SHORT ANSWER QUESTIONS
1.
When should revenue be recognized? Are there any
exceptions to the general rule.
2.
Name and explain the accounting
concept/principle which:
a.
Requires that the same accounting method be used
from one accounting period to the next.
b.
Requires that revenue should generally be
recognized at the point of sale.
c.
Requires recognition of expenses in the same
period as associated revenues.
d.
Assumes that a business enterprise will not be
sold or liquidated in the near future.
e.
Helps to ascertain the amount and time of
recognizing the revenues from business activities.
f.
Requires that accounting should be free from
bias of accountants and others.
g.
Requires that a provision of bad and doubtful
debts should be created against debtors.
h.
Requires that stock of goods should be valued at
cost and not at market price.
3.
What is the main advantage of Accounting
Standards?
4.
What is meant by Generally Accepted Accounting
Principles(GAAPs)?
5.
Which accounting concept states that the rent
for the month of March,2015 which is not paid, should be recorded as an expense
for the year ended 31st March,2015. Justify.
6.
International Financial Reporting Standards
(IFRS) provides a number of benefits. Explain any three.
7.
How does matching principle apply to
depreciation?
8.
Define principle of Matching Revenue with cost.
9.
What is
Full Disclosure Principle? Are there any exceptions to this Principle?
10.
When are expenses taken as incurred? Give
Examples.
LONG ANSWER QUESTIONS
1.
Explain the following with the help of examples:
a.
Revenue Recognition or Realisation Concept
b.
Principle of Full Disclosure
c.
Prudence Concept
2.
Explain the effects of going concern and
periodicity concepts on financial statements.
3.
Explain the importance of accounting standards.
4.
Briefly explain your understanding of IFRS and
also give the underlying assumptions of IFRS.
5.
Why is it
important to adopt a consistent basis for the preparation of financial
statements. Explain.
Chapter-4
SHORT ANSWER QUESTIONS
LONG ANSWER QUESTIONS
1.
Discuss any two advantages and disadvantages each
of cash and accrual basis of accounting
2.
Roshan, a chartered accountant earned
Rs.12,00,000 during the financial year 2014-15. Out of which he received
Rs.10,50.000. He incurred an expense of Rs.5,10,000, out of which Rs.1,20,000
are outstanding. He also received his fees relating to previous year Rs.1,35,000
and also paid Rs.60,000 expenses of last year. Find out Roshan’s income for
2014-15 following the cash and accrual basis.
3.
A, during a
financial year 2007 made sales and earned income of Rs 10,00,000. It included
credit sales of Rs 3,00,000 and 1,00,000 received pertaining to the previous
accounting year. The expenses paid were Rs 2,00,000 out of which 50,000
pertains to previous years rent. However Rs 20,000 salary has not been paid of
the current financial year.
Calculate
the amount of profit earned as per:-
(a)
Cash basis of
accounting
(b)
Accrual basis
of accounting
4.
Ram, during a
financial year 2013 made sales of Rs 25, 00,000. It included credit sales of Rs
9, 00,000 and 5, 00,000 received as advance for an order received. The
purchases made were Rs 8, 00,000 out of which 3, 00,000 were credit purchases.
Of the other expenses incurred i.e. 70,000, 8,000 is paid as advance salaries.
Calculate
the amount of profit earned as per:-
(a)
Cash basis of
accounting
(b)
Accrual basis
of accounting
5.
Name the basis of accounting in which
outstanding and prepaid expenses are taken into consideration.
6.
Name the basis of accounting which is recognized
under the Companies Act,1956.
7.
Differentiate between cash and accrual basis of
accounting.
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