Advanced Accounting AFTERSCHOOOL – DEVELOPING CHANGE MAKERS CENTRE FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME – World’ Most Comprehensive programme in social entrepreneurship & spiritual entrepreneurship OPEN FOR ALL FREE FOR ALL
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Advanced Accounting Dr. T.K. Jain. AFTERSCHOOOL Centre for social entrepreneurship Bikaner M: 9414430763
[email protected] www.afterschool.tk www.afterschoool.tk www.afterschoool.tk
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Dividends are paid on which: Authorised
capital (mentioned in memorandum of association) Paid up capital Called up capital Answer: paid up capital
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Amount set aside to meet losses due to bad debt is ? Provision
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
If proposed dividend is 20%, how much amount has to be set aside as reserve? 7.5%
answer.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Corporate dividend tax rate is ? 10%
answer.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Securities premium is shown as ? it
is shown as security premium account in liabilities side of balance sheet in the heading reserves and surplus.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Profit prior to incorporation is transferred to ? General reserve 2. Capital reserve 3. P & L account Answer: Capital reserve. 1.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
What are the methods of preparing cash flow statement? 1.
2.
Direct method (here you directly add all gross cash receipts and cash payments) Indirect method (here you adjust profit earned from P& L account).
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
There are 3 types of cash flow activities - which are those? 1. 2.
3.
Operating activities (purchase sale etc.) Investment activities (plant, machinery etc.) Financing activities (issue of shares, debentures, bonds etc.).
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
What is clause 32 of listing agreement? It
has been amended in 2000. It says: “every company shall give a cash flow statement along with balance sheet and P& L account. “
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Interest paid by bank is what ? Operating
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activity.
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
In cash flow statement, cash and cash equivalent include? Bank 2. Cash 3. Short investment 4. All these Answer: all these. 1.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
I have sold my old plant for Rs. 300000 (depreciated value Rs. 200000). What should I show in operating activity in Cash flow statement? Nil I
shall show the amount in investing activity.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
What will you do with loss prior to incorporation? You can do any of these: 2. Show as goodwill 3. Show as loss prior to incorporation in asset side 4. Write off in P& L Account
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
How will you distribute income and expenses in pre and post incorporateion category? Based
on time Distributed expenses on the basis of sales (turnover).
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Can a company convert its fully paid shares into stocks? Yes
– under sec 94 ©.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
What are SEBI requirements for issue of Bonus shares?
The company should not have defaulted in payment of interest. The articles should permit capitalisation of reserves Has to give bonus shares in 6 months of time from date of approval by board of directors Reserves created by revaluation of assets cannot be used. Partly paid shares should be fully paid. Such benefit should also be extended to convertible debenture holders. Only cash capital reserve can be utilised.
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What is employee stock option? The
option given to employees directors, etc. for purchasing shares at a predetermined price. (sec. 2, clause 15A) ESOS
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
What is buy back?
2. 3. 4.
Sec. 77 A of companies act 56 (amended in 99) give permission to company to buy back its shares out of : Free reserves Security premium account Proceeds of any shares / securities.
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Buy back – when not permitted? If
it is not permitted by articles Special resolution not passed Debt more than 2 times equity Buy back is less than 25% of paidup equity.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Suppose you go abroad to purchase some plant. Your expenses amount to Rs. 100000. What type of expenses are these? Capital
expenses (will be added to the cost of the plant). (all the expenses incurred to purchase any plant / machinery are called capital expenses).
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Suppose you spend Rs. 3 crore on advertisements – which will give you benefits over next 10 years. What type of expenses are these? Deferred
Revenue Expenses (because the benefit will be available for a long time.)
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
You have received Rs. 10 Lakh from insurase company against a claim regarding fire in your factory. What kind of receipt is it? Capital
receipt (because it is against loss of some assets).
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
You have received A loan from SBBJ as Working capital term loan – to augument your working capital. It is in addition to your cash credit loan. What type of receipt is it? Capital
receipt
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
You have received a subsidy of Rs. 200000 from govt. for starting a plant in backward area. What type of receipt is it? Revenue
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receipt.
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
You had given goods on credit to Ramu in 1999. You had considered a bad debt. Ramu made the payment in 2008. How will you treat receipt? Revenue
receipt. Cash A/c Debit Bad debt recovered account credit.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
You have given Diwali advance to your employees, what type of expense is it? It
is not expense. It is only an advance (neither revenue nor expense).
