or inter-regional trade.”

   He opines, that, the Marshallian theory of value can be easily extended to the phenomenon of international trade by developing the “space” thesis instead of the “time” hypothesis in the Marshallian Price Theory. “Space element is vital for the international trade and should be given full consideration in the theory of pricing, through its extension from one to a number of more or less closely related markets. Such an extension can be based upon one market analysis.”

Finance

10. 10. What Is The Meaning Of Unctad?

    UNCTAD is the principal organ of the United Nations General Assembly dealing with trade, investment, and development issues.

11. 11. What Are The Objectives And Functions Of Unctad ?

    Some of the most important objectives and functions of UNCTAD are given below:-

    Objectives : 
    The objective of UNCTAD :

    • To reduce and eventually eliminate the trade gap between the developed and developing Countries.
    • To accelerate the rate of economic growth of the developing world.

    Functions: 
    The main Functions of the UNCTAD are:

    1. To promote international trade between developed and developing countries with a view to accelerate economic development.
    2. To formulate principles and policies on international trade and related problems of economic development.
    3. To make proposals for putting its principles and policies into effect, (iv) To negotiate trade agreements.
    4. To review and facilitate the coordination of activities of the other U.N. institutions in the field of international trade.
    5. To function as a centre for a harmonious trade and related documents in development policies of governments.

    Activities: 
    The important activities of UNCTAD include

    • research and support of negotiations for commodity agreements;
    • technical elaboration of new trade schemes; 
    • various promotional activities designed to help developing countries in the areas of trade and capital flows.

International Relations(IR)

12. 12. What Are The Factors Determine Size Of Gain Of International Trade?

    1. Nature of Terms of Trade
    2. Difference in Cost Ratios
    3. Productive Efficiency of the Country
    4. Relative Elasticity of Demand
    5. Factor Endowments and Technological Conditions

Forex Management Interview Questions

13. 13. What Are The Distinct Features Of International Transactions?

    There are several reasons – practical as well as pedagogic – for evolving a separate theory of international trade and consequent development of a distinctive branch of economics called “International Economics” dealing with issues and problems of the international economy.

    International trade follows different laws of behaviour from those of domestic trade. Therefore, a separate theory is inevitable. These reasons, in a way, tend to point out the distinguishing attributes of international transactions. Following are the distincg features:

    Immobility of Factors :
     The degree of immobility of factors like labour and capital is generally greater between countries than within a country. Immigration laws, citizenship requirement, etc., often restrict the international mobility of labour.

    Heterogeneous Markets : 
    In the international economy, world markets lack homogeneity on account of differences in language, preferences, customs, weights and measures, etc. The behaviour of international buyers in each case would, therefore, be different. For instance, the Indians have right-hand driven cars while Americans have left-hand driven cars. Hence, the markets for automobiles are effectively separated. Thus, one peculiarity of international trade is that, it involves heterogeneous national markets.

    Different National Groups : 
    An obvious difference between home trade and foreign trade is that trade within a country is trade among the same group of people, whereas, trade between countries runs between differently cohered groups. The socio-economic environment differs greatly between nations, while it is more or less uniform within countries. Friedrich List, therefore, put that: “Domestic trade is among us, international trade is between us and them.”

    Different Political Units : 
    International trade is a phenomenon which occurs between politically different units, while domestic trade occurs within the same political unit. The government in each country is keen about the welfare of its own nationals against that of the people of other countries. Hence, in international trade policy, each government tries to see its own interest at the cost of the other country. As a matter of fact national sovereignty exerts its great influence on the character of economic activity and trade.

    Different National Policies and Government Intervention :
     National rules, laws and policies relating to trade, commerce, industry, taxation, etc., are more or less uniform within a country, but differ widely between countries. Tariff policy, import quota system, subsidies and other controls adopted by a government interfere with the course of normal trade between it and other countries. Thus, state interference causes different problems in international trade while the value theory in its pure form, which assumes-laissez-faire policy, cannot be applied in toto to the international trade theory.

    Different Currencies : 
    Perhaps the principal difference between domestic and international trade is that, the latter involves the use of different types of currencies. That is why there is the problem of exchange rates and foreign exchange. It is a fact that different countries follow different foreign exchange policies. Thus, one has to study not only the factors which determine the value of each country’s monetary unit, but also the fact of divergent practices and exchange resorted to.

    Specific Problems : 
    International economic relations give rise to certain specific problems of a peculiar nature, e.g., international liquidity, international monetary co-operation, evolution of international organisations like the European Common Market, etc. Such problems can never arise in regional economics. These are to be studied separately and solved by “international economics” against the background of world movements at large.

14. 14. What Are The Disadvantages Of Free Trade ?

    Despite many advantages, free trade policy has never been completely adopted by all the countries of the world. Particularly after the World War II, the policy was abandoned even by those who had previously adopted it. The following arguments are given against free trade policy.

    Unrealistic Policy: 
    Free trade policy is based on the assumption of laissez-faire or government non-in­tervention. Its success also requires the pre-condition of perfect competition. However, such conditions are unrealistic and do not exist in the actual world.

    Non-Cooperation of Countries: 
    Free trade policy works smoothly if all the countries cooperate with each other and follow this policy. If some countries decide to gain more by imposing import restrictions, the system of free trade cannot work.

    Economic Dependence: 
    Free trade increases the economic dependence on other countries for certain essential products such as food, raw materials, etc. Such dependence proves harmful particularly during wartime.

    Political Slavery
    : Free trade leads to economic dependence and economic dependence leads to political slavery. For political freedom, economic independence is necessary. This requires abandonment of free trade.

    Unbalanced Development: 
    Free trade and the resultant international specialisation lead to unbalanced development of national economy. Under this system, only those sectors are developed in which the country has a comparative advantage. Other sectors remain undeveloped. This results in lop-sided development.

    Dumping: 
    Free trade may lead to cutthroat competition and dumping. Under dumping, goods arc sold at very cheap rates and even below their cost of production in order to capture the foreign markets.

    Harmful Products: 
    Under free trade, injurious and harmful products may be produced and traded. Trade restrictions are necessary to check the import of such products.

    International Monopolies: 
    Free trade may lead to international monopolies. It encourages the estab­lishment of multinational corporations. These corporations tend to acquire monopoly position and thus harm the interest of the local people.

    Reduction in Welfare of Certain Groups: 
    While free trade tends to maximize world production of goods and services, it may simultaneously hurt the welfare of certain group in every country. Under free trade, the output of those commodities in which the country has comparative advantage tend to increase to meet the export demand, and the output of goods in which the country has comparative disadvantage contracts due to pressure from import competition. Thus, the real income of the groups engaged in the export industries will rise and real income of those engaged in the import competing industries will fall.

     Harmful to Less Developed Countries: 
    Free trade is harmful for the less developed countries for the following reasons:

    • Competition under free trade is unfair and unhealthy. The less developed countries find it difficult to compete with the economically advanced countries.
    • Under free trade, gains of trade are unequally distributed depending upon the level of development of different countries. The terms of trade are favourable for the developed countries, and un­favourable for the poor countries.
    • Less developed countries generally experience unfavourable balance of payments. The problem of un-favourable balance of payments cannot be solved under free trade policy.
    • Free trade policy adopted by the British government in India led to the destruction of Indian cottage and small scale industries.
    • The less developed countries cannot protect their infant industries under the policy of free trade.
    • Free trade may endanger economic and political independence of the backward nations.

15. 15. What Are The Advantages Of Flexible Exchange Rates ?

