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1. Accrual Accounting. Accounting method that records revenues and expenses when
they are incurred, regardless of when cash is exchanged. The term "accrual" refers to
any individual entry recording revenue or expense in the absence of a cash transaction.
2. Fictitious Assets: Assets, which have no market value, are called fictitious assets.
Examples of fictitious assets are preliminary expenses, loss on issue of shares or
debentures etc.
3.
Imprest Petty Cash System: is a method of accounting for petty cash expenses.
Under the system, the petty cash fund balance is always maintained at a fixed amount
decided on when the fund is first established. Cash spent is reimbursed to restore the
imprest petty cash fund balance back to its original fixed amount.
4. Accounts Receivable Aging is a report that lists unpaid customer invoices and unused
credit memos by date ranges. The aging report is the primary tool used by collections
personnel to determine which invoices are overdue for payment
5. Accrued Revenues are revenues that are earned in one accounting period, but cash is
not received until another accounting period. Accrued Expenses are expenses that
have been incurred in one accounting period but won't be paid until another accounting
period.
6. Prepaid Income / Unearned Income is funds received from a customer prior to the
provision of goods or services. It is considered a liability, since the seller has not yet
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delivered, and so it appears on the balance sheet of the seller as a current liability.
Prepaid expenses / Unexpired Expenses are future expenses that have been paid in
advance. Prepaid expenses are costs that have been paid but are not yet used up or
have not yet expired.
7. Amortization and Depreciation are non-cash expenses on a company's income
statement. Depreciation represents the cost of capital assets on the balance sheet being
used over time, and amortization is the similar cost of using intangible assets like
goodwill over time.
8. Tangible Assets which have a physical existence and can be touched and felt.
Examples are furniture, machinery and computers. Intangible Assets don’t have a
physical existence and cannot be touched or felt. Examples are goodwill, patent and
copyrights
9.
Basic financial statements: 1) balance sheet (or statement of financial position), 2)
income statement (or Trading and Profit & Loss), 3) cash flow statement, and 4)
statement of changes in owners' equity (or stockholders' equity).
10. Chart of Accounts: is an index of all the financial accounts in the general ledger of a
company. In short, it is an organizational tool that provides a digestible breakdown of all
the financial transactions that a company conducted during a specific accounting period,
broken down into subcategories.
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11. IBAN ( International Bank Account Number), is a standard international numbering
system developed to identify an overseas bank account. The number starts with a twodigit country code, then two numbers, followed by up to third-five alphanumeric
characters.
12. Definition of Purchase Purchase refers to those goods which are bought with the
intention of selling. This also means that purchases of non-current assets should not be
part of purchases. Purchase includes both cash and credit purchases.
13. Definition of Sale: sales refers to the revenues earned when a company sells its
goods, products, merchandise, etc. (If a company sells one of its noncurrent assets that
was used in its business, the amount received is not recorded in its Sales account
14. Payable Aging Reports are the opposite of aged accounts receivable reports. An
accounts receivable aging report allows you to view the balances that are owed to your
company by customers. Similarly, an accounts payable aging report allows you to view
the balances you owe to other companies for supplies, inventory and services your
company receives. Several pieces of information are found on a standard accounts
payable report.
15. Post Dated Cheque (PDC) is a cheque written with a future date. In other words, the
date that appears on the cheque is after the date when the cheque was written.
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16. Short note of Debit and Credit note Both the debit notes and the credit notes are
issued in the situation involving the return or cancellation of goods and services by one
party to another, where debit note is issued by the buyer of goods and services if it is
returned back to the vendor whereas the credit note is issued by the seller of goods and
services if it is returned back to him by the purchaser.
17. Rectification entry means finding the error in the whole accounting process and
correcting it by passing the rectified entry which will help you to make the corrections in
the entry which are passed wrongly.
18. Dishonour of Cheque A cheque is said to be honoured, if the banks give the amount to
the payee. While, if the bank refuses to pay the amount to the payee, the cheque is said
to be dishonoured. In other words, dishonour of cheque is a condition in which bank
refuses to pay the amount of cheque to the payee.
