Accounting Process-Books of Accounts - Preparation of Trial Balance (CA Foundation Principles of Accounting): Questions 1 - 4 of 31

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Question number: 1

» 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) …

Question number: 2

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

Essay Question▾

Describe in Detail

Describe the classification of accounts briefly?

Explanation

All the transactions that occur in a business enterprise can be classified into three types. Every account head that is used in the transaction should be capable of coming under any one of the three types. The three types of classification are as follows:

  • Personal Accounts:

    • Natural personal account: this… (159 more words) …

Question number: 3

» 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: 4

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

Short Answer Question▾

Write in Short

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

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