x Topics for Preparation

8/11/2019 x Topics for Preparation

1/27

Hi,

Please the detailed notes on Finance & Accounting, request you to understand and prepare well so that you could crackthe various rounds of interviews

* Three olden rules of accounting*

* A!"AP*

* #A$ % & its forula*

* 'alance (heet )How it is prepared+ *

* -F. *

* F-F. *

* 'ank !econciliation (tateent )How & why it is prepared+ *

* -nterest *

* /ividend *

* (hares and /e0entures *

* 1utual funds *

* /erivatives " Types of derivatives2 *

* Types of derivatives *

* 3apital 1arket *

* Hedging*

Additional Topics

3lassification of Accounting, 4ey Accounting 3oncepts, Fundaental Accounting Assuptions, Accounting Policies

Types of Accounts, /ou0le 5ntry syste

6ournal 5ntries, Posting to edger, Preparation of Trial 'alance

(u0sidiary 'ooks

!ectification of 5rrors

Ad7usting 5ntries

'ank !econciliation

-nventory $aluation

Fi8ed Assets, /epreciation, (ale of assets


2/27


3/27

T.P-3( F.! P!5PA!AT-.#

= olden rules of accounting

/efine the use of a 'alance (heet and its preparation in detail2

Accounts Paya0le & Accounts !eceiva0le

/erivative

Hedging

-F. & F-F.

'A#4 !53.#3-AT-.# (TAT515#T

/efine 3apital 1arket with relevant concept

>hat are 1utual funds

/ifference 0etween (hares and /e0entures

>hat do we ean 0y the ter -nterest and how is it different fro /ividend

/epreciation

'alance (heet


4/27

= olden rules of accounting

REAL ACCOUNTS: DEBIT WHAT COMES IN & CREDIT WHAT GOES OUTNOMINAL ACCOUNTS: DEBIT ALL EXPENSES AND LOSSES & CREDIT ALL INCOMES ANDGAINS

PERSONAL ACCOUNTS: DEBIT THE RECEIVER & CREDIT THE GIVER

/efine the use of a 'alance (heet and its preparation in detail2

A financial stat!nt t"at s#!!a$i%s a c!'an()s assts* lia+ilitis an, s"a$"l,$s) -#it( at a s'cific 'int in ti!.T"s t"$ +alanc s"t s/!nts /i0 in0st$s an i,a as t 1"at t" c!'an( 1ns an, 1s* as 1ll as t" a!#ntin0st, +( t" s"a$"l,$s.

T" +alanc s"t !#st fll1 t" fll1in/ f$!#la:

Assts 2 Lia+ilitis 3 S"a$"l,$s) E-#it(

It)s call, a +alanc s"t +ca#s t" t1 si,s +alanc #t. T"is !a4s sns: a c!'an( "as t 'a( f$ all t" t"in/s it"as 5assts6 +( it"$ +$$1in/ !n( 5lia+ilitis6 $ /ttin/ it f$! s"a$"l,$s 5s"a$"l,$s) -#it(6.

Eac" f t" t"$ s/!nts f t" +alanc s"t 1ill "a0 !an( acc#nts 1it"in it t"at ,c#!nt t" 0al# f ac".Acc#nts s#c" as cas"* in0nt$( an, '$'$t( a$ n t" asst si, f t" +alanc s"t* 1"il n t" lia+ilit( si, t"$ a$acc#nts s#c" as acc#nts 'a(a+l $ ln/7t$! ,+t. T" 8act acc#nts n a +alanc s"t 1ill ,iff$ +( c!'an( an, +(in,#st$(* as t"$ is n n st t!'lat t"at acc#$atl( acc!!,ats f$ t" ,iff$ncs +t1n ,iff$nt t('s f+#sinsss.

/ifference 0etween Accounts Paya0le & Accounts !eceiva0le with suita0le e8aples

Accounts Paya0le59'a(a+ls96

An acc#ntin/ nt$( t"at $'$snts an ntit()s +li/atin t 'a( ff a s"$t7t$! ,+t t its c$,it$s. T" acc#nts 'a(a+lnt$( is f#n, n a +alanc s"t #n,$ t" "a,in/ c#$$nt lia+ilitis.

Acc#nts 'a(a+l a$ ftn $f$$, t as 9'a(a+ls9.

Ant"$ c!!n #sa/ f AP $f$s t a +#sinss ,'a$t!nt $ ,i0isin t"at is $s'nsi+l f$ !a4in/ 'a(!nts 1, +(t" c!'an( t s#''li$s an, t"$ c$,it$s.


5/27

Acc#nts 'a(a+l a$ ,+ts t"at !#st + 'ai, ff 1it"in a /i0n '$i, f ti! in $,$ t a0i, ,fa#lt. $ 8a!'l* at t"c$'$at l0l* AP $f$s t s"$t7t$! ,+t 'a(!nts t s#''li$s an, +an4s.