19. Cost of Sale also known as the cost of goods sold (COGS), represents the direct costs
related to the manufacturing or purchasing of a good that is sold to a customer.
Companies use this measurement to calculate their gross margin.
20. Golden rule of accounting:: First – Real Account : Debit what comes in, Credit what
goes out. Second-Nominal Account: Debit all expenses and losses, Credit all incomes
and gains. Third- Personal Account: Debit the receiver, Credit the giver.
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21. Different Branches of Accounting There are three branches of accounting: Financial
Accounting, Management Accounting and Cost Accounting
22. What is GAAP GAAP is the abbreviation for Generally Accepted Accounting Principles
(GAAP) issued by the Institute of Chartered Accountants of India (ICAI) and the
provisions of the Companies Act, 1956. It is a cluster of accounting standards and
common industry usage, and it is used by organizations to Record their financial
information properly, summarize accounting records into financial statements and
disclose information whenever required.
23. Bad debts expense is related to a company's current asset accounts receivable. Bad
debts expense is also referred to as uncollectible accounts expense or doubtful
accounts expense. Bad debts expense results because a company delivered goods or
services on credit and the customer did not pay the amount owed.
24. Drawings: it refers to the act of withdrawing cash or assets from the company by the
owner(s) for personal use. Drawings can occur by withdrawing cash from a business
account, but can also include anything that is considered a business asset, such as
products or equipment that is removed from the business for personal use by the
owners.
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25. Cash flow statement: It is a statement depicts the changes in cash position from one
period to another. It show the inflow and outflow of cash. It ascertain the availability of
cash to meet business obligation and useful for short term planning by the management.
26. Working capital is calculated as current assets minus current liabilities, which is used in
day-to-day trading.
27. Financial accounting is a specialized branch of accounting that keeps track of a
company's financial transactions. Using standardized guidelines, the transactions are
recorded, summarized, and presented in a financial report or financial statement such as
an income statement or a balance sheet.
28. Trial balance is the list of all balances in a ledger account and is used to check the
arithmetical accuracy in recording and posting.
29. Balance sheet is a statement which shows the assets, liabilities and equity of a
company and is used to ascertain its financial position on a particular date.
30. Income statement is one of the three important financial statements used for reporting
a company's financial performance over a specific accounting period
31. IFRS: International Financial Reporting Standards set common rules so that financial
statements can be consistent, transparent and comparable around the world. IFRS are
issued by the International Accounting Standards Board (IASB)
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32. Deferred revenue refers to payments received in advance for services which have not
yet been performed or goods which have not yet been delivered. These revenues are
classified on the company's balance sheet as a liability and not as an asset.
33. Deferred expense is a cost that has already been incurred, but which has not yet been
consumed. The cost is recorded as an asset until such time as the underlying goods or
services are consumed; at that point, the cost is charged to expense.
34. Capital Expenditure is an amount spent to acquire or significantly improve the capacity
or capabilities of a long-term asset such as equipment or buildings. Examples of capital
expenditures include the amounts spent to acquire or significantly improve assets such
as equipment, furnishings, fixtures, vehicles etc.
35. Revenue Expenditure Revenue expenditure is a cost that is charged to expense as
soon as the cost is incurred. Examples of revenue expenditures include the amounts
spent on repairs and maintenance, selling, general and administrative expenses.
36. . What you mean by Payroll
Payroll is the account that shows payments to employee salaries, wages, bonuses, and
deductions. Often this will appear on the Balance Sheet as a Liability that the company
owes if there is accrued vacation pay or any unpaid wages.
37. What is the journal entry of Provision for Leave Salary and Gratuity?
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A) Dr Leave Salary Expense Cr Provision for Leave Salary
B) Dr Gratuity Expense Cr Provision for Gratuity
38. What is GCC VAT?
GCC VAT is an indirect tax that will be levied on goods and services in the member
states of the Gulf Cooperation Council. The member states of GCC are Saudi Arabia,
Dubai, Qatar, Bahrain, Oman and Kuwait. The GCC VAT will be calculated at the rate of
5 Percent. However, as mentioned above, certain sectors and exports will be taxed zero
Percent, making them tax exempt.
