Accounting Process (CA Foundation Principles of Accounting): Questions 15 - 20 of 68

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Question number: 15

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

Short Answer Question▾

Write in Short

What are capital and revenue losses? Explain?

Question number: 16

» Accounting Process » Books of Accounts - Fundamental Errors

Short Answer Question▾

Write in Short

What is meant by errors?

Question number: 17

» Accounting Process » Books of Accounts - Fundamental Errors

Short Answer Question▾

Write in Short

What is meant by the term suspense account?

Question number: 18

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

Essay Question▾

Describe in Detail

What is the difference between a capital expenditure and revenue expenditure?

Explanation

Capital expenditure and revenue expenditure differ from each other on the following basis:

Distinction between capital and revenue expenditure

The basis on which capital and revenue expenditure differ from each other is explained

Basis of distinction

Capital expenditure

Revenue Expenditure

Earning Capacity

These increase the earning capacity of the business… (78 more words) …

Question number: 19

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

Essay Question▾

Describe in Detail

The following details were extracted from the books of Mr. Makes on March 31st 2015. Prepare a trial balance as on that date keeping in mind the classification of accounts and the rules involving them.

Table shows the Details of Mr. Makes

Details were extracted from the books of Mr. Makes on March 31st 2015

Particulars

Amount

Particulars

Amount

Salaries

726400

Return inwards

20000

Sales

3470000

Return outwards

8000

Plant and machinery

686000

Discount allowed

23000

Commission paid

37600

Rent

64400

Purchases

2893400

Sundry creditors

285200

Opening stock

222000

Carriage inward

4800

Repairs

33400

Travelling expenses

52600

Sundry expenses

9200

Drawings

70000

Sundry debtors

28600

Investments

120000

Cash

21800

Capital

1250000

Explanation

  • The rules of accounting based on the classification is as follows

  • Personal Account: Debit the receiver’s account and credit the giver’s account

  • Real Account: Debit what comes in and credit what goes out

  • Nominal account: Debit all expenses and losses and credit all incomes and gains.

Based on these rules,… (199 more words) …

Question number: 20

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

Short Answer Question▾

Write in Short

Just classify the following into capital or revenue expenditures or as capital or revenue receipts as the case may be:

  1. Term loan from bank

  2. Dividend received from investments

  3. Expense incurred in R&D with no fruitful results

  4. Expenditure incurred in conversion of petrol driven car to diesel driven car to reduce the operational expenses

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