Pa(a+ls a$ nt li!it, t c$'$atins. At t" "#s"l, l0l* ''l a$ als s#+;ct t +ill 'a(!nt f$ /,s $s$0ics '$0i,, t t"! +( c$,it$s. $ 8a!'l* t" '"n c!'an(* t" /as c!'an( an, t" ca+l c!'an( a$ t('sf c$,it$s. Eac" n f t"s c$,it$s '$0i,s a s$0ic fi$st an, t"n +ills t" c#st!$ aft$ t" fact. T" 'a(a+lis ssntiall( a s"$t7t$! IOU f$! a c#st!$ t t" c$,it$.

Eac" ,!an,s 'a(!nt f$ /,s $ s$0ics $n,$, an, !#st + 'ai, acc$,in/l(. If ''l $ c!'anis ,n)t 'a( t"i$+ills* t"( a$ cnsi,$, t + in ,fa#lt.

Accounts !eceiva0le

Mn( 1, +( c#st!$s 5in,i0i,#als $ c$'$atins6 t ant"$ ntit( in 8c"an/ f$ /,s $ s$0ics t"at "a0 +n,li0$, $ #s,* +#t nt (t 'ai, f$.

I c!'an( "as $ci0a+ls it !ans t"at it "as !a, sal +#t

Rci0a+ls #s#all( c! in t" f$! f '$atin/ lins f c$,it an, a$ #s#all( ,# 1it"in a $lati0l( s"$t ti! '$i,*$an/in/ f$! a f1 ,a(s t a (a$.

On a '#+lic c!'an()s +alanc s"t* acc#nts $ci0a+l is ftn $c$,, as an asst +ca#s t"is $'$snts a l/al+li/atin f$ t" c#st!$ t $!it cas" f$ its s"$t7t$! ,+tsIf a c!'an( "as $ci0a+ls* t"is !ans it "as !a, a sal +#t "as (t t cllct t" !n( f$! t" '#$c"as$. Mstc!'anis '$at +( all1in/ s! '$tin f t"i$ sals t + n c$,it. T"s t('s f sals a$ #s#all( !a, tf$-#nt $ s'cial c#st!$s 1" a$ in0ic, '$i,icall(* an, all1 t"! t a0i, t" "assl f '"(sicall( !a4in/'a(!nts as ac" t$ansactin cc#$s. In t"$ 1$,s* t"is is 1"n a c#st!$ /i0s a c!'an( an IOU f$ /,s $s$0ics al$a,( $ci0, $ $n,$,.

Acc#nts $ci0a+l a$ nt li!it, t +#sinsss 7 in,i0i,#als "a0 t"! as 1ll. P'l /t $ci0a+ls f$! t"i$

!'l($s in t" f$! f a !nt"l( $ +i714l( 'a(c"c4. T"( a$ l/all( 1, t"is !n( f$ s$0ics 51$46 al$a,('$0i,,.

W"n a c!'an( 1s ,+ts t its s#''li$s $ t"$ 'a$tis* t"s a$ 4n1n as acc#nts 'a(a+l.

58plain /erivatives

A sc#$it( 1"s '$ic is ,'n,nt #'n $ ,$i0, f$! n $ !$ #n,$l(in/ assts. T" ,$i0ati0 itslf is !$l( acnt$act +t1n t1 $ !$ 'a$tis. Its 0al# is ,t$!in, +( fl#ct#atins in t" #n,$l(in/ asst. T" !st c!!n#n,$l(in/ assts incl#, stc4s* +n,s* c!!,itis* c#$$ncis* int$st $ats an, !a$4t in,8s. Mst ,$i0ati0s a$c"a$act$i%, +( "i/" l0$a/. H


6/27

Ma4in/ an in0st!nt t $,#c t" $is4 f a,0$s '$ic !0!nts in an asst. N$!all(* a ",/ cnsists f ta4in/ anffsttin/ 'sitin in a $lat, sc#$it(* s#c" as a f#t#$s cnt$act. H>111.in0st',ia.c!>t$!s>">",/.as'9 >hat is the difference 0etween hedging andspeculation

H,/in/ in0l0s ta4in/ an ffsttin/ 'sitin in a H>111.in0st',ia.c!>t$!s>s>s'c#latin.as'9 s'c#latin* n t" t"$ "an,* is t'$fit f$! +ttin/ n t" ,i$ctin in 1"ic" an asst 1ill + !0in/.

H,/$s $,#c t"i$ $is4 +( ta4in/ an ''sit 'sitin in t" !a$4t t 1"at t"( a$ t$(in/ t ",/. T" i,al sit#atin in

",/in/ 1#l, + t ca#s n ffct t cancl #t ant"$. $ 8a!'l* ass#! t"at a c!'an( s'ciali%s in '$,#cin/;1l$( an, it "as a !a;$ cnt$act ,# in si8 !nt"s* f$ 1"ic" /l, is n f t" c!'an()s !ain in'#ts. T" c!'an( is1$$i, a+#t t" 0latilit( f t" /l, !a$4t an, +li0s t"at /l, '$ics !a( inc$as s#+stantiall( in t" na$ f#t#$. In$,$ t '$tct itslf f$! t"is #nc$taint(* t" c!'an( c#l, +#( a si87!nt" Ht$!s>,>,1nsi,.as'9 ,1nsi, $is4.

