17 july advanced accounting

8/14/2019 17 July Advanced Accounting

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www.afterschoool.tk AFTERSCHOOOL MATERIAL FO

Advanced Accounting

AFTERSCHOOOL DEVELOPING CHANGEMAKERS

CENTRE FOR SOCIAL ENTREPRENEURSHIP

PGPSE PROGRAMME

World Most Comprehensive programme in socialentrepreneurship & spiritual entrepreneurship

OPEN FOR ALL FREE FOR ALL


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Advanced AccountingDr. T.K. Jain.

AFTERSCHOOOL

Centre for social entrepreneurship

Bikaner

M: 9414430763

[email protected]

www.afterschool.tk

www.afterschoool.tk
http://www.afterschool.tk/http://www.afterschoool.tk/http://www.afterschoool.tk/http://www.afterschool.tk/


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Dividends are paid on which:Authorised capital (mentioned in

memorandum of association)

Paid up capitalCalled up capital

Answer: paid up capital


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Amount set aside to meet

losses due to bad debt is ?Provision


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If proposed dividend is 20%, how

much amount has to be set aside as

reserve?7.5% answer.


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Corporate dividend tax rate is ?10% answer.


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Securities premium is shown

as ? it is shown as security premium account

in liabilities side of balance sheet in the

heading reserves and surplus.


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Profit prior to incorporation is

transferred to ?1. General reserve

2. Capital reserve

3. P & L account

Answer: Capital reserve.


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What are the methods of

preparing cash flow statement?1. Direct method (here you directly add all

gross cash receipts and cash

payments)2. Indirect method (here you adjust profit

earned from P& L account).


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There are 3 types of cash flow

activities - which are those?1. Operating activities (purchase sale etc.)

2. Investment activities (plant, machinery

etc.)3. Financing activities (issue of shares,

debentures, bonds etc.).


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What is clause 32 of listing

agreement? It has been amended in 2000. It says:

every company shall give a cash flow

statement along with balance sheet andP& L account.


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Interest paid by bank is what ?Operating activity.


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In cash flow statement, cash

and cash equivalent include?1. Bank

2. Cash

3. Short investment

4. All these

Answer: all these.


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I have sold my old plant for Rs.

300000 (depreciated value Rs.

200000). What should I show inoperating activity in Cash flow

statement?

Nil I shall show the amount in investing

activity.


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What will you do with loss prior

to incorporation?You can do any of these:

2. Show as goodwill

3. Show as loss prior to incorporation inasset side

4. Write off in P& L Account


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How will you distribute income and

expenses in pre and post

incorporateion category?Based on time

Distributed expenses on the basis of

sales (turnover).


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Can a company convert its fully

paid shares into stocks?Yes under sec 94 .


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What are SEBI requirements for

issue of Bonus shares?

The company should not have defaulted in paymentof interest.

The articles should permit capitalisation of reserves

Has to give bonus shares in 6 months of time fromdate of approval by board of directors Reserves created by revaluation of assets cannot be

used. Partly paid shares should be fully paid.

Such benefit should also be extended to convertibledebenture holders.

Only cash capital reserve can be utilised.


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What is employee stock option?

The option given to employees directors,

etc. for purchasing shares at a

predetermined price. (sec. 2, clause15A)

ESOS


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What is buy back?

Sec. 77 A of companies act 56

(amended in 99) give permission to

company to buy back its shares out of :2. Free reserves

3. Security premium account

4. Proceeds of any shares / securities.


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Buy back when not permitted?

If it is not permitted by articles

Special resolution not passed

Debt more than 2 times equityBuy back is less than 25% of paidup

equity.


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Suppose you go abroad to purchase

some plant. Your expenses amount

to Rs. 100000. What type of

expenses are these?Capital expenses (will be added to the

cost of the plant).

(all the expenses incurred to purchaseany plant / machinery are called capital

expenses).

S d R 3


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Suppose you spend Rs. 3 crore on

advertisements which will give you

benefits over next 10 years. What

type of expenses are these?Deferred Revenue Expenses (because

the benefit will be available for a long

time.)

You have received Rs 10 Lakh from


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You have received Rs. 10 Lakh from

insurase company against a claim

regarding fire in your factory. What

kind of receipt is it?Capital receipt (because it is against loss

of some assets).


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You have received A loan from SBBJ

as Working capital term loan to

augument your working capital. It isin addition to your cash credit loan.

What type of receipt is it?

Capital receipt


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You have received a subsidy of Rs.

200000 from govt. for starting a

plant in backward area. What type ofreceipt is it?

Revenue receipt.


