Fundamentals of Accounting

FUNDAMENTALS OF ACCOUNTING (BBA 105) PART – A FILL IN THE BLANKS :-

20 marks

1. 2. 3. 4.

The prime prime function function of accounting is to_____ to_________ ________ ________ _____. _. The system system of recording recording transactions transactions based based on dual aspect aspect concept concept is called called ________ ____________ _____. _. The cash discount discount allowed allowed to a debtor debtor should should be credited credited to _____ _________ ________ ____.. The process process of transferri transferring ng the debit and credit credit items items from a journal journal to their their respective respective accounts accounts in the ledger l edger is termed as _______________. _______________. 5. For goods withdraw withdrawn n by the proprietor proprietor for for personal personal use ______ _________ ___ account account will will be debited. debited. 6. The statement statement containing containing various various ledger balances balances on a particul particular ar date is known known as _______ _________. __. 7. Outstanding Outstanding salaries salaries are are shown shown as _____ _________ ________ _____. _. 8. Sales Sales are equal equal to _____ _______ ____ __ plus plus _____ ________ ___.. 9. Goods given as sample sampless should should be credited credited to ________ __________. __. 10. Under diminishing balance method, method, depreciation ___________ ___________ every year. 11. _______________ _______________ method method is normally recommended for amortization of intangible assets. 12. When money is withdrawn from the the bank , the bank _______ account of the customer. 13. 13. In case case the pass pass book book shows shows a favour favourab able le balanc balancee and it is take taken n as the star starti ting ng point point for   preparing  preparing a bank reconciliation reconciliation statement, cheques issued but not n ot presented presented for payment should  be _______ _________ __ to find find out cash cash balance. balance. 14. If debenture debenture of the nominal nominal value of Rs. 10000 100000 0 are issued issued at discount discount of 10% 10% for net assets assets worth Rs. 80000, the balance of Rs. 10000 will be debited to ____________ account. 15. Shares having preferential right as to dividend and repayment of capital are termed as ________. ________. 16. Return of shares voluntarily by a shareholder to the company company for cancellation is called ______. ______. 17. The amount of share premium premium received by the company is shown under the heading _______ _______ in the company’s balance sheet. 18. In case debenture debenture of Rs. 10000 10000 are issued issued at par but payable payable at premium premium of 10 per cent. The  premium  premium payable payable will will be debited debited to ______ __________ ________ ______. __. 19. The convent convention ion of _____ _______ ___ _ implie impliess that all materi material al informa informatio tion n should should be reveale revealed d in the accounts. 20. Accounti Accounting ng _____ _______ _____ ___ are rules rules of action action or conduct conduct which are adopted adopted by the accountant accountant universally. PART – B

ATTEMPT ANY 3 QUESTIONS OUT OF 5 QUESTIONS

30 marks

1. “Accounting “Accounting concepts concepts and convention conventionss are even even relevant today”. Discuss Discuss the the statement statement and the various concepts and conventions by giving suitable examples. 2. What is a profit profit and loss loss account ? How does does it differ differ from from trading trading account? account? 3. What is a Bank Reconciliat Reconciliation ion Statement Statement ? How How is it prepared prepared ? Submit Submit a pro pro – forma of a Bank Reconciliation statement with imaginary figures.

4. Write short notes on :a)  b) c) d)

Difference between Trial balance and Balance sheet Intangible assets Accounting cycle Hire purchase system

5. On 1st April 2004, Moon Ltd. Purchased a plant for Rs. 10,00,000. On 1st October, 2004, an additional plant was purchased costing Rs. 500000. On 1 st October, 2005, the plant purchased on 1st October 2004 was sold off for Rs.400000. On 1 st October 2006, a new plant was  purchased for Rs. 1200000 and the plant purchased on 1st October, 2004 was sold for Rs. 420000 on the same date. Depreciation is to be provided at 10% per annum on the Written Down Value on 31st March every year. Prepare the Plant Account for three years ended on 31st March, 2007. PART – C ALL QUESTIONS ARE COMPULSORY ATTEMPT 1 QUESTION FROM SET OF QUESTIONS 50marks

1 (a). Define Accounting, state its functions. How does it differ from Book-Keeping? State the  persons who should be interested in accounting information. OR 

1 (b). Journalise the following transactions. Also state the nature of each account involved in the Journal entry. a. Dec. 1, 2000, Ajit started business with cash Rs.40000.  b. Dec. 3, he paid into the bank Rs.2000 c. Dec. 5, he purchased goods for cash Rs.15000. d. Dec. 8, he sold goods for cash Rs.6000. e. Dec. 10, he purchased furniture and paid by Cheque Rs.5000 f. Dec. 12, he sold goods to Arvind for Rs.4000 g. Dec. 14, he purchased goods from Amrit Rs.10000 h. Dec. 15, he returned goods to Amrit Rs.5000 i. Dec. 16, he received from Arvind Rs.3960 in full settlement.  j. Dec. 18, he withdraw goods for personal use Rs.1000 k. Dec. 20, he withdrew cash from business for personal use Rs.2000 l. Dec. 24, he paid telephone charges Rs.1000 m. Dec. 26, cash paid to Amrit in full settlement Rs.4900 n. Dec. 31, paid for stationary Rs.200, rent Rs.500 and salaries to staff Rs.2000 o. Dec. 31, goods distributed by way of free samples Rs.1000. 2 (a). “Is Trial Balance merely a proof of arithmetical accuracy”? Explain the errors which are not disclosed by a Trial Balance?