S'c#lat$s !a4 +ts $ /#sss n 1"$ t"( +li0 t" !a$4t is "a,,. $ 8a!'l* if a s'c#lat$ +li0s t"at astc4 is 0$'$ic,* " $ s" !a( Ht$!s>$>$is4l0$.as'9 $is4 l0$s. H,/$st$( t $,#c t" $is4s assciat, 1it" #nc$taint(* 1"il s'c#lat$s +t a/ainst t" !0!nts f t" !a$4t t t$( t '$fitf$! fl#ct#atins in t" '$ic f sc#$itis.

>hat is -F. & F-F. ethod

ast -n, First .ut % -F.

An asst7!ana/!nt an, 0al#atin !t", t"at ass#!s t"at assts '$,#c, $ ac-#i$, last a$ t" ns t"at a$#s, sl, $ ,is's, f fi$st.

LIO ass#!s t"at an ntit( slls* #ss $ ,is'ss f its n1st in0nt$( fi$st. If an asst is sl, f$ lss t"an it is ac-#i$,f$* t"n t" ,iff$nc is cnsi,$, a ca'ital lss. If an asst is sl, f$ !$ t"an it is ac-#i$, f$* t" ,iff$nc iscnsi,$, a ca'ital /ain. Usin/ t" LIO !t", t 0al#at an, !ana/ in0nt$( can + ta8 a,0anta/#s* +#t it !a(als inc$as ta8 lia+ilit(.

First in, First out % F-F.

An asst7!ana/!nt an, 0al#atin !t", in 1"ic" t" assts '$,#c, $ ac-#i$, fi$st a$ sl,* #s, $ ,is's,f fi$st. IO !a( + #s, +( a in,i0i,#al $ a c$'$atin.


7/27

$ ta8atin '#$'ss* IO ass#!s t"at t" assts t"at a$ $!ainin/ in in0nt$( a$ !atc", t t" assts t"at a$ !st$cntl( '#$c"as, $ '$,#c,. Bca#s f t"is ass#!'tin* t"$ is a n#!+$ f ta8 !ini!i%atin st$at/is assciat,1it" #sin/ t" IO asst7!ana/!nt an, 0al#atin !t",.

'A#4 !53.#3-AT-.# (TAT515#T

'ank reconciliationis t" '$css f c!'a$in/ an, !atc"in/ fi/#$s f$! t" acc#ntin/ $c$,s a/ainst t"s s"1n na H


8/27

'ank (tateent

INCLUDEPICTURE 9"tt':>>111.+44'in/7financial7acc#ntin/7$s#$cs.c!>i!a/s>+an47stat!nt.;'/9 J

MERGEORMATINET

On t" +an4 stat!nt (# can s ,tails f ac" t$ansactin. In t" O#tfl1 cl#!n (# can s 'a(!nts f$! ABC +an4acc#nt cla$, +( t" +an4* ac" s#c" 'a(!nt if s#''$t, +( c"-# "as a $f$nc n#!+$. In t" cl#!n Infl1 (#can s 'a(!nts $ci0, int t" +an4 acc#nt f ABC +as, n t" c"-#s $ci0,. S! 'a(!nts c#l, + $ci0,,i$ctl( t t" +an4 acc#nt.

Ad7ust 3ash 'ook 'y -nforational /ifferences

S #$ fi$st tas4 t sl0 t"is +an4 $cnciliatin sa!'l is t c!'a$ +an4 stat!nt an, cas" +4 an, i,ntif( it!s nt" +an4 stat!nt 1"ic" a$ nt in t" cas" +4. In t" 'ict#$ +l1 (# can s t"s it!s* i.. ci$cl, in $,: 'a(!nt!a, t B$itis" 1a( ,i$ctl( f$! +an4 acc#nt an, 'a(!nt $ci0, f$! BC Wa( ,i$ctl( t t" +an4 acc#nt. T"sit!s a$ incl#,, int t" a,;#st, cas" +4* 1"ic" is '$snt, +l1.


9/27

INCLUDEPICTURE 9"tt':>>111.+44'in/7financial7acc#ntin/7$s#$cs.c!>i!a/s>cas"7+47a,;#st!nts.;'/9 J

MERGEORMATINET

S "1 1 a,;#st cas" +4 W ta4 nn7a,;#st, cas" +4 +alanc at t" n, f !nt"* a,, 'a(!nts $ci0, ,i$ctl(t t" +an4 acc#nt 5f$! BC Wa( a!#ntin/ t 6 an, ,,#ct 'a(!nts !a, ,i$ctl( f$! +an4 acc#nt 5t B$itis"

1a( a!#ntin/ t 6 an, /t a,;#st, cas" +4 +alanc a!#ntin/ t F.


10/27

-dentify Tiing /ifferences

N8t 1"at 1 , is t fin, it!s n t" cas" +4 1"ic" a$ nt n t" +an4 stat!nt. T"s 1ill + ti!in/ ,iff$ncs* i..it!s 'ai, $ $ci0, +( nt (t cla$, +( t" +an4 an, t"( 1ill + incl#,, int t" +an4 $cnciliatin sa!'l. Pict#$+l1 s"1s s#c" it!s n t" cas" +4 ci$cl, in $,.