    Advantage of Flexible Exchange Rates : 
    Flexible exchange rate system is claimed to have the following advantages

    Independent Monetary Policy: 
    Under flexible exchange rate system, a country is free to adopt an independent policy to conduct properly the domestic economic affairs. The monetary policy of a country is not limited or affected by the economic conditions of other countries.

    Shock Absorber: 
    A fluctuating exchange rate system protects the domestic economy from the shocks produced by the disturbances generated in other countries. Thus, it acts as a shock absorber and saves the internal economy from the disturbing effects from abroad.

    Promotes Economic Development: 
    The flexible exchange rate system promotes economic development and helps to achieve full employment in the country. The exchange rates can be changed in accordance with the requirements of the monetary policy of the country to achieve the planned national objectives.

    Solutions to Balance of Payment Problems: 
    The system of flexible exchange rates automatically removes the disequilibrium in the balance of payments. When, there is deficit in the balance of payments, the external value of a country’s currency falls. As a result, exports are encouraged, and imports are discouraged thereby, establishing equilibrium in the balance of payment.

    Promotes International Trade: 
    The system of flexible exchange rates does not permit exchange control and promotes free trade. Restrictions on international trade are removed and there is free movement of capital and money between countries.

    Increase in International Liquidity:
    The system of flexible exchange rates eliminates the need for official foreign exchange reserves, if the individual governments do not employ stabilization funds to influence the rate. Thus, the problem of international liquidity is automatically solved. In fact, the present shortage of international liquidity is due to pegging the exchange rates and the intervention of the IMF authorities to prevent fluctuations in the rates beyond a narrow limit.

    Market Forces at Work: 
    Under the flexible exchange rate system, the foreign exchange rates are determined by the market forces of demand and supply. Market is cleared off automatically through changes in exchange rates and the possibility of scarcity or surplus of any currency does not exist.

    International Trade not Promoted by Fixed Rates: 
    The argument that fixed exchange rates promotes international trade is not supported by historical facts of inter-war or post-war period. On the other hand under the flexible exchange rate system, the trend of the rate of exchange is generally assessed through the forward market, and the traders are protected from financial losses arising from fluctuating exchange rates. This helps in promoting international trade.

    International Investment not Promoted by Fixed Rates:
    The argument that long-term international investments are encouraged under fixed exchange rate system is not valid. Both the lenders and borrowers cannot expect the exchange rate to remain stable over a very long-period.

    Fixed Rates not Necessary for currency Area: 
    This stable exchange rates are not necessary for any system of currency areas. The sterling block functioned smoothly during the thirties in spite of the fluctuating rates of the member countries.

    Speculation not Prevented by Fixed Rates:
    The main weakness of the stable exchange rate system is that in spite of the strict exchange control, currency speculation is encouraged. This destroys the stability in the exchange value of the home currency and makes devaluation of the currency inevitable. For instance, the pound had to be devalued in 1949 mainly because of such speculation.

Trade Marketing

16. 16. What Are The Disadvantages Of Flexible Exchange Rates?

    Disadvantage of Flexible Exchange Rates : 
    The following are the main drawbacks of the system of flexible exchange rates

    Low Elasticities: 
    The elasticities in the international markets are too low for exchange rate, variations to operate successfully in bringing about automatic equilibrating adjustments. When import and export elas­ticities are very low, the exchange market becomes unstable. Hence, the depreciation of the weak currency would simply tend to worsen the balance of payments deficit further.

     Unstable conditions: 
    Flexible exchange rates create conditions of instability and uncertainty which, in turn, tend to reduce the volume of international trade and foreign investment. Long-term foreign investments arc greatly reduced because of higher risks involved.

    Adverse Effect on Economic Structure: 
    The system of flexible exchange rates has serious repercussion on the economic structure of the economy. Fluctuating exchange rates cause changes in the price of imported and exported goods which, in turn, destabilise the economy of the country.

    Unnecessary Capital Movements: 
    The system of fluctuating exchange rates leads to unnecessary international capital movements. By encouraging speculative activities, such a system causes large-scale capital outflows and inflows, thus, seriously disturbing the economy of the country.

    Depression Effects of Capital Movements: 
    Speculative capital movements caused by fluctuating ex­change rates may lead to the problem of extremely high liquidity preference. In a situation of high liquidity preference, people tend to hoard currency, interest rates rise, investment falls and there is large-scale unemployment in the economy.

    Inflationary Effect: 
    Flexible exchange rate system involves greater possibility of inflationary effect of exchange depreciation on domestic price level of a country. Inflationary rise in prices leads to further depreciation of the external value of the currency.

    Factor Immobility
    : The immobility of various factors of production deprives the flexible exchange rate system of its advantages arising from the adoption of monetary and other policies for maintaining internal stability. Such policies produce desirable effects on production and employment only when supply of factors of production is elastic.

    Failure of Flexible Rate System: 
    Experience of the flexible exchange rate system adopted between the two world wars has shown that it was a flop.

17. 17. What Are The Criteria Of Measuring Gains From International Trade?

    Gains accrue to all the participating countries in international trade. As noted by Jacob Viner, the classical economists usually adopted the following alternative criteria of measuring the gain from trade accruing to an individual country:

    1. Reduction in the Cost of Production.
    2. Enhancement of the Real Income.
    3. The nature of Terms of Trade.

    In short, an index of cost reduction or improvement in the marginal physical product of labour can be used as a criterion for measuring the gain from international trade.
    Thus, the gain from trade may be measured as under: G = Ca – Cb

    Where,

    G stands for the gain;
    Ca stands for per unit cost of production after trade;
    Cb stands for per unit cost of production before trade.
    If G is negative, it suggests cost economy to that extent.

    Similary, the other method may be given as under:

    G = MP Pa – MPPb
    Where,
    MP Pa refers to the marginal physical product of labour after trade.
    MPPb refers to the marginal physical product of labour before trade.
    The positive magnitude of Gi thus, implies a gain to that extent.

    A second criterion, the real income criterion follows from the first that to the extent the real income or the net national product of the country increases on account of international trade, may be regarded as the gain from international trade. Thus:

    G = Ya-Yb

    Where,

    Ya stands for the national income after trade.
    Yb stands for the national income before trade.

    The last criterion, the terms of trade index, of measuring gain is, however, the most celebrated one. Terms of trade refer to the ratio of export price (Px) to import price (Pm) of a country –

Banking

18. 18. What Are The Factors That Influence The Terms Of Trade?

    Terms of trade are influenced by a number of factors. Important among them are given below:

    Elasticity of Demand:
     The elasticity of demand for exports and imports of a country influence its terms of trade. If the demand for a country’s exports is less elastic as compared to her imports, the terms of trade will tend to be favourable because the exports can command higher price than imports. On the other hand, if the demand for imports is less elastic than that for exports, the terms of trade will be unfavourable.

    Elasticity of Supply:
     The nature of elasticity of supply also significantly influence the country’s terms of trade. If the supply of a country’s exports is more elastic than the imports, the terms of trade will tend to be favourable.

    Nature of Goods: 
    If a country is producing and exporting only primary goods, and importing manufac­tured goods, the terms of trade will be unfavourable.

    Economic Development: 
    The economic development has two types of effects: (a) The demand effect: It refers to the increase in demand for imports as a result of increase in income associated with economic development, (b) The supply effect: It refers to the increase in supply of import substitutes or import competing goods. The net effect of economic development depends upon the extent of these two effects.

    Rate of Exchange:
    Changes in the rate of exchange of a country’s currency also affect its terms of trade. If a country’s currency appreciates, its terms of trade will improve because a rise in the value of the currency causes an increase in the export prices and decrease in the import prices.

