Questions and Answers
Define accounting and discuss its objectives.
Accounting is the systematic recording, reporting, and analysis of financial transactions. Its objectives include providing information for decision-making, ensuring accountability, and facilitating compliance with laws.
Why are final accounts prepared?
Final accounts are prepared to summarize the financial position and performance of an entity over a specific period, providing insights for stakeholders.
What are the objectives of departmental accounting?
The objectives of departmental accounting include measuring the performance of different departments, enhancing control over departmental expenses, and facilitating better decision-making.
What are the main types of branches?
Signup and view all the answers
Explain del credere commission and overriding commission.
Signup and view all the answers
Differentiate between bookkeeping and accounting.
Signup and view all the answers
Prepare Trading and Profit and Loss Account for the year ending 31st March, 2022 from the following Trial Balance: Purchases (Adjusted) ___, Salaries ___, Bank ___.
Signup and view all the answers
What was Brahma Limited's total purchases for the year ending on 31st March, 2022?
Signup and view all the answers
What is a financial statement?
Signup and view all the answers
Define branch accounting.
Signup and view all the answers
Define abnormal loss.
Signup and view all the answers
Explain the systems of accounting in detail.
Signup and view all the answers
From the following Trial Balance of M/s Vikram Brothers, prepare Trading and Profit and Loss Account for the year ended 31st March 2021.
Signup and view all the answers
What are the bases of allocation of common expenses in departmental accounting?
Signup and view all the answers
Study Notes
Examination Overview
- Subject: Financial Accounting
- Institution: Government College for Women, Parade Ground, Jammu
- Max Marks: 80, Pass Marks: 29
- Semester: I, Course No: UCOMJT-101
- Duration: 3 hours
Section A: Short Answer Questions
- Define accounting: The systematic recording, reporting, and analysis of financial transactions.
- Objectives of accounting: To provide financial information for decision-making, assess performance, ensure accountability, and aid in regulatory compliance.
- Purpose of final accounts: To summarize the financial position and performance of a business at a specific period.
- Objectives of departmental accounting: To assess profitability of each department separately, facilitate performance evaluation, and assist in efficient resource allocation.
- Main types of branches in accounting: Dependent branches, independent branches, and franchise branches.
- Del credere commission: A commission paid to agents for guaranteeing payment from debtors; Over-riding commission rewards agents for exceeding sales targets or for managing multiple agents.
Section B: Long Answer Questions
- Differentiate between book keeping and accounting: Bookkeeping involves recording daily transactions; accounting encompasses the broader scope of summarizing, analyzing, and reporting financial data.
- Trading and Profit & Loss Account preparation:
- Analyze given Trial Balance data.
- Adjustments include prepayments, provisions for bad debts, depreciation calculations for buildings (2%) and furniture (10%).
- Departmental information for Brahma Limited includes: Three departments with purchases listed; useful for departmental profitability analysis.
- Abnormal loss definition: Loss incurred that is unusual or above the normal expectations or estimates during operations, often requiring separate analysis.
- Systems of accounting: Cash basis (recognizes income when received and expenses when paid) and accrual basis (recognizes income and expenses when incurred, regardless of cash flow).
Trial Balance of M/s Vikram Brothers
- Presented a complete Trial Balance with Dr. and Cr. balances totaling Rs 391,000.
- Important balances:
- Cash in hand: Rs 500
- Motor car: Rs 25,000
- Plant & Machinery: Rs 60,000
- Total Sales: Rs 230,000
- Total Debtors: Rs 60,000
- Closing stock valued at Rs 28,000.
- Prepare Trading and Profit & Loss Account, and Balance Sheet from the provided data.
Common Expense Allocation in Departmental Accounting
- Analyze expenditures that benefit multiple departments.
- Possible bases for allocation: Equal distribution, usage (square footage), sales volume, or headcount per department.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on Financial Accounting concepts with this quiz based on the Semester I syllabus for Commerce (Major). The questions cover essential objectives of accounting and the preparation of final accounts. Get ready to score and succeed!