39. Explain Reverse Charge Mechanism Vs Forward Charge in UAE VAT?
Reverse Charge Mechanism is a process under which responsibility of paying tax to
Government shifts from seller to buyer, unlike in the forward charge, where the
supplier is liable to pay the tax. This mechanism of reverse charges applies on the
import of goods and services into UAE.
40. Wages Protection System (“WPS”) WPS has for several years operated as a transparent
means of securing the timely payment of employee salaries and regulating employer noncompliance. In-scope employers are obliged to pay salaries into local currency at least once a
month and into a locally regulated bank account.
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41. Consolidated financial statements are financial statements of an entity with multiple
divisions or subsidiaries. Companies can often use the word consolidated loosely in financial
statement reporting to refer to the aggregated reporting of their entire business collectively.
42. What is the journal entry of Accrued Income?
Dr Accrued Income
Cr Income
43. What is the journal entry of Depreciation?
Dr Depreciation of Fixed Asset
Cr Accumulated Depreciation of Fixed Asset
44. What is the journal entry of Salary Payable?
Dr Salary Expense
Cr Salary Payable / Outstanding Salary
45. What is the journal entry for Profit on Sale of Fixed Asset?
Dr Cash / Bank
Dr Accumulated Depreciation
Cr Fixed Asset
Cr Profit on Sale of Fixed Asset
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46. What is the journal entry for bad debt provision?
Dr Bad Debt
Cr Provision for bad debt
47. What is the journal entry for Commission Receivable?
Dr Accrued Commission
Cr Commission
48. What is the journal entry for Loan taken from Bank?
Dr Bank Current A/c
Cr Bank Loan A/c
49. What is the journal entry for Discount Allowed?
Dr Cash / Bank
Dr Discount Allowed
Cr Accounts Receivable
50. .How can you explain the basic accounting equation?
We know that accounting is all about assets, liabilities and capital. Therefore, the accounting
equation is: Assets = Liabilities + Owners Equity.
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OBJECTIVE TYPE QUESTIONS (Right Answers filled with Yellow Colour)
1. Courier Charge Paid To DHL By Credit Card.
Choose the right journal entry from the following
A) Dr Accrued Courier Charge Cr Bank
B) Dr Courier Charge Cr DHL
C) Dr DHL Cr Credit Card
D) Dr Courier Charge Cr Credit Card
Note:
Dr Courier charge (Increase Expense)
Cr Credit Card (Increase Liability)
2. Flat Rent Received From ABC Ltd by Cheque
Choose the right journal entry from the following
A. Dr Bank Cr ABC Ltd
B. Dr Flat Rent Cr Bank
C. Dr Cash Cr ABC Ltd
D. Dr Bank Cr Flat Rent
Note:
Dr Bank (Increase Asset)
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Cr Flat Rent (Increase Income)
3. Payment of Expense Will _________ the Asset
A. Increase
B. Reduce
C. Overstate
D. None Of The Above
Note :
Example: Office rent paid by cash in hand
Dr Office Rent (Increase Expense)
Cr Cash in hand (Decrease Asset)
4. 31-Jan-2019: Office Rent paid to Asset Home by Cheque ( Cheque Dated
02-01- 2019)
Choose the right journal from the following
A. Dr Asset Home
Cr PDC Payable
B. Dr Office Rent
Cr Bank
C. Dr Office Rent
Cr PDC Payable
D. Dr Accrued Office Rent
Cr Bank
Note :
Dr Office Rent (Increase Expense)
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Cr Bank (Decrease Asset)
5. Outstanding Electricity Bill Paid By Credit Card.
Choose the Right Journal from the Following
A. Dr Electricity Bill
Cr Bank
B. Dr Outstanding Electricity Bill Cr Bank
C. Dr Credit Card Cr Electricity Bill
D. Dr Outstanding Electricity bill Cr Credit Card
Note :
Dr Outstanding Electricity Bill (Decrease Liability)
Cr Credit Card (Increase Liability)
6. What Is the Nature of "Deferred Revenue?"
A. Income
B. Asset
C. Liability
D. Contra-Asset
Note: Deferred revenue refers to payments received in advance for
services which have not yet been performed or goods which have not yet
been delivered. These revenues are classified on the company's balance
sheet as a liability.
