CA Foundation Principles of Accounting: Questions 44 - 50 of 351

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Question number: 44

» Theoretical Framework » Accounting Policies

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On what basis does a firm select a suitable accounting policy for itself?

Question number: 45

» Theoretical Framework » Meaning and Scope of Accounting

Essay Question▾

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Describe about the accounting cycle?

Explanation

  • Accounting cycle:

    A complete sequence of accounting process is known as accounting cycle. It usually begins with recording of business transactions and ends with the final accounts preparation. The day to day business activities are entered in business transactions. This transactions are took place in cyclic movement in continuous process.… (183 more words) …

Question number: 46

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

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Classify the following accounts in terms of real, personal, nominal, and valuation accounts in the books of Mehta and Co:

  1. Machinery

  2. Trademark

  3. Mohan lal

  4. investment

  5. Provision for bad debts

  6. Rent

  7. Return outward

  8. Capital

  9. Provision for depreciation

  10. import duty

  11. Tata iron & Steel co Ltd

  12. Commission

Question number: 47

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

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Classify the following into capital or revenue expenditures or as capital or revenue receipts as the case may be. Justify your classification.

  1. Purchase of machinery for Rs. 200000, sales tax on it is 5%, carriage involved is Rs. 20000 and an installation expense is Rs. 10000.

  2. An amount of Rs. 2000 spent on repairs and Rs. 5000 was sent on replacing the worn out parts of a machine.

  3. Rs. 50000 was paid in connection to obtain the trade license to start the business.

  4. Rs. 100000 was received as insurance claim on machine damaged in fire.

Question number: 48

» Theoretical Framework » Accounting Standards

Essay Question▾

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What is the need to standardize accounting principles and policies?

Explanation

As every human varies in their thought process, every accountant may adopt different methods of accounting in preparing the financial statements. The financial statement includes:

  • Profit & loss account

  • Balance sheet

  • Cash flow statement

These are prepared to give a fair and true view of the organization to the users… (97 more words) …

Question number: 49

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

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What is deferred revenue expenditure? Give example

Explanation

  • In an organization sometimes, there may be a few expenditures, which though might be of revenue in nature, but the benefit derived by the organization from such expenditure would be spread beyond one accounting year. These expenses are called as deferred revenue expenditures.

  • The amount of such expenditures are carried… (62 more words) …

Question number: 50

» Theoretical Framework » Meaning and Scope of Accounting

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What are the bases of Accounting?

Explanation

In common usage, we have three bases of accounting system namely:

  1. Cash basis
  2. Accrual or Mercantile basis

  3. Hybrid or Mixed basis
  • Cash basis:

    Under this system all incomes and expenses are considered when actually received and paid. The difference between total income and total expenses are represented as profit of… (202 more words) …

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