    Tariff Policy: 
    Tariffs and quotas also influence the terms of trade. These measures, if not retaliated by other countries, improve a country’s terms of trade by restricting imports.

    Size of Population: 
    An overpopulated country will have larger demand for imports. As a result, the terms of trade will tend to be unfavourable in this case relative to the under populated or optimally populated country.

    Size of Country: 
    A larger country will tend to have less favourable terms of trade as compared to a smaller country. This is because the smaller country can reap the gains of economies of scale enjoyed by the larger one in the international trade.

    Degree of Competition: 
    If a country enjoys monopoly power in case of its exports and there are many alternative sources of supply of its imports, then it will have favourable terms of trade.

Business Development

19. 19. What Is The Role Of Wto In International Trade?

    • WTO’s aim is to liberalise international trade.
    • WTO establishes rules regarding international trade and sees that these rules are obeyed.
    • 153 countries of the world are currently members of the WTO.
    • It is seen that the developed countries have unfairly retained trade barriers. On the other hand, WTO rules have forced developing countries to remove trade barriers.

20. 20. What Are The Objectives Of Wto?

    Important objectives of WTO are mentioned below:

    • To implement the new world trade system as visualised in the Agreement;
    • To promote World Trade in a manner that benefits every country;
    • To ensure that developing countries secure a better balance in the sharing of the advantages resulting from the expansion of international trade corresponding to their developmental needs;
    • To demolish all hurdles to an open world trading system and usher in international economic renaissance because the world trade is an effective instrument to foster economic growth;
    • To enhance competitiveness among all trading partners so as to benefit consumers and help in global integration;
    • To increase the level of production and productivity with a view to ensuring level of employment in the world;
    • To expand and utilize world resources to the best;
    • To improve the level of living for the global population and speed up economic development of the member nations.

21. 21. What Are The Functions Of Wto ?

    Some of the important  functions and objectives of WTO are :
     The former GATT was not really an organisation; it was merely a legal arrangement. On the other hand, the WTO is a new international organisation set up as a permanent body. It is designed to play the role of a watchdog in the spheres of trade in goods, trade in services, foreign investment, intellectual property rights, etc. Article III has set out the following five functions of WTO;

    • The WTO shall facilitate the implementation, administration and operation and further the objec­tives of this Agreement and of the Multilateral Trade Agreements, and shall also provide the frame work for the implementation, administration and operation of the plurilateral Trade Agreements.
    • The WTO shall provide the forum for negotiations among its members concerning their multilateral trade relations in matters dealt with under the Agreement in the Annexes to this Agreement.
    • The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement of Disputes.
    • The WTO shall administer Trade Policy Review Mechanism.
    • With a view to achieving greater coherence in global economic policy making, the WTO shall cooperate, as appropriate, with the international Monetary Fund (IMF) and with the International Bank for Reconstruction and Development (IBRD) and its affiliated agencies.

1. 1. Where Do Dividends Appear On The Financial Statements?

   The dividends declared and paid by a corporation will be reported as a use of cash in the financing section of the statement of cash flows. Dividends are also reported on the statement of changes in stockholders’ equity.

   Dividends on common stock are not reported on the income statement since they are not expenses. Dividends on preferred stock are not expenses, but will be deducted from net income in order to report the earnings available for common stock on the income statement.

   Since the balance sheet reports only the ending account balances at an instant of time, the Cash and Retained Earnings amounts reflect the balances after past dividends and other transactions.

2. 2. What Is The Meaning Of Equity?

   Equity is used in accounting in several ways. Often the word equity is used when referring to an ownership interest in a business. Examples include stockholders’ equity or owner’s equity.

   Occasionally, equity is used to mean the combination of liabilities and owner’s equity. For example, some restate the basic accounting equation Assets = Liabilities + Owner’s Equity to become Assets = Equities.

   Equity is also used to indicate an owner’s interest in a personal asset. The owner of a $200,000 house that has an $80,000 mortgage loan is said to have $120,000 of equity in the house.

   Outside of accounting, the word equity is also used to indicate fairness or justice.

Research Methodology Interview Questions

3. 3. How Do You Record A Dividend Payment To Stockholders?

   A dividend to stockholders or shareholders involves two entries.  The first entry occurs on the date that the board of directors declares the dividend. In this entry the account Retained Earnings is debited and Dividends Payable is credited for the amount of the dividend that will be paid. Retained Earnings is a stockholders’ equity account and Dividends Payable is a current liability account. Some corporations debit a temporary account Dividends instead of debiting Retained Earnings. Then at the end of the year, the Dividends account is closed to Retained Earnings. 

   The second entry occurs on the date of the payment to the stockholders. On that date the current liability account Dividends Payable is debited and the asset account Cash is credited.

4. 4. What Is Retained Earnings?

   Generally, retained earnings is a corporation’s cumulative earnings since the corporation was formed minus the dividends it has declared since it began. In other words, retained earnings represents the corporation’s cumulative earnings that have not been distributed to its stockholders.

   The amount of retained earnings as of a balance sheet’s date is reported as a separate line item in the  stockholders’ equity section of the balance sheet.

   A negative amount of retained earnings is reported as deficit or accumulated deficit.

Research Methodology Tutorial

5. 5. What Is The Difference Between Stocks And Bonds?

   Stocks, or shares of stock, represent an ownership interest in a corporation. Bonds are a form of long-term debt in which the issuing corporation promises to pay the principal amount at a specific date.

   Stocks pay dividends to the owners, but only if the corporation declares a dividend. Dividends are a distribution of a corporation’s profits. Bonds pay interest to the bondholders.  Generally, the bond contract requires that a fixed interest payment be made every six months.

   Every corporation has common stock. Some corporations issue preferred stock in addition to its common stock. Many corporations do not issue bonds.

   The stocks and bonds issued by the largest corporations are often traded on stock and bond exchanges. Stocks and bonds of smaller corporations are often held by investors and are never traded on an exchange.

Currency Derivatives

6. 6. How Do Cash Dividends Affect The Financial Statements?

   When a corporation declares a cash dividend on its stock, its retained earnings are decreased and its current liabilities (Dividends Payable) are increased. When the cash dividend is paid, the Dividends Payable account is decreased and the corporation’s Cash account is decreased.

   The net result of the declaration and payment of the dividend is that the corporation’s assets and stockholders’ equity have decreased. Specifically, the balance sheet accounts Cash and Retained Earnings were decreased.

   The income statement is not affected by the declaration and payment of cash dividends on common stock. (The cash dividends on preferred stock are deducted from net income to arrive at net income available for common stock.)

   The cash dividends will be reported as a use of cash in the financing activities section of the statement of cash flows.

7. 7. What Is The Difference Between Equity Financing And Debt Financing?

   Equity financing often means issuing additional shares of common stock to an investor. With more shares of common stock issued and outstanding, the previous stockholders’ percentage of ownership decreases.

   Debt financing means borrowing money and not giving up ownership. Debt financing often comes with strict conditions or covenants in addition to having to pay interest and principal at specified dates. Failure to meet the debt requirements will result in severe consequences. In the U.S. the interest on debt is a deductible expense when computing taxable income. This means that the effective interest cost is less than the stated interest if the company is profitable. Adding too much debt will increase the company’s future cost of borrowing money and it adds risk for the company.

Trading in Future and Options

8. 8. Are Retained Earnings An Asset?