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7. Outstanding Advertisement Charge Paid to Prime Media by Cheque
Choose the right one from the following
A. Dr Advertisement
Cr Bank
B. Dr Prime Media
Cr Advertisement
C. Dr Bank
Cr Advertisement
D. Dr Prime Media
Cr Bank
Note:
Dr Prime Media (Decrease Liability)
Cr Bank (Decrease Asset)
8. What's the Nature of "Cost of Goods Sold"
A. Contra Asset
B. Expense
C. Contra Revenue
D. Liability
Note: The cost of goods sold is reported on the income statement and
should be viewed as an expense of the accounting period.
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9. Opening Stock -
500000
Purchase -
300000
Sales -
800000 (Cost Of Sale= 40% of Sale)
Purchase Return – 150000
Goods Lost By Fire - 50000
Find out Closing Stock & Profit?
A. Closing Stock 280000
B. Closing Stock – Nil
Profit 430000
Profit 100000
C. Closing Stock 330000
Profit 480000
D. None of the above
ANSWER Note:
Closing Stock = Opening Stock + Purchase – Purchase Return – Cost
of Sale
= 500000 + 300000 – (150000 + 50000) - 320000
Closing stock = 280000
Profit = income – expense
800000 – (320000 + 50000)
PROFIT = 430000
10. Cash Advance Received From a Customer
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What's The Nature Of Customer?
A. Income
B. Asset
C. Expense
D. Liability
E. Equity
Note: The business has received cash from the customer.
The cash represents an advance payment for goods to be delivered in
the future. As the revenue has not been earned it must be recorded as a
liability.
11. Courier Charge due but not received."
Choose the Right Journal from the following
A. Dr Cash
Cr Courier Charge
B. Dr Courier Charge
Cr Bank
C. Dr Accrued Courier Charge
D. Dr Courier Charge
Cr Courier Charge
Cr Accrued Courier Charge
Note:
Dr Accrued Courier Charge (Increase Asset)
Cr Courier Charge (Increase Income)
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12. Any written evidence in support of a business transaction is called
A. Journal
B. Ledger
C. Voucher
D. Ledger Posting
13. Which of the following is not an asset?
A. Furniture
B. Deferred Expense
C. Accrued Revenue
D. Credit Card
E. Petty Cash
14. What's the Nature of "Accumulated Depreciation?”
A) Asset
B) Expense
C) Income
D) Contra Asset
Note: The amount of a long-term asset's cost that has been allocated
to Depreciation Expense since the time that the asset was
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acquired. Accumulated Depreciation is a long-term contra
asset account (an asset account with a credit balance) that is reported on
the balance sheet under the heading Property, Plant, and Equipment.
15. "Outstanding Consultation Fees Received by Cheque".
The above mentioned transaction affects
A. Increase Expense, Decrease Asset
B. Decrease Liability, Increase Income
C. Increase Income, Increase Asset
D. Decrease Asset, Increase Asset
Note:
Dr Bank (Increase Asset)
Cr Accrued Consultation Fees (Decrease Asset)
16. Two Months Outstanding Store Rent Received by Cheque
Choose the Right Journal from the following
A. Dr Bank
Cr Store Rent
B. Dr Deferred Store Rent Cr Bank
C. Dr Bank
Cr Prepaid Income
D. Dr Bank
Cr Accrued Store Rent
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Note:
Dr Bank (Increase Asset)
Cr Accrued Store Rent (Decrease Asset)
17. Laptop purchase cost Rs 40000
Accumulated depreciation of Laptop 20000
Sold laptop Rs.18000 and received cash
Choose the right journal entry at the time of the sale of Laptop
A.
