Professional Documents
Culture Documents
4.
As the two fold aspects of every transaction are not recorded a trial balance cannot be drawn up
to test the arithmetical accuracy of the record
As nominal accord are not maintained a profit and loss account cannot be prepared for want of
information regarding the various income and expenditures
5.
As no real account are maintained the preparation of a balance sheet is not possible
12. Calculate the missing figures profits made during the year Rs, 2400 Drawing Rs.1200 capital at the end
Rs 8000 opening capital? Fresh capital introduced during the year Rs 2000?
Net income = capital at the end (+) Drawings (-) Additional capital (-) Capital at the beginning
2400 =
8000 + 1200-2000-Capital at the beginning
Capital at the beginning = 8000 + 1200-2000-2400 = 4800
13. Calculate the Net income/Loss
Opening capital Rs. 5000, capital introduced Rs.1000
Net income = capital at the end (+) Drawings (-) Additional capital (-) Capital at the beginning
Net Loss = 0+0-1000-5000= -6000
14. Calculate the drawing s during the year:
Capital in the beginning Rs, 20000
Capital introduced Rs, 25000
Profit made during the year Rs.15000
Net income = capital at the end (+) Drawings (-) Additional capital (-) Capital at the beginning
15000 = 0+Drawings-25000-20000
Drawings
=
15000+25000+20000
= 60000
15. How Many methods are for conversion from single entry to double entry?
Prospective ( on and from the date on which arrangements are made for conversion)
Retrospective (on and from a date before the date of conversion) 16. In case of conversion of single
entry system into double entry. What necessary information / item are required for the preparation of
trading account?
In order to prepare trading account following informations / items are required
Opening stock + purchase + direct expenses-sales- closing stock 17. In case of conversion of single
entry system into double entry. What necessary information / item are required for the preparation of profit
and loss account? The following item are required in order to prepare the profit and loss account Indirect
expense- other incomes 18. In case of conversion of single entry system into double entry. What
necessary information / item are required for the preparation balance sheet?
Following information are required in order to prepare the balance sheet
All assets
All liabilities
Opening capital
Profit or loss of the year
Opening Balance
Credit Purchases
B/P dishonored
NON TRADING
CONCERN
1.What is meant by non trading concerns? Individuals or institutions with activities other than trade and
their primary object is not to earn profit are known as non trading concerns. Like hospitals, libraries and
colleges. 2. What is receipt & payment account? A receipts & payments account is summarized cash
book for given period. Receipts are shown on the debit side and payments are shown on credit side
without any distinction between capital and revenue. 3. What is income and expenditure account? The
account through which surplus or deficits of a non trading concern is ascertained. This account is credited
with all earning and debited with expenses is called income and expenditure account.4. What is major
difference between receipts or payment account and an income and expenditure account?
Receipts and payments account only a summary of the cash transactions whereas income & expenditure
accounts a comparable account of a profit and loss account which shows the incomes expenses and
surplus / deficit for the period. 5. What are key statements prepared in accounts of non profit seeking
organization?
The following three key statements are prepared at the end of year
Receipts and payments accounts
Balance sheet
Balance sheet
7. Define legacy?
The amount given to a non trading concern as per the will of deceased person is known as legacy. It
should be treated as capital receipts and included capital fund account.8. Define donations?
Donation is the amount received from some person, firm, company or any other body by way of gift.
if donations are for specified purpose then it should be treated as capital expenditures and otherwise
credited to income and expenditure account 9. What is subscription?
The amount paid by the member annually to keep their membership alive is known as subscription.