Brief Answer Question
TUpapers.comWhat is financial accounting?
Define realization concept of accounting?
What is periodic inventory system?
Write down the meaning of contingent liabilities.
What is GAAP?
Following information are provided:
Started business with cash Rs. 300,000 and stock Rs. 100,000.
Paid salary Rs. 195,000 including advance of Rs. 15,000.
Required: Accounting equation
You are provided the following information:
| Sales | Rs. 150,000 | Salary to staff | Rs. 24,000 |
| Dividend received | Rs. 10,000 | Income tax paid | Rs. 2,000 |
| Opening stock | Rs. 20,000 | Closing stock | Rs. 30,000 |
| Purchase | Rs. 80,000 | Depreciation | Rs. 8,000 |
Required: Amount of value added.
Following transactions are given:
June 10: Purchased from R Furniture
6 Sofa Set @ Rs. 20,000 each
10 Chairs for Rs. 5,000
(Trade Discount @ 10%)
June 25: Purchased from S Furniture:
10 Tables @ Rs. 5,000 each
10 Chairs @ Rs 4,000 each with trade discount @ 5%
Required: Purchase Book
On 1st Baishak, A Grocery Shop borrowed Rs. 450,000 from a bank by signing a 3-months, 12% note payable. It paid the principal and interest at due date.
Required: Journal entries for issue and retirement of note.
A Company issued Rs. 300,000 face value bond at discount of Rs. 30,000. The unamortized discount was Rs. 5,000 and the bond contains a call provision of Rs. 102.
Required: Gain or loss on early redemption of bond
Descriptive Answer Question
The following information is provided:
| Current ratio | 2 | Current Liabilities | Rs. 200,000 |
| Prepaid expenses | Rs.48,000 | Inventory | Rs. 90,000 |
| Debentures | Rs. 200,000 | Shareholder's equity | Rs. 600,000 |
Operating profit of the year Rs.100,000 being 10% of Sales.
Income tax is 25%
Analytical Answer Question
Following are the transaction of a company.
I. Started business with cash Rs. 800,000 in exchange of 8,000 shares of Rs. 100 each.
II. Deposited into bank Rs.300,000.
III. Took a bank loan of Rs. 100,000 @ 10% interest.
IV. Sold merchandise goods for Rs.300,000 on account.
V. Purchased merchandise goods for Rs.180,000 on account
VI. Paid Rs.10,000 for insurance premium.
VII. Received Rs.270,000 after deduction of 10% discount from the customers
VIII. Paid Rs. 170,000 in full settlement of Rs.180,000 by cheque.
IX. Paid electricity bill Rs. 5,000
X. Pre-paid office rent Rs.26,000 by issuing cheque.
Additional Information
a) Closing stock Rs, 20,000.
b) Prepaid rent expired Rs. 24,000.
c) Outstanding interest Rs.10,000
Required:
a. Journal entries for above transactions (6)
b. Accounts receivable and payable account (2)
c. Triple column cash book (4)
d. Adjusted Trial balance (3)
The Balance Sheet and Income Statement of a company have been given below:
| Liabilities | Year I | Year II | Assets | Year I | Year II |
| Equity share capital | 800,000 | 1,000,000 | Land and building | 300,000 | 340,000 |
| Share premium | 80,000 | 100,000 | Plant and machinery | 500,000 | 700,000 |
| Bank loan | - | 200,000 | Inventories | 230,000 | 300,000 |
| Accounts payable | 180,000 | 160,000 | Accounts receivable | 220,000 | 250,000 |
| Provision for taxation | 50,000 | 60,000 | Provision for doubtful debts | (40,000) | (30,000) |
| Profit and loss | 140,000 | 280,000 | Cash at bank | 40,000 | 240,000 |
| 1,250,000 | 1,800,000 | 1,250,000 | 1,800,000 |
| Particulars | Rs. | Rs. |
| Sales | 1,000,000 | |
| Less: Cost of goods sold | 600,000 | |
| Gross profit | 400,000 | |
| Less: Operating expenses | 100,000 | |
| Interest on bank loan | 20,000 | |
| Depreciation on machinery | 40,000 | |
| Provision for taxation | 60,000 | |
| Loss sales of machine (Book value Rs. 60,000) | 40,000 | 260,000 |
| Net income | 140,000 |
Required: Cash flow statement by using direct method (6+3+4+2=15)
a. What is accounting information? Who are the users of accounting information? Explain. (2+5=7)
b. Define source of documents. Write down the objectives of source of documents. (3+5=8)