INCLUDEPICTURE 9"tt':>>111.+44'in/7financial7acc#ntin/7$s#$cs.c!>i!a/s>ti!in/7,iff$ncs.;'/9 J

MERGEORMATINET

On an#a$( @ 1as $ci0, f$! =ala* +#t nt (t cla$, +( t" +an4 an, incl#,, int t" +an4 stat!nt. Onan#a$( F an, acc$,in/l( ABC c!'an( 'ai, t L/('l an, Di%%( a!#ntin/ acc$,in/l( t an, @* 1"ic"1$ als nt incl#,, int t" +an4 stat!nt. T"s it!s 1ill + incl#,, int t" +an4 $cnciliatin.

'ank !econciliation (aple

Bl1 +as, n t" a+0 ,ata (# can s +an4 $cnciliatin sa!'l* 1"ic" $cncils +alanc in t" a,;#st, cas" +41it" t" +an4 stat!nt an, 8'lains ,iff$ncs.

T !a4 s#c" $cnciliatin 1 sta$t f$! a,;#st, cas" +4 +alanc f F. A,, t t"is a!#nt c"-#s nt (t'$snt, t t" +an4* i.. 'a(!nts t L/('l an, Di%%( a!#ntin/ acc$,in/l( t an, @. Int$!,iat a!#nt is

.

Aft$1a$,s 1 ,,#ct f$! t" int$!,iat a!#nt 'a(!nts acc't, +( t" +an4 aft$ t" n, f an#a$(* i.. 'a(!ntf$! =ala a!#ntin/ t @. B( !a4in/ t"s calc#latins 1 /t t" final a!#nt f @ 1"ic" is t" sa! as '$+an4 stat!nt at t" n, f an#a$(.


11/27

INCLUDEPICTURE 9"tt':>>111.+44'in/7financial7acc#ntin/7$s#$cs.c!>i!a/s>+an47$cnciliatin7sa!'l.;'/9 J MERGEORMATINET

S finall( in t"is +an4 $cnciliatin sa!'l 1 "a0 a,;#st, cas" +4 an, $cncils a,;#st, cas" +4 +alanc 1it" t"

+an4 stat!nt 8'lainin/ ,iff$ncs 1"ic" a$ ,# t ,iff$nt ti!in/ f 'a(!nts $c$,, n t" cas" +4 an, +an4stat!nt.


12/27

/efine 3apital 1arket with relevant concept

T" !a$4t f$ ln/7t$! f#n,s 1"$ sc#$itis s#c" as c!!n stc4* '$f$$, stc4* an, +n,s a$ t$a,,. Bt" t"'$i!a$( !a$4t f$ n1 iss#s an, t" scn,a$( !a$4t f$ 8istin/ sc#$itis a$ 'a$t f t" ca'ital !a$4t. An(HMa$4t9 !a$4t in 1"ic" HSc#$itis9 sc#$itis a$ HT$a,in/9 t$a,,. Ca'ital !a$4ts incl#, t" HStc49 stc4 an, HBn,3Ma$4t9 +n, !a$4ts. C!'anis an, /0$n!nts #s ca'ital !a$4ts t $aisH#n,in/9 f#n,s f$ t"i$ '$atins f$ 8a!'l* ac!'an( !a( HIss#9 iss# an HIPO9 IPO 1"il a /0$n!nt !a( iss# a HBn,9 +n, in $,$ t cn,#ct n1 $ 8'an, n/in/ HActi0itis9 acti0itis. HIn0st$s9 In0st$s '#$c"as sc#$itis in t" ca'ital !a$4ts in $,$ t 8t$act a

HRt#$n9 $t#$n an, a$n HP$fit9 '$fit n t" sc#$itis. Ca'ital !a$4ts incl#, HP$i!a$(3Ma$4t9 '$i!a$( !a$4ts* s#c" as IPOs t"at a$ 'lac, 1it" in0st$s t"$#/"HUn,$1$it$9 #n,$1$it$s* an, HScn,a$(3Ma$4t9 scn,a$( !a$4ts* in 1"ic" all s#+s-#nt t$a,in/ta4s 'lac. G0$n!nt a/ncis in ,iff$nt c#nt$is $/#lat lcal ca'ital !a$4ts* t"#/" s!* s'ciall( 8c"an/s*'la( s! $l in $/#latin/ t"!sl0s.

>hat are 1utual funds

A !#t#al f#n, is nt"in/ !$ t"an a cllctin f stc4s an,>$ +n,s. t$!s>,>,i0i,n,.as'9 ,i0i,n,s n stc4s an,Ht$!s>c>ca'ital/ain.as'9 ca'ital /ain. Mst f#n,s als 'ass n t"s /ains t in0st$s in a,ist$i+#tin.

6 If f#n, "l,in/s inc$as in '$ic +#t a$ nt sl, +( t" f#n, !ana/$* t" f#n,)s s"a$s inc$as in '$ic.


13/27

Advantages of 1utual Funds

P$fssinal Mana/!nt 7 T" '$i!a$( a,0anta/ f f#n,s is t" '$fssinal !ana/!nt f (#$ !n(. In0st$s'#$c"as f#n,s +ca#s t"( , nt "a0 t" ti! $ t" 8'$tis t !ana/ t"i$ 1n '$tflis. A !#t#al f#n, is a$lati0l( in8'nsi0 1a( f$ a s!all in0st$ t /t a f#ll7ti! !ana/$ t !a4 an, !nit$ in0st!nts.

