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JAIPUR NATIONAL UNIVERSITY, JAIPUR
School of Distance Education & Learning
Internal Assignment No. 1
Bachelor of Business Administration (BBA)- (Retailing)
Paper code: BBA-101
Paper title: Fundamentals Of Accounting
Last date of submission: Max.Marks:30
Note : Question No. 1 is of short answer type and is compulsory for all the students. It carries 1 Mark each (Word limits 50-100)
Question 1. Answer all the questions:
- What do you mean by accounting?
Answer: In simple words, accounting can be defined as keeping records of all financial transactions related to an individual or an entity. And then there are pre-defined rules and procedures in the way a transaction should be accounted for. This is what we call debit or credit, income or expenditure, asset or liability. There are then rules on whether it would be an asset or an expenditure and so on.
A proper definition of accounting is that it is the process of recording, summarizing, analyzing, and reporting the financial transactions related to a business. It explains how a business organization records, organizes and reports these transactions to regulators and other parties. It helps to translate the working of business intangible reports for
Question3.What do you mean by incomplete records?
Answer: There can be two ways of maintaining the accounting records, one is the double entry system and another is the single entry system. The records maintained according to the single entry system are known as Incomplete Records. Usually, small firms like grocery shops, general stores, food joints, etc. keep their books on the single entry system. It does not maintain the accounts of expenses, incomes, assets, and liabilities properly. Hence, as the information provided by these records is incomplete, they are known as Incomplete Records.
Reasons for Incompleteness
The proprietor may keep the accounting records on the basis of single entry due to the following reasons:
Question4. What do you mean by forfeited of share? Explain with example.
Answer: Forfeiture of shares is referred to as the situation when the allotted shares are cancelled by the issuing company due to non-payment of the subscription amount as requested by the issuing company from the shareholder.In the event of forfeiture of shares, the shareholders loses the rights and interests of being a shareholder and ceases to be a member of the organisation.
Question5. Explain any one method of depreciation.
Answer: Double Declining Balance Depreciation Method:-
Compared to other depreciation methods, double-declining-balance depreciation results in a larger amount expensed in the earlier years as opposed to the later years of an asset’s useful life. The method reflects the fact that assets are typically more productive in their early years than in their later years – also, the practical fact that
Question6. Define accounting. Give the main objectives of accounting?
Answer: According to Smith and Ashburne, Accounting is the science of recording and classifying business transactions and events, primarily of a financial character and the art of making significant summaries, analysis and interpretations of these transactions and events and communicating results to persons who must take decisions or form judgement.”
Question7. What do you mean by depreciation? Give two reason of decrease in the value of assets?
Answer: Depreciation is an accounting method of allocating the cost of a tangible or physical asset over its useful life or life expectancy. Depreciation represents how much of an asset’s value has been used up. Depreciating assets helps companies earn revenue from an asset while expensing a portion of its cost each year the asset is in use. If not taken into account, it can greatly affect profits.
Assets depreciate for two main reasons:
Wear and tear. For example, a car will decrease in value because of the mileage, wear on tyres, and other factors related to the use of the vehicle.
Question8.What is income and expenditure account? How is it differentiate for receipt and payment account?
Answer: . 1)Cash and non-cash transactions:-
Receipt &
Question9. Write down the different type of shares?
Answer: Preferential Share Capital:-
The preferential share capital is that part of the Issued share capital of the company carrying a preferential right for:
Dividend Payment – A fixed amount or amount calculated at a fixed rate. This might/might not be subject
Question10. What do you mean by redemption of debenture?
Answer: Redemption of debentures is a process of repayment of loan taken by issue of debentures. Generally debentures are issued with the notice that they may be redeemed at the option of the company within a specified period and at a specified price. The terms of redemption of debentures are clearly mentioned in the debentures certificate.
Note: Answer any four questions. Each question carries 5 marks (Word limits 500)
Question1. What do you mean by accounting? Who are the users of accounting? Explain its scope.
Answer: Accounting is the process of recording financial transactions pertaining to a business. The accounting process includes summarizing, analyzing and reporting these transactions to oversight agencies, regulators and tax collection entities. The financial statements used in accounting are a concise summary of financial transactions over an accounting period, summarizing a company’s operations, financial position and cash flows.
Users of Accounting:-
Question 2. Define debenture. Explain the various types of debentures.
Answer: A debenture is a medium- to long-term debt instrument used by large companies to borrow money, at a fixed rate of interest. The legal term “debenture” originally referred to a document that either creates a debt or acknowledges it, but in some countries the term is now used interchangeably with bond, loan stock or note. A debenture is thus like a certificate of loan or a loan bond evidencing the fact that the company is liable to pay a specified amount with interest. Although the money raised by the debentures becomes a part of the
Q. 3. Journalise the following transactions in the books of M/s Sohan & sons:
| 2008 | Rs. | |
| Jan., 01 | Goods purchase for cash | 1,200 |
| Jan., 02 | Purchase good from Ram | 1,500 |
| Jan., 04 | Goods sold to Laxman | 1,000 |
| Jan., 05 | Furniture purchase for cash | 800 |
| Jan., 07 | Charge interest on capital | 2,500 |
| Jan., 11 | Goods return from Laxman | 200 |
| Jan., 12 | Goods return to Ram | 500 |
| Jan., 14 | Withdrew from bank for private use | 6,000 |
| Jan., 16 | Give in charity: Cash | 100 |
| Goods | 200 | |
| Jan., 19 | Salaries paid by cheque | 4,000 |
| Jan., 21 | Goods sold to Sachin on 10% trade discount and 8% Cash discount | 1,000 |
| Jan., 23 | Laxman become insolvent and could pay only 75 paise in a rupee | |
| Jan., 26 | Proprietor took goods for his personal use | 2,000 |
| Jan., 29 | Postage Rs. 200 and Rent Rs. 1000 Paid | |
| Jan., 31 | Received Rs. 4,000 from insurance company | |
Answer: JOURNAL ENTRIES
In the books of M/s Sohan & sons
For the month of January, 2008:
Jan., 01 Goods purchase for cash 1,200
Purchases A/C… Dr. Rs. 1200
To Cash A/C
Question4. What are redeemable [reference shares? Discuss the different methods of redeeming the redeemable preference shares.
Answer: Redeemable Preferences shares are those type of preference shares issued to shareholders which have a callable option embedded, meaning they can be redeemed later by the company. Redeemable preference shares are those preference shares that have a predetermined redemption clause at the time of their issue. In the case of these shares, a redemption price/price range is predetermined and noted in the issue prospectus. The issuing company has a right to redeem i.e., buy back these shares at the predetermined redemption price at any time before the redemption period specified.
Dear students, get latest JNU MBA Solved assignments by professionals.
Mail us at: help.mbaassignments@gmail.com
Call us at: 08263069601