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
You have received interest on Bond. Rupees 5000 received will be treated as? Revenue
receipt. Cash Account debit Interest on bond account credit.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Yours is a CA /CS professional club. There is entrance fees of Rs. 10000 and annual fees Rs. 5000. Rishabh has joined the club. How will you do accounting? Entrance
fees is capital receipt but annual fees is revenue expenses. Cash account Debit Entrance Fees Fund a/c credit Annual fees account credit. www.afterschoool.tk
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
In order to take a tender, you have deposited Rs. 1 crore as earnest deposit. What type of expense is it? It
is not an expenditure, it is only a deposit.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
You have spent Rs. 50000 on repairs of your old plant. What type of expenses is it? Revenue
expenses.
Repairs
and maintenance account debit Cash account credit.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
You have a furniture showroom. You sell furniture of Rs. 10 lakh and you havent received payment yet. What will be accounting treatment? It
is a revenue receipt (although you havent yet received money.) Sale is recognised as soon as it is made. So entry will be : Party name a/c debit To sales account credit.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
You have purchased paper of Rs. 1000 to be used a stationery. How will you treat it? Revenue
expenses Stationery account debit To cash account credit.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
You have spent Rs. 1 crore on advertisement and Rs. 50 lakh on distribution of free samples. This has been done to launch a new product. How will you treat it? Deferred
revenue expenses
Advertisement
& publicity a/c debit Purchase account credit. Bank account credit. www.afterschoool.tk
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
You have spent Rs. 2 00000 on overhaul of second machines so that you use those machines. What type of expense is it? Capital
Expenses.
Machinery
account debit Bank account credit.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
You have opened the LOOTS showroom. You spent Rs. 100000 on inauguration. How will you treat it? Deferred
revenue expenses (because it will benefit you for many years).
Inauguration Bank
Expenses Debit
credit
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
You have spent Rs. 100000 on wages of workers for installation of machinery. How will you treat it? Capital
account
Entry: Machinery
account debit Bank account credit
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Where do you show contingent liability in balance sheet? You
don’t show it in balance sheet. It is added as footnote with balance sheet.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Differentiate provision & reserve? Provision
is a liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation. Reserve is to set aside some money for future requirements. Provision is present liability, but reserve is to set aside some profit.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
If any economic benefit is probable, what will you call it and how will you treat it? It
is contingent asset. It is not shown in balance sheet / financial statements. Directors may mention about it in their report.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Total of sales day book had been undercast by Rs. 2000. how will you rectify it? We
will undertake credit entry in Sales Account of Rs. 2000 more.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Rs. 200 paid as wages for installing new machinery has been shown as wages. Is it ok? It
is error of principle Rectify it : Machiinery account debit Wages account credit.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
We purchased old plant and spent rs. 10000 on its repairs and debited repairs account. Is it ok? It
is also error of principle
Plant
account debit Repairs account credit.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
I am the owner of my company. I take away goods of Rs. 1000 for home use and don’t make any entry of it. Is it ok? Error
of omission
Drawing
account debit Purchase account credit.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
I have distributed Rs. 10000 worth of goods as charity. I don’t believe in recording charity. Is it OK? Error
of commission
Charity
account debit Purchase account credit.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
I have sold my office computer in Rs. 2000. since its value was completely depreciated, so we didn’t make any entry. Is it OK? Error
of commission
Cash
account debit Computer account credit.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Can error of principles be identified by preparing trial balance? NO
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Can compensatory errors be identified by preparing trial balance? NO
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Can Error of commission be identified by preparing trial balance? Yes
– if there is wrong posting or wrong balancing or wrong casting If the amount has been written wrong in subsidiary – it is difficult to identify it though trial balance.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Can error of ommission be identified by preparing trial balance? Yes
or NO. Yes – if posting to ledger has been left (only one side). No – if the entry has been completely omitted.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
I treat purchase of machinery as regular purchase. What type of error is it? Error
of principle.
Rectify
it : Machinery account debit Purchase account credit.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Which errors may affect trial balance? Error
of partial omission Error of principle Error of complete omission Answer: Error of partial omission
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Total of sales day book is posted to ? Credit
side of sales account.
