Accountancy Assignment


Accountancy Assignment 

                      



Answers

I. 

1. Business Entity Concept

2. Debtor

3. Conservatism / Principle of Prudence

4. Creditors

5. Debit

6. Furniture, others are current asset

II. 

7. Business Transaction 

           Business Transaction means an exchange of goods or services for cash or credit. A transaction involves at least  two persons one is the receiver and other is the creditor. 

Example of a credit transaction business sold goods to Remo on credit. He wants to pay the money to the business in near future.  


8. Qualitative Characteristics of Accounting 

  1. Reliability - Accounting information system is free from errors and bias and failthfully represents  the facts. To ensure this, it must be verifiable and neutral. 
  2. Relevance - All accounting information are available on time. 
  3. Understandability - The system must be understood by those who handle it. 
  4. Comparability - The accounting information system should be comparable with other firms. 
9. Current Liabilities 
    
    Creditor, A bills payable, outstanding expenses, bank overdraft 



10. Journal
       
        A journal is a day book kept in the business wherein the complete history of transactions of accounting nature including debit and credit aspect is shown in chronologically. 

11. GST
     
       Government of India introduced Goods and Service Tax ( GST ) from July 1st 2017 in across the country. GST ensures ' One Nation One Tax " and provides unified markets. GST is a destination based single tax. It is a indirect tax the burden of the tax is borne by the final customer. 


III. 

12.   Match the following 

  1. Stock 

Current Asset


  1. Long term loan 


Non-Current Liability

  1. Machinery 

Non-Current Asset


13. 

a. Sold goods for cash ₹ 1000

Cash - Debit , Goods - Credit 

b. Purchased goods form Chandran for cash ₹ 3,000

Cash - Credit, Goods - Debit

c. Purchased building from Suresh ₹10,00,000

  Building - Debit , Sumesh - Credit 

14.  

Assets 


Increases 

Debit 

Capital  


Increases

Credit 

Expenses 

Decreases 

Credit

Income 

Increases 

Credit 



15.

a)  Dual Aspect Concept 

         It is the fundamental principle of accounting. This concept states that every transactions has two aspects. In other words at least 2 accounts will be involved in recording a transaction. Recording transactions based on these principle is " Double Entry System. " This system ensures that accounting equation always remain balanced. 

b) Historical Cost Concept 

         Historical Cost Concept is also known as Cost Concept. It is a fundamental principle of accounting it states that assets  should be recorded at its cost of acquisition, includes transportation cost, installation cost etc. Cost Concept never consider the market value of the asset. 

               
              Example : Purchased a Building for ₹10,00,000 its current value is ₹ 20,00,000. Here accountant can only record in ₹10,00,000 cost price of the building. 

16. 

                                     Statement Showing

                         Assets = Capital + Liabilities 

 




 














           Assets =  Cash + Stock + Debtor 
                      =   2,94,000 +10,000  + 7,000
                      =  ₹ 3,11,000

        Liabilities = Creditor 
                          = ₹10,000

      Capital  = ₹ 3,01,000


Assets = Capital + Liability 
            = 3,01,000 + 10,000
             = ₹3,11,000

Liabilities = Assets - Capital 
                 = 3,11,000 - 3,01,000
                =  ₹10,000
 
Capital =  Assets - Liabilities 
             = 3,11,000 - 10,000
             = ₹3,01,000
   


17. 

a. Going Concern Concept
b. Consistency
c. Matching Concept
d. Materiality Concept 
e. Objectivity Concept 

18.       
         Accounting is an art of recording, classifying, summarizing, in a significant manner in terms of money transactions and events which are in a part of financial characters and interpreting the result thereof. 

Objectives 

1. To Maintain records of business
2.To calculate profit and loss
3. Disclosure of financial position 
4. To provide information to various users of accounting. 



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