Star Rating
On the basis of Maximum marks from a chapter
On the basis of Questions included every year from a chapter
On the basis of Compulsory questions from a chapter
1
Nil
jjj
jjj
Accounting Concepts
and Conventions
This Chapter Includes : Nature and Meaning of Accounting Principle; Essential
Feature s of Acco unting Princ iples; A cco unting Conce pts; G oing Conce rn C onc ept. .
Marks of Short Notes, Distinguish Between, Descriptive & Practical Questions
S HORT N OTES
2004 - June [8] Write short notes on the following:
(a)
Conceptual Framework of Accounting
(4 marks)
Question upto December - 2007 are from ICWA Stage II and from December - 2008
onwards are from ICWA Gr. I New Course.
Q&A-5.13
Q&A-5.14
O
Solved Scanner
CMA (CWA) Inter Gr. I Paper 5
Answer :
A Conceptual Framework of Accounting prescribes the nature, functions and limits of
Financial Accounts and Financial Statements. It provides Guidance in developing
Accounting Standards and assists users of Accounts in interpreting information in
Financial Statements.
Need for Conceptual Framework :
As an aid in developing more useful, consistent Standards.
As an aid in solving practical problems by reference to an existing framework of
basic theory.
In combination with goods judgement, a sound body of theory will help Accountants
focus on logical and consistent solutions to Accounting problems as they arise.
Accounting Principles depend on :
General acceptance.
Relevance & Reliability.
Usefulness.
Cost/benefit constraints.
Conceptual framework-Coherent set of Rules and Standards for Comparability and
Consistency
Development of framework : nor Universally Accepted nor static.
2008 - Dec [8] Write notes on :
(e) Materiality concept.
(3 marks)
Answer :
Materiality Concept : Materiality principle permits other concepts to be ignored, if the
effect is not considered material. This principle is an exception of full disclosure
principle. According to materiality principle, all the items having significant economic
effect on the business of the enterprise should be disclosed in the financial statements
and any insignificant item which will only increase the work of the accountant but will not
be relevant to the users need should not be disclosed in the financial statements. The
term materiality is the subjective term. It is on the judgment, common sense and
discretion of the accountant that which item is material and which is not. For example
stationary purchased by the organization though not used fully in the accounting year
purchased still shown as an expense of that year because of the materiality concept.
Similarly depreciation on small items like books, calculators etc, is taken as 100% in the
year of purchase though used by the company for more than a year, This is because
the amount of books or calculator is very small to be shown in the balance sheet though
it is the asset of the company.
The materiality depends not only upon the amount of the item but also upon the size
of the business, nature and level of information, level of the person making the decision
etc. Moreover an item material to one person may be immaterial to another person.
[Chapter # 1] Accounting Concepts and Conventions O
Q&A-5.15
What is important is that omission of any information should not impair the decisionmaking of various users.
2009 - Dec [8] Write notes on :
(d) Accounting Bases;
(3 marks)
Answer :
Accounting Bases : There are three bases of Accounting :
1. Accrual Base : Here, income as well expenses are considered on the bases of
their occurrence in an Accounting period and not on the bases of their actual
receipts and payments.
2. Pure Cash Base : Here the Revenues are not recognized and recorded unless they
are received in cash. Similarly expenses are recognized only when they are paid in
cash.
3. Modified Cash Base or Hybrid system : The system is the mixture of both the
mixture of both the bases of accounting as stated above. In this system Accrual
bases is followed for expenses and cash system is followed for revenues. Such
system is followed by professionals who term their Income Statements as ‘Receipts
and Expenditure Account’.
2011 - Dec [8] Write short notes on :
(e) Money measurement concept.
(5 marks)
Answer :
Money Measurement Concept : Business existed even before the invention of money.
The use of money bagan in the 6th Century BC. By Roman times money had become
the medium of exchange. The tradition of keeping accounting records is about 2000
years old. It is also the easiest way to describe a material object that has value. Also for
mathematical treatment such material objects of value need to be expressed in terms
of a common denomination. Money. i.e. the ruling currency of a country provides such
common denomination.
It may be mentioned that when transactions occur across the boundary of a country.
One may see many currencies, suppose an Indian businessman sells goods worth ` 50
lakhs at home and he also sells worth of 5 lakhs dollars in the United States. What is
his total sales? ` 50 Lakhs plus 5Lakhs dollars.
These are not amenable to even arithmetic treatment. So transactions are to be
recorded at uniform monetary unit i.e. in one currency. Suppose $1 = ` 25.
