CHAPTER: Accounting Concepts And Principles

Assignment:

Q:1 Purchase of stationery even if it is kept in use for more than one year is shown as an expense but not shown as an asset. Which Accounting Principle does it relate to?

i)             Matching Principle

ii)            Historical Cost concept

iii)          Revenue Recognition Concept

iv)          Accrual Principle

Q:2 In cash basis of accounting, Machinery is shown in the books of accounts when it is paid for at the time of its purchase. It is not depreciated over its life. Which Accounting principle is ignored?

i)             Historical Cost concept

ii)            Accrual Principle

iii)          Going Concern Concept

iv)          Revenue Recognition Concept

Q:3 Salary of the current year is paid in the next financial year but it is recorded in the profit and Loss A/c of the current year and is used in calculating profit and loss. It adheres to the requirement of which accounting principle.

i)             Matching Principle

ii)            Accrual Principle

iii)          Double Entry Concept

iv)          Revenue Recognition Concept

Q:4 According thich principle, Closing stock is shown on the credit side of Trading A/c, as a deduction from purchase.

i)               Historical Cost concept

ii)            Accrual Principle

iii)          Matching Principle

iv)          Revenue Recognition Concept

Q:5 A Jeweler is left with a stock of gold at the end of the financial year which has a cost of Rs 50,000 but a market value of Rs 70,000. At what value the closing stock be shown and in adherence to which principle?

i)             Rs 70,000 & Principle of conservatism and prudence

ii)            Rs 70,000 and Matching Principle

iii)          Rs 50,000 and & Principle of conservatism and prudence

iv)          Rs 50,000 and Matching Principle

Q:6 Income tax paid by the owner on the firm’s income is treated as drawings. Which principle is followed?

i)             Going Concern Principle

ii)            Business Entity Concept

iii)          Double Entry Concept

iv)          Revenue Recognition Concept

Q:7 Mr X buys a TV set from an electronics showroom. He pays the amount immediately but agrees to take its delivery only after 15 days. The bill is made and given to buyer. After one week, the fire occurred in the godown causing complete damage to the TV set kept by Mr X. Can Mr X recover the money from the showroom owner.

i)             Yes, Revenue Recognition

ii)            No , Revenue Recognition

iii)          Yes, Going Concern

iv)          No , Going Concern

Q:8 Income received in advance is not treated as income but is shown as a liability. It is according to which accounting Principle?

i)             Accrual Principle

ii)            Historical Cost

iii)          Going Concern

iv)          Business Entity

Q:9 The principle that leads to the equality of Debit and Credit balances in Trial balance

i)             Accrual Principle

ii)            Dual Aspect

iii)          Accounting Period

iv)          Business Entity

Q:10 Apple files a suit against Samsung for infringement of patent laws. Apple is quite sure of receiving Rs 120 crore out of it. But the verdict has not been given by the court yet. Can Rs 120 crore be shown as an income.

i)             Yes Accrual principle

ii)            No, Prudence principle

iii)          Yes, Prudence principle

iv)          No, Accrual principle

Q:11 Purchase of machinery Rs 1,00,000 having a life of 10 years wrongly debited to purchase A/c. Which Accounting principle is violated?

i)             Matching Principle

ii)            Accrual Principle

iii)          Going Concern

iv)          Business Entity Concept

Q:12 Which Accounting principle is violated if an Account of Rs 400 withdrawn by the proprietor for his personal use has been debited to repairs A/c.

i)             Consistency

ii)            Going Concern

iii)          Business Entity

iv)          Dual Aspect

Q:13 According to which accounting principle Prepaid expenses is shown in the Balance Sheet not in Profit and Loss A/c.

i)             Accrual

ii)            Matching

iii)          Accrual and matching both

iv)          Revenue Recognition

Q: 14 Value of machine purchased on 1/4/2015 was Rs 1,00,000. The fair value of the machine is Rs 80,000 as on 31/03/2016. The life of the machine is 10 years. What is the amount of depreciation to be charged to P&L A/c as per a) Indian GAAP, b) IFRS

i)             20,000; 10,000

ii)            20,000; 10,000

iii)          10,000; 10,000

iv)          10,000; 20,000

Q: 15 Different Accountants may follow different accounting methods for same items like depreciation. This violates the Accounting principle of  i)Prudence  

ii) Objectivity

iii) Consistency

v)           Objectivity & Consistency.