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You had given goods on credit to

Ramu in 1999. You had considered a

bad debt. Ramu made the payment in

2008. How will you treat receipt?

Revenue receipt.

Cash A/c DebitBad debt recovered account credit.


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You have given Diwali advance to

your employees, what type of

expense is it?

It is not expense. It is only an advance

(neither revenue nor expense).


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You have received interest on Bond.

Rupees 5000 received will be treated

as?

Revenue receipt.

Cash Account debit

Interest on bond account credit.


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Yours is a CA /CS professional club.

There is entrance fees of Rs. 10000

and annual fees Rs. 5000. Rishabhhas joined the club. How will you do

accounting?

Entrance fees is capital receipt butannual fees is revenue expenses.

Cash account Debit

Entrance Fees Fund a/c creditAnnual fees account credit.


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In order to take a tender, you have

deposited Rs. 1 crore as earnest

deposit. What type of expense is it?

It is not an expenditure, it is only a

deposit.


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You have spent Rs. 50000 on repairs

of your old plant. What type of

expenses is it?

Revenue expenses.

Repairs and maintenance account debitCash account credit.

Y h f it h Y


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You have a furniture showroom. You

sell furniture of Rs. 10 lakh and you

havent received payment yet. What

will be accounting treatment? It is a revenue receipt (although you

havent yet received money.)

Sale is recognised as soon as it is made.So entry will be :

Party name a/c debit

To sales account credit.


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You have purchased paper of Rs.

1000 to be used a stationery. How

will you treat it?

Revenue expenses

Stationery account debit

To cash account credit.

ou ave spen s. crore on


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ou ave spen s. crore onadvertisement and Rs. 50 lakh on

distribution of free samples. This has

been done to launch a new product.

How will you treat it?

Deferred revenue expenses

Advertisement & publicity a/c debit

Purchase account credit.Bank account credit.

You have spent Rs 2 00000 on


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You have spent Rs. 2 00000 on

overhaul of second machines so that

you use those machines. What type

of expense is it?Capital Expenses.

Machinery account debitBank account credit.


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You have opened the LOOTS

showroom. You spent Rs. 100000 on

inauguration. How will you treat it?

Deferred revenue expenses (because it

will benefit you for many years).

Inauguration Expenses Debit

Bank credit


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You have spent Rs. 100000 on wages

of workers for installation of

machinery. How will you treat it?

Capital account

Entry:Machinery account debit

Bank account credit


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Where do you show contingent

liability in balance sheet?

You dont show it in balance sheet. It is

added as footnote with balance sheet.


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Differentiate provision &

reserve?

Provision is a liability of uncertain

amount, which can be measured reliably

by using a substantial degree ofestimation. Reserve is to set aside some

money for future requirements. Provision

is present liability, but reserve is to set

aside some profit.


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If any economic benefit is probable,

what will you call it and how will you

treat it?

It is contingent asset. It is not shown in

balance sheet / financial statements.

Directors may mention about it in theirreport.


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Total of sales day book had been

undercast by Rs. 2000. how will you

rectify it?

We will undertake credit entry in Sales

Account of Rs. 2000 more.


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Rs. 200 paid as wages for installing

new machinery has been shown as

wages. Is it ok?

It is error of principle

Rectify it :

Machiinery account debitWages account credit.


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We purchased old plant and spent rs.

10000 on its repairs and debited

repairs account. Is it ok?

It is also error of principle

Plant account debitRepairs account credit.

am e owner o my company.


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y p ytake away goods of Rs. 1000 for

home use and dont make any entry

of it. Is it ok?

Error of omission

Drawing account debitPurchase account credit.


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I have distributed Rs. 10000 worth of

goods as charity. I dont believe in

recording charity. Is it OK?

Error of commission

Charity account debitPurchase account credit.

I have sold my office computer in Rs


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I have sold my office computer in Rs.

2000. since its value was completely

depreciated, so we didnt make any

entry. Is it OK?Error of commission

Cash account debitComputer account credit.


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Can error of principles be identified

by preparing trial balance?

NO


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Can compensatory errors be

identified by preparing trial balance?

NO


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Can Error of commission be

identified by preparing trial balance?

Yes if there is wrong posting or wrong

balancing or wrong casting

If the amount has been written wrong insubsidiary it is difficult to identify it

though trial balance.


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Can error of ommission be identified

by preparing trial balance?

Yes or NO.

Yes if posting to ledger has been left

(only one side).No if the entry has been completely

omitted.

I t t h f hi


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I treat purchase of machinery as

regular purchase. What type of error

is it?

Error of principle.

