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Q.1 ) Fill in the blanks with correct answers. ( 5 Marks with any 5 )
1) Surplus of income over expenses is ______________.
a) Profit
b) Deficit
c) Loss
d) Financial Statements
2) Accounts must be honestly prepared and they must disclose all material information is known as _________.
a) Entity Concepts
b) Dual Aspect Concept
c) Disclosure Concept
d) Cost Concept
3) A commodity in which a trader deals is known as _______________.
a) Goods
b) Income
c) Property
d) Expenditure
4) The immediate recognition of loss is supported by principle of __________.
a) Conservatism
b) Objective
c) Matching
d) Consistency
5) Brief explanation of an entry is called as _________.
a) Folio
b) Narration
c) Posting
d) Journalising
6) An act of exchange of things or services between the two parties is termed as______.
a) Ledger
b) Transfer
c) Transaction
d) Business
Q.2) True and false with statement ( 4 marks with any 4 )
1) Book-keeping and accounting are one and the same thing.
2) The double entry system is based on “Dual Aspect” concept.
3) Bank overdraft is an asset of the business.
4) Solvent person is a person whose assets are more than his liabilities
5) Cash discount does not appear in the books of accounts.
Q.3) Name the Following. ( 5 marks with any 5 )
1) Allowance is given on catalogue price of goods.
2) Assets which remain in the business for only for short time and can be converted into cash very easily.
3) Property of any description owned by Proprietor.
4) A person whose assets are sufficient enough to meet business obligations.
5) Excess of expenses over income.
6) Exchange between two persons.
Q.4) Answer in one sentence. ( 6 marks with any 6)
1) What is Book-keeping ?
2) What is meant by Goods ?
3) What is Capital ?
4) What is Drawings ?
5) What is Goodwill ?
6) Who is Solvent Person ?
7) What is Bad Debt ?
Q.5) Explain the concept. ( 5 marks with any 1 )
1) write about Expenditure and its types.
2) what are points of Accounting Standards in India. Write only names.
3) Difference between Book- keeping and Accountancy.
Answers
Q.1 ) Fill in the blanks with correct answers. ( 5 Marks with any 5 )
Answers:
1) Surplus of income over expenses is Profit
2) Accounts must be honestly prepared and they must disclose all material information is known as Disclosure Concept.
3) A commodity in which a trader deals is known as Goods.
4) The immediate recognition of loss is supported by the principle of Conservatism.
5) Brief explanation of an entry is called as Narration.
6) An act of exchange of things or services between the two parties is termed
as Transaction.
Q.2) True and false with statement ( 4 marks with any 4 )
Answers:
1) This statement is False.
Bookkeeping and accounting are not one and the same thing. Book-keeping is the art of recording business transactions in a set of books whereas accounting refers to analysis and interpretation of book-keeping records.
2) This statement is True.
As per dual aspect concept, in every transaction. Every debit has its corresponding and equal credit effect, which is always followed in the double-entry system.
3) This statement is False
The amount withdrawn by the Current Accountholder in excess of the balance in his Current Account up to a predetermined limit decided by the bank on the basis of security offered is called Bank Overdraft. It is a temporary loan given by the bank to the Current Accountholder. It is a liability of the business.
4) This statement is True.
As per the definition of solvent, a person can be a solvent person when a person’s assets
are more than its liabilities.
5) This statement is False.
For the encouragement of the prompt payment, the seller allows some discount to their buyers and it is an expense for the seller. Therefore, cash discount, as an expense, will appear in the book of account.
Q.3) Name the Following. ( 5 marks with any 5 )
Answers:
1) Allowance is given on catalogue price of goods. - Trade discount
2) Assets which remain in the business for only for short time and can be converted into cash very easily. - Current assets
3) Property of any description owned by Proprietor. - Assets
4) A person whose assets are sufficient enough to meet business obligations. - Solvent person
5) Excess of expenses over income. - Loss
6) Exchange between two persons. - Transaction
Q.4) Answer in one sentence. ( 6 marks with any 6)
Answers:
1) “Book-keeping is an art of recording in the books of accounts the monetary aspects
of commercial or financial transactions.”
2) The term Goods refers to merchandise, commodities, articles, or things in which a trader trades.
3) The total amount invested in the business by the owner is called Capital. Excess of assets over the liabilities is known as Capital.
4) The amount of cash or value of goods, assets, etc. withdrawn from the business by the owner for personal use is known as Drawings.
5) Goodwill means the aggregate of those intangible attributes of a business which
contributes to its superior earning capacity over a normal return on investments.
6) solvent person is a person whose assets are more than his liabilities .
7) an irrecoverable amount from debtor is known as bad debts.
Q.5) Explain the concept. ( 5 marks with any 1 )
Answers:
1) Expenditure: An amount spent by the business for any consideration received by business is called expenditure.
i) Capital Expenditure : This expenditure is incurred to acquire fixed asset or to increase the value of fixed asset. It gives the benefit for a long period of time and it is non-recurring in
nature.
E.g. : Purchase of Machinery, extension of building, purchase of computer etc.
ii) Revenue Expenditure : Revenue expenditure is an expenditure from which no future benefit is expected but having immediate or short term benefit may be less than one year. It does not increase profit earning capacity of an organization. These are normal day to day operating expenses of a business organization and appear on the debit side of Trading A/c or Profit and Loss A/c.
E.g. : Rent paid, Salary paid, Wages paid etc.
iii) Deferred Revenue Expenditure: An expenditure which is basically revenue in nature but benefit of which is not exhausted within one year is called as Deferred Revenue Expenditure.
Such expenditure is written off over number of years. Such written off amount is shown on
debit side of profit and loss a/c and unwritten amount is shown on asset side of the Balance
Sheet.
E.g. : Heavy expenditure on advertising , heavy legal expenses.
2) The following given points are know as Accounting Standards in India:
1) AS-1 Disclosure of Accounting Policies (1-4-1991 for Companies and 1-4-1993 for
others)
2) AS-2 Valuation of Inventories (1-4-1999)
3) AS-3 Cash Flow Statements (1-4-2001)
4) AS-6 Depreciation Accounting (1-4-1995)
5) AS-8 Accounting for Research and
Development (1-4-1991 for Companies and 1-4-
1993 for others)
6) AS-9 Revenue Recognition(1-4-1991 for Companies and 1-4-1993 for others)
7) AS-10 Accounting for Fixed Assets(1-4-1991 for Companies and 1-4-1993 for others)
8) As-12 Accounting for Government Grants(1-4-1994)
9) As-13 Accounting for Investments (1-4-1995)
10) AS-22 Accounting for Taxes on Income (1-4-2001)
3)
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