Total Sales = ` 50 lakhs plus 125 lakhs = ` 175 lakhs. Money measurement Concept
imparts the essential flexibility for measurement and interpretation of accounting data.
2012 - Dec [8] Write short notes on :
(c) Accounting convention of consistency;
(5 marks)
Q&A-5.16
O
Solved Scanner
CMA (CWA) Inter Gr. I Paper 5
Answer :
In order to enable the management to draw important conclusions regarding the working
of a company over a num ber it is essential that accounting practices and methods
remain unchanged from one accounting period to another. According to AS-1
consistency is a fundamental assumption and it is assumed that accounting policies are
consistent from one period to another. Where this assumption is not followed, the fact
should be disclosed with proper reasons.
Kohler has talked about three types of consistencies :
(i) Vertical consistency- consistency maintained within the interrelated financial
statements of the same date.
(ii) Horizontal consistency- this enables the comparison of performance of the
organization in one year with its performance of previous/ next year.
(iii) Third dimensional consistency- Performance of one organization can be
compared with that of another organization in the same industry.
D ESCRIPTIVE Q UESTIONS
2002 - Dec [1] {C} (a) A going-concern is one, which has not contemplated going into
liquidation even in the remotest future at the time of preparing its latest financial
statements.—True or False.
(2 marks)
(b) Link-up the items with appropriate Accounting systems.
Item
Accounting System
(i) Money at Call and Short Notice Insurance Accounts
(ii) Balance at Marine Fund
Bank Accounts
(iii) General Balance Sheet
Company Accounts
(iv) Calls-in-Arrear A/C
Double Accounting System
(2 marks)
(d) State how Profits prior to Incorporation is treated in Accounts.
(2 marks)
(f) Name four concepts on which Financial Accounting is founded.
(2 marks)
Answer :
(a) The above statement is true because as per Fundamental Accounting
Assumptions Going Concern denote that any business going through its operation
is of the nature of continuing operation in the Foreseeable Future and there is no
interim necessity of liquidation or winding up or reducing scale of operation.
(b) (i) b, Bank Accounts
(ii) a, Insurance Accounts
(iii) d, Double Accounting System
(iv) c, Company Accounts
[Chapter # 1] Accounting Concepts and Conventions O
Q&A-5.17
(d) Some of the ways in which profits prior to Incorporation are treated in Accounts are:
(a) Credited to Capital Reserve Account.
(b) Credited to Goodwill Account to reduce the amount of Goodw ill arising from
Acquisition of Business.
(c) Utilized to write down the value of Fixed Assets.
(f) Four concepts on which Financing Accounting is founded are:
(a) Money Measurement Concept: As per this concept only those transactions
which can be measured in terms in money are recorded. Since money is the
medium of exchange and standard of Economic Value, this concept requires
those transactions alone that are capable of being measured in terms of money
be only to be recorded in the books of Accounts.
(b) Accrual Concept: Under Accrual Concept, the effects of transactions and
other events are recognised on Mercantile basis ,i.e. when they occur (and not
as Cash or a Cash equivalent is received or paid) and they are recorded in the
Accounting records and reported in the Financial Statements of the period to
which it relate. Financial Statements prepared on Accrual Basis inform users
not only of past events involving the payment and receipt of Cash but also of
obligations to pay Cash in future and of resources that represents Cash to be
received in the future.
(c) Going concern concept: Going Concern Concept is a Fundamental
Accounting Assumption in the preparation of Financial Statement. The meaning
of Going Concern is that the entity for which the Account are being written will
continue its operation/Business for an indefinitely long period and because of
this assumption, depreciation is provided in Accounts. The Fixed Assets are
shown in Balance Sheet at cost less accumulated depreciation less
accumulated impairment loss. Distinction between Capital and Revenue
Expenditure is made only because of Going Concern Assumption. Hence it is
assumed that the enterprise has neither the intention nor the need to liquidate
or curtail materially the scale of its operation and will continue its operation for
the foreseeable future.
(d) Dual Aspect Concept: This aspect is the core of Double Entry Book-Keeping.
Every transaction or event has two aspects:
1. It increases one Asset and decreases other Asset.
2. It increases one Asset and simultaneously increases Liability.
3. It decreases one Asset and increases another Asset.
4. It decreases one Asset and decreases a Liability.
Q&A-5.18
O
Solved Scanner
CMA (CWA) Inter Gr. I Paper 5
2003 - June [1] {C} (a) Accounting principles are built on a foundation of a few basic
concepts.—List out four such concepts.