Business studies

Class 12th

Chapter : Principles of management

Case Studies

Q1 In a school ABC Public School, there is a biometric device and employees need to punch while entering and leaving out of school. Every employee is paid remuneration according to the government scale and any increment in the salary by the government is also appropriated accordingly. There is a contract entered into with the employee according to which neither the employee nor the school can leave before a notice period of three months and they are employed for at least a period of one year. The school provides a letter of appreciation to the teacher performing in outstanding manner.

Identify and state the principles of management followed by the school by quoting the lines from the above paragraph.    (6)  

                                                                             

 Q:2 In a school, there is a leave application form to be filled by every employee and approval from the Principal is to be taken before taking leave from the school. There is a leave policy and a teacher can take eight leaves during a year.

The teachers working here belong to different castes and religion and every employee working on the same post and has same experience is paid an equivalent salary. The exam , CBSE, Timetable, bus duty related instructions are given to the teachers by specified head only. The formal line of communication requires here that the subject teachers must report to the subject coordinators who in turn has to report to the incharge and finally the incharge has to report to the Principal.

Identify and state the principles of management followed in the school by quoting lines from the above paragraph.   (6)

Q:3 One time there developed a dispute between Harbhajan Singh and Andrew Symonds in the game of cricket during a series between India and Australia. The issue was that Andrew charged Harbhajan of a racial abuse. India was on a loosing side that time. The entire Indian team backed Harbhajan Singh and fought hand in hand causing Harbhajan out of the charge and lifting the spirit of the team so high that India went on to win the series.

i)             Identify the principle of management in the above case study.

ii)            Explain the principle.

Q4. An employee of Tata Group is entrusted with confidential information like restructuring plans, raising finances, information on profits, earnings and dividends. However he is not required to use information not available to investing public. In Tata Beverage group, human resources, communication  ,IT ,finance, production, procurement and research are handled at global level.Global executive office is situated at London which takes care of these functions.Sales and Marketing operations are handled from six regions:South America,U.S.A.,South Asia,Africa,U.K.,Canada.Tata Group also has come up with Tata Innovista to award teams that come up with best innovations.

Identify three principles of management being followed here.Justify your answer.

Q5. Nutan Tiffin Box service was started in Mumbai by Mumbai Dabbawalas. The Dabbawalas aim to provide prompt and efficient services by providing tasty homemade tiffin to all office goers at right time and place. The service is uninterrupted even on the days of bad weather, political unrest and social disturbances. Recently they have started online booking system through their website ‘mydabbawala.com’.The Dabbawalas operate in a group of 25-30 people along with a group leader. Each group teams up with other groups in order to deliver the tiffin on time. They are not transferred on frequent basis as they have to remember the addresses of their customers. They follow certain rules while doing trade- No alcohol during working hours; No leave without permission; Wearing of white cap & carrying ID cards during business hours.

 State any two principles of management given by Fayol from above paragraph

Q6. Voltechindia Ltd, is manufacturing LED bulbs to save electricity and running under heavy losses. To revive from losses, the management thought of shifting the unit to backward area where labour is available at the low cost .The management also asked workers to work overtime without any additional payment and promised to increase the wages of the workers after achieving the mission .State principle of management discussed above.

Q7 Identify the general principles of management violated, state the principle and give one advantage & one consequence of its violation:

Deepak & shikha are clerks & are paid Rs 20000 pm & Rs 15000 pm 
respectively. 

Q8 Identify the general principles of management violated, state the principle and give one advantage & one consequence of its violation:

Mohan, an employee receives contradictory instructions from three different 
managers to carry out a task. 
                              

Q9 Identify the general principles of management violated, state the principle and give one advantage & one consequence of its violation:

Prakash, a general manager, is always engaged in day to day operational 
activities & is unable to concentrate on core issues of the company. 


Q10 One of the Principles of scientific management emphasizes that to make the employees learn the 'best method' of production, training to workers is essential. It 
further emphasis that each person should be scientifically selected and the work assigned to the employees should suit physical, mental & intellectual capabilities.

a. Name and explain the principle of scientific management involved.


b. Name the technique of scientific management which is supports the above principle of scientific management.