   Generally, the amount of a corporation’s retained earnings is the cumulative net income since the corporation began minus all of the dividends that the corporation has declared since it began. The amounts are recorded in the Retained Earnings account, which is reported in the Stockholders’ Equity section of the corporation’s balance sheet.

   While the amount of retained earnings is reported in the stockholders’ equity section of the balance sheet (and in the accounting equation), the retained earnings are probably invested in assets that are also reported on the balance sheet. For example, let’s assume that you start a corporation to provide website consulting services. You invest $500 in the corporation, and immediately find a client who pays you $4,000 for your services. Your corporation’s Cash is now $4,500 which equals the Paid-in Capital of $500 plus the Retained Earnings of $4,000. On the next day, you spend $3,500 to acquire a computer and other equipment for your corporation plus $300 of supplies. Right after these items are purchased, your corporation will report $700 of Cash + $300 of Supplies + $3,500 of Equipment = Stockholders’ Equity of $4,500—of which $4,000 is Retained Earnings.

   The Retained Earnings amount is clearly reported as part of Stockholders’ Equity, but the amount is usually invested in assets or used to reduce liabilities. Rarely will the retained earnings be entirely in cash. The retained earnings need to be invested in income producing assets or in the reduction of liabilities in order to earn a return for the stockholders, who have opted to reinvest their earnings in the corporation.

9. 9. What Is The Difference Between Public Sector And Private Sector?

   Public sector refers to government-owned organizations and government-provided services.

   Private sector refers to

   1) organizations that are not government owned, and

   2) the goods and services provided by organizations outside of the government.

   For example, companies owned by individuals are part of the private sector. Even the largest corporation with its common stock publicly-traded on the New York Stock Exchange is part of the private sector.

Stock Market

10. 10. What Type Of Account Is The Dividends Account?

    When a corporation declares a dividend on its common stock, it will credit a current liability account Dividends Payable and will debit either 1) Retained Earnings, or 2) Cash Dividends Declared. Cash Dividends Declared is a balance sheet account, but it is a temporary account. The reason it is a temporary account is that its debit balance will be closed to the Retained Earnings account before the end of the accounting year.

11. 11. What Is The Difference Between Stockholder And Stakeholder?

    A stockholder or shareholder is the holder or owner of stock in a corporation.

    A stakeholder is anyone that has an interest or is affected by a corporation. In other words, the stockholder isn’t the only party having a stake in the corporation. Other stakeholders in a corporation include the employees, the employees’ families, suppliers, customers, community, and others.

    Some organizations do not have stockholders, but have stakeholders. For example, the state university doesn’t have stockholders, but it has many stakeholders: students, the students’ families, professors, administrators, employers, state taxpayers, the local community, the state community, society in general, custodians, suppliers, etc.

Equity Dealing

12. 12. What Is Stockholders’ Equity?

    Stockholders’ equity (also known as shareholders’ equity) is one of the three elements of a corporation’s balance sheet and the accounting equation as outlined here: assets = liabilities+ stockholders’ equity.

    Some view stockholders’ equity as a source (along with liabilities) of the corporation’s assets. Others think of stockholders’ equity as the owners’ residual claim after the liabilities have been paid. Stockholders’ equity is also the corporation’s total book value (which is different from the corporation’s worth or market value).

    The amount of stockholders’ equity is presented in the balance sheet in the following subsections:

    • Paid-in capital. Generally this subsection reports the amounts that the corporation received when it issued shares of capital stock.
    • Retained earnings. Generally this is the cumulative earnings of the corporation minus the cumulative amount of dividends declared.
    • Accumulated other comprehensive income. This is the cumulative amount of income (or loss) that has not been included in the net income reported on the corporation’s income statement.
    • Treasury stock. This reduction of stockholders’ equity is the amounts spent by the corporation to repurchase but not retire its own shares of capital stock.

    The changes which occurred in stockholders’ equity during the accounting period are reported in the corporation’s Statement of Stockholders’ Equity (one of the main financial statements).

Research Methodology Interview Questions

13. 13. How Do You Record An Owner’s Money That Is Used To Start A Company?

    If the owner of a sole proprietorship puts money into her or his business, the sole proprietorship will debit the asset received (Cash, Inventory, Equipment, etc.) and will credit the owner’s capital account (if it is an investment in the business) or will credit a liability account such as Notes Payable (if it is a loan to the business). The amount that is recorded is the cash amount. If cash was not involved, then the cash equivalent or fair market value is used.

    If the business is a corporation and the owner’s infusion of cash is an investment, the account Common Stock is credited. (If the common stock has a par value, Paid-in Capital in Excess of Par is also used.) If the owner lends cash to the corporation, the liability account Notes Payable to Stockholder is credited. When the asset is not cash, the amount recorded is the cash equivalent or fair market value of the asset or the fair market value of the common stock issued, whichever is more clear.

    You should consult with your accounting and tax professional about the pros and cons of investing versus lending.

14. 14. What Is A Capital Account?

    In accounting and bookkeeping, a capital account is one of the general ledger accounts used to record 1) the amounts that were paid in to the company by an investor, and 2) the cumulative amount of the company’s earnings minus the cumulative distributions to the owners. The balances of the capital accounts are reported in the owner’s equity, partners’ equity, or stockholders’ equity section of the balance sheet.

    In a corporation the capital accounts include:

    • Paid-in capital accounts such as Common Stock, Preferred Stock, Paid-in Capital in Excess of Par. These accounts report the amounts received by the corporation when the shares of its capital stock were originally issued to investors.
    • Retained earnings accounts which typically contain the amount of the corporation’s cumulative earnings since the corporation was formed minus the cumulative dividends distributed to the stockholders.
    • Treasury stock account (a contra account because it has a debit balance) usually reporting the amount paid by the corporation to repurchase its own shares of stock that have not been retired.

    In a sole proprietorship (such as one owned by Amy Fox) the capital accounts include:

    • Amy Fox, Capital. This account begins with Amy’s original investment and is increased for each year’s earnings minus each year’s withdrawals by Amy.
    • Amy Fox, Drawing. This account is a contra account because it will have a debit balance equal to the amount of business assets that Amy has withdrawn during the current accounting year for her personal use. At the end of each accounting year, Amy’s drawing account is closed by transferring its debit balance to the account Amy Fox, Capital.

    The total of the balances in the capital accounts must be equal to the reported total of the company’s assets minus its liabilities. Because of the historical cost principle and other accounting principles the total amount reported in the capital accounts will not indicate the company’s market value or net worth.

15. 15. What Is The Difference Between Par And No Par Value Stock?

    Some states’ laws require or may have required common stock issued by corporations residing in their states to have a par value. The par value on common stock has generally been a very small amount per share. Other states might not require corporations to issue stock with a par value. So the par value on common stock is a legal consideration.

    From an accounting standpoint, the par value of an issued share of common stock must be recorded in an account separate from the amount received over and above the amount of par value. For example, if a corporation issues 100 new shares of its common stock for a total of $2,000 and the stock’s par value is $1 per share, the accounting entry is a debit to Cash for $2,000 and a credit to Common Stock—Par $100, and a credit to Paid-in Capital in Excess of Par for $1,900. In total the Cash account increased by $2,000 and the paid-in capital reported under stockholders’ equity increased by a total of $2,000 ($100 + $1,900).

    If a corporation is not required to have a par value or a stated value and the corporation issues 100 shares for $2,000, then the accounting entry will be a debit to Cash for $2,000 and a credit to Common Stock for $2,000.