(2 marks)
(b) Name four areas in which a choice with regard to policy is made by the enterprise.
(2 marks)
(e) When an event affects both revenue and expenses, the effect on each period
should be recognised in the same accounting period. True or false.
(2 marks)
(f) Link-up the items with appropriate accounting systems:
Item
Accounting System
(i) Commission on Re-insurance
Bank Accounts
(ii) Net Revenue Account
Company Account
(iii) Forfeited Shares A/c
Double Accounting System
(iv) Acceptances, Endorsement and
other obligations
Insurance Accounts
(2 marks)
Answer :
(a) Please refer 2002 - Dec [1] (f) on page no. 16
(b) Four areas in which a choice with regard to policy can be made by the enterprise
are:
(a) Treatment of Inventory
(b) Method of Depreciation
(c) Treatment of Retirement Benefit
(d) Treatment of Expenditure Construction
(e) True: We know that Matching Concept require that the expense for an Accounting
Period should be matched against related income. It is necessary that the
accounting system match periodically the revenue earned against expenses.
(f)
(i)
(ii)
(iii)
(iv)
d, Insurance Accounts
c, Double Accounting System
b, Company Account
a, Bank Accounts
2003 - Dec [1] {C} (a) An entity means an organisation, whether a company or not, big
or small or profit oriented or not having a separate existence (entity) from the owner. —
True or False?
(2 marks)
(b) Certain fundamental accounting assumptions undertake the preparation and
presentation of financial statements. State briefly which are these assumptions.
(2 marks)
(c) Name four areas in which a choice with regard to accounting policy is made by an
enterprise.
(2 marks)
[Chapter # 1] Accounting Concepts and Conventions O
Q&A-5.19
(d) State what is meant by the concept of "materiality" as used by accountants.
(2 marks)
(e) How does the proprietary theory of accounting view a business firm? (2 marks)
(h) Information requirements of external users are served through financial statements.
State clearly the names of such statements.
(2 marks)
Answer :
(a) True: Entity concepts states that Business Enterprise his a separate identity apart
from the owners. Accountants should treat a business as distinct from the owner.
Business transactions are recorded in the Business books of the Accounts and
owner transactions in the personal Books of Accounts. This basic concept is
applied to all the organisations.
(b) Going Concern Concept: Accounting is based on the assumption that the
Accounting unit is to remain in operation in the foreseeable future in pursuit of its
goals and objectives. When a business is inaugurated, except for terminable
ventures, it is assumed that the termination of the business is not certain. Based
on this/idea, this concept assumes that the business will continue in operation for
as long as possible and will not be dissolved in the foreseeable future, unless we
have some strong evidence/to suggest that this is not the case. From the
Accountant's standpoint, Profit and/Loss Account and Balance Sheet are drawn up
on the assumption that the business unit will continue functioning in the
foreseeable future.
Accrual Concept: Under Accrual Concept, the effects of transactions and other
events are recognised on Mercantile Basis i.e., when they occur (and not as Cash
or a Cash Equivalent is received or paid) and they are recorded in the Accounting
Records and reported in the Financial Statements of the periods to which they
relate. Financial Statements prepared on the Accrual Basis inform users not only
of past events involving the payment and receipt of Cash but also of obligations to
pay Cash in the future and of resources that represent cash to be received in the
future.
Consistency Concept: Consistency Concept relates to the method of
measurement in Accounting. Accounting principles are not static or unchanging.
It is possible to adopt a variety of principles and procedures for financial events. If,
in treating a given event, two or more contradictory methods are used, it may yield
conflicting results. Whatever Accounting method a Business unit decides to adopt,
a Consistent Approach has to be followed.
Q&A-5.20
O
Solved Scanner
CMA (CWA) Inter Gr. I Paper 5
(c) Four areas in which a choice with regard to policy can be made by the enterprise
are:
(a) Treatment of Inventory
(b) Method of Depreciation
(c) Treatment of Retirement Benefit
(d) Treatment of Expenditure Construction
(d) Materiality Concept: Materiality implies significance, substance, importance and
consequence. The Materiality concept permits other Concepts to be ignored if the
effects are not considered Material. The Concept of Materiality is the threshold for
recognition of a transaction in Accounting Process. Since Materiality is primarily
related to relevance, this Concept deals with the relative importance of economic
data. In the Accounting sense, an item is recorded only when it is considered to be
useful or important to the user of a financial statement. Thus, accountants do not
record those transactions, which are insignificant, and recording those would
create more problems than solutions.
