Accounting Process (CA Foundation Principles of Accounting): Questions 40 - 44 of 68

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Question number: 40

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

Short Answer Question▾

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Classify the following transactions as Capital, revenue or deferred revenue expenditures. And justify your answer:

  1. Carriage of Rs. 750 spent on a Xerox machine purchased and installed.

  2. Advertising expenses of Rs. 200000 spent on launching a new brand of the company’s product.

  3. Car servicing charges of Rs. 2500

  4. Construction of a parking lot at the factory premises for Rs. 31, 00, 000

Question number: 41

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

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During the financial year 2015 - 16, Santosh had cash sales of Rs. 200000 and credit sale of Rs. 100000. His expenses for the year were Rs. 50000 out of which Rs. 25000 is still to be paid. Find the Santosh income for 2015 - 16 under Cash Basis of Accounting as well as in Accrual Basis of Accounting.

Question number: 42

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

Short Answer Question▾

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State with reasons weather the following are capital or revenue in nature

  1. Overhauling expenses for second hand machinery purchased for use in business.

  2. Amount written off from the cost of fixed asset.

  3. Legal fees paid in connection with purchase of land

  4. Money paid to BSNL as security for installation of telephone lines in office premises

Question number: 43

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

Essay Question▾

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What is meant by the golden rules of accounting?

Explanation

In accounting we have different types of account to deal with. These include accounts such as persons, bank, cash, expenses, losses, profits, revenues, corporate, assets, liabilities etc. All these types of accounts are classified into three major categories such as

  • Personal Accounts

  • Real accounts

  • Nominal accounts.

Major categories of accounts

Major Categories of Accounts… (89 more words) …

Question number: 44

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

Short Answer Question▾

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Prepare the Accounting Equation on the basis of the following information:

  • Rakesh started business with Rs. 100000 in cash.

  • Purchased goods in cash Rs. 20000

  • Furniture purchased for cash Rs. 10000

  • Commission received in advance Rs. 2000

  • Sold goods costing Rs. 5000 to Sachin for cash Rs. 7000

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