NIOS Free Solved Assignments (2021 - 2022): ACCOUNTANCY 224 ENGLISH MEDIUM

NIOS Free Solved Assignments (2021-22)
Accountancy (224)
Tutor Marked Assignment
Max Marks: 20

Note:

(i) All questions are compulsory. The Marks allotted for each question are given beside the questions.

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

1. Answer any one of the following questions in about 40-60 words.

(a) Accounting information is useful to potential investors and customers. How?

Ans: With the help of accounting information, potential investors can judge the financial position and operating efficiency of the firm which help them in taking investment decision.

Accounting information helps to the customer to check the continuous inflow of stock and also the pace of overall production.

(b) What do you understand by External Liabilities? Give two examples of External Liabilities.

Ans: The entire amount due payable to person other than owners, management, employees are known as external liabilities. For example: amount due to sundry creditors and bank loans & overdraft.

2. Answer any one of the following questions in about 40-60 words.

(a) Explain the Dual aspect concept with the help of an example. (See Lesson 2)

Ans: Dual Aspect Concept: According to this basic concept of accounting, every transaction has a two-fold aspect, Viz.,

1.Giving certain benefits and

2. Receiving certain benefits. The basic principle of double entry system is that every debit has a corresponding and equal amount of credit. This is the underlying assumption of this concept. The accounting equation viz., Assets = Capital + Liabilities or Capital = Assets – Liabilities, will further clarify this concept, i.e., at any point of time the total assets of the business unit are equal to its total liabilities.

(b) Financial accounting ignores non–monetary information. Explain. (See Lesson 1)

Ans: In financial accounting, only those events and transactions are recorded in accounts which can be expressed in terms of money. Facts, events and transactions which cannot be expressed in monetary terms are not recorded in accounting. Hence, the accounting does not give a complete picture of all the transactions of a business unit. For example: dispute between management and worker union, bad health of owners etc are not recorded in financial accounting.

3. Answer any one of the following questions in about 40-60 words.

(a) Write short notes on tangible and intangible assets. (See Lesson 3)

Ans: Tangible assets: It refers to those assets which can be touched and seen. Tangible assets have physical existence. For example, vehicle, plant and machinery, equipments.etc.

Intangible assets: It refers to those assets which cannot be touched and seen. Intangible assets do not have physical existence. For example, goodwill, trademark, patents, copyright etc.

(b) Write down the rules for accounting equation for the following: (See Lesson 4)

(i) Capital

Ans: Rules of Debit and Credit for Capital

Debit: Decrease in capital

Credit: Increase in capital

(ii) Assets

Ans: Rules of Debit and Credit for Assets

Debit: Increase in Assets

Credit: Decrease in Assets

4. Answer any one of the following questions in about 100 to 150 words.

(a) Your friend wants to prepare a journal. As a good friend, explain to him the process of journalising. (See Lesson 6)

Ans: Journalising: The process of recording the transaction in the Journal or making entry in the journal is called Journalizing. Since transactions are first of all recorded in this book, Journal is also called "The Book of Original Entry'. Entries in the Journal are recorded on the basis of source Documents like Cash Memos, Vouchers etc which serve as an evidence of a transaction. Entries in the Journal are made on the basis of ' Rules of Journalizing'.

The following steps lead to the preparation of a journal:

a)      Identifying the Affected Accounts. First of all, the affected accounts in a transaction should be identified. For example, if goods worth Rs. 20,000 are sold for cash, then goods and ‘Cash’ are the two affected accounts.

b)      Recognizing the Kinds of Affected Accounts. The kind of the affected accounts should be determined e.g. in the above case, ‘goods’ and ‘Cash’ are both asset accounts.

c)       Applying the Rules of Debit and Credit. Then the rules of ‘debit’ and ‘credit’ should be applied to the affected accounts.

(b) Explain the meaning and significance of Convention of Conservatism. (See Lesson 2)

Ans: Convention of Conservatism also known as doctrine of prudence, follows the policy of caution or playing safe. It takes into account” all possible losses but the possible future profits or gains are ignored”.

The implication of this principle is to give a pessimistic view of the financial position of the business. The losses which can occur in future can be shown in current year which can help in reducing tax and also creating secret reserves for future needs.

Provisions for bad debts, provision for depreciation and contingencies are some of the example which are shown in current years financial statement as per the convention of conservatism.