Ht$!s>>cn!isfscal.as'9 Ecn!is f Scal 7 Bca#s a !#t#al f#n,+#(s an, slls la$/ a!#nts f sc#$itis at a ti!* its t$ansactin csts a$ l1$ t"an 1"at an in,i0i,#al 1#l, 'a( f$sc#$itis t$ansactins.

H


14/27

>hat is /epreciation

A H>111.+#sinss,ictina$(.c!>,finitin>acc#ntin/7!t",."t!l9 acc#ntin/ !t",s t"at

a$ #s, in H>111.in0st$1$,s.c!>F>cst."t!l9 cst 0$ t" H>111.in0st$1$,s.c!>>nn?cas"?8'ns."t!l9 nn7cas" 8'ns* ,'$ciatin l1$s t" H


15/27

3) Sinking fund method,

4) Annuity method,

5) Depletion method. et.

T"$ a$ t1 t('s f ,'$ciatin t" st$ai/"t lin !t", an, t" 1$ittn ,1n 0al# !t",. T" $ats f ,'$ciatin

#n,$ t" t1 !t",s 0a$( as t" #sf#l lif f t" asst $!ains t" sa! i$$s'cti0 f t" !t", f ,'$ciatin #s,.

Un,$ st$ai/"t lin !t",* a fi8, '$cnta/ is a''li, n t" $i/inal cst f t" asst* t"$+( ns#$in/ t"at t"

,'$ciatin '$ ann#! 0$ t" #sf#l lif is cnstant. Un,$ 1$ittn ,1n 0al# !t",* a fi8, '$cnta/ is a''li, n

t" 1$ittn ,1n 0al# 5$i/inal cst lss ,'$ciatin c"a$/, till t" n, f t" '$0i#s (a$6 f t" asst. T"is $s#lts in

"i/"$ ,'$ciatin in t" a$li$ (a$s an, lss$ ,'$ciatin in t" lat$ (a$s.

N$!all( t" ,'$ciatin $at #n,$ 1$ittn ,1n 0al# is "i/"$ t"an t" $at #n,$ st$ai/"t lin !t",. T"is ns#$s

c$atin f ,'$ciatin '$0isin 0$ t" #sf#l lif f t" asst.

All t" Bst........

Acc#ntin/ #stinnai$

:2 inancial 'sitin f t" +#sinss is asc$tain, n t" +asis f:a2 !ecords prepared under 0ook%keeping process+. T$ial +alancc. Acc#ntin/ $'$ts,. Nn f t" a+0


16/27

;2 A +#sinss!an '#$c"as, /,s f$ *@* an, sl, FK f s#c" /,s ,#$in/ t"acc#ntin/ (a$ n,, stMa$c"* @.T" !a$4t 0al# f t" $!ainin/ /,s 1as*.H 0al#, t" clsin/ stic4 at cst. H 0ilat, t" cnc't f:

a. Mn( !as#$!nt +. Cns$0atis!

c2 3ost ,.P$i,icit(

=2 Assts a$ "l, in t" +#sinss f$ t" '#$'s f:

a. Rsal02 3onversion into cashc. Ea$nin/ $0n#,. Nn f t" a+0

?2 If an in,i0i,#al asst is inc$as, t"$ 1ill + c$$s'n,in/

a. -ncrease of another asset or increase of capital+. Dc$as f ant"$ asst $ inc$as f lia+ilit(c. Dc$as f s'cific lia+ilit( $ ,c$as f ca'ital,. Inc$as f ,$a1in/s an, lia+ilit(

@2 Cnsi,$ t" fll1in/ ,ata '$tainin/ t Al'"a Lt,.

Pa$tic#la$s

Cst f !ac"in$( '#$c"as, n

stA'$il*@

**

Installatin c"a$/s *

Ma$4t 0al# as n stMa$c"*

**

W"il finali%in/ t" ann#al acc#nts* if t" c!'an( 0al#s t" !ac"in$( at **.W"ic" f t"fll1in/ cnc'ts is fll1, +( t" Al'"a Lt,

a. Cst+. Matc"in/

c2 !ealiation,. P$i,icit(

B2 W"ic" financial stat!nt $'$snts t" acc#ntin/ -#atin* Assts2Lia+ilitis O1n$s-#it(:

a. Inc! stat!nt+. Stat!nt f Cas" fl1sc2 'alance (heet


17/27

,. Nn f t" a+0

C2 T" ,+ts 1$ittn ff as +a,* if $c0$, s#+s-#ntl( a$:

a. C$,it, t Ba, D+ts Rc0$, Acc#nt

+. C$,it, t D+t$s Acc#ntc2 /e0ited to Profit and oss Account,. Nn f t" A+0

D2 #$nal an, L,/$ $c$,s t$ansactin in:

a. A c"$nl/ical $,$ an, anal(tical $,$ $s'cti0l(+. An anal(tical $,$ an, c"$nl/ical $,$ $s'cti0l(c2 A chronological order only,. An anal(tical $,$ nl(

