Amity BBA 3 SEM Solve Assignment For Accounting For Managers
QUESTION 1.
Write Short notes on any three of the following.
a. Dual Aspect Concept
b. Cash book is Journal as well as Ledger. Explain
c. Accrued Income and Outstanding Expenses
d. Convention of Conservatism
e. Accounting Cycle
QUESTION 2
Anil sent on 1 st July,2006 to Rahul goods costing Rs.50,000 and spent Rs.1,000 on packing
etc. On 3 rd July 2006, Rahul received the goods and sent his acceptance to Anil for Rs.30,000
payable at 3 months. Rahul spent Rs.2,000 on freight and cartage,Rs 500 on godown rent
and Rs.300 on insurance. On 31 st December, 2006 he sent his Account Sales (along with the
amount due to)Showing that 4/5 of the goods had been sold for Rs.55,000.Rahul is entitled to
a commission of 10%.One of the customers turned insolvent and could not pay Rs.600 due
from him. Show the necessary ledger accounts.
QUESTION 3
a) Explain the nature ,uses and limitations of Financial Statements
(b) Prepare a Trading Account of Mr. Anil for the year ending 31 st March, 2009
Rs.
Purchases 3, 00,000
Sales 5, 00,000
Stock (April 1, 2008) 40,000
Wages 30,000
Return Outwards 3.000
Return inward 2,500
Freight and clearing charges 5.000
Additional information:-
Stock on 31 st March, 2009 42,000
QUESTION 4
Shakti International invited applications for 100,000 shares of Rs 10 each issued at a discount
of 10% payable as follows:
Application Rs 4 per share
Allotment Rs 3
First call Re 1
Final call Balance amount
The company received applications for 140,000 shares and pro rata allotment was made
for applications for 120,000 shares who had applied for 600 shares failed to pay amount
due on allotment and his shares were forfeited after the first call. Subsequently after the
final call, half of his shares were re-issued to K for Rs 11 per share. Journalize and
prepare balance sheet in the books of Shakti International
QUESTION 5
B and C enter a joint venture to prepare a film for the Government. The Government agrees to
pay Rs.1, 00,000.B contributes Rs.10, 000 and C contributes Rs. 15,000.These amounts are
paid into a Joint Bank Account. Payments made out of the joint account were:
Purchase of equipment Rs.6000
Hire of equipment Rs.5, 000
Wages Rs.45, 000
Materials Rs.10, 000
Other expenses Rs.5, 000
B paid Rs.2, 000 as licensing fees. On completion, the film was found defective and
Government made a deduction of Rs.10, 000.The equipment was taken over by C at
a valuation of Rs.2, 000. Prepare P&L account in respect of the company.
ASSIGNMENT B
Case Study
X, Y and Z were partners in a firm sharing profits in the proportions of 1/2, 1/3 and 1/6 respectively. The
Balance Sheet of the firm on 31 st March 2001 was as follows:
Liabilities Amt. Assets Amt.
Trade Creditors
Employees Provident Fund
Reserve Fund
Capitals
X 65,000
Y 30,000
Z 20,000
Z retired on the above date on the following terms:
a) Goodwill of the firm was valued at Rs. 30,000
b) Value of patents was to be reduced by 20% and that of plant & machinery to 90%.
c) Provision for doubtful debts was to be raised to 6 %.
d) Z took over the investments at a value of Rs.17,600.
e) Liability for workmen’s compensation to the extent of Rs. 375 is to be created.
f) Trade creditors to the extent of 2.5 % are not likely to claim their dues.
g) Amount due to Z is to be settled on the following basis:
50 % on retirement, 50 % of the balance to be paid in 2 equal half yearly installments carrying
interest at 5 % p.a. and the balance by a Bill of Exchange (without interest) at 3 months. The entire
capital of the firm as newly constituted is fixed at Rs.100, 000 and the partners’ capital accounts
are to be adjusted in the profit sharing ratio. Any excess is to be transferred to current account
and any deficit is to be brought in cash
QUESTION 1
Prepare Revaluation account, Partners’ Capital accounts and Balance Sheet of X & Y after Z’s retirement. Also
prepare Z’s Loan account till it is fully paid.
ASSIGNMENT C
Which of the following is the activity which finance people are involved?
Investing decisions
Operation decisions
Promotion decisions
Marketing decisions
Question No: 2
Refers to part of current assets that fluctuates directly with changes in sales level.
Financing
Investment
Permanent assets
Temporary assets
Question No: 3
Profit and Loss Account is--
Real Account
Nominal Account
Personal Account
None of the above
Question No: 4
According to the accounting profession, which of the following would be considered a cash-flow item from a
"financing" activity?
A cash outflow to the government for taxes.
A cash outflow to repurchase the firm's own common stock.
A cash outflow to lenders as interest.
A cash outflow to purchase bonds issued by another company
Question No: 5
Which of these items would be accounted for as an expense?
Repayment of a bank loan.
Dividends to stockholders
The purchase of land.
Payment of the current period's rent.
Question No: 6
Which of the following would not be included on a balance sheet?
Accounts receivable.
Accounts payable
Sales.
Cash.
Question No: 7
The requirement that only transaction data capable of being expressed in terms of money be included in the
accounting records relates to the --
Cost principle
Monetary unit assumption
Economic entity assumption
Both a & b
Question No: 8
Revenue is generally recognized at the point of sales .Which principle is applied herein--
Consistency principle
Matching principle
Revenue recognition principle
Cost principle
Question No: 9
Petty cash fund is--
Used to pay relatively small amounts
Reimbursed when the amount of money in the fund is reduced to a predetermined minimum amount
Established by estimating the amount of cash needed for disbursement of relatively small amounts during a specified period
All of the above
Question No: 10
Which of the following errors will be disclosed in the preparation of a trial balance?
