Beruflich Dokumente
Kultur Dokumente
PRESENTATION BY
S.D.BARGIR
Joint Director, IIBF
17-10-2007
TOPICS
BANK RECONCILIATION
TRIAL BALANCE
CAPITAL & REVENUE EXPENDITURE
INVENTORY VALUATION
BILLS OF EXCHANGE
CONSIGNMENT ACCOUNT
JOINT VENTURE
LEASING & HIRE PURCHASE
NON-TRADING ORGANISATIONS
DEPRECIATION
MODEL QUESTIONS
EXAMPLES
M/s Shekhar Enterprises .was maintaining account with
KRB Bank Ltd. On 31st December,2006, Bank column of
cash book of company showed a debit balance of Rs.
26000.
Cheques deposited into the bank but not credited before
31st December,2006 amounted to Rs.4000
Bank charges of Rs. 500 were debited by the bank but no
entry was made by the accountant of the company.
From the above particulars, find out the balance as
per KRB Banks books.
Rs.30500
Rs.25500
Rs.21500
Rs.22500
EXAMPLES
EXAMPLES
4.
5.
Errors of principles
Rectification of Errors-Examples
(1) Rs. 7000 paid as wages for installing the
machinery should be debited to----Wages A/c
Machinery a/c
Capital A/c
None of the above
(2) Sales to Navin of Rs.1000 is debited to Ravin
A/c. this will be rectified by----Debiting Navin a/c and Crediting Ravin A/c
Debiting both Accounts
Debiting Ravin a/c and Crediting Navin A/c
Debiting Navin A/c and crediting Sales A/C
Trial Balance-Examples
3.
Credit sale of
Rs.5000 to Suresh is posted to
his credit, then rectification is
i.
ii.
iii.
iv.
4.
Rectification of Errors-Examples
5.
REVENUE
Large amount
Relatively small
Maintain asset
Short duration
Non- recurring
recurring
Examples
Capital expenditure
Revenue expenditure
Deferred revenue expenditure
None of the above
It is recurring
Amount involved is small
Loss is arising out of business operations
None of the above
(3)
(4)
Examples
Capital expenditure
Deferred revenue expenditure
Revenue expenditure
LIFO
AVERAGECOST
Goods issued
valued at
earliest price
Stock
valuation at
latest price
Goods issued
valued at
latest price
Stock
valuation at
earliest price
Found out by
dividing total
price paid by
quantity
received
Examples
1. Select the incorrect statement from the following--a.
b.
c.
d.
Examples-conted..
Q:During the rising prices the ______
method will reflect
(FIFO/LIFO/weighted Average)
lowest cost of material supplied and
results in under pricing the products
Inventory is shown at the higher
priced material.
Lock up of large amount of working
capital.
Profits are inflated
More liability for payment of taxes
Bill of Exchange
Bill of Exchange
Promissory Note
Unconditional order
Unconditional promise
Made by creditor
Made by debtor
No acceptance as such
On dishonor, noting is
necessary by notary public
Bill of Exchange
Honoring on due date
Retirement
Discounting of bill
Sent for collection to bank
Endorsed to creditor
Renewal of the bill
Accommodation bill
Examples
Q1. ___________ draws a bill on __________
Q2. A bill of exchange is a negotiable instrument
True
False
Q3. Negotiable instruments can be ________from
one person to another
Q4. A bill of exchange must be in writing
True
False
Q5: A bill of exchange is not to be dated
True
False
Examples-conted
Q6.: The date on which the bill is payable is called
its _________
Q7. The due date is calculated after adding
__________ to the actual period of the bill.
Q8. If the due date falls on a public holiday, then it
becomes due on the ------Q9.A bill was drawn on 23rd Dec. 2005 for one
month maturity. What will be its due date.
Q10. When a Bill of exchange or promissory note
has been dishonoured for non acceptance or non
payment, the holder may, within a reasonable
period, cause such dishonour to be noted and
certified by a notary public, such a certificate is
called________
Ans.: due date, Three days of grace, Previous working day, 25th
January,protest
CONSIGNMENT ACCOUNT
A consignment is the dispatch of goods by
its owner to his agent for the purpose of
selling.
Consignor, consignee, Proforma Invoice,
Account Sale
Books of Account in the books of consignorConsignment A/c
Consignee A/c
Goods sent on Consignment
CONSIGNMENT ACCOUNT
A TYPICAL CONSIGNMENT ACCOUNT WILL APPEAR
AS FOLLOWS:
DR.
CR
To goods sent on
By consignee
consignment
(goods sold by
(invoice value)
consignee)
To bank
By closing stock
(all expenses incurred by
Consignor in transporting)
To consignee
(all expenses incurred by
Consignee in selling)
To profit & loss a/c
Examples
Q1. The possession of the goods remains with the _________,
Personal account
Nominal account
Real account
a.
b.
c.
d.
