Question Bank for Basics Of Accounting. Q1. . A Company purchased machinery for Rs.

10,00,000 on 1st April, 2000 and followed the diminishing balance method of providing depreciation @10% p.a. Company closes its books on 31st March every year. On 31st March, 2004, it was decided to follow the fixed instalment system of depereciating the machine from the very beginning. Rate of Depreciation was kept unchanged. Deficiency of depreciation from 1st April, 2000 to 31st March, 2003 was transferred to Profit and Loss Account on 31 st March, 2004. Prepare the Machinery Account from 1st April, 2000 to 31st March 2004. Q2. . Explain the following adjustments and give their treatment in final accounts: a) Goods given away as charity. b) Outstanding Expenses. c) Accrued Income. d) Income received in advance e) Interest on Capital f) Provision for Doubtful Debts g) Deferred Revenue Expenditure h) Sale of Goods on sale or return basis i) Contigent Liabilities. Q3. What do you understand by cash budget? Prepare a cash budget with imaginary figures? Q4. Explain the concept of creative accounting along with its forms? Q5. Discuss interim reports and there significance? Q6. On 1st April, 2000 a firm purchased a machinery for Rs. 2,00,000. On 1 st Oct, 2000 additional machinery costing Rs. 1,00,000 was purchased. On 1st Oct, 2001 the machinery purchased on 1st April, 2000 having become obsolete, was sold off Rs. 90,000. On 1st Oct, 2002 new machinery was purchased for Rs. 2,50,000 while the machinery purchased on 1st Oct, 2000 was sold for Rs. 84,000 on the same day. The firm provide depreciation on its machinery @ 10% p.a. on reducing balance method and closes its books of accounts on 31st March every year. Show the Machinery account for the period of three accounting years ending 31 st March,2003. Q7. Explain the concept of management accounting along with features & functions of management accounting?

Q8. The following is the trial balance of Sh. SK Yadav on 31st March 2006 Dr.________________________________ RS. Opening Stock 30,000 Advertising 7,000 Wages 1,500 Factory rent 1,000 Carriage inward 500 Return inward 550 Salaries 3,300 Office rent 700 Plant 10,000 Purchases 1,35,000 Bills receivable 1,500 Cash 3,500 Furniture 2,000 Debtors 9,000 General expenses 800 Drawings 3,000 __________________ 2,09,550 ___________________ Cr.________________________________ RS. Capital 40,000 Bad debts reserve 500 Discount 800 Bills payable 4,200 Sales 1,59,100 Return outward 350 Creditors 4,600

____________________ 2,09,550 _____________________

You are required to prepare trading account, profit and loss account and balance sheet after taking into account the following adjustments: a) Closing Stock was valued at 50,000 ( Realisable Value 42,000) b) Salaries outstanding Rs.300 and Wages outstanding Rs.500 c) Unexpired insurance Rs.50 d) Depreciate plant by 10% and furniture by 15% e) Write off Rs. 1,000 as bad debts and create reserve for doubtful debt at 5% and for discount on debtors at 2% Q9. What is responsibility accounting and how it is different from creative accounting? Q10. Discuss the concept of annual reports in todays competitive business world?