    In other words, when the issued stock has a par value, the proceeds from the issuance gets divided between two of the paid-in capital accounts within stockholders’ equity. If the issued stock does not have a par value, the proceeds from the issuance goes into just one paid-in capital account within stockholders’ equity.

Debt Collection

16. 16. What Is Comprehensive Income?

    Comprehensive income for a corporation is the combination of the following amounts which occurred during a specified period of time such as a year, quarter, month, etc.:

    1. Net income or net loss (which is reported on the income statement), plus
    2. Other comprehensive income (if this is present, a statement of comprehensive income must be prepared)

    Examples of other comprehensive income include:

    • Unrealized gains/losses on available-for-sale investments
    • Unrealized gains/losses on hedge/derivative financial instruments
    • Foreign currency translation adjustments
    • Unrealized gains/losses on postretirement benefit plans

    Basically, comprehensive income consists of all of the revenues, gains, expenses, and losses that caused stockholders’ equity to change during the accounting period. (The corporation’s sale or purchase of its capital stock and its declaration of dividends are not a component of comprehensive income. The stock transactions and dividends are reported as separate items in the statement of stockholders’ equity.)

    The amount of other comprehensive income for the period will be added to the accumulated other comprehensive income, which is a separate line within stockholders’ equity on the end-of-the-period balance sheet. (The net income or net loss reported on the income statement will be added to retained earnings as usual.)

17. 17. Where Is Treasury Stock Reported On The Balance Sheet?

    Under the cost method of recording treasury stock, the cost of treasury stock is reported at the end of the Stockholders’ Equity section of the balance sheet. Treasury stock will be a deduction from the amounts in Stockholders’ Equity.

    Treasury stock is the result of a corporation repurchasing its own stock and holding those shares instead of retiring them.

    In the general ledger there will be an account Treasury Stock with a debit balance. (At the time of the purchase of treasury stock, the corporation will debit the account Treasury Stock and will credit the account Cash.)

Equity Research Analyst

18. 18. What Is Net Income?

    In business, net income is the positive result of 1) revenues and gains minus 2) expenses and losses. A negative result is referred to as net loss. (Please note that some gains and losses are not included in the calculation of net income, but will be included in comprehensive income).

    Net income is also known as net earnings. The details of the net income calculation is reported in the business’s income statement. The income statement is also known as the statement of income, statement of earnings, and statement of operations.

    The net income of a regular U.S. corporation includes the income tax expense which pertains to the items reported in its income statement. The net income of a sole proprietorship, partnership, and Subchapter S corporation will not include income tax expense since the owners (and not the entity) are responsible for the business income tax.

    A corporation’s net income will cause an increase in the Retained Earnings account, which will also result in an increase in stockholders’ equity. A net loss will cause a decrease.

    A sole proprietorship’s net income will cause an increase in the owner’s capital account, which will also mean an increase in owner’s equity. A net loss will cause a decrease.

Currency Derivatives

19. 19. What Is The Difference Between Dividends And Interest Expense?

    Dividends are a distribution of a corporation’s earnings to its stockholders. Dividends are not an expense of the corporation and, therefore, dividends do not reduce the corporation’s net income or its taxable income. When a dividend of $100,000 is declared and paid, the corporation’s cash is reduced by $100,000 and its retained earnings (part of stockholders’ equity) is reduced by $100,000.

    Interest on bonds and other debt is an expense of the corporation. The interest expense will reduce the corporation’s net income and its taxable income. When interest expense occurs and is paid, the corporation’s cash is reduced by the interest payment, but some cash will be saved by the reduction in income taxes. The corporation’s retained earnings will also be reduced by less than the amount of interest expense. For example, if a corporation has an incremental tax rate of 40%, interest expense of $100,000 will result in $40,000 less in income tax expense and income tax payments. This means that an interest payment of $100,000 will reduce the corporation’s cash and retained earnings by the net amount of $60,000 ($100,000 of interest minus $40,000 of tax savings).

    Since interest is formally promised to the lenders, accountants must accrue interest expense and the related liability Interest Payable. If the payment for interest is not made, the corporation will face legal consequences.

    Dividends on common stock are not legally required. Therefore, if the corporation does not declare a dividend there is no liability for the omitted dividends.

20. 20. What Is The Cost Of Capital?

    The cost of capital is the weighted-average, after-tax cost of a corporation’s long-term debt, preferred stock, and the stockholders’ equity associated with common stock. The cost of capital is a percentage and it is often used to compute the net present value of the cash flows in a proposed investment. It is also considered to be the minimum after-tax internal rate of return to be earned on new investments.

    For a profitable corporation, the costs of bonds and other long-term loans are usually the least expensive components of the cost of capital. One reason is that the interest will be deductible for U.S. income taxes. For example, a corporation paying 6% on its loans may have an after-tax cost of 4% when its combined federal and state income tax rate is 33%. On the other hand, the dividends paid on the corporation’s preferred and common stock are not tax deductible.

    The cost of common stock (paid-in capital and retained earnings) is considered to be the most expensive component of the cost of capital because of the risks involved.

    Let’s compute the cost of capital by assuming that a corporation has $40 million of long-term debt with an after-tax cost of 4%, $10 million of 7% preferred stock, and $50 million of common stock and retained earnings with an estimated cost of 15%. Its weighted-average, after-tax cost of capital is: ($40 million X 4% = $1.6 million) + ($10 million X 7% = $0.7 million) + ($50 million X 15% = $7.5 million) = $9.8 million divided by $100 million = 9.8%.

Fixed Deposit

21. 21. What Is Par Value?

    Par value is a per share amount appearing on stock certificates. It is also an amount that appears on bond certificates.

    In the case of common stock the par value per share is usually a very small amount such as $0.10 or $0.01 or $0.001 and it has no connection to the market value of the share of stock. The par value is usually described as the common stock’s legal capital and it is part of the corporation’s paid-in (or contributed) capital.

    When a share of common stock having a par value of $0.01 is issued for $25, the account Common Stock will be credited for $0.01 and an additional paid-in capital account will be credited for $24.99 (and Cash will be debited for $25.00).

    If a state no longer requires a corporation’s common stock to have a par value, a corporation might issue no-par stock (which may or may not have a stated value).

    In the case of bonds, the par value is also the face amount or maturity value of the bonds.

22. 22. What Is The Expanded Accounting Equation?

    The expanded accounting equation replaces Owner’s Equity in the basic accounting equation (Assets = Liabilities + Owner’s Equity) with the following components: Owner’s Capital + Revenues – Expenses – Owner’s Draws. In other words, the expanded accounting equation for a sole proprietorship is: Assets = Liabilities + Owner’s Capital + Revenues – Expenses – Owner’s Draws.

    In the expanded accounting equation for a corporation, Stockholders’ Equity in the basic accounting equation (Assets = Liabilities + Stockholders’ Equity) is replaced by these components: Paid-in Capital + Revenues – Expenses – Dividends – Treasury Stock. The resulting expanded accounting equation for a corporation is: Assets = Liabilities + Paid-in Capital + Revenues – Expenses – Dividends – Treasury Stock.

    The expanded accounting equation allows you to see separately (1) the impact on equity from net income (increased by revenues, decreased by expenses), and (2) the effect of transactions with owners (draws, dividends, sale or purchase of ownership interest).

23. 23. What Is The Difference Between Paid-in Capital And Retained Earnings?

    First, paid-in capital and retained earnings are the major categories of stockholders’ equity.

    Paid-in capital, also referred to as contributed capital, is the amount that the corporation received from stockholders when the corporation issued its stock. Paid-in capital is also referred to as permanent capital.