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Cash account is ? Real
Account
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Purchase account is ? Real
account
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Sales account is? Revenue
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account.
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
What is goodwill? Intangible
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fixed assets
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
ABO UT A FTERSCH OOO L Afterschoool conducts three year integrated PGPSE (after class 12th along with IAS / CA / CS) and 18 month PGPSE (Post Graduate Programme in Social Entrepreneurship) along with preparation for CS / CFP / CFA /CMA / FRM. This course is also available online also. It also conducts workshops on social entrepreneurship in schools and colleges all over India – start social entrepreneurship club in your institution today with the help from afterschoool and help us in developing society.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Why such a programme?
To promote people to take up entrepreneurship and help develop the society To enable people to take up franchising and other such options to start a business / social development project To enable people to take up social development as their mission To enable people to promote spirituality and positive thinking in the world
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Who are our supporters? Afterschoolians,
our past beneficiaries, entrepreneurs and social entrepreneurs are supporting us. You can also support us – not necessarily by money – but by being promotor of our concept and our ideas.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
About AFTERSCHOOOL PGPSE – the best programme for developing great entrepreneurs
Most flexible, adaptive but rigorous programme Available in distance learning mode Case study focused- latest cases Industry oriented practical curriculum Designed to make you entrepreneurs – not just an employee Option to take up part time job – so earn while you learn The only absolutely free course on internet
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Workshops from AFTERSCHOOOL
IIF, Delhi CIPS, Jaipur ICSI Hyderabad Branch Gyan Vihar, Jaipur Apex Institute of Management, Jaipur Aravali Institute of Management, Jodhpur Xavier Institute of Management, Bhubaneshwar Pacific Institute, Udaipur Engineering College, Hyderabad
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Flexible Specialisations:
Spiritualising business and society Rural development and transformation HRD and Education, Social Development NGO and voluntary work Investment analysis,microfinance and inclusion Retail sector, BPO, KPO Accounting & Information system (with CA / CS /CMA) Hospital management and Health care Hospitality sector and culture and heritage Other sectors of high growth, high technology and social relevance
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Salient features: The only programme of its kind (in the whole world) No publicity and low profile course For those who want to achieve success in life – not just a degree Indepth knowledge and expertise Professional approac: World class approach Strong intellectual and business capabilities Flexible – you may stay for a month and continue the rest of the education by distance mode. / you may attend weekend classes Scholarships for those from poor economic background Latest and constantly changing curriculum – keeping pace with the time Placement for those who are interested Admissions open throughout the year Latest and most advanced technologies, books and study www.afterschoool.tk AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS material
Components
Pedagogy curriculum and approach based on IIM Ahmedabad and ISB Hyderabad (the founder is alumnus from IIMA & ISB Hyderabad) Meditation, spiritualisation, and self development Essential softwares for business Business plan, Research projects Participation in conferences / seminars Workshops on leadership, team building etc. Written submissions of research projects/articles / papers Interview of entrepreneurs, writing biographies of entrepreneurs Editing of journals / newsletters Consultancy / research projects Assignments, communication skill workshops Participation in conferences and seminars Group discussions, mock interviews, self development diaryng Mind Power Training & writing workshop (by Dr. T.K.Jain)
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Pedagogy
Case analysis, Articles from Harvard Business Review Quiz, seminars, workshops, games, Visits to entrepreneurs and industrial visits Presentations, Latest audio-visuals Group discussions and group projects Periodic self assessment Mentoring and counselling Study exchange programme (with institutions out of India) Rural development / Social welfare projects
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Branches AFTERSCHOOOL
will shortly open its branches in important cities in India including Delhi, Kota, Mumbai, Gurgaon and other important cities. Afterschooolians will be responsible for managing and developing these branches – and for promoting social entrepreneurs.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Case Studies We
want to write case studies on social entrepreneurs, first generation entrepreneurs, ethical entrepreneurs. Please help us in this process. Help us to be in touch with entrepreneurs, so that we may develop entrepreneurs.
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
Basic values at afterschoool
Share to learn more Interact to develop yourself Fear is your worst enemy Make mistakes to learn Study & discuss in a group Criticism is the healthy route to mutual support and help Ask fundamental questions : why, when, how & where? Embrace change – and compete with yourself only
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
www.afterschoool.tk social entrepreneurship for better society
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AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS