Basaria Confectioner bought a cold storage plant on July 01, 2014 for ₹ 1,00,000. Compare the amount of depreciation charged for first three years using:
Depreciation for 1 year (2014-15) = 7500 (Charged for 9 months)
Depreciation for 2 year (2015-16) = 1,00,000 – 7500 = 92,500
= ₹ 92500 × 10/100 = ₹ 9250
Depreciation for 3 year (2016-17) = ₹ 92500 – ₹ 9250 = 83050
= ₹ 83050 × 10/100 = ₹ 8305
State whether the following statements are true or false:
State briefly the need for providing depreciation.
Give four examples each of ‘revenue reserve’ and ‘capital reserves’.
Give four examples each of ‘provision’ and ‘reserves’.
Explain the concept of depreciation. What is the need for charging depreciation and what are the causes of depreciation?
What are the effects of depreciation on profit and loss account and balance sheet?
Name and explain different types of reserves in detail.
State with reasons whether the following statements are True or False ;
(i) Making excessive provision for doubtful debits builds up the secret reserve in the business.
(ii) Capital reserves are normally created out of free or distributable profits.
(iii) Dividend equalisation reserve is an example of general reserve.
(iv) General reserve can be used only for some specific purposes.
(v) ‘Provision’ is a charge against profit.
(vi) Reserves are created to meet future expenses or losses the amount of which is not certain.
(vii) Creation of reserve reduces taxable profits of the business.
Discuss in detail the straight line method and written down value method of depreciation. Distinguish between the two and also give situations where they are useful.
Distinguish between ‘general reserve’ and ‘specific reserve’.
Name any two types of commonly used negotiable instruments.
Why is it necessary to record the adjusting entries in the preparation of final accounts?
State the meaning of incomplete records?
Briefly state how the cash book is both journal and a ledger.
State the meaning of a trial balance?
State the four basic requirements of a database applications.
Define accounting.
State the different elements of a computer system.
Why is it necessary for accountants to assume that business entity will remain a going concern?
State the need for the preparation of bank reconciliation statement?
What is difference between trade discount and cash discount?
Explain the errors of commission and give two examples with measures to rectify them.
Accounting equation remains intact under all circumstances. Justify the statement with the help of an example.
If the rent of one month is still to be paid the adjustment entry will be :
(a) Debit outstanding rent account and Credit rent account.
(b) Debit profit and loss account and Credit rent account.
(c) Debit rent account and Credit profit and loss account.
(d) Debit rent account and Credit outstanding rent account.
Describe how accounts are used to record information about the effects of transactions?
Write the process of preparing ledger from a journal.
Indicate against each amount wheather it is a debit or a credit balance, and prepare a trial balance as at March 31, 2014 based on the following balances:
Accounts Title Amount ₹
Capital 1,00,000
Drawings 16,000
Machinery 20,000
Sales 2,00,000
Purchases 2,10,000
Sales return 20,000
Purchases return 30,000
Wages 40,000
Goodwill 60,000
Interest received 15,000
Discount allowed 6,000
Bank overdraft 22,000
Bank loan 90,000
Debtors :
Nathu 55,000
Roopa 20,000
Creditors :
Reena 35,000
Ganesh 25,000
Cash 54,000
Stock on April 01, 2013 16,000
Select the Correct Answer:
A bank reconciliation statement is prepared by:
(a) Creditors (b) Bank
(c) Account holder in a bank (d) Debtors
If the trial balance agrees, it implies that:
(a) There is no error in the books.
(b) There may be two sided errors in the book.
(c) There may be one sided error in the books.
(d) There may be both two sided and one sided errors in the books.