        

Business Studies: Class 12th 

Case Studies : 

Chapter :1 Nature and significance of management

1

1.  Reshma and Samiksha are friends. Considering the fact that activities involved in managing an enterprise are common to all organisations, after completing their masters in Business Management, both of them take up job at managerial level in different organizations as per their individual areas of interest. Reshma takes up a marketing job in a retail company and strives to increase sales whereas Samiksha joins an NGO and works diligently to realize its objectives related to providing employment to specially abled persons. Both of them have to perform a series of continuous, composite but separate functions. On some days, Reshma may spend time sorting out an employee’s problems and on other days she may spend more time in planning a future display layout. Both of them make conscious efforts to build a feeling of team spirit and coordination among diverse individuals with different needs who work under them. The effect of their management is noticeable in their respective departments as the targets are met according to plans, employees are happy and satisfied and there is orderliness in its functioning rather than chaos.

In the context of the above case, identify and state the various features of management highlighted by quoting the lines and explain them.

2.2.    Sunshine ltd. Manufacturer electronic goods like washing machines, microwave ovens, refrigerators and air conditioners. The company is facing a lot of problems these days. The company’s margins are under pressure and the profits and market share is declining. The production department blames marketing department and the marketing department blames production department. The finance department blames all the the departments for declining return on investment and bad marketing.

A.   What quality of management do you think the company is lacking? Justify your answer.

B.   State 2 points of importance of the concept identified in A.

3.   3.  Vansh’s father has retired as a regional manager of a company. Name the level at which he was working. State any one function he was performing at that level.

4.    4.  Amar Ltd.is engaged in production of electrical goods The company’s profits and market   share are declining. The production department blames the marketing department for not meeting the sales targets and the marketing department blames the production department for producing goods which are not of good quality and do not meet the customer’s expectations. The finance department blames both the production and marketing departments for declining return on investment. 

          1.What quality of management do you think the company is lacking?   

          2.List its two features

          3.List any two values which are ignored by employees of Amar Ltd.  

5.    5.Technology major Google is looking for a major expansion in the region as it opens its first data centre in India next year, with plans to hire thrice the number of people, as well as reach out to start-ups and small and medium enterprises (SMEs).Rick Harshman, managing director, Asia Pacific and Japan, Google Cloud, who is in India finalising details before the launch of the data centre, said they were hiring people for multiple roles, including technical and sales.

Identify the two major objectives being pursued by Google In India. Explain the objectives and also clearly specify the sub category of the objective identified.

6.  6.  The Overseas Indian Facilitation Center (OIFC) has partnered with the Hyderabad-based Indian School of Business (ISB) to launch OIFC-ISB India Fellows Programme, which is designed for the young Indian  business owners and professionals outside India to familiarise them with doing business in India. The year-long programme led by ISB is offered as a blended model comprising technology-aided learning and a specially-designed 12-days residential programme in India. It will provide an experiential mix including exposure to the touch and feel of the Indian market, networking .

(a)Identify the nature of management highlighted .

              (b) Also identify and explain the features that are being fulfilled by management.

7.  Rama Clothes ltd.’s target is to produce 20,000 shirts per month at a cost of Rs.500/- per shirt. The production manager achieved this target at a cost of Rs.450/- per shirt. Do you think the manager is effective and efficient?

Q8.  Identify the type of objectives of management

a)  A sale of Rs. 27,500 is must to cover the production cost at least. 


b)  A play way school will be set up by the company for its employees‘ children within the office premises.

c)  We will introduce one variant of the fruit juices processed by us every six months for the next 4 years. 


9.  Josh Enterprises decides to have a meeting of all the key employees of different departments in the organisation. The main motive is to tell the employees to keep the target of 20% increase in sales as the main objective when they work throughout the year. The meeting is full of ideas regarding the employees and processes involved. Various plans are made to harness the potential of the employees and streamline the processes. However with the passage of a few days the external business environment checks the capability of the organisation to adapt to the situations. The company successfully comes out at the end of the year with flying colours.

What are the various features of business you can find highlighted here? Also identify the lines in which these features have been highlighted.

10. Mr A is a qualified CA graduate and has learned well about various Accounting techniques. He and his three batch mates have graduated from the same institutes and are taught by the same teachers and have gone through the same test assignments. Mr A actually took up internship assignment with one of the big four companies and took up audit, accounting and other practical assignments with a number of good companies. Now all these three friends are employed in different companies. While Mr A is able to explore the entire world of Accounting but the other two face problems whenever some new situation or assignment comes.

i) Identify the nature of management in the above case study.

ii) Give three features of the nature identified above and explain them.

