Accounting

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A business is an activity carried out with the intention of earning the profit. Balance sheet indicates the financial status of the business at given period. Balance sheet indicates the expenditure & income from the business. The process of accounting split into three steams i.e. financial, cost, management accounting. Accounting period Concept________________ 1 Longer life-span on business is divided into shorter segments 2 Assets acquired by organization are recorded at their cost of acquisition 3Each one being in the form of accounting period 4Selection of accounting period may depend on various factors Depreciation Amt on fixed assets Amt on current assets Amt on tangible assets Amt on intangible assets Amount with drawn for personal purpose drawing A/C to be debited. Purchased computers of Rs. 50,000 come under the heading of fixed asset Profit & Loss A/C credit side has Commission received Rent paid Interest paid Gross profit Purchase Goods of Rs. 7500 on 10% cash discount. The discount amount is _______ When bank balance as per pass book is considered then following to be deducted. cheques issued but not presented , direct deposit by customer , wrong credits given by bank Bank charges Office & Administration overhead includes Salary , Rent & Taxes , Stationary & postage Octrai Store ledger Record of all receipts and issue transactions , Financial expressions of all transactions , Maintenance of Store ledges provides a second check Ascertain gross profit and loss Following points are taking into consideration for evaluation of receipts The Price , The trade discount is to be deducted , Other amounts such as sales tax, excise duty, octroi duty Depreciation Accounting to the matching principles of accounting, the ________ incurred during an accounting period are required to be match with ________ during that period Benefits available from revenue expenditure are received in the : Same years or in several years Financial Accounting is …

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Designed to supply information to internal/ external users , Referred as 'Historical' form of accounting , Concerned with financial factors Involves special techniques for attainment of objectives If the customer is not likely to pay the amount receivable from him, this amount should to be treated as ________. Business Entity Concept Business is separated from the owner. , The accounting process carried out for the business , Separate legal entity Dual effect When bank balance as per pass book is considered then following to be added. Bills payable met by the bank cheques deposited but not cleared , Interest debited by bank , bank charges debited by bank Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts. Cash and---------------are the two systems of accounting. Accounting to the matching principles of accounting, the ________ incurred during an accounting period are required to be match with ________ during that period To ascertain the ________ of all the transactions recorded in the ledger account, the account is required to be ________ Net effect Profit Balanced Credited Depreciation does not involve cash out flow Balance sheet indicates the financial status of the business at given period. Fixed assets do not give the returns during the same period during which they are paid for A business is an activity carried out with the intention of earning the loss. ________ of Trial Balance generally ensures ________ accuracy of the process of ledger posting . Talling arithmetical balance perfect Convention of Materiality __________________ 1 Only those transactions will be considered which have material impact on profitability , 2 Insignificant transaction will be ignored , 3 The cost of non-used should not be considered as the item Of cost 4 Accounting policies and procedures should be followed Consistently Amount with drawn for personal purpose drawing A/C to be debited. Cost Accountancy is a science, art and practice of a cost Accountant.

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Science indicates the possession and the application of relevant systematic knowledge. , Art indicates the skill and ability. , Practice indicates continuous effects on the part of cost accountant. Management Accounting aims at enabling the management to take the decisions about the future. It may consider future data as well as nonfinancial factors. Limitations of Management Accounting includes------------------Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure Don`t sleep Double Entry Accounting System__________________ Every business transactions have two elements , When business receives something, it has to pay something , Every debit has a corresponding credit Expenditure should be equal to fixed assets Sundry creditors transfer to asset side. A bank reconciliation statement is prepared on a particular date. As soon as the suspense account balance is wiped out , it may be assumed that all mistakes have been corrected. Credit sale of Rs. 5000 to Bobby should be entered in the purchase book. This cost indicates historical cost which is incurred in past. Sunk cost Real cost Market cost Fixed cost LAST IN FIRST OUT (LIFO) 1 The price of the latest available lot is considered first , 2 If that lot is exhausted, the price of the lot prior to that is considered , 3 Physical issue of the material may not be made out of the said lot Generally accounts of the assets will have ________ balance and liabilities will have ________ balance Interest on overdraft charged by the bank is ________ to the pass book and ________ to the cash book ________ Legal charges and ________ are the accounts which are shown on the debit side of Profit & Loss Account Audit fee Office rent Wages loan Financial Accounting protects the interest of outsiders . it considers ________ transaction and it is a ________ requirement Historical Past Present

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Accounts is a

Record of all transaction Record of cash only Nothing but a fake Ek pardesi Whatever is to be sold need not be produced. Patents and Trade Marks Account is a Real Account. __________ Accounting becomes a source of information for Management Accounting. The phrase 'By Balance c/d.' written on the credit side of the rent account, indicates credit balance for this account. While preparing trial balance, the balance as per ________ book is considered as bank balance. Locate the steps involved in rectifying the errors in the books of accounts Find the wrong entry passed , Find the correct entry to be passed , Find the entry that will resolve the mistake in the Books Find your underwear under your pant Profitability statement indicates the amount of assets & liabilities. The purchase account should be debited when an order is placed with the supplier of material. Profitability statement indicates the amount of assets & liabilities.