Recording transactions in the wrong account.
Duplication of a transaction in the accounting records
Posting only the debit portion of a particular journal entry
Recording the wrong amount for a transaction to both the account debited and the account credited.
Question No: 11
1. Book Value is--
The amount that is due at the maturity or due date of a note.
The process of transferring the cost of natural resources to an expense account.
The cost of a fixed asset minus accumulated depreciation on the asset
The estimated value of a fixed asset at the end of its useful life.
Question No: 12
An examination of the sources and uses of funds is part of--
a forecasting technique
A funds flow analysis
a ratio analysis
calculations for preparing the balance sheet
Question No: 13
Which of the following is not a cash outflow for the firm?
Depreciation.
Dividends
Interest payments
Taxes
Question No: 14
What must be known or estimated in order to calculate depreciation?
The estimated useful life of the asset to the company
The acquisition cost of the asset.
The estimated residual value of the asset.
All of the above
Question No: 15
Information that goes into __________ can be used to help prepare __________.
a forecast balance sheet; a forecast income statement
forecast financial statements; a cash budget
a cash budget; forecast financial statements
a forecast income statement; a cash budget
Question No: 16
Which of the following terms best relates to natural resources?
Depreciation.
Depletion.
Amortization.
Accrual
Question No: 17
A debit may signify--
An increase in an asset account
A decrease in an asset account
An increase in a liability account
An increase in the owner's capital Account
Question No: 18
When a partnership firm is to be dissolved, the following account is opened in the ledger--
Revaluation Account
Profit and Loss Adjustment Account
Realisation Account
Profit and Loss Appropriation Account
Question No: 19
Settlement of accounts on the dissolution of a partnership firm is governed by the following section of the Indian
Partnership Act ,1932
2
49
48
10
Question No: 20
A new partner brings in cash as his share of goodwill, this amount will be distributed among the old partners--
In the old profit sharing ratio
In the ratio of their capital
Equally
In the ratio of sacrifice of profit by them
Question No: 21
In the absence of an agreement to the contrary, on drawings--
No interest is to be charged
Interest @5% per annum is to be charged
Interest @6% per annum is to be charged
Interest @12% per annum is to be charged
Question No: 22
For a charitable institution, subscriptions by its member constitute its-- -- -.
Asset
Income
Expenditure
Liability
Question No: 23
The most suitable method for providing depreciation on mines, oil wells and quarries--
Straight line method
Depletion method
Annuity method
Machine hour rate method
Question No: 24
In income and expenditure account, the excess of income over expenditure is called--
Surplus
Deficit
Gross Profit
Net Profit
Question No: 25
In consignment the risk of loss is borne by--
The consignor only
The consignee only
The consignor as well as the consignee
Neither the consignor nor the consignee
Question No: 26
Carriage Outward Account will appear on the--
Debit side of the Trading Account
Debit side of the Profit and Loss Account
Credit side of the Trading Account
Credit side of the Profit and Loss Account
Question No: 27
At the end of an accounting year, trade debtors total Rs.50, 000. Provisions for bad debts and discount on debtors
are made @5% and @% respectively. Provisions on discount on debtors will be made for--
Rs.1000
Rs.2,500
Rs.950
Rs.975
Question No: 28
The primary record of a credit purchase of a fixed asset is made in--
Cash Book
Sales Book
Purchases Book
Journal Proper
Question No: 29
Which one of the following assets could be described as a current asset?
Machinery to manufacture goods for resale
Stock of goods for resale
Buildings to house the machinery
Land on which the buildings stand
Question No: 30
Which of the following equations properly represents a derivation of the fundamental accounting equation?
Assets + Liabilities = Capital
Assets + Capital = Liabilities
Assets = Liabilities + Capital
Assets = Capital – Liabilities
Question No: 31
If we take goods for own use we should --
Debit Drawings Account: Credit Stock Account
Debit Purchases Account: Credit Drawings Account
Debit Sales Account: Credit Stock Account
Debit Drawings Account: Credit Purchases Account
Question No: 32
Forfeited Shares Account is finally closed by the transfer of its balance to--
Securities Premium Account
General Reserve Account
Debenture Sinking Fund Account
Capital Reserve Account
Question No: 33
Capital Expenditure is--
The costs of running the business on a day-to- day
Money spent on selling fixed assets
The extra capital paid in by the proprietor
Money spent on buying fixed assets or adding value to them
Question No: 34
If it is required to maintain fixed capitals then the partners’ shares of profits must be--
Credited to capital accounts
Debited to partners’ current accounts
Debited to capital accounts
Credited to partners’ current accounts
Question No: 35
According to the money measurement concept, the following will be recorded in the books of accounts of the
business--
Health of the managing director of the company
Quality of the company’ goods
Value of plant and machinery
Dedicated and trusted employees
Question No: 36
Sales made to Mahesh for cash should be debited to--
Cash account
Mahesh account
Sales account
Purchase account
Question No: 37
A bank reconciliation is prepared so that the difference in the under-mentioned balance is reconciled
The difference in the balance of the bank and cash balances
The difference in the balance in the Pass Book in the beginning and at the end
The difference in the Pass Book and Cash Book balance
None of the above
Question No: 38
In the absence of any provisions in the partnership agreement, profits and losses are shared by the partners--
In the ratio of their capitals
Equally
In the ratio of loans given by them to the partnership firm
None of the above
Question No: 39
Under the Written down value method, the amount of depreciation goes on _________ from year to year
Decreasing
Increasing
Fluctuating
None of the above
Question No: 40
How will the purchase of an asset on credit affect the accounting equation?
It will decrease the assets and decrease the capital
It will decrease the assets and decrease the liabilities
It will increase the assets and decrease another asset
It will increase the assets and increase the liabilities