Saturday, 5 September 2015

ACCOUNTING PROCEDURES-RULES OF DEBIT AND CREDIT


1.       State and explain the types of Accounts under modern classification.
2.       What are Representative Personal Accounts? Give one example.
3.       What is the rule of recording transactions in:
a.       Personal Accounts
b.      Real Accounts
c.       Nominal Accounts

4.       What are Artificial Personal Accounts? Give one example
5.       A credit balance always signifies a balance in Liabilities account. Is it correct?
6.       Why are the rules of debit and credit same for liability and capital?
7.       What is an Account?
8.       “Every debit must have a corresponding credit.” Explain.
9.       To record a purchase of an asset, why Asset account is debited?
10.   Drawings made by the owner mean a decrease in the proprietor’s capital. Is it correct.
SECTION-B
PRACTICAL QUESTIONS
1.       Classify the following accounts under personal, real or nominal accounts:
i.                     Commission paid
ii.                   Commission Accrued
iii.                  Discount Allowed
iv.                 Sales A/c
v.                   Bank Overdraft
vi.                 Debtors
2.       Identify the two accounts involved in the following transactions. Also indicate which account will be debited and which account will be credited with reasons for each.
Rs.
1.       Sohan started business with cash                                             2,00,000
2.       Purchased a machine                                                                     80,000
3.       Purchased Goods for Cash                                                           50,000
4.       Purchased goods on credit from Sen                                       40,000
5.       Paid Cash to Sen                                                                               32,000
6.       Salaries paid to staff                                                                       18,000
7.       Rent paid                                                                                             4,000
8.       Deposited cash into bank to open an account                     60,000
9.       Interest received                                                                             6,000

3.       Classify the following accounts both according to
 (i) Traditional Approach
(ii) Modern Accounting Equation Approach

1.       Capital introduced                                           2. Goods Purchased
3. Carriage on Purchases                                       4. Sales
5. Rent paid                                                                                6. Rent received
7. Interest received                                                                8. Interest paid
9. Discount allowed                                                 10. Discount received
11. Repairs                                                                  12. Cash received
13. Drawings                                                              14. Bad debts
15. Advertising Expenses                                      16. Bad Debts Recovered
17. Goodwill                                                               18. Wages
19. Prepaid Insurance                                            20. Expenses outstanding                                           


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