Dr Cash
18000
Cr Laptop
B.
Dr Cash
Dr Loss on Sale of Laptop
18000
18000
2000
Dr Accumulated Dep of Lap 20000
Cr Laptop
C.
Dr Cash
Dr Loss of Sale of Laptop
Cr Laptop
40000
18000
2000
20000
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D.
Dr Cash
20000
Cr Laptop
Cr Gain on Sale of Laptop
18000
2000
Note:
Dr Cash (Increase Asset) 18000
Dr Loss on Sale of Laptop (Increase Expense) 2000
Dr Accumulated Depreciation of Laptop (Decrease Contra-Asset) 20000
Cr Laptop (Decrease Asset) 40000
18. What’s The Nature of “Unearned Revenue?”
Choose the right one from the following
A. Asset
B. Equity
C. Income
D. Liability
Note: Unearned revenue. Unearned revenue is money received from a
customer for work that has not yet been performed. Unearned revenue is a
liability for the recipient of the payment,
19. What is the nature of Retained Earnings?
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A. Asset
B. Expense
C. Income
D. Equity
Note: In privately owned companies, the retained earnings account is
an owner's equity account. Thus, an increase in retained earnings is an
increase in owner's equity, and a decrease in retained earnings is a
decrease in owner's equity.
20. What’s The Nature of ‘Amortization?’
A. Contra Asset
B. Expense
C. Liability
D. Income
Note: Amortization includes such practices as depreciation, depletion,
write-off of intangibles. It’s treated as an expense
21. Owner’s Vehicle Insurance Renewal Charge Rs 24000 Paid to Birla
Insurance Co.by Credit Card (Note: Insurance Renewed For 2 Year)
Please choose the right journal from the following.
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A. Dr Prepaid Insurance
Cr Bank
B. Dr Birla Insurance
Cr Owner’s C/A
C. Dr Owners Drawings a/c
Cr Credit Card
D. Dr Deferred Insurance
Cr Credit Card
Note :
Dr Owner’s Drawings A/c (Decrease Equity)
Cr Credit Card (Increase Liability)
22. What’s The Nature of “Deferred Expense?”
Choose the right one from the following
A. Expense
B. Equity
C. Asset
D. Income
Note: Deferred expense. A deferred expense is a cost that has already
been incurred, but which has not yet been consumed. The cost is recorded
as an asset until such time as the underlying goods or services are
consumed; at that point, the cost is charged to expense
23. Tender fees paid to Qatar Petroleum from Ajith’s Petty cash , This
Transaction Affects
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A. Increase Expense, Decrease Asset
B. Decrease Liability, Increase Income
C. Increase Income, Increase Asset
D. Decrease Asset, Increase Asset
Note:
Dr Tender Fees (Increase Expense)
Cr Ajith’s Petty Cash (Decrease Asset)
24. Find the closing stock
Opening Stock
Rs.220000
Purchase
Rs.1080000
Sales
Rs. 1100000
Purchase Return
Rs. 50000
Sales return
Rs.100000
Cost of Sales
Rs.750000
Choose the right answer from the following
A. 200000
B. 250000
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C. 500000
D. 120000
Note:
Closing Stock = Opening Stock + Purchase – Purchase Return –
Cost of Sale
Closing Stock =220000+1080000-50000-750000
Closing Stock = 500000
25. Which one of the following is not included in Financial Statements?
A. Income Statement
B. Cash Flow Statement
C. Trial Balance
D. Balance Sheet
E. Statement of retained earnings
Note: There are four main financial statements. They are: (1) balance
sheets; (2) income statements; (3) cash flow statements; and (4)
statements of shareholders' equity.
26. Which of these is not included as a separate item in the basic accounting
equation?
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A. Asset
B. Revenue
C. Liability
D. Share Holder’s Equity
Note: Accounting Equation is
Asset = Liabilities + Owner’s Equity
27. The Income statement shows which of the following
A. Assets and Liabilities
B. Income and Expenses
C. Receipts and Payments
D. None of the above
Note: Income Statement Formula is represented as, Gross Profit =
Revenues – Cost of Goods Sold. Operating Income = Gross Profit –
Operating Expenses. Net income = Operating Income + Non-operating
Items.