Business Studies Class 11th

Chapter: Nature and Purpose of Business

Multiple Choice Questions

1. Which of the following is not an economic activity?

a. Production of goods. b. Trading in goods

c. Professional service d. Social service

2. Which of the following is not a business activity?

a. Production of goods b. Work in a factory for wages

c. Exchange of goods d. Transportation

3. Which of the following is not a characteristic of business?

a. Production b. Exchange or sale

c. Wages or salaries to investors. d. Risk element.

4. To what category of industries can sugar mill or oil refinery be put?

a. Primary b.Secondary

c. Tertiary d None of the above

5. Why should a business earn profits?

a. To provide returns to investors.

b. To provide funds for future growth

c. To increase the reputation of business

d. All the above

Very Short Answer Questions

1. “There are activities which are carried out to earn economic gains/ rewards.” What are they called?

2. Tata power is planting trees on the roadside of several big cities. Name the objective Tata power is engaged in.

3. What is the reward that the entrepreneur gets for risk bearing in business?

. Why is it of great importance in the business world?

Questions Based on HOTS (Higher Order Thinking Skills)

1. “The structure of business is composed of both industry and commerce.” Explain this

statement.

2. Identify any four obstacles in the smooth flow of goods between producers and consumers.How can they be removed?

Chapter: 2 Forms of Organisation

Multiple Choice Questions

1. Identify the type of organization which ensures separation of ownership and management:

a. Sole proprietorship b. Partnership

c. Company d. None of the above

2. Which of the following organization is not governed by a specific act?

a. Sole proprietorship b. Partnership

c. Company d. None of the above

3. Name the partner whose association with the firm is not known to the general public:

a. Sleeping Partner b. Active Partner

c. Nominal Partner d. Secret Partner

4. Cooperative society is called a democratic organization because of:

a. One share one vote b. One man one vote

b. No voting rights for members. d. all of the above

5. Qualification shares are subscribed by:

a. Directors of the company b. Auditors of the company

c. Bankers of the company c. Employees of the company

6. Which document is issued by a company to invite public to purchase its shares?

a. Articles of Association b. Memorandum of Association

c. Prospectus d. None of the above.

Very Short Answer Questions

1. Which sort of business is suitable for a small tailoring shop?

2. Can a public company commence business after obtaining Certificate of Incorporation?

3. “A number of signatories are required to the Memorandum of Association of a private company “.What is that number?

4. “A document containing rules and regulations for the internal management of the company”What is it called?

Long Answer Questions

1. Registration of a partnership firm is not compulsory, but it is desirable to get it registered. Give the reasons due to which a firm should be registered.

2. Account for the popularity of limited liability Company as a form of business organization in modern times.

.

Questions Based on HOTS (Higher order thinking skills)

1. An entrepreneur has developed a new product and does not want to share business secrets with anybody. Should he enter into partnership with somebody to raise capital for the business?

2. “A private company is a compromise between partnership and public company.” Explain.

Entrepreneurship

Chapter 1: Entrepreneurial Opportunities

Q1 Saurabh wants to start a new business. He is not sure of the type of business he should start. His friend suggested him to seek the help of professionals. He contacted a professional who asked Saurabh to pay a big amount for providing the repots and industry updates. Therefore he decided to search for the reports and industry updates himself. He scanned the relevant information from various national and international websites.
Identify and state the way that Saurabh is using for spotting the trend. Also state one more way which will help Saurabh in starting his business.

Q2 Abhiraj Chaudhary is into the business of manufacturing low - cost Diesel Cars in Germany. He is earning good profits and ambitiously considering overseas expansion. He scans the environment for finding out the opportunities and threats that may influence his current and future plans. He zeros down on India as a potential place for his business expansion as Indian Government has announced favourable trade regulations. On selling the first lot of cars in India, the Indian Government noticed that the emissions from these cars were above the permissible limit. The government asked him to make necessary modifications in his cars if he wanted to continue business in India. He readily agreed to meet the emission norms set by the Indian Government.
(a) Quoting the lines from the above para identify any two environmental factors.
(b) Also, state any two values which Abiraj Chaudhary tried to communicate to the Indian Society.

Q3 Naveen has just completed his B. Tech. and wants to start his own business, he knew that the demand for electricity in India was increasing day by day. Whereas its generation was not sufficient. Naveen shared his views with some of his friends and they all decided to start the business of electricity generation. They experimented various methods and ultimately succeeded in electricity generation through garbage. They all were happy as India is also facing the problem of garbage disposal.
(a) Identify and explain the source of ‘idea-field’ from where the idea had been generated by Naveen and his friends.
(b) Also explain two other sources of Idea-fields with the help of example.

