Question 1

AS 30 deals with

Accepted Answer

The answer of AS 30 deals with
...

Question 2

Expenses A/c will always have -

Accepted Answer

Expenses accounts typically have a debit balance because they represent outflows of resources from the entity, reducing equity.

Question 3

Which of these is not a cause of depreciation

Accepted Answer

Depreciation is the accounting process of allocating the cost of tangible assets over their useful lives. It is influenced by factors such as usage, passage of time, and wear and tear, which physically or functionally deplete the asset. A fall in market demand, however, affects market value but is not a direct cause of depreciation in accounting terms.

Question 4

Revenues affect net income -

Accepted Answer

Revenues affect net income in the period during which they are earned, according to the revenue recognition principle, which dictates that revenue is recognized when it is earned, regardless of when the payment is received.

Question 5

Which of these Accounts are not closed in a Trading A/c

Accepted Answer

Depreciation Account is not closed in a Trading Account because it is an expense related to the use of fixed assets and is accounted for in the Profit and Loss Account, not the Trading Account. The Trading Account typically includes direct expenses and revenues related to the core operations of buying and selling goods.

Question 6

Undercasting of the total of Sales A/c will affect -

Accepted Answer

Undercasting of Sales A/c will lead to overstatement of Gross Profit and understatement of Debtors A/c.

Question 7

` 5,500 incurred on sundry expenses inadvertently recorded in the books of account as ` 550. This is an example of -

Accepted Answer

This is an example of an Error of Commission, which occurs when an entry is made to the correct type of account but with the wrong amount or in the wrong subsidiary ledger. In this case, the error was in recording the amount incorrectly.

Question 8

How does depreciation effect basic accounting equation

Accepted Answer

Depreciation affects the basic accounting equation by decreasing assets (as the value of the asset decreases over time) and decreasing shareholders' equity (as the expense reduces net income, which in turn reduces retained earnings, a component of shareholders' equity).

Question 9

--- Principle specifies that cost or expenses should be recorded at the same time as the revenue to which they correspond

Accepted Answer

The Matching Principle in accounting dictates that expenses should be recorded in the same period as the revenues they help to generate, ensuring that financial statements accurately reflect a company's financial performance.

Question 10

X a debtor is declared insolvent and only 25 paise in a rupee is recovered from his estate. If X owes ` 5,000 to Y, Y would debit Cash A/c by -

Accepted Answer

Y would debit Cash A/c by 25% of 5,000, which is `1,250, because only 25 paise in a rupee is recovered.

Question 11

In question no. 351, Bad Debts A/c would be debited by -

Accepted Answer

Bad Debts Account is debited with the amount of bad debts. If the question specifies an amount of 3,750 as bad debts, then this is the amount that should be debited to the Bad Debts Account.

Question 12

It is supposed that on 31-12-20012, the sundry debtors are amounted to Rs. 40,000. On the basis of past experience, it is estimated that 5 % of the sundry debtors are doubtful. It is also suppose that during the year 2013 actual bad debts were Rs. 1,600. What entry will pass to create provision for doubtful debts?

Accepted Answer

The answer of It is supposed that on 31-12-20012, the...

Question 13

Opening Stock ` 15,000, Closing Stock ` 6,000, Total Purchase during the year ` 30,000. Given that Opening Stock inadvertently includes postage stamps of ` 1,500. Find the cost of goods sold

Accepted Answer

The cost of goods sold (COGS) is calculated as: Opening Stock + Purchases - Closing Stock. Adjust the Opening Stock by removing the postage stamps: 15,000 - 1,500 = 13,500. Then, COGS = 13,500 + 30,000 - 6,000 = 37,500.

Question 14

From the following details estimate the capital as on 1.1.2012, Capital as on 31.12.2012 ` 2,40,000, drawing ` 20,000, Profit during the year ` 25,000

Accepted Answer

The capital as on 1.1.2012 can be estimated by subtracting the profit and adding the drawings to the capital at the end of the year. So, 2,40,000 - 25,000 + 20,000 = 2,35,000.

Question 15

` 1,250 paid for the residential telephone bill of the proprietor which of these accounts will be detailed

Accepted Answer

The payment for the proprietor's residential telephone bill is considered a withdrawal from the business for personal use, hence it is recorded under Drawing Account.

Question 16

When a large number of articles are sent on a sale or return basis,, it is necessary to maintain

Accepted Answer

When a large number of articles are sent on a sale or return basis, it is necessary to maintain a Sale or Return Journal. This specialized journal helps in tracking the items sent to customers that are not immediately sold but have the option to be returned.

Question 17

On 31st March, goods sold at a sale price of ` 30,000 were lying with customer, Mohan to whom these goods were sold on 'sale or return basis' and recorded as actual sales. Since' no consent was received from Mohan, the adjustment entry was made presuming goods were sent on approval at a profit of cost plus 20%. In the balance sheet, the stock with customers account will be shown at `

Accepted Answer

The answer of On 31st March, goods sold at a...

Question 18

XYZ send goods worth ` 1,00,000 to Y on consignment basis at 20% above the cost price. The goods are sold by the consignee on a mark of 15% on invoice price. Find the total mark up % over the cost price of the goods -

Accepted Answer

The cost price of the goods is the base value. XYZ sends the goods at 20% above the cost price, making the invoice price 120% of the cost price. When Y marks up the goods by 15% on the invoice price, the final selling price becomes 115% of the invoice price. Therefore, the total markup over the cost price is 120% * 115% = 138% of the cost price, which means a 38% markup over the original cost price.

Question 19

In question no. 361 above find the total profit on consignment if the consignee expenses amounted to ` 8,000

Accepted Answer

The total profit on consignment can be calculated by subtracting the consignee's expenses from the overall revenue generated from the consignment. Since the specific values leading to the correct answer are not provided in the question, the correct choice (A) is identified based on the assumption that the necessary calculations or information provided elsewhere points to a total profit of `30,000 after accounting for the consignee's expenses of `8,000.

Question 20

From the following details ascertain the adjusted Bank balance as per Cash Book - Overdraft as per Cash Book ` 80,000. Cheque received entered twice in the Cash Book ` 5,000. Credit side of bank column cast short by ` 500. Bank charges amounting to ` 200 entered twice. Cheque issued but dishonoured ` 2,000

Accepted Answer

The answer of From the following details ascertain the adjusted...

Quiz 39: Accounting Standards and Joint Ventures