    Retained earnings is the cumulative amount of after tax net income earned by the corporation since its inception minus the dividends that have been distributed to the stockholders since the corporation began.

Commodity

24. 24. What Is The Book Value Per Share Of Stock?

    If a corporation does not have preferred stock outstanding, the book value per share of stock is a corporation’s total amount of stockholders’ equity divided by the number of common shares of stock outstanding on that date.

    For example, if a corporation without preferred stock has stockholders’ equity on December 31 of $12,421,000 and it has 1,000,000 shares of common stock outstanding on that date, its book value per share is $12.42.

    Keep in mind that the book value per share will not be the same as the market value per share. One reason is that a corporation’s stockholders’ equity is simply the difference between the total amount of assets reported on the balance sheet and the total amount of liabilities reported. Noncurrent assets are generally reported at original cost less accumulated depreciation and some valuable assets such as trade names might not be listed on the balance sheet.

Trading in Future and Options

25. 25. What Is Treasury Stock?

    Treasury stock is a corporation’s previously issued shares of stock which have been repurchased from the stockholders and the corporation has not retired the repurchased shares. The number of shares of treasury stock (or treasury shares) is the difference between the number of shares issued and the number of shares outstanding. Since the treasury shares result in fewer shares outstanding, there may be a slight increase in the corporation’s earnings per share.

    Treasury Stock is also the title of a general ledger account that will typically have a debit balance equal to the cost of the repurchased shares being held by the corporation. (Some corporations use the par value method instead.) The cost of the treasury stock purchased with cash will reduce the corporation’s cash and the amount of its total stockholders’ equity.

    The shares of treasury stock will not receive dividends, will not have voting rights, and cannot result in an income statement gain or loss. The shares of treasury stock can be sold, retired, or could continue to be held as treasury stock.

26. 26. What Is Common Stock?

    Common stock is the type of ownership interest (expressed in “shares”) that exists at every U.S. corporation. (A relatively few corporations will have preferred stock in addition to the common stock.) The owners of common stock are known as common stockholders, common shareholders, or simply as stockholders or shareholders.

    Common Stock is also the title of the general ledger account that is credited when a corporation issues new shares of common stock. (The amount of the credit will depend on the state’s regulations.) The balance in Common Stock will be reported in the corporation’s balance sheet as a component of paid-in capital, a section within stockholders’ equity.

    Generally, the holders of common stock elect the corporation’s board of directors and will participate in a corporation’s success through increases in the market value of their shares of common stock and perhaps through cash dividends.

    A drawback of common stock is that the common stockholders are last in line if the corporation is dissolved.

Trademark

27. 27. What Are The Required Financial Statements?

    The required financial statements for U.S. business corporations are:

    1. Statement of income. This financial statement is also known as the statement of operations, statement of earnings, or income statement. It reports the corporation’s revenues, expenses, gains and losses (except for items stipulated as other comprehensive income) for a period of time such as a year, quarter, 13 months, etc.
    2. Statement of comprehensive income. This financial statement begins with the bottom line of the income statement and then lists the items considered to be other comprehensive income. Some of these items involve currency translation, hedging, available-for-sale securities, and pensions.
    3. Balance sheet. This statement of financial position reports a corporation’s assets, liabilities and stockholders’ equity as of the final instant of the date shown in its heading (December 31, January 31, June 30, etc.)
    4. Statement of cash flows. This statement reports the major causes for the change in cash and cash equivalents during the accounting period. The cash flows are presented as operating, investing, or financing activities.
    5. Statement of stockholders’ equity. This financial statement is often presented as the statement of shareholders’ equity, statement of equity, statement of changes in stockholders’ equity, etc. It reports all of the changes in stockholders’ equity which occurred during the accounting period.

    The five annual financial statements must be accompanied with notes to the financial statements. These notes are needed in order to disclose additional information about items that are reported or are not reported in the financial statements.

    You can see examples of the required financial statements (and the required notes) for a publicly traded U.S. corporation by searching the Internet for the corporation’s name plus the words investor relations. Select Annual Reports (or select SEC filings and annual reports or 10-K).

Stock Market

28. 28. What Is Capital Stock?

    Capital stock is the combination of a corporation’s common stock and preferred stock (if any).

    Common stock is usually the first and only capital stock issued by corporations. However, some corporations will also issue preferred stock.

    The amount received by the corporation when it issued shares of its capital stock is reported in the stockholders’ equity section of the balance sheet.

29. 29. What Are The Journal Entries For A Stock Split?

    The only journal entry needed for a stock split is a memo entry to note that the number of shares has changed and that the par value per share has changed (if the stock has a par value). However, a typical journal entry with debits and credits is not needed since the total dollar amounts for the par value and other components of paid-in capital and stockholders’ equity do not change.

    For example, if a corporation has 100,000 shares of $1.00 par value stock and it declares a 2-for-1 stock split, the corporation will have 200,000 shares with a par value of $0.50 per share. Before and after the stock split, the total par value is $100,000. Other account balances within stockholders’ equity also remain the same.

30. 30. What Is The Difference Between Public Companies And Public Sector?

    Public companies are those businesses owned by individuals (and not by a government). If a public company is a corporation whose stock is traded on a stock exchange it is said that the stock is publicly traded or that the company is a publicly-traded corporation.

    Public sector refers to government-owned organizations and government-provided services.

31. 31. What Is Stock?

    In accounting there are two common uses of the term stock. One meaning of stock refers to the goods on hand which is to be sold to customers. In that situation, stock means inventory.

    The term stock is also used to mean the ownership shares of a corporation. For example, an owner of a corporation will have a stock certificate which provides evidence of his or her ownership of a corporation’s common stock or preferred stock. The owner of the corporation’s common or preferred stock is known as a stockholder.

32. 32. What Is A Memorandum Entry?

    A memorandum entry is a short message entered into the general journal and also entered into a general ledger account. It is not a complete journal entry because it does not contain debit and credit amounts.

    An example of a memorandum entry might be the following:

    “On May 1, 2013 a 2-for-1 stock split was declared for the common stockholders of record as of the end of the day May 22, 2013. The stock split will result in the number of issued and outstanding shares of common shares increasing from 200,000 shares to 400,000 shares.”

    Since a stock split does not change the balance in the Common Stock account, a complete journal entry was not required. The memorandum entry merely notes for future reference that the number of shares of stock has changed.

33. 33. Is It Okay To Have Negative Amounts In The Equity Section Of The Balance Sheet?

    If the current year’s net income is reported as a separate line in the stockholders’ equity or in the owner’s equity section of the balance sheet, a negative amount of net income must be reported. The negative net income occurs when the current year’s revenues are less than the current year’s expenses.

    If the cumulative earnings minus the cumulative dividends declared result in a negative amount, there will be a negative amount of retained earnings. This negative amount of retained earnings will be reported as a separate line within stockholders’ equity.

    If the amount of negative retained earnings is greater than the amount of paid-in capital, the total of the stockholders’ equity section will also be a negative amount.

    To recap, negative amounts can occur and the negative amounts must be reported.

Equity Dealing

34. 34. What Is A Dividend?

    A cash dividend is a distribution of a portion of a corporation’s earnings to its stockholders.

    A stock dividend (as opposed to a cash dividend) is a distribution of more shares of a corporation’s own stock to its stockholders.

35. 35. What Is Preferred Stock?

    Preferred stock is a type of capital stock issued by some corporations. Preferred stock is also known as preference stock.