Proforma invoice*
Commercial invoice
Account sales
Bank draft
Examples
Q5. Where del-credere commission is paid:
stock on consignment is
JOINT VENTURE
Meaning
Temporary partnership
Accounting-when separate books
Joint Bank Account
Co-venturers Account
Joint Venture Account
Examples
Q1.When separate set of books are kept for keeping
the accounts of Joint Venture, then
a) Memorandum Joint Venture Account is
prepared
b) Transactions take the form of ordinary
accounting system
c) Only Joint Venture and Personal accounts of
the co-venturers are maintained.
d) Joint Venture, Co-venturers and Joint Bank
accounts are opened
Q2.A debit balance in Joint Venture A/c indicates
a. Profit on Joint Venture
b. Loss on Joint venture
c. Amount receivable
d. Amount payable
LEASING
Leasing Examples
A lease which does not secure for
the lessor, the recovery of his
capital outlay (original cost of the
asset leased) plus a return on the
funds invested during the lease
term is called----(a) Capital Lease
(b) Operational Lease
Leasing Examples
Leasing Examples
(4) If Lease charges of the year exceed the depreciation
charge of the year then----a. Lease Equalization account is debited (with the difference)
b. Lease Equalization account is credited (with the
difference)
c.
Lease Terminal Adjustment account is debited (with the
difference)
d. None of the above
(5) In case operational Lease , if the total lease rent is
receivable in various installments then in the first year of
lease , the journal entry for total lease rent receivable, in
the books of lessor is-----a. Debit Lessee account and Credit Rent Suspense a/c*
b. Debit Advance Lease Rent account and Credit Lease Rent
a/c
c.
Debit Bank Account and Credit Lease Rent Account
d.
Accounting of non-trading
organizations
Meaning
Need for maintenance of accounts
Accounts
Receipt & Payment account
Income & Expenditure Account
Balance sheet
Distinction
Receipt & Payment A/c
Income& ExpenditureA/c
Real Account
Nominal Account
adjustments
Outstanding income
Outstanding expenses
Income received in advance
Prepaid expenses
Depreciation on assets
EXAMPLES
1.
Rs.1200
Rs.1000
Rs.1800
None of the above
a.
b.
c.
d.
Rs.1800
Rs.1200
Rs.1000
None of the above
a.
b.
c.
d.
Rs.1120
Rs.1200
Rs.1800
None of the above
2.
3.
What is the value of closing stock, if co. follows weighted average cost
method
EXAMPLES
4.
5.
6.
a.
b.
c.
d.
a.
b.
c.
d.
c.
d.
revenue
fall in its
EXAMPLES
Sudhir Draws following bills
1.
2.
3.
4.
On
On
On
On
a.
b.
c.
d.
a.
b.
c.
d.
All the bills are accepted by all.Solve the examples as per following
7.
Ruchiras acceptance is retained till due date, but it was
dishonoured. Identify the correct entry in sudhirs books
8.
EXAMPLES
9.
EXAMPLES
11. Choose the wrong pair
a. There is no difference in appearance between trade
bill and accommodation bill
b. Both the parties must accept the accommodation
bill
c. Accommodation bill is drawn and accepted without
any consideration
d. The purpose of any accommodation bill is to
provide temporary finance
EXAMPLES
12. A trainee in a/c dept. has put up
following four entries for accounting for
closing stock of joint venture . One of the
entries is correct. Select the same
a.
b.
c.
d.
EXAMPLES
13. Select the wrong statement in respect of
joint
a. It is temporary partnership
b. Nature of co-venturers liability is limited
c. Balancing figure of Joint venture a/c is either profit or
loss on joint venture
d. Joint bank account is the account in which banking
transactions are transacted by co-venturers
EXAMPLES
14.Select the wrong pair in respect of
joint
a.
b.
c.
EXAMPLES
15.Select the false statement
a. Amount spent on uniform of workers is a
revenue expenditure
b. Expenses of whitewashing of a factory building is
a revenue expenditure
c. Cost of stores consumed in manufacturing
machinery for installation in owned factory is a
revenue expenditure
d. Wages paid for construction of the extension of
the factory building is a capital expenditure
.
16.The following financial statement is not
prepared by a non-trading concerns
a)
b)
c)
d)
Real account
Personal account
Nominal account
EXAMPLES
18.Incurring
of
expenditure
of
Rs.100000
on
dismantling,
removing and reinstalling plant &
machinery is a ----a.
b.
c.
d.
Capital expenditure
Revenue expenses
Deferred revenue expenditure
None of the above
EXAMPLES
20. RVY sport club has given following information regarding
subscription income. Ascertain income for Current year
1.
2.
3.
4.
5.
Subscription
Subscription
Subscription
Subscription
Subscription
Rs.5800
Rs.6000
Rs.5200
Rs.5600
Examples
21. If
A= Income accrued during CY (figure from I & E a/c)
B= outstanding for CY
C= outstanding for PY
D=advance for CY
E= advance for PY
Find the income received in cash during cy to be shown in receipt &
payment a/c
a.
b.
c.
d.
A+B+C+DE
AB+C+DE
A + B C - D + E
AB+CD+E
EXAMPLES
23. Select the wrong statement in respect of lease
accounting
a. Lease Terminal Adjustment a/c is carried forward
from year to year
b. If Lease Terminal Adjustment a/c shows credit
balance it is shown at liability side
c. If Lease Terminal Adjustment a/c shows debit
balance it is debited to Profit and Loss account
d. Lease Terminal Adjustment a/c balance is not
carried forward to next year but written off to Profit
and Loss account
EXAMPLES
22. Select the
accounting
wrong
statement
in
respect
of
lease
a.
b.
c.
d.
Thank you
For any queries or difficulties do contact at
E mail: sudaaba@iibf.org.in
Phone; 022-22183898
Best of luck