CA Foundation Principles of Accounting: Questions 1 - 5 of 502

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Question number: 1

» Accounting Process » Books of Accounts - Capital and Revenue Expenditures

Essay Question▾

Describe in Detail

Classify the following expenses incurred by Moon ltd in shifting its factory premises into Capital, Revenue and deferred revenue, justifying your classification

  1. Rs. 30000 was spent on dismantling, removing and re installing the machinery

  2. The movement of stock from the old premises to new premises was Rs. 2500

  3. A machinery in the books was valued at Rs. 37500, was inclusive of a machine of book value of Rs. 8500. the same was sold of Rs. 2250 and was replaced by a new machine costing Rs. 12000

  4. The freight for the new machine was Rs. 750 and installation charges was Rs. 1375

  5. The furniture was valued in the books at Rs. 3750. one of the fixtures having a book value of Rs. 750 was discarded at Rs. 800 and replaced with a new one costing Rs. 2100

  6. The painting charges of factory was Rs. 550

Explanation

All the expenses incurred by Moon Ltd in shifting its factory premises can be classified as follows due to the following reasons

  1. The cost of dismantling, removing and re installing will be treated as deferred revenue expenditure, as it has not given rise to the existence of any new asset.… (147 more words) …

Question number: 2

» Theoretical Framework » Accounting Policies

Essay Question▾

Describe in Detail

What is the difference between accounting assumptions and accounting policies?

Explanation

The difference between accounting assumptions and accounting policies is as follows:

Distinction between accounting assumptions and accounting policies

Table of differences between accounting assumptions and accounting policies

Basis

Accounting assumptions

Accounting policies

Number

3 in number (Going concern, accrual and consistency)

No specific number

Disclosure requirement

Not required

Disclosure is… (27 more words) …

Question number: 3

» Accounting Process » Books of Accounts - Capital and Revenue Receipts

Short Answer Question▾

Write in Short

State weather the following are capital or revenue receipts with reasons

  1. Amount realized on sale of old furniture

  2. Bad debts realized

  3. Fees received from apprentices

  4. Loan taken from bank

Question number: 4

» Theoretical Framework » Meaning and Scope of Accounting

Short Answer Question▾

Write in Short

Distinguish between Book keeping and Accounting.

Question number: 5

» Accounting Process » Books of Accounts - Preparation of Trial Balance

Essay Question▾

Describe in Detail

How will you determine profit or loss earned or incurred by a business during an accounting period?

Explanation

The profit earned or loss incurred by a business can be ascertained either by

  1. Cash Basis of Accounting or

  2. Accrual Basis of Accounting

Bases of accounting

Bases of Accounting

The bases of accounting and its explanations.

Cash Basis of Accounting:

The cash transactions are recorded when it is received or paid during the… (120 more words) …

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