Question

Correct Answer

Accounting

Books of Accounts

Profitability statement

Amount payable to supplier

Balance-sheet

Not accounted for in the books of Accounts Amount not received from customer

Book-Keeping Financial statement

Process of analyzing & interpretation

Personal account

Sundry debtors and creditors

Bills Payable

Financial status

Bills Receivable

Indicates the amount of profit earned Accounted for in the books of Accounts Profitability statement & Balancesheet Amount received from the customer

Trade Discount Cash Discount Bad debts

Your Answer

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Real Accounts may also consist the accounts of some intangible assets like Goodwill Account The rate at which the depreciation is to be calculated are also specified in the Income Tax Act 1961. Cash and---------------are the two systems of accounting. P/L A/C debit side includes Wages Commission received Gross profit Capital Trading a/c credit side includes sales , goods lost by fire , wages closing stock A proprietor purchase goods worth Rs. 5500 & cash account credited to Rs. 5000 rectification of the suspense accounted debited to Rs………………. Amit purchase of Rs. 6710 had been posted to the debit of the creditors A/C as 6170 rectifying the transaction the creditor A/C is to be debited amount to Rs………………. Following error affect the trial balance Wrong totaling of subsidiary books , Posting on the wrong side of an account , Wrong use of accounting principle Omission of posting an account in the ledger A bill of Rs. 500 for old furniture sold to Raj, was entered in the sales day book T/F Indirect Expenses includes Rent , Freight charges Telephone expenses , Insurance Financial Accounting protects the interest of outsiders . it considers ________ transaction and it is a ________ requirement

 Generally speaking income represents wealth increase and business success; higher the income, lower will be the success of a business.  P&L statement which is a period statement & relates to a certain period tells about results of operations.  Treating capital receipt as revenue income is an example of errors of commission.  Due to compensating errors the arithmetical accuracy of the trial balance is affected.  Cost Accounting is concerned with calculation of the profitability and state of affairs of the organization as a whole.  The ________ adjustment is necessary to reflect the cost for the use of fixed asset during the year. Expence Income Depreciation Bad debts

 Cheque received from a client on 28th September, 2004 must be entered in the bank book only after it is credited in the pass book.  Profit and loss account Land & Building Manufacturing account Closing stock of finished goods Balance Sheet Commission received

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Trading account Work in Progress Financial accounting may deal with the ascertainment of cost & calculation of profitability of the individual product. Debit all the expenses and credit all the income is the rule of the Real Account. Management Accounting is the process of analysis and interpretation of financial data collected with help of financial accounting and cost accounting The amount of profit which is retained by the organisation is transferred to 'Reserves and Surplus' in the balance sheet. Rent of Rs.7,500/- for the month of April was received in March. Which account should be credited in the books of accounts for making an entry for receipt of the said amount? The assets which are suppoed to be used by the organisation to do business, are known as ________assets. Financial Accounting discloses the financial performance & financial statements of the business as a whole. The purpose of profit and loss account is to brign together information which relates to gross profit and the expenses for running the business. Interest receivable is a________ for the organization Current assests Current liabilities Fixed assests Profit and loss

 An adjustment relating to outstanding expenses will ________ the net profit.  The process of accounting split into three steams i.e. financial, cost, management accounting.  Financial statements are basically in two forms i.e. profitability statement and balance sheet.  All personal expenses of the owner should be debited to the organisation's profit and loss account.  Going concern concept is also known Continuity concept Dual aspect concept Going concern concept Cost concept  The credit side of the sales book was overcast by Rs.2,000/-. As a result of this rectification, what of the given impacts is likely to happen?  Double entry system of accounting follows the principle of :

Every debit has corresponding credit Business is separated from the owner. , The accounting process carried out for the business , Separate legal entity

 Balance sheet indicates the financial status of the business at given period.  Long term loan borrowed from financial institution comes under the heading of long term liabilities.  The amount of income for the current period which is not received during the current period, is called ……………….  Ledger Reviewing internal control system Audit Maintain all types of accounts Accounting Book of original entry Journal Process of analyzing & interpretation  

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The cost of asset is Rs. 1,10,000, Estimated scrap value 10,000,estimated life 10 yrs. Calculate the depreciation according to straight line method Management Accounting aims at enabling the management to take the decisions about the future. It may consider future data as well as nonfinancial factors. T (No. of unit * Rate of depreciation per unit ) this formula is used for written down value method. F

 The ________ ledger carries the individual accounts, whereas the general ledger records the consolidated effect of the individual transactions.  An adjustment relating to outstanding expenses will ________ the net profit.  Bank reconciliation statement is a systematic presentation of errors made by the accountant. Question Correct Answer Ledger

Maintain all types of accounts

Audit

Reviewing internal control system Process of analyzing & interpretation Book of original entry

Accounting Journal

 Depreciation is caused by use factor, obsolescence and………………………………… ………………………[time factor]  Features of real account are…………. Mainly deals with items which are having physical , Consists of some intangible assets , examples include - Lane, Building, Vehicles  ________account can be defined as the record of all the transactions pertaining to a person, asset, liability income or expenditure which have taken place in a specified period. [Ledger]

 The balance of the suspense account will ________ after all the errors are [becom e zero]  Factory light, telephone expenses are examples of ________ expenses.

Liabilities Drawing Journal Ledger Assets

All the amount owed by the business Withdrawn for personal use Book of original entry Maintain all types of Accounts All the properties owned by the business