E2 At t" n, f t" acc#ntin/ (a$ all t" n!inal acc#nts f t" l,/$ +4 a$:

a. Balanc +#t nt t$ansf$$, t '$fit an, lss acc#nt+. Nt +alanc, an, als t" +alanc is nt t$ansf$$, t t" '$fit an, lss acc#ntc. Balanc, an, t" +alanc is t$ansf$$, t t" +alanc s"t,. #ot 0alanced and their 0alance is transferred to the profit and loss account

:2 T" ,+it nt iss#, a$ #s, t '$'a$:

a. Sals $t#$n +402 Purchase return 0ookc. Sals +4,. P#$c"as +4

::2 A scn, "an, !t$ ca$ 1as '#$c"as, n c$,it f$! B B$t"$s f$ *

a2 6ournal Proper)eneral 6ournal++. Sals B4c. Cas" B4,. P#$c"as B4

:;2 P#$c"as, /,s f$! E 1$t" @* n t" c$,it +asis

a. Bills Rci0a+l B402 Purchases 0ookc. #$nal P$'$5Gn$al #$nal6,. P#$c"ass Rt#$n

:=2 A ,+it nt f$ * iss#, t M$. f$ /,s $t#$n, +( #s is t + acc#nt, f$:


18/27

a. Bills Rci0a+l B4+. P#$c"ass B4c. #$nal P$'$5Gn$al #$nal6d2 Purchases !eturn

:?2 T" Sals Rt#$ns B4 $c$,s

a. T" $t#$n f /,s '#$c"as,+. Rt#$n f an(t"in/ '#$c"as,c2 !eturn of goods sold

:@2 T" 14l( $ !nt"l( ttal f t" '#$c"as +4 is:

a2 Posted to the de0it of the purchases Account+. Pst, t t" ,+it f t" Sals Acc#ntc. Pst, t t" c$,it f t" P#$c"ass Acc#nt

:B2 Cnt$a nt$is a$ 'ass, nl( 1"n

a. D#+l cl#!n cas" +4 is '$'a$,+. T"$7cl#!n cas" +4 is '$'a$,c. Si!'l cas" +4 is '$'a$,d2 'oth a and 0

:C2 T" +alanc in t" 'tt( cas" +4 is:

a2 An e8penses+. A '$fitc. An asst,. A lia+ilit(

:D2 A!#nt $ci0, f$! IDBI as a !,i#! t$! lan f$ a#/!ntin/ 1$4in/ ca'ital:

a. Ca'ital 8'n,it#$+. R0n# 8'n,it#$c2 3apital receipt,. R0n# $ci't

:E2 A scn, "an, ca$ is '#$c"as, f$ * t" a!#nt f * is s'nt n its $'ai$s* @ isinc#$$, t /t t" ca$ $/ist$, in 1n$s na! an, is 'ai, as ,al$s c!!issin. T"a!#nt ,+it, t ca$ acc#nt 1ill +

a. *+. *@c2 G::,@


19/27

,. *

;2 If t" a!#nt is 'st, in t" 1$n/ acc#nt $ it is 1$ittn n t" 1$n/ si, f t" acc#nt* itis call,

a. E$$$ f !issin+. E$$$ f c!!issinc. E$$$ f '$inci'ld2 3opensating error

;:2 If a '#$c"as $t#$n f * "as +n 1$n/l( 'st, t t" ,+it f t" sals $t#$ns acc#nt*+#t "as +n c$$ctl( nt$, in t" s#''li$s acc#nt* t" ttal f t"

a. T$ial +alanc 1#l, s"1 t" ,+it si, t + * !$ t"an t" c$,it02 Trial 0alance would show the credit side to 0e G:, ore than the de0itc. T" ,+it si, f t" t$ial +alanc 1ill + * !$ t"an t" c$,it si,,. T" c$,it si, f t" t$ial +alanc 1ill + * !$ t"an t" ,+it si,

;;2 $ci0, f$! S!it" 1"s acc#nt* 1as 1$ittn ff as a +a, ,+t s"#l, + c$,it, t:

a. Ba, D+ts Rc0$, acc#nt02 (iths accountc. Cas" acc#nt,. Ba, ,+ts acc#nt

;=2 If a '#$c"as $t#$n f "as +n 1$n/l( 'st, t t" ,+it f t" sals $t#$n acc#nt* +#t"a, +n c$$ctl( nt$, in t" s#''li$s acc#nt* t" ttal f t" t$ial +alanc 1#l, s"1:

a2 The credit side to 0e G;? ore than de0it side+. T" ,+it si, t + !$ t"an c$,it si,c. T" c$,it si, t + F !$ t"an ,+it si,,. T" ,+it si, t + F !$ t"an c$,it si,

;?2 G,s '#$c"as, *.Sals *.Ma$/in K n cst. Clsin/ Stc42

a. 5*6+. *c2 :E,B?=,. F*

;@2 E$$$s f c!!issin , nt '$!it

a. C$$ct ttalin/ f t" +alanc s"t


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02 3orrect totaling of the trial 0alancec. T" t$ial +alanc t a/$,. Nn f t" a+0