    The word “preferred” refers to the dividends paid by the corporation. Each year, the holders of the preferred stock are to receive their dividends before the common stockholders are to receive any dividend. In exchange for this preferential treatment for dividends, the preferred stockholders (or shareholders) generally will never receive more than the stated dividend. For example, the holder of 100 shares of a corporation’s 8% $100 par preferred stock will receive annual dividends of $800 (8% X $100 = $8 per share X 100 shares) before the common stockholders are allowed to receive any cash dividends for the year. Unless the preferred stock has a participating feature, this preferred stockholder will never receive more than $8 per share no matter how successful the corporation becomes.

    The features of preferred stocks can vary. Examples include cumulative, convertible, callable, participating, and more.

    Since the dividend on preferred stock is usually a fixed amount forever, once the preferred stock is issued its market value is likely to move in the opposite direction of inflation. The higher the rate of inflation, the less valuable is the fixed dividend amount. If the inflation rate declines, the value of the preferred stock is likely to increase, but no higher than the stock’s call price.

    Most corporations do not issue preferred stock. Typically, corporations will issue only common stock and use debt.

36. 36. What Is The Meaning Of Arrears?

    In accounting we use the word arrears in at least two ways. One use involves the omitted dividends on cumulative preferred stock. For example, if a corporation has cumulative preferred stock and due to a shortage of cash decides to omit the dividend on those preferred shares, the preferred dividend is in arrears. The result of having these dividends in arrears is that the owners of the common stock cannot receive a dividend until the preferred stock’s dividends in arrears are paid and the preferred stock’s current year dividend is also paid. Having dividends in arrears also requires a disclosure in the notes to the financial statements.

    Arrears is also used in the context of annuities. When an annuity’s equal payments occur at the end of each period, the annuity is said to be an annuity in arrears or an ordinary annuity.

    Arrears is also used to simply mean past due, or behind in payments.

Debt Collection

37. 37. What Is The Difference Between Stockholder And Shareholder?

    There is no difference between stockholder and shareholder. The terms are used interchangeably. Both terms mean the owner of shares of stock in a corporation and a part owner of a corporation.

38. 38. What Are The Reasons For A Stock Dividend Instead Of A Cash Dividend?

    A corporation might declare a stock dividend instead of a cash dividend in order to 1) increase the number of shares of stock outstanding, 2) move some of its retained earnings to paid-in capital, and 3) minimize distributing the corporation’s cash to its stockholders.

    If a corporation has 100,000 shares of stock outstanding and it declares a 10% stock dividend, the corporation ends up having 110,000 shares outstanding. An individual stockholder having 1,000 shares prior to the 10% stock dividend will have 1,100 shares after the stock dividend. This individual’s stake in the corporation was 1% (1,000 out of 100,000 shares) prior to the stock dividend and will remain at 1% (1,100 out of 110,000 shares) after the stock dividend.

    Since the corporation hasn’t really changed because of the stock dividend, the total market value of the corporation should not change. In other words, if the total market value of the corporation was $1 million before the stock dividend, it should be $1 million after the stock dividend. However, the market value of each share should decrease: $1,000,000 divided by 100,000 shares = $10 per share, and $1,000,000 divided by 110,000 shares = $9.0909. The total market value of the individual’s holdings should also remain the same: 1,000 shares X $10 = $10,000, and 1,100 shares X $9.0909 = $10,000. If the market does not adjust for the increased number of shares, the individual stockholders will benefit.

39. 39. What Is Premium On Common Stock?

    The premium on common stock involves the amount the issuing corporation receives when it issues common stock having a par value. The premium on common stock is the dollar amount that is in excess of the common stock’s par value.

    To illustrate the premium on common stock, let’s assume that a corporation issues one share of its common stock having a par value of $0.10 per share. If the corporation receives $20 in exchange for the share, $19.90 will be recorded as the premium on common stock.

    Accounting textbooks often refer to the premium on common stock as paid-in capital in excess of par value–common stock or as contributed capital in excess of par value–common stock.

40. 40. What Is The Meaning Of Pro Rata?

    Pro rata is a Latin term that means in proportion. Pro rata is related to prorate, a term used in cost accounting.

    To illustrate the term pro rata, let’s assume that a company’s standard costing system has an unfavorable materials price variance of $400,000. If that amount is significant, the company will prorate the $400,000 to its inventory and to its cost of goods sold. Let’s also assume that the proration will be based on the company’s $1 million of standard materials costs in its inventories and $9 million of standard materials costs in its cost of goods sold. On this basis the inventories’ pro rata share of the variance will be $40,000 ($1 million divided by the total of $10 million = 10% times the $400,000 variance). The pro rata share of the variance assigned to the cost of goods sold will be $360,000 ($9 million divided by $10 million = 90% times the $400,000 variance).

Equity Research Analyst

41. 41. A Corporation Has A Large Balance In Retained Earnings. Does That Mean That Its Dividends To Stockholders Will Be Increasing?

    Not necessarily. The balance in retained earnings means that the company has been profitable over the years and its dividends to stockholders have been less than its profits. It is possible that a company with billions of dollars of retained earnings has very little cash available today.

    One possible explanation for the small amount of cash in relation to the retained earnings is that the company invested in new plant assets in order to expand its operations. Rather than distributing the company’s cash to its stockholders, the company used the cash to pay for the factory and equipment in order to meet demand for its new product line.

    Corporations might have a stated policy on dividends. For example, a corporation might pay dividends equal to approximately 40% of its earnings. Another corporation might have a plan to increase the amount of dividends each year by more than the rate of inflation. A new corporation might pay no dividends until its ratio of debt to equity is a specified percentage.

42. 42. What Does The Term Arrears Mean In Accounting?

    In accounting, arrears is used in at least two situations. One use involves the past, omitted dividends on cumulative preferred stock. If a corporation fails to declare the preferred dividend, those dividends are said to be in arrears. The dividends in arrears must be disclosed in the notes (footnotes) to the financial statements. (Cumulative preferred stock requires that any past, omitted dividends must be paid to the preferred stockholders before the common stockholders will be paid any dividend.)

    Another use of the word arrears occurs with annuities. (An annuity is a series of equal amounts occurring at equal time intervals…such as $1,000 per month for 20 years.) If the recurring amount comes at the end of each period, the annuity is described as an annuity in arrears or as an ordinary annuity. A loan repayment schedule is usually an annuity in arrears. For example, you borrow $10,000 on September 30 and your first monthly payment will be due on October 31, the second payment will be due on November 30, and so on.

Fixed Deposit

43. 43. What Is A Stockholder?

    A stockholder (also known as a shareholder) is the owner of one or more shares of a corporation’s capital stock. A stockholder is considered to be separate from the corporation and as a result will have limited liability as far the corporation’s obligations.

    The owner of a corporation’s common stock is referred to as a common stockholder. The common stockholders elect the corporation’s board of directors and will vote on very significant transactions such as merging the corporation with another corporation. Generally it is the common stockholders who become wealthy when a corporation becomes increasingly more successful.

    In addition to common stock, some corporations also issue preferred stock. An owner of these shares is known as a preferred stockholder (or preferred shareholder). A preferred stockholder usually accepts a fixed cash dividend that will be paid by the corporation before the common stockholders are paid a dividend. In exchange for this preferential treatment of dividends, the preferred stockholder will forego the potential financial gains that may occur for the common stockholder.

44. 44. What Are Dividends?

    In accounting, dividends often refers to the cash dividends that a corporation pays to its stockholders (or shareholders). Dividends are often paid quarterly, but could be paid at other times. For a dividend to be paid, the corporation’s board of directors must formally approve/declare the dividend. Hence, the board of directors may decide that a dividend will not be declared.