28. What is another name for the statement of shareholders’ equity?
A. Statement of Retained Earnings
B. Income Statement
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C. Cash Flow Statement
D. Fund Flow Statement
Note: The statement of retained earnings is also known as the retained
earnings statement, the statement of shareholders' equity,
the statement of owners' equity, and the equity statement.
29. 15-Jan-2019:Delivery order fee paid to Arcon co. by cheque (Cheque Dated
17-01-2019)
Choose the right journal from the following
A. Dr Deliver Order Fee
Cr PDC Payable
B. Dr Arcon
Cr Owner’s Current A/C
C. Dr Delivery Order Fee
Cr Bank
D. Dr Owner’s Current A/C
Cr PDC Payable
Note: A post-dated cheque is a cheque written with a future date. In other words, the
date that appears on the cheque is after the date when the cheque was written.
30. Which of the following is an Asset?
A. Unearned Revenue
B. Retained Earnings
C. Accrued Sale
D. Amortization
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Note: Accrued revenue is a sale that has been recognized by the seller,
but which has not yet been billed to the customer. ... The debit balance
in the accrued billings account appears in the balance sheet as asset.
31. What is the nature of "Provision for Bad Debt"
A. Expense
B. Asset
C. Income
D. Contra-Asset
Note: The provision for doubtful debts is the estimated amount of bad
debt that will arise from accounts receivable that have been issued but not
yet collected. It is identical to the allowance for doubtful accounts
32. "Deferred Advertisement Charge" Shows Debit Balance in the trial balance
Choose the right nature from the following
A. Expense
B. Asset
C. Income
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D. Liability
C. Equity
33. Listing of all account names and account codes is called what?
A. Balance Sheet
B. Chart of Accounts
C. Trial Balance
Note: A chart of accounts is a financial organizational tool that
provides a complete listing of every account in an accounting
system. An account is a unique record for each type of asset, liability,
equity, revenue and expense.
34. Which of the following shows summary of a company's financial position at a
Specific date?
A) Income Statement
B) Retained Earnings Statement
C) Cash Flow Statement
D) Balance Sheet
Note: A balance sheet is a statement of the financial position of a
business that lists the assets, liabilities, and owner's equity at a
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particular point in time. In other words, the balance sheet illustrates
your business's net worth.
35. Petty Cash withdrawn from owner's credit card account
A. Dr Petty Cash Cr Bank
B. Dr Owner's C/A
Cr Credit Card
C. Dr Petty Cash Cr Owner's C/A
D. Dr Petty Cash
Cr Credit Card
Note:
Dr Petty Cash (Increase Asset)
Cr Owner’s Current Account (Increase Equity)
36. Which of the following would not included on an Income statement.
A. Interest Expense
B. Amortization Expense
C. Commission Income
D. Accrued Sale
Note: Accrued revenue is a sale that has been recognized by the seller, but
which has not yet been billed to the customer. ... The debit balance in
the accrued billings account appears in the balance sheet as asset.
37. Payment of a dividend
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A. Increases Expenses; Decreases Cash.
B. Decreases Cash; Increases Stockholders' Equity
C. Decrease Income; Decrease Cash
D. Decreases Cash; Decreases Retained Earnings.
Note: When the dividends are paid, the effect on the balance sheet is
a decrease in the company's retained earnings and its cash balance.
As a result, the balance sheet size is reduced. Retained earnings are
listed in the shareholders' equity section of the balance sheet
38. 05-Feb-2019:Outstanding rent received by cheque(cheque dated15-02-2019)
Choose the right journal from the following
A. Dr Bank
Cr Outstanding Rent
B. Dr PDC Receivable
Cr Rent
C. Dr Accrued Rent
Cr PDC Payable
D. Dr PDC Receivable
Cr Outstanding Rent
Note: A post-dated cheque is a cheque written with a future date. In other words, the date
that appears on the cheque is after the date when the cheque was written.
