Fa Assignment

1. Explain any two concepts of accounting with examples. 2. Prove that accounting equation is satisfied in all the following transaction of Mr.X 1. Commenced business with cash – Rs. 80000 2. Purchased goods for cash – Rs. 40000 and on credit Rs. 30000 3. Sold goods for cash – 40000 costing Rs. 25000 4. Paid salary – Rs. 2000 and salary outstanding Rs 1000 5. Bought scooter for personal use for cash at Rs 20000 Ans: - (1). Capital Rs. 80000 (liability) = Cash Rs. 80000 (asset) (2). Purchase A/c

70000

To Cash To Creditors

40000 30000 70000

(3). Cash A/c 40000 To sales A/c Note: Difference is reflected in P/L A/c

40000

(4). Salary A/c

To Cash To O/s salary

2000 1000 3000

To Cash

20000

70000

3000 3000

(5). Drawings A/c

20000

3. Show the rectification entries for the following: a. The sales account is undercast by Rs. 15,000 b. Goods returned by the customer Mr. X of Rs. 5650 has been posted in the return inward Account as Rs. 5560 and in Mr. X a/c as Rs.6550. c. Salary paid Rs. 6000 has been posted to Rent account d. Cash received from Ram posted to shyam account Rs. 7000 e. Cash received from jadu Rs. 8640 has been posted to the debit of madhu’s a/c a) this error can be rectified by crediting sales a/c by Rs.15000 b) ret. Inwards book in undercast by Rs 90 (5650-5560) rectification can be done by debiting Rs. 90 to Rect. Inwards book. also x a/c is over credited by 900(65505650) This error can be rectified by debiting x a/c to the tune of Rs. 900 c) rectification entry: salary a/c dr. 6000 to rent a/c 6000 (being wrong posting to rent a/c rectified) d) Rectification Entry: shyam a/c 7000 To Ram a/c 7000 (Being wrong posting to shyam rectified)

e) This error can by rectified by crediting madhu’s A/c by Rs. 8640 to cancel debit entry. Credit jadu a/c with Rs. 8640 to record missing entry