Convention of conservatism sometimes leads to understatement of assets and misleading accounting information.

5. Answer any one of the following questions in about 100 to 150 words.

(a) Prepare Accounting Equation on the basis of the following: (See Lesson 4)

(i) Ankit started business with cash Rs. 1, 80,000.

(ii) He purchased furniture for cash Rs. 20,000.

(iii) He purchased goods on credit Rs. 25,000.

(iv) He sold goods costing Rs. 18,000 for Rs. 40,000 for cash.

Ans: Accounting Equation:

Transactions

Cash        +         Furniture   +          Stock =   Creditors +    Capital

(i) Ankit started business with cash Rs. 1, 80,000.

(ii) He purchased furniture for cash Rs. 20,000.

(iii) He purchased goods on credit Rs. 25,000.

(iv) He sold goods costing Rs. 18,000 for Rs. 40,000 for cash.

1,80,000 +              0             +            0     =           0         +   1,80,000

- 20,000   +        20,000        +            0     =           0         +            0

        0        +            0              +    25,000  =      25,000     +             0

   40,000   +            0              -     18,000  =           0          +   22,000

Total

2,00,000  +       20,000         +   7,000      =     25,000     +   2,02,000

 (b) Explain the traditional classification of different types of Accounts. (See Lesson 5)

Ans: Traditional Approach: Under this approach, Accounts are classified in to three namely real accounts, personal accounts and nominal accounts. There are separate rules for each type of accounts they are as follows

1. Real accounts: An account relating to an asset or property is called real account. Cash, furniture, plant and machinery etc are examples of real accounts the debit, credit rule applicable to real account is:

Debit what comes in

Credit what goes out

2. Personal accounts: It includes the account of person with whom the business deals. These accounts are classified in to three categories

a) Natural personal accounts: The term natural persons mean persons who are creation of god. For e.g.;-Raja’s accounts, Gupta’s accounts etc.

b) Artificial personal accounts: These accounts includes accounts of corporate bodies or institutions

c) Representative personal account-these are accounts which represents certain person or group of persons. For example salary due, rent outstanding etc. The rule of personal account is

Debit the receiver

Credit the giver

3) Nominal accounts: Accounts relating to expenses and losses and incomes and gains are called nominal accounts. Salary accounts, commission account etc are examples. The rule of nominal account is

Debit all expenses and losses

Credit all incomes and gains

6. Prepare any one project out of the given below:

(a) Prepare Credit Vouchers from the source vouchers of M/s G. K. Computers, South Ex, New Delhi based on the following transactions:

April 4 Sold pen drives for cash vide Cash Memo No. 10 –Rs. 55,000

April 15 sold old Computer Monitor for cash vide cash Memo No. 39–Rs. 19,000

April 30 withdrawn cash from Bank for office use vide cheque No. 500417 –Rs. 15,000

Credit voucher

M/s G. K. Computers, South Ex, New Delhi

Voucher Number: 10                                                                                                                        Date: 04-04-2021

Credit Account: Sales

Amount: Rs. 55,000

S.N.

Accounts name

Amount (Rs.)

Narration

1.

2.

Cash

Sales

55,000

55,000

Sold pen drives for cash vide Cash Memo No. 10

               

Authorised by:                                                                                                                            Prepared by:

 

Credit voucher

M/s G. K. Computers, South Ex, New Delhi

Voucher Number: 39                                                                                                                         Date: 15-04-2021

Credit Account: Old Computer

Amount: Rs. 19,000

S.N.

Accounts name

Amount (Rs.)

Narration

1.

2.

Cash

Old Computer

19,000

19,000

sold old Computer Monitor for cash vide cash Memo No. 39

               

Authorised by:                                                                                                                            Prepared by:

 

Credit voucher

M/s G. K. Computers, South Ex, New Delhi

Voucher Number: ----                                                                                                                   Date: 30-04-2021

Credit Account: Bank

Amount: Rs. 15,000

S.N.

Accounts name

Amount (Rs.)

Narration

1.

2.

Cash

Bank

15,000

15,000

Withdrawn cash from Bank for office use vide cheque No. 500417

               

Authorised by:                                                                                                                            Prepared by:

 

(b) Visit any nearby shop and observe their ten business transactions and record them on a page as journal. (See Lesson 6)

 

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