;B2 T" ttal cst f /,s a0aila+l f$ sal 1it" a c!'an( ,#$in/ t" c#$$nt (a$ is **an, t" ttal sals ,#$in/ t" '$i, a$ **.If t" /$ss '$fit !a$/in f t" c!'an( is >K n cst* t" clsin/ in0nt$( ,#$in/ t" c#$$nt (a$ is

a. *+. *c2 G;;@,,. *

;C2 Asc$tain t" a!#nt f '#$c"as if Cst f /,s sl, is F* * O'nin/ stc4 F*clsin/ stc4 *

a. F*@+. *c. *d2 GD@,E

;D2 Un,$ inflatina$( cn,itins* 1"ic" f t" !t",s 1ill nt s"1 l1st 0al# f t" clsin/stc4

a2 F-F.+. LIOc. Nn f t" 'tins a$ c$$ct,. All f t" 'tins a$ c$$ct

;E2 On A'$il * @* i..* a 14 aft$ t" n, f t" acc#ntin/ (a$ 7@* a c!'an(#n,$t4 '"(sical stc4 0$ificatin. T" 0al# f stc4 as '$ '"(sical stc4 0$ificatin 1asf#n, t + @*.T" fll1in/ ,tails '$tainin/ t t" '$i, A'$il *@ t A'$il *@ a$ /i0n:

5i6 G,s cstin/ @* 1$ sl, ,#$in/ t" 145ii6 G,s $ci0, f$! cnsi/n$ a!#ntin/ t * incl#,, in t" 0al# f stc45iii6 G,s a$li$ '#$c"as, +#t $t#$n, ,#$in/ t" '$i, a!#nt, t *5i06 G,s a$li$ '#$c"as, an, acc#nt, +#t nt $ci0, *

a2 G;C,+. *c. *,. @*


21/27

. Cnsi,$ t" fll1in/ ,ata '$tainin/ t N Lt,. $ t" !nt" f Ma$c" @:

Dat

P#$c"ass Iss#s Balanc

#antit( Rat #antit( #antit( Rat

54/.6 56 54/.6 564/. 56

77@ @ .F

77@

77@ @

@77@ *

If t" c!'an( #ss 1i/"t, a0$a/ !t", f$ in0nt$( 0al#atin* t" 0al# f in0nt$( as n Ma$c" @ is

a2 G::EBC+. c. @

,.

. W"ic" f t" fll1in/ is als. T" 0al# f n,in/ in0nt$( #n,$ si!'l a0$a/ '$ic !t", is $alistic.. Us#all( '$fit $ lss 1ill nt a$is #t f '$icin/ t" iss#s n t" +asis f si!'l a0$a/

'$ic !t",.=2 The value of stock is shown on the assets side of the 0alance sheet as fi8ed assets2. O'nin/ stc4 'l#s '#$c"ass !in#s cst f /,s sl, is t" 0al# f clsin/ stc4.


22/27

. If a cnc$n '$'ss t ,iscntin# its +#sinss f$! Ma$c" @ an, ,ci,s t ,is's ff all its ass1it"in a '$i, f !nt"s* t" +alanc s"t as n Ma$c" * @ s"#l, in,icat t" assts at t"i$

. Hist$ical cst.;2 #et realia0le value2. Cst lss ,'$ciatin.. Cst '$ic $ !a$4t 0al#* 1"ic"0$ is l1$.

. A!it Lt,. '#$c"as, a !ac"in n .. f$ *. Installatin 8'nss 1$ *. On..* 8'nss f$ $'ai$s 1$ inc#$$, t t" 8tnt f . D'$ciatin is '$0i,, #n,$ st$ai/lin !t",. D'$ciatin $at 2 @K. Ann#al ,'$ciatin 2

:2 G:=. @. . @

. i8, assts a$::2 4ept in the 0usiness for use over a long tie for earning incoe2. Mant f$ $sal.

. Mant f$ cn0$sin int cas" as -#ic4l( as 'ssi+l.. All f t" a+0.

@. $! t" fll1in/ fi/#$s asc$tain t" /$ss '$fit:

Pa$tic#la$s

O'nin/ stc4 5..6 @

G,s '#$c"as, ,#$in/ *

$i/"t an, 'ac4in/ n a+0 @

Clsin/ stc4 5..6

Sals *

Sllin/ 8'nss n sals

a. +. @c. @d2 G@E

Bas, n t" fll1in/ 'a$a ans1$ 7M"an '#$c"as, a !ac"in$( a!#ntin/ ** n stA'$il* . On stMa$c"* . T" si!ila$!ac"in$( c#l, + '#$c"as, f$ *F* +#t t" $ali%a+l 0al# f t" !ac"in$( 5'#$c"as, n..6 1as sti!at, at *@*. T" '$snt ,isc#nt, 0al# f t" f#t#$ nt cas" infl1s t"at t"!ac"in$( 1as 8'ct, t /n$at in t" n$!al c#$s f +#sinss* 1as calc#lat, as *@*.