39. 31-Jan-2019: Office Rent paid to asset home from ABC company’s petty
cash
(Note: ABC Company is our associated company)
What’s the journal entry of our company?
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Choose the right one from the following
A. Dr Asset Home
Cr Petty Cash
B. Dr Office Rent
Cr Asset Home
C. Dr Asset Home
Cr ABC Co.
D. Dr Office Rent
Cr ABC Co.
E. Dr Office Rent
Cr Petty Cash
40. 31-Jan-2019: Owner’s Vehicle Insurance (Period: 01-02-2019 to 31-1-2020)
Charge Rs 12000 paid to Birla insurance co. by credit card
Choose the right journal from the following
A. Dr Prepaid Insurance Cr Credit Card
B. Dr Birla Insurance Co. Cr Owner’s C/A
C. Dr Deferred Insurance
D. Dr Owner’s C/A
Cr Bank
Cr Credit Card
41. 28-Feb-2019: Courier Charge Paid To DHL By Cheque (Cheque No: 1001)
Journal Entry: Dr Courier Charge Cr Bank
...................................................................................................
03-Mar-2019: Cheque No: 1001 Bounced due to mismatch of signature
Pass the journal entry dated 03-mar-2019
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Choose the right journal from the following
A. Dr Bank
Cr DHL
B. Dr Bank
Cr Courier Charge
C. Dr Courier Charge
Cr DHL
D. Dr Cash
Cr Accrued Courier Charge
Note:
Dr Bank (Increase Asset)
Cr DHL (Increase Liability)
42. Six Months Outstanding Store Rent Received by Cheque
A. Dr Bank
Cr Store Rent
B. Dr Deferred Store Rent
C. Dr Bank
Cr Bank
Cr Prepaid Income
D. Dr Bank Cr Accrued Store Rent
Note:
Dr Bank (Increase Asset)
Cr Accrued Store Rent (Decrease Asset)
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43. An Instruction to a bank to pay a specified amount at stated interval is a
………
A. Cheque Discounting
B. Standing Order
C. Credit Transfer
D. Wage Protection System (WPS)
E. None of the above
44
PURCHASE FOR JANUARY 2008
AED 25,00,000.00
SALES
AED 40,00,000.00
VAT
5%
CALCULATE VAT PAYABLE FOR JANUARY 2018
INPUT VAT
(=2500000 X 5%)
AED 1,25,000.00
OUTPUT VAT
(= 4000000 X 5%)
AED 2,00,000.00
VAT PAYABLE
=
VAT PAYABLE
=
OUTPUT VAT - INPUT VAT
AED 75,000.00
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45
PURCHASE FOR MARCH 2018
AED 60,00,000.00
SALES
AED 85,00,000.00
EXCESS Input Tax Credit - Previous Month
AED 1,20,000.00
VAT RATE
5.00%
CALCULATE VAT PAYABLE FOR MARCH 2018
INPUT VAT FOR MATCH 2018
( 6000000 X 5% )
AED 3,00,000.00
PREVIOUS INPUT TAX CREDIT - ITC
AED 1,20,000.00
OUTPUT VAT
(8500000 X 5% )
AED 4,25,000.00
VAT PAYABLE
=
VAT PAYABLE
=
(OUT PUT VAT - (INPUT VAT + ITC PREVIOUS MONTH))
AED 5,000.00
46. Trial Balance of Nidhal Ltd posted below, find out income statement
and balance sheet as on 31st December 2019
NIDHAL LTD
S.NO
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
TRIAL BALANCE AS ON 31ST DECEMBER 2019