Q4 Mr. Raghav had always wanted to manufacture an innovative, energy efficient fan. He was looking into various options and has finally narrowed it down to one option. He understands that the entire idea would have to follow a process. Identify and explain the process.

Q5 ‘It is the process of entrepreneurship which involves the translation of a useful idea into an application which has commercial value.’ Identify the process.

Accountancy Class 12

Chapter: 1

Fundamentals of Partnership and Goodwill

Q1 Vinod, Shubh and Gaurav were partners sharing profits in the ratio of 1:1:1. Their fixed capitals were Rs.2,00,000 each. Manager of the firm will be paid 10% commission after charging such commission. Vinod has advanced Rs.1,00,000 to the firm as loan on 1 July, 2012. Partnership deed is silent on interest on loan to the partner. A guaranteed amount of Rs.30,000 will be paid to Gaurav whether there is profit or loss incurred by the firm. Profit on 31st December, 2012 was Rs.25,000. Show the distribution of profit or loss to the partners

Q2 Vinod and Kumar are partners sharing profits and losses in the ratio of 3:2. Their capitals were Rs.1,00,000 and Rs.50,000 respectively. Rate of Interest on capital is 10% p.a. Show the distribution of profit when: Case 1: Partnership deed is silent as to interest on capital and profit for the year is Rs.30,000. Case 2: Partnership deed provides for interest on capital but there is loss Rs.20,000. Case 3: Partnership deed provides for interest on capital and profit for the year is Rs.20,000. Case 4: Partnership deed provides for interest on capital and profit for the year is Rs.9,000. Case 5: Interest on capital is a charge and profit for the year is Rs.9,000. Case 6: Interest on capital is a charge and loss for the year is Rs.5,000

Q3 A, B, C and D are partners sharing profits and losses in the ratio of 4:3:3:2. Their fixed capitals on 31.3.2010 were Rs.30,000; Rs.45,000; 60,000 and 45,000 respectively. After preparing the final accounts for the year ended 31.3.2011. it was discovered that interest on capital @12% p.a. was not allowed and interest on drawings amounting to Rs.1,000; 1,250; 750 and 500 respectively was not charged. Give necessary adjustment entry.

Q4. PK, MK and NK shared profits in the ratio of 3:2:1. The profits of the last three years were Rs.2,80,000, Rs.1,68,000 and Rs.2,12,000 respectively. These profits were by mistake, shared equally for all the three years. It is now decided to correct the error. Give entry

A partnership firm earned net profits during the last three years as follows: Years Profit 

2007-08 38,000

2008-09 44,000

2009-10 50,000

The Capital Employed in the firm throughout the above mentioned period has been Rs.80,000. Having regard to the risk involved, 15% is considered to be a fair return on the capital. The remuneration of all the partners during this period is estimated to be Rs.20,000 per annum. Calculate the value of goodwill on the basis of (i) Two years purchase of super profits earned on average basis during the above mentioned three years and (ii) Capitalization method.

Q.5 A, B and C were partners in a firm having capitals of Rs. 60,000, Rs. 60,000 and Rs. 80,000 respectively. Their current account balances were A- Rs. 10,000, B- Rs. 5000 and C- Rs. 2000 (Dr.). According to the partnership deed the partners were entitled to an interest on capital @ 5% p.a. C being the working partner was also entitled to a salary of Rs. 6,000 p. a. The profits were to be divided as follows:

         (i) The first Rs. 20,000 in proportion to their capitals.

         (ii) Next Rs. 30,000 in the ratio of 5:3:2.

         (iii) Remaining profits to be shared equally.

        During the year the firm made a profit of Rs. 1,56,000 before charging any of the above items.  

        Prepare the profit and loss appropriate on A/C.

Q.6 A and B are partners sharing profits in proportion of 3:2 with capitals of Rs. 40,000 and Rs. 30,000 respectively. Interest on capital is agreed at 5 % p.a. B is to be allowed an annual salary of Rs. 3000 which has not been withdrawn. During 2001 the profits for the year prior to calculation of interest on capital but after charging B’s salary amounted to Rs. 12,000. A provision of 5% of this amount is to be made in respect of commission to the manager.

                       

                         Prepare profit and loss appropriation account showing the allocation of profits.