. t" c#$$nt cst f t" !ac"in$( is:a2 G;,D,+. **c. *@*,. **

. T" '$snt 0al# f t" !ac"in$( is:a2 G:,;@,+. **


23/27

c. *@*,. **

F. T" "ist$ical cst f !ac"in$( is:a. **+. **c2 G:,:,

,. **

. T" $ali%a+l 0al# f !ac"in$( is:a. **+. **c2 G:,@,,. **

Bas, n t" fll1in/ 'a$a ans1$ 7@

T" fll1in/ a$ t" ,tails s#''li, +( A/$il Lt,. in $s'ct f its $a1 !at$ials f$ t" !nt" f Dc!+@:

Dat Rci'ts5Units6 P$ic '$ #nit56

Iss#s5Units6

..@ *5'nin/6 @.

..@ * .

..@ 7 7 *@

@..@ * .@

..@ 7 7 *

On ..@* a s"$ta/ f #nits 1as f#n,.

. in, t" 0al# f clsin/ stc4 #sin/ LIO '$inci'la. *+. *c. *d2 G:,

. Usin/ t" ,ata /i0n in '$+l!* t" 0al# f t" iss#s in t" !nt" f Dc!+$ @ #sin/ LIO'$inci'l


24/27

a. @*02 G;D,c. *,. @*

. Usin/ t" ,ata /i0n in '$+l!* t" 0al# f clsin/ stc4 #sin/ IO '$inci'la. *

+. *@c2 G:,=,. *

. Usin/ t" ,ata /i0n in t" '$+l!* t" 0al# f t" iss#s in t" !nt" f Dc!+$ @ #sin/ IO!t",.

a2 G;C,C+. @*@c. *@,. *

. Usin/ t" ,ata /i0n in '$+l!* t" 0al# f clsin/ stc4 #sin/ si!'l a0$a/ '$inci'la. @02 GDC@c. *,. *. @

@. Usin/ t" ,ata /i0n in t" '$+l!* t" 0al# f iss#s in t" !nt" f Dc!+$ @ #sin/ si!'la0$a/ !t",

a. @*F@

+. *@c. *@d2 G;D,:;@

Bas, n t" fll1in/ 'a$a ans1$ FIn t" (a$ 7@* C Lt, '#$c"as, a n1 !ac"in an, !a, t" fll1in/ 'a(!nts in $latin t it:

Pa$tic#la$s

Cst as '$ s#''li$s list @*

Lss: a/$, ,isc#nt @* *

Dli0$( c"a$/s *

E$ctin c"a$/s *Ann#al !aintnanc c"a$/s *

A,,itinal c!'nnts t inc$as ca'acit( f t"Mac"in

*

Ann#al ins#$anc '$!i#! @*

. T" cst f t" !ac"in isa. @*+. @@*


25/27

c2 G@?,,. @@*

. If ,'$ciatin is '$0i,, K '.a. SLM* ,'$ciatin f$ $,(a$ isa. @*+. @*@c. *

d2 G@,?

F. If ,'$ciatin is '$0i,, K '.a. #n,$ ,clinin/ +alanc !t",* ,'$ciatin f$ $,(a$ isa. *+. *@c2 G?,D;?,. *@@

. O$i/inal cst 2 *. Sal0a/ 0al# 2 *. Usf#l lif 2 (a$s. Ann#al ,'$ciatin #n,$ SLM2

a. *

+. *c. @*d2 G?,

@. Bl1 s! $$$s a$ !ntin,. Stat 1"ic" f t"s 1ill nt + $0al, +( t" T$ial Balanc:a. C!'nsatin/ $$$s02 5rrors of principlec.W$n/ +alancin/ f an acc#nt,. Bt" a an, +.

-A'-T-5( Aount Aount A((5T Aount A

3urrent ia0ilitiesI 3urrent AssetsI

C!!$cial Pa'$ Cas" an, Cas" E-#i'!nts

Acc#nts Pa(a+l Rci0a+ls

Acc#$, Lia+litis In0nt$is

Acc#$, Inc! Ta8s P$'ai, E8'nss an, Ot"$ Ln/7T$! D+t D# i8, Assts

O+li/atins Un,$ Ca'ital Lass P$'$t( an, E-#i'!nts* at cst

Total 3urrent ia0ilites **** **** Lan,

Ln/ T$! D+t B#il,in/s an, I!'$0!nts

Ln/ T$! O+li/atins Un,$ Ca'ital Lass #$nit#$s An, i8t#$s

Dff$, Inc! Ta8s an, Ot"$ T$ans'$tatin E-#i'!nts

Min$it( Int$st **** Ttal P$'$t( an, E-#i'!nt

(hareholderJs 5quityI Lss : Acc#!#lat, D'$ciatin


26/27

P$ff$, Stc4 P$'$t( an, E-#i'!nts: Nt

C!!n Stc4

Ca'ital in E8css f Pa$ Val# P$'$t( Un,$ Ca'ital Las

Acc#!#lat, Ot"$ C!'$"nsi0 Inc! Lss: Acc#!#lat, A!$ti%atin

Rtain, Ea$nin/s

Total (hareholderJs 5quity **** **** P$'$t( Un,$ Ca'ital Las : Nt

G,1ill

Ot"$ Assts an, Dff$, C"a$/s

Total ia0ilities **** Total Assets *


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