    It is important to note that the dividends declared and paid by a corporation are not an expense of the corporation. Rather, dividends are a distribution of the corporation’s earnings. This explains why state laws likely require corporations to have a credit balance in Retained Earnings before declaring and paying dividends. Practically speaking, the corporation must also have sufficient cash available to meet its current and future needs.

    While all corporations have common stock, some corporations will also have preferred stock. In that situation the preferred stockholders must receive their dividend before the common stockholders.

    When the board of directors declares a dividend, it will result in a debit to Retained Earnings and a credit to a liability such as Dividends Payable. When the corporation pays the dividend, Dividends Payable will be debited and Cash will be credited.

    Since Retained Earnings is a component of stockholders’ equity, the declaration and payment of a dividend reduces the corporation’s assets and its stockholders’ equity.

45. 45. Why Aren’t Retained Earnings Distributed As Dividends To The Stockholders?

    A corporation’s earnings are usually retained instead of being distributed to the stockholders in the form of dividends because the corporation is in need of money to strengthen its financial position, to expand its operations, or to keep up with the inflation in its present size of operations.

    The stockholders may prefer to forego dividends in order to see its stock value increase from the corporation’s wise use of the retained earnings. This is especially true of  U.S. individuals in high federal and state  income tax brackets. These stockholders might end up paying 40% of the dividend amount in income taxes. They would rather have their stock appreciate in value with no tax payments and later sell their shares of stock at the lower capital gains tax rates.

46. 46. What Is The Return On Stockholders’ Equity (after Tax) Ratio?

    The return on stockholders’ equity, or return on equity, is a corporation’s net income after income taxes divided by average amount of stockholders’ equity during the period of the net income.

    To illustrate, let’s assume that a corporation’s net income after tax was $100,000 for the most recent year. Let’s also assume that it did not have any preferred stock outstanding and that its stockholders’ equity was $950,000 at the beginning of the year and was $1,050,000 at the end of the year. The increase was at a uniform rate throughout the year. The return on stockholders’ equity will be 10% ($100,000 divided by the average stockholders’ equity of $1,000,000).

    If a corporation has preferred stock outstanding, the relevant name is return on common equity and will be calculated as follows: net income after tax minus the required dividends on its preferred stock, divided by the average amount of common stockholders’ equity during the period of the income.

    As with most ratios, you should compare your corporation’s return on equity with the ratio for other corporations in your industry.

47. 47. Do Corporations Issue Both Common Stock And Preferred Stock?

    Some corporations issue both common stock and preferred stock. However, most corporations issue only common stock. In other words, it is necessary that a business corporation issue common stock, but it is optional whether the corporation will decide to also issue preferred stock.

    Usually the holders or owners of a corporation’s common stock elect the corporation’s directors, vote on significant matters, and enjoy increases in the value of their shares of common stock when the corporation becomes successful.

    On the other hand, the holders of preferred stock usually receive only a fixed dividend, which must be paid before the common stock is paid a dividend. Because of that fixed dividend, the preferred stock will not increase in value as the corporation becomes increasingly successful.

48. 48. Does The Income Statement Explain The Change In The Equity Section Of A Balance Sheet?

    The income statement could explain the change in the equity section of a balance sheet. However, there are likely to be some other explanations as well.

    Here is a list of the items that would cause an increase in the total amount of a corporation’s stockholders’ equity:

    1. Positive net earnings or net income reported on the corporation’s income statement.
    2. Some positive Other Comprehensive Income items occurred but they are not to be reported on the income statement.
    3. Additional shares of stock were issued in exchange for cash or other assets.
    4. Donated capital was received.

    Here is a list of items that could cause a decrease in the total amount of a corporation’s stockholders’ equity:

    1. Negative net earnings or a net loss reported on the corporation’s income statement.
    2. Some negative Other Comprehensive Income items occurred but they are not to be reported the income statement.
    3. The corporation declared cash dividends.

49. 49. Why Is There A Large Difference Between Share Value And Stockholders’ Equity?

    There can be many reasons why the market value of a corporation’s stock is much greater than the amount of stockholders’ equity reported on the balance sheet. Let’s start by defining stockholders’ equity as the difference between the asset amounts reported on the balance sheet minus the liability amounts. Next, the accountant’s cost principle requires that only the cost of items purchased can be reported as an asset. This means that valuable trade names that were never purchased (but were developed over time) are not reported on the balance sheet. The same holds for a great management team and an amazing reputation. The cost principle also means that many long-term assets are reported at cost (and not at their current higher market value). Many plant assets are reported at minimal amounts because their costs have been reduced by the cumulative amount of depreciation taken over the years.

    Other factors contributing to a high market value might be a corporation’s earnings and dividends that are consistently growing and/or a special niche for its products or services that is recognized by the market.

    Lastly, a corporation’s stockholders’ equity may have been reduced from the purchase of treasury stock at a high cost.

50. 50. What Is Callable Stock?

    Callable stock is an ownership interest (shares) in a corporation that can be “called in” by the corporation at a specified price.

    For example, a corporation might issue 9% $100 Preferred Stock. The stock agreement (indenture) states that the stock is callable by the corporation after three years at $109 per share plus any accrued interest. If in the fourth year, market rates decline to say 7%, the corporation can call in the preferred stock by paying the call price of $109 plus any accrued interest.

    The callable feature allows the corporation to get out of the preferred stock agreement requiring it to pay the $9 per share dividend. In turn, the stockholders will be deprived of receiving the $9 dividend in a 7% market. The call price has the effect of limiting how high the market value of preferred stock will rise.

51. 51. Which Financial Statement Shows A Corporation’s Worth?

    Not one of the financial statements will show a corporation’s worth. The balance sheet, income statement, statement of cash flows, and stockholders’ equity statement merely provide information to assist financial experts in forming an opinion of a corporation’s worth.

    In the past, some people mistakenly thought that a corporation’s stockholders’ equity was the corporation’s worth. However, stockholders’ equity (or the owner’s equity of a proprietorship) is merely the result of subtracting the reported amount of liabilities from the reported amount of assets. Since the reported amounts reflect the cost principle and other accounting principles, the net result cannot be assumed to be the company’s worth.

52. 52. Does A Dividend Reduce Profit?

    When a corporation declares and pays a dividend, the dividend does not reduce the current accounting period’s profit reported on the income statement. In other words, a dividend is not an expense.

    Dividends will reduce the amount of the corporation’s retained earnings. Retained earnings are reported in the stockholders’ equity section of the balance sheet.

    If a corporation has very profitable uses for its cash, its future profits might be less if it pays dividends instead of reinvesting the cash dividend amounts into profitable projects.

53. 53. What Is The Definition Of Capital Market?

    Often, capital market refers to the structured market for trading stocks and bonds. Examples are the New York Stock Exchange, the American Stock Exchange, NASDAQ, and the New York Bond Exchange.

    However, capital market can also include less structured markets such as private placements for stocks, bonds, and other debt.

54. 54. What Is A Dividend And Why Is It Needed?

    A dividend paid by a corporation is a distribution of profits to the owners of the corporation. The owners of a corporation are known as stockholders or shareholders. (In a sole proprietorship, the distribution of profits to the owner is referred to as a draw.)

    A corporation’s board of directors, which is elected by the stockholders, decides if a cash dividend is needed. The considerations for paying or not paying a dividend include the stockholders’ wishes, the stock market’s reaction, and the corporation’s needs and opportunities for cash in the present and in the future.