(e) Proprietary Theory: Proprietorship is the interest of the owners in an Accounting
Entity. Proprietary Concept stresses the importance of the proprietors (owners) of
an enterprise rather than the enterprise itself. The Balance Sheet of a business unit
shows the wealth of some person or a group of persons. The whole purpose of
Business struggle is increase of wealth, that is, increase of proprietorship. The
Proprietary Concept requires that all observations are made from the viewpoint of
the owner by placing him in the centre of the Accounting System. Therefore, an
Accountant should see what the Proprietor wants to see. He should value all the
Assets and Liabilities of the business according to the interest of the owner.
(h) Information requirements of external users are served through Financial
Statements. Following are some of the statements which serve the external
requirements
(a) Profit & Loss Statement
(b) Balance sheet
(c) Cash Flow Statement
(d) Notes to Accounts
2004 - June [1] {C} (a) What is the primary consideration in the selection of accounting
policies by an enterprise?
(2 marks)
(g) Which of the following is not a satisfactory balance sheet equation?
(i) Assets ! liabilities = owners’ equity;
(ii) Assets = liabilities + owners’ equity;
(iii) Assets = liabilities ! owners’ equity;
(iv) Assets ! owner's equity = liabilities.
(2 marks)
(h) State any two ways to create a Secret Reserve.
(2 marks)
[Chapter # 1] Accounting Concepts and Conventions O
Q&A-5.21
Answer :
(a) Basic objective of selection of Accounting Policies is that the Financial Statement
should be prepared on the basis of such Accounting Policies, which exhibit True
and Fair view of State of affairs of Balance Sheet and the Profit and Loss account.
Useful to those making investment and credit decisions.
Directed at persons with a reasonable level of understanding of business and
economic activities.
Helpful to present and future investors, Creditors in assessing future Cash Flows.
About economic resources, the claims on those resources and changes in them.
(g) (iii) Assets =liabilities – Owners Equity.
(h) Secret Reserve which is also called Hidden Reserve, is a Reserve which is not
apparent on the face of the -Balance Sheet and the instances of which can be
gauged on an intelligent perusal of the various items, in the Balance Sheet. If a
Secret Reserve is created, Balance Sheet of the company would show a position
hoist than what it actually is. This is a way to conceal or withhold the actual position
from the eyes of the competitors. Secret Reserve is created in the following way:
(i) By providing excess Depreciation on Fixed Assets,
(ii) By ignoring the Appreciation in the value of Fixed Assets,
(iii) By Over Valuing the liabilities or showing Fictitious Liabilities,
(iv) By Under Valuation of Closing Stock,
(v) By providing of excess provision of Doubtful Debts,
(vi) By showing Contingent Liabilities as Actual Liabilities.
2005 - June [1] {C} (h) What do you mean by "fundamental accounting assumptions"?
(2 marks)
Answer :
Please refer 2003 - Dec [1] (b) on page no. 18
2005 - Dec [1] {C} (b) A company has incurred a net loss during an accounting period,
but its net worth (assets-liabilities) has increased. How could this happen? (2 marks)
(h) In accordance with the provisions of the Companies Act it is necessary to group the
items appearing in the company's balance sheet under certain headings:
What are these headings?
(2 marks)
Answer :
(b) The following are the reasons for the above:
(i) Income from Non Trade Investment
(ii) Fresh issue of Share Capital
(iii) Capital Gain Income (e.g. Profit from Sale of Fixed Assets)
Q&A-5.22
O
Solved Scanner
CMA (CWA) Inter Gr. I Paper 5
(h) The following are the headings necessary to group the items appearing in the
Company’s Balance Sheet:
1. Share Capital,
2. Reserve and Surplus,
3. Secured Loans,
4. Unsecured Loans,
5. Current Liabilities,
6. Provisions,
7. Contingent Liabilities,
8. Fixed assets,
9. Investment,
10. Current assets and loan and advances,
11. Miscellaneous Expenditure.
2006 - June [1] {C} (b) What according to ICAI conceptual framework, are the
qualitative characteristics that financial statements should observe and maintain in order
to improve the usefulness of financial information?
(2 marks)
(d) What is meant by ‘general purpose financial statement’?
(2 marks)
(f) Transactions and events are guided by generally accepted accounting principles
subject to laws of land. Comment.
(2 marks)
(i) State the concept of materiality.
