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
- Reliability - Accounting information system is free from errors and bias and failthfully represents the facts. To ensure this, it must be verifiable and neutral.
- Relevance - All accounting information are available on time.
- Understandability - The system must be understood by those who handle it.
- 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
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.
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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