Rectify it :Machinery account debit

Purchase account credit.


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Which errors may affect trial

balance?

Error of partial omission

Error of principle

Error of complete omission

Answer: Error of partial omission


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Total of sales day book is

posted to ?

Credit side of sales account.


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Cash account is ?

Real Account


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Purchase account is ?

Real account


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Sales account is?

Revenue account.


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What is goodwill?

Intangible fixed assets


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ABOUT A FTERSCH OOOLAfterschoool conducts three year integrated PGPSE (after

class 12th along with IAS / CA / CS) and 18 month PGPSE

(Post Graduate Programme in Social Entrepreneurship)

along with preparation forCS / CFP / CFA /CMA / FRM. This

course is also available online also. It also conductsworkshops on social entrepreneurship in schools and

colleges all over India start social entrepreneurship club in

your institution today with the help from afterschoool and help

us in developing society.


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Why such a programme?

To promote people to take up entrepreneurship

and help develop the society

To enable people to take up franchising and

other such options to start a business / social

development project

To enable people to take up social

development as their mission To enable people to promote spirituality and

positive thinking in the world


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Who are our supporters?

Afterschoolians, our past beneficiaries,

entrepreneurs and social entrepreneurs

are supporting us.You can also support us not

necessarily by money but by being

promotor of our concept and our ideas.


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About AFTERSCHOOOL PGPSE the best

programme for developing great entrepreneurs

Most flexible, adaptive but rigorous programme

Available in distance learning mode

Case study focused- latest cases Industry oriented practical curriculum

Designed to make you entrepreneurs not just

an employee

Option to take up part time job so earn while

you learn

The only absolutely free course on internet


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Workshops from

AFTERSCHOOOL

IIF, Delhi CIPS, Jaipur ICSI Hyderabad Branch

Gyan Vihar, Jaipur Apex Institute of Management, Jaipur Aravali Institute of Management, Jodhpur Xavier Institute of Management,

Bhubaneshwar Pacific Institute, Udaipur Engineering College, Hyderabad


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Flexible Specialisations:

Spiritualising business and society Rural development and transformation HRD and Education, Social Development NGO and voluntary work Investment analysis,microfinance and inclusion Retail sector, BPO, KPO Accounting & Information system (with CA / CS /CMA) Hospital management and Health care Hospitality sector and culture and heritage Other sectors of high growth, high technology and social

relevance


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Salient features:

The only programme of its kind (in the whole world) No publicity and low profile course For those who want to achieve success in life not just a

degree

Indepth knowledge and expertise Professional approac: World class approach Strong intellectual and business capabilities Flexible you may stay for a month and continue the rest of

the education by distance mode. / you may attend weekendclasses

Scholarships for those from poor economic background Latest and constantly changing curriculum keeping pace

with the time Placement for those who are interested Admissions open throughout the year

Latest and most advanced technologies, books and studymaterial


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Components

Pedagogy curriculum and approach based on IIM Ahmedabad and ISBHyderabad (the founder is alumnus from IIMA & ISB Hyderabad)

Meditation, spiritualisation, and self development Essential softwares for business Business plan, Research projects

Participation in conferences / seminars Workshops on leadership, team building etc. Written submissions of research projects/articles / papers Interview of entrepreneurs, writing biographies of entrepreneurs Editing of journals / newsletters Consultancy / research projects Assignments, communication skill workshops Participation in conferences and seminars Group discussions, mock interviews, self development diaryng Mind Power Training & writing workshop (by Dr. T.K.Jain)


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Pedagogy

Case analysis, Articles from Harvard Business Review Quiz, seminars, workshops, games,

Visits to entrepreneurs and industrial visits Presentations, Latest audio-visuals Group discussions and group projects Periodic self assessment Mentoring and counselling Study exchange programme (with institutions out of India) Rural development / Social welfare projects


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Branches

AFTERSCHOOOL will shortly open itsbranches in important cities in Indiaincluding Delhi, Kota, Mumbai, Gurgaon

and other important cities.Afterschooolians will be responsible formanaging and developing thesebranches and for promoting socialentrepreneurs.


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Case Studies

We want to write case studies on social

entrepreneurs, first generation

entrepreneurs, ethical entrepreneurs.Please help us in this process. Help us

to be in touch with entrepreneurs, so that

we may develop entrepreneurs.


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Basic values at afterschoool

Share to learn more Interact to develop yourself Fear is your worst enemy

Make mistakes to learn Study & discuss in a group Criticism is the healthy route to mutual support

and help

Ask fundamental questions : why, when, how& where? Embrace change and compete with yourself

only

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17 july advanced accounting

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