(2 marks)
Answer :
(b) A Conceptual Framework of Accounting prescribes the nature, functions and limits
of Financial Accounts and Financial Statements. It provides Guidance in developing
Accounting Standards and assists users of Accounts in interpreting information in
Financial Statements.
Need for Conceptual Framework:
As an aid in developing more useful, consistent Standards.
As an aid in solving practical problems by reference to an existing framework
of basic theory.
In combination with goods judgement, a sound body of theory will help
Accountants focus on logical and consistent solutions to Accounting problems as
they arise.
The qualitative characteristics that Financial Statements should observe and
maintain in order to improve the usefulness of financial information are:
General acceptance.
Relevance & Reliability.
Usefulness.
Cost/benefit constraints.
[Chapter # 1] Accounting Concepts and Conventions O
Q&A-5.23
Conceptual framework-Coherent set of Rules and Standards for Comparability
and Consistency.
Development of framework: nor Universally Accepted nor static.
(d) Rule 2(1)(d) of Companies Rules, 2006 describe the General Purpose Financial
Statement, which include Balance Sheet, Statement of Profit and Loss, Cash flow
Statement and Other Statements and Explanatory Notes which form part thereof.
(f) Transactions and events of financial character… under GAAP, Only those
transactions and events which are of financial character will be recorded in terms
of Money. If a transaction has no financial character then it will not be measured in
terms of money and will not be recorded but subject to law in force.
(i) Please refer 2003 - Dec [1] (d) on page no. 19
2006 - Dec [1] {C} (a) Accounting involves communication. — Comment. (2 marks)
Answer :
It is concerned with the transmission of summarized, analyzed and interpreted
information to the end-users to enable them to make rational decisions. This is done
through preparation and distribution of Accounting Reports, which include besides the
usual Profit and Loss Account and the Balance Sheet, additional information in the form
of Accounting Ratios, Graphs, Diagrams, Fund Flow Statements etc.
2007 - June [1] {C} (a) List out any four of accounting concepts.
(2 marks)
(c) State the components of financial statement.
(2 marks)
(e) State with reasons whether the following statements are True or False:
(i) Accounting principle is general rule followed in preparation of financial
statements.
(1 mark)
(g) Link-up the items with appropriate accounting systems :
Items Accounting Systems
(i) Commission on re-insurance
(1) Bank Account
(ii) Net Revenue Account
(2) Company Account
(iii) Forfeited shares A/c
(3) Double Accounting system
(iv) Acceptances, endorsements
(4) Insurance Accounts
and other obligations
(2 marks)
Answer :
(a) Please refer 2002 - Dec [1] (f) on page no. 16
(c) Following are the components of Financial Statements:
(a) Profit & loss Statement
(b) Balance sheet
(c) Cash flow statement
(d) Notes to Accounts
Q&A-5.24
O
Solved Scanner
CMA (CWA) Inter Gr. I Paper 5
(e) True, Accounting principles are Body of Doctrines commonly associated with the
theory and procedures of Accounting serving as an explanation of current practices
and a guide for preparation of Financial Statement.
(g) (i) d, Insurance Accounts
(ii) c, Double Accounting System
(iii) b, Company Account
(iv) a, Bank Accounts
2007 - Dec [5] (a) What is the procedure for reduction of share capital?
(6 marks)
Answer :
Following is the procedure of reduction of Share Capital:
1. Reductions in Unpaid Capital : The Company may extinguish or reduce the
liability on any of its Share in respect of Share Capital not paid up.
2. Cancellation of lost Paid up Capital : Either with or without extinguishing or
reducing liability on any of its Share cancel any paid up Share Capital which is
lost, or is unrepresented by available Assets.
3. Paying of excess Paid up Capital : Either with or without extinguishing
reducing liability on any of its Share, pay off any paid up Share Capital which is
in excess of the wants of the company.
2008 - June [1] {C} (f) State with reasons whether the following is True or False :
Hema Pvt. Ltd. adopts the practice of disclosing the significant policies pertaining to
each relevant item in the appropriate schedule (wherein the said item forms a part) to
the Income Statement or Balance Sheet. This is a perfectly valid disclosure.
(2 marks)
(i) What is meant by Notes to Accounts ?
(2 marks)
Answer :
(f) True : As per AS-1 Disclosure of Accounting Policies, every company should
comply with the Accounting Standard and Relevant Accounting Policies, any
deviation from the relevant Accounting Standard, reasons, for such deviation and
the accounting policies should be disclosed separately.