OR 

2 (b). Prepare Trading and Profit and Loss account for the year ended at 31st December, 2000 from the following Trial Balance and adjustments :Trial Balance PARTICULARS

Capital Plant and Machinery Fixtures and Fittings Fuel and Power for factory Office salaries Electric expenses of factory Travelling expenses Carriage on sales Cash at bank  Cash in hand Debtors Purchases Factory wages Rent and rates Office expenses Carriage on purchase Discount Drawings Stock on 1st January 2000 Manufacturing expenses Sales Sales return Creditors Purchase returns Bills payable Insurance

Rs.

Rs. 186460

110000 3440 1084 7490 784 1850 1920 4490 136 95600 166580 19830 3530 5556 1794 844 13640 43450 5360 14844

252354 45360 6344 12844

1140 503362

503362

Adjustments:Stock on 31st December, 2000 Rs.33160; Depreciation: on Plant & Machinery 5%, on Fixtures & Fittings 10%, Outstanding Rent and Rates Rs.150; Prepaid Insurance Rs.140, Outstanding Wages Rs.700 and Outstanding Salaries Rs.1600.

3(a). Explain the need, significance and causes of depreciation? What factors should be considered for  determining amount of depreciation?

OR 

3(b). Write short notes on:i. Sinking fund method ii. Distinguish between “Straight Line Method” and “Written Down Value Method”.

4(a). What is Forfeiture of Shares? What are the legal requirements necessarily followed by the Board  before forfeiture of shares? How can forfeiture shares be re-issued? Show Journal Entries for  recording forfeiture and re-issue of forfeiture shares. OR 

4(b). Show Journal Entries for the following:On 1st January 2000, a Company offers 8000 shares of Rs.10 each. Applications are received for  full 8000 shares. Money payable is as follows:On Application Rs.3 per share On Allotment Rs.2 per share On First call Rs.3 per share On Final call Rs.2 per share 5(a). Briefly explain the difference between:i. Personal and Impersonal account ii. Real account and Nominal account OR 

5(b). What is meant by Hire Purchase System? How does it differ from Installment System?

BUSINESS ECONOMICS (BBA 103)

PART - A FILL IN THE BLANKS

(20 x 1= 20 marks)

1. Economics is a _____________________ science. 2. Law of demand states that there is ______________ relationship between price and demand. 3. If the demand of two goods are not at all inter-related, then it is called ___________ of demand. 4. Demand for a good is associated with another good, it is called __________ demand. 5. In oligopoly, price determination is done using ____________ curve. 6. The more we have of a thing, the __________ we desire additional units of it. 7. The object of monopoly is ___________ maximization. 8. At the point where _____________ is equal to _______, the profit will be maximized. 9. The difference between fixed and variable costs holds good only in the _________ run. 10. When the average cost is ___________, the marginal cost is less than the average cost and when average cost is ___________, the marginal cost is higher than the average cost. 11. At any given time, the demand for the commodity or service at the prevailing price is _______  than it would be at a higher price and ________than it would be at a lower price. 12. Elasticity of demand for a commodity is said to be ____________ if the total expenditure on the commodity increases in the event of a rise in its price. 13. Demand for wheat is____________ elastic. 14. _______________ is the addition made to the total cost by producing one more unit of output. 15. If the price of the commodity rises relatively to other goods, the consumer will buy less of that commodity and buy more of the other goods in place of this particular good. This is called  _________. 16. Man’s wants are _________ and means to satisfy them are ________. 17. The additional benefit which a person derives from a given increase of his stock of anything  _________ with the growth of the stock that he has. 18. Goods that can be consume only once are known as __________ goods. 19. ______________ is the utility at the point where the consumer stops further consumption of a commodity. 20. The elasticity is the ratio of the percentage change in the _____________________ to the  percentage change in the _____________.

PART – B

ATTEMPT ANY 3 QUESTIONS OUT OF 5 QUESTIONS

(3 x 10 = 30 marks)

1. What is Managerial Economics? How it is different from Traditional Economics? What are the responsibilities of Managerial Economist? 2. Explain with example the ‘law of demand’ and discuss its main characteristics. What are its exceptions? Why does a demand curve always slope downwards to the right? 3. Discuss the nature of the short-run and long-run average cost curves. Why is the long-run cost curve flatter than the short-run cost curve? 4. What is Break-Even Analysis? State its limitations and uses? What are the objectives of BreakEven Analysis? 5. Write short notes on: i. Micro v/s Macro economics ii. Degree or types of price elasticity of demand iii. Relationship between average variable cost, average fixed cost and average cost iv. Graphical presentation of break-even point

PART – C ALL QUESTIONS ARE COMPULSORY ATTEMPT 1 QUESTION FROM SET OF QUESTIONS (5 x 10 = 50 marks)

1(a). Illustrate the relationship of Managerial economics with other relevant academic disciplines. OR 

1(b). State and explain the relevance and importance of economics to management. 2(a). Define “Elasticity of Demand”. Describe the factors which determine the Elasticity of Demand for a commodity. OR 

2(b). What is the importance of demand forecasting? Which steps would you take in forecasting the demand? Explain ‘Delphi’ method of demand forecasting.

3(a). From the following information calculate Fixed Cost, Variable Cost, Average Fixed Cost, Average Variable Cost, Average Cost and Marginal Cost.

OUTPUT 0 1 2 3 4 5 6 7 8 9 10

TOTAL COST 300 600 700 750 780 800 900 1035 1180 1650 2300

OR 

3(b). What do you understand by Market Structure? Differentiate between Pure Competition and Monopoly. 4(a). Define Profit. How are Profits determined? Critically examine the Rent Theory of Profit. OR 

4(b). Write short notes on:i. Cross elasticity of demand ii. Margin of safety iii. Break – even analysis iv. Pricing under Oligopoly 5(a). State the ‘Monopoly’ and ‘Monopolistic’ market conditions and trace a line of difference  between the two. OR 

5(b). Meaning and objectives of business firms. What is the difference between Accounting Profit and Economic Profit.