NIOS Free Solved Assignments (2019 - 2020): ACCOUNTANCY 224 ENGLISH MEDIUM

Accountancy (224)

Tutor Marked Assignment

Max. Marks: 20

Note: (i) All questions are compulsary. The marks allotted for each question are given at same place.

(ii) Write your name enrollment numbers, AI name subject on the top of the first page of the answer sheet.

1. Answer any one of the following

i. How can you show Prepaid Insurance in the Accounting Equation? If commission worth Rs. 2800/- is received, what will be its effect in the Accounting Equation?        (2 Marks)

Ans: Accounting equation => Assets = Liabilities + Capital

If insurance premium is paid in cash, two aspects involved is prepaid insurance which is an asset and cash which is also an asset. In this transaction, one asset is increased and another assets is decreased with similar amount by the reason of which accounting equation is balance. In this transaction there is no change in value of assets , liabilities and capital.

Again, if commission of Rs. 2,800 is received, two aspects involved is cash which is an asset and commission which is an income and increases capital. In this transaction, assets are increased by Rs. 2,800 and capital is also increased by the same amount. Change on left hand side and right hand side of the accounting equation is same and accounting equation is balanced.

ii. From the following information prepare Credit Voucher of M/s Stanley Leather shoes Ahmedabad. 2015

April 17 Sold leather bags for cash vide Cash Memo No.: 514 Rs. 5800

April 24 Received cash from Tyagi & Co. on account vide Cash receipt No.: 38 Rs. 4200 (Lesson 5)

Credit voucher

M/S Stanley Leather Shoes Ahmadabad Voucher Number: 514                                                                                                                           Date: 17-04-2015 Credit Account: Sales Amount: Rs. 5,800
S.N.	Accounts name	Amount (Rs.)	Narration
1. 2.	Cash Sales	5,800 5,800	Sales of leather bags for cash vide cash memo no.: 514
Authorised by:                                                                                                                            Prepared by:

Credit voucher

M/S Stanley Leather Shoes Ahmadabad Voucher Number: 38                                                                                                                         Date: 24-04-2015 Credit Account: Tyagi & Co. Amount: Rs. 4,200
S.N.	Accounts name	Amount (Rs.)	Narration
1. 2.	Cash Tyagi & Co.	4,200 4,200	Received cash from Tyagi & co. on account vide cash receipt no.: 38
Authorised by:                                                                                                                            Prepared by:

2. Answer any one of the following

i. What does the Going Concern Concept say? (Lesson 2) (2 marks)

Ans: According to Going concern concept, the reporting entity is normally viewed to be continuing in operation in the foreseeable future, and without there being any intention or necessity for it to either liquidate or curtail materially its scale of business operations.

ii. How can you explain 'Creditors' and 'Proprietors' as users of accounting information? (Lesson 1)

Ans: Creditors as an user of accounting information: Creditors supply goods and services on credit. Before granting credit, Creditors satisfy themselves about the creditworthiness of the business. The financial statement helps them in making such assessment.

Proprietor as an user of accounting information: Proprietor contribute capital in the business and they are always exposed to risk. In view of risk involved, the proprietors are always interested in knowing the profitability and financial strength of the company.

3. Answer any one of the following (2 Marks)

i. Can 'Capital' be considered as External Liability? Why?

Ans: No, capital is an internal liability. Internal Liabilities means the liability of business towards it's owners and External Liabilities means what a business owes to outsiders e.g., creditors, bank loan, overdraft etc. Since, Capital is the money contributed by owners or shareholders to the firm. That is why we considered capital as an internal liability.

ii. Identify the type of accounts in this transaction: Paid for Printing & Stationary Rs. 12,500/-

Ans: Types of accounts involved in the given transaction:

Particulars	Types of Account	Dr/Cr
Transaction: Paid for Printing & Stationary	Printing & Stationery: Expenses – Nominal Account Cash : Assets – Real Account	Debited Credited

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