(i) Notes to account are the explanations of the management about the items in the
financial statement (Profit & Loss A/c and Balance Sheet). The management gives
more explanations and information about the items of Profit and Loss A/c and
Balance Sheet and any other items, by way of notes to Accounts.
For example:
1. Disclosure of details of contingent liability by notes to accounts.
2. Disclosure of litigation about the claim recoverable, each receivable etc.
2008 - Dec [3] (b) Mention any five areas in which different accounting policies may be
adopted by different enterprises.
(5 marks)
[Chapter # 1] Accounting Concepts and Conventions O
Q&A-5.25
Answer :
Five areas in which different Accounting Policies may be adopted by different
enterprises are :
1. Treatment of Contingent liabilities
2. Treatment of retirement benefits
3. Valuation of investments
4. Treatment of Intangible Assets
5. Methods of Depreciation depletion and amortization
6. Valuation of fixed assets
7. Valuation of Inventory
2010 - Dec [5] (b) State the various accounting concepts.
(5 marks)
Answer :
Various Accounting concepts are as follows :
1. Money measurement concept
2. Dual aspect concept
3. Going concern concept
4. Periodicity concept.
5. Accrual concept.
6. Matching concept.
7. Realisation concept
8. Materiality concept
9. Consistency concept.
10. Business entity concept.
11. Historical cost concept.
2011 - June [1] {C} (f) Name four errors which are not detected by Trial Balance.
(2 marks)
Answer :
(i) Errors not disclosed by Trial Balance even on its agreement.
(ii) Wrong entries in books of original records.
(iii) Complete omission of a transaction.
(iv) Compensating errors.
(iv) Errors of principles.
2012 - June [3] (b) Classify the following accounts into Personal, Real and Nominal
accounts.
(i) Patent Rights a/c (ii) Drawing a/c (iii) Purchases a/c (iv) Prepaid Insurance a/c
(v) Donation a/c (vi) Bank Overdraft a/c.
(3 marks)
Answer:
Personal A/c – Drawings, Prepaid insurance, Bank Overdraft
Real A/c – Patent rights
Nominal A/c – Purchases, Donations
Q&A-5.26
O
Solved Scanner
CMA (CWA) Inter Gr. I Paper 5
P RACTICAL Q UESTIONS
2011 - Dec [2] (a) For the year ending 31st December, 2011, the Sales, Purchases,
Opening Stock and Closing Stock of a Trader was ` 5,00,000, ` 3,80,000, ` 65,000 and
` 52,000 respectively. Some goods were destroyed by fire (without realization of any
value) during the year. If the Trader earned Gross Profit @ 25% on Sales for the year,
calculate the value of goods destroyed by fire.
(3 marks)
Answer :
Calculation of goods destroyed by fire
Opening Stock
65,000
(+) Purchases
3,80,000
4,45,000
(-) Sales less Gross profit [5,00,000 –(25% of 5,00,000)] 3,75,000
(-) Closing Stock
52,000
Goods destroyed by fire
18,000
2012 - Dec [6] (b) The total of debit side of the Trial Balance of Lotus Stores as at
31.03.2012 is ` 3,65,000 and that of the credit side is ` 2,26,000.
After checking, the following mistakes were discovered:
Items of account
Correct figures
Figures as it appears
(as it should be)
in the Trial Balance
(`)
(`)
Opening stock
15,000
10,000
Rent and rates
36,000
63,000
Sundry creditors
81,000
18,000
Sundry debtors
1,04,000
1,58,000
Ascertain the correct total of the Trial Balance.
( 5 marks)
Answer :
In the books of Lotus Stores calculation of correct Total of Trial Balance
Particulars
Dr.
Cr.
Total of Trial Balance as per on
Add: under statement of op. stock
Less: over statement of Rent & Rates
Add: under statement of sundry creditors
Less: over statement of sundry debtors
Correct Total
3,65,000
2,26,000
5,000
—
27,000
—
—
63,000
54,000
—
2,89,000
2,89,000
[Chapter # 1] Accounting Concepts and Conventions O
Q&A-5.27
Repeatedly Asked Questions
No.
Question
Frequency
1
State the concept of materiality
03 - Dec [1] (d), 06 - June [1] (i)
2 Times
2
Descriptive Questions of 03 - June [1] (f) and 07 - June [1]
(g)
2 Times
Table Showing Marks of Compulsory Questions
Year
08
D
09
J
09
D
10
J
10
D
11
J
Descriptive
2
Total
2
11
D
12
J
12
D
13
J