PARTICULAR
DEBIT
CREDIT
NAFIL'S CAPITAL
10,00,000.00
NAFIL'S DRAWINGS A/C
3,00,000.00
REFUNDABLE RENT DEPOSIT
2,00,000.00
FURNTIRUE COST
3,50,000.00
DEPRECIATION OF FURNITURE
22,000.00
ACC.DEPREC.OF FURNITURE
75,000.00
MOTOR VEHICLE COST
11,00,000.00
DEPRECIATION OF MOTOR VEHICLE
35,000.00
ACC.DEPREC.OF MOTOR VEHICLE
4,20,000.00
MSHQ-3000521421 A/C
3,71,100.00
MSHQ-300053215-CREDIT CARD A/C
5,000.00
OFFICE EQUIMENTS COST
2,20,000.00
DEPRECIATION OF OFFICE EQUIPMETS
21,000.00
ACC.DEPREC.OF OFFICE EQUIPMENTS
1,02,000.00
CAR LOAN
1,50,000.00
TRAVELLING EXP
600.00
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17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
PURCHASE
PENALTY
ADVERTISEMENT EXP
REGISTRATION EXPENSE
VAT PAYABLE
PREPAID ADVERTISEMENT CHARGE
PRINTING AND STATIONERY
POSTAGE EXPENSE
SALE
ACCOUNTING CHARGES
FOOD AND FERFESHMENT EXPENSE
ELECTRICITY CHARGE
TEA EXPENSE
SALARY
SALARY PAYABLE
RENT
RENT PAYABLE
25,00,000.00
700.00
7,000.00
3,500.00
12,000.00
25,000.00
1,600.00
450.00
37,00,000.00
2,000.00
850.00
2,950.00
250.00
3,00,000.00
52,000.00
62,000.00
55,26,000.00
31-Dec-19
CLOSING STOCK
10000
55,26,000.00
2,32,000.00
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46-Answer:
INCOME STATEMENT OF NIDHAL LTD
31ST December 2019
PARTICLUAR
Amount
TURN OVER:SALE
37,00,000.00
TOTAL (A)
COST OF SALE
37,00,000.00
22,68,000.00
TOTAL (B)
GROSS PROFIT (A-B)
22,68,000.00
14,32,000.00
OTHER EXPENSES:DEPRECIATION OF FURNITURE
DEPRECIATION OF MOTOR VEHICLE
DEPRECIATION OF OFFICE
EQUIPMETS
TRAVELLING EXP
PENALTY
ADVERTISEMENT EXP
REGISTRATION EXPENSE
PRINTING AND STATIONERY
POSTAGE EXPENSE
ACCOUNTING CHARGES
FOOD AND FERFESHMENT EXPENSE
ELECTRICITY CHARGE
TEA EXPENSE
SALARY
RENT
NET PROFIT / LOSS
22,000.00
35,000.00
21,000.00
600.00
700.00
7,000.00
3,500.00
1,600.00
450.00
2,000.00
850.00
2,950.00
250.00
3,00,000.00
62,000.00
4,59,900.00
9,72,100.00
*COST OF SALE = PURCHASE - CLOSING STOCK
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NIDHAL LTD
LIABILITIES
CAPITAL
NAFIL'S CAPITAL
NAFIL'S DRAWINGS A/C
NET PROFIT/LOSS
BALANCE SHEET AS ON 31ST DECEMBER, 2019
AMT
ASSET
AMT
NON-CURRENT ASSET
10,00,000.00
REFUNDABLE RENT DEPOSIT
2,00,000.00
(3,00,000)
FURNTIRUE COST
3,50,000.00
9,72,100.00
ACC.DEPREC.OF FURNITURE
(75,000)
MOTOR VEHICLE COST
11,00,000.00
ACC.DEPREC.OF MOTOR VEHICLE
(4,20,000)
OFFICE EQUIMENTS COST
2,20,000.00
ACC.DEPREC.OF OFFICE EQUIPMENTS
(1,02,000)
OTHER LIABILITY
CAR LOAN
SALARY PAYABLE
MSHQ-300053215-CREDIT CARD A/C
VAT PAYABLE
RENT PAYABLE
1,50,000.00
52,000.00
5,000.00
12,000.00
10,000.00
CURRENT ASSET
MSHQ-3000521421 A/C
CLOSING STOCK
PREPAID ADVERTISEMENT CHARGE
19,01,100.00
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3,71,100.00
2,32,000.00
25,000.00
19,01,100.00