B.COM DCM 1103 FUNDAMENTALS OF ACCOUNTING I

Description

SESSION	FEB-2024
PROGRAM	BACHELOR of Commerce (BCom)
SEMESTER	I
course CODE & NAME	DCM1103 – Fundamentals of Accounting I
CREDITS	4

 

 

Assignment Set – 1

Questions

 

1. a. Describe the types of subsidiary books.

Ans:

Subsidiary books, also known as subsidiary ledgers, are a group of accounting books that record detailed information about specific types of transactions.

The types of subsidiary books include: 

Sales Day Book: A book that records all credit sales transactions.  Purchases Day Book: A book that records all credit

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2. a. Explain the Golden Rules of Accounting of Debit and Credit.

Ans: The accounting process involves a series of systematic steps that ensure financial transactions are accurately recorded, classified, summarized, and reported.

 

Here are the key steps in the accounting process:

 

1. Identifying Transactions:

   – Recognize and identify all

 

3. Mention which side (debit or credit) and column (Cash/Bank/Discount) will be affected in a three-column cash book for the following transactions-
4. Received Cash
5. Cash paid
6. Discount allowed
7. Discount received
8. Cash deposited in the bank
9. Cash withdrawn for office use
10. Cheque received and deposited into bank
11. Cheque issued
12. Wages paid
13. Interest received from bank.

In a three-column cash book, the following sides and columns are affected for the given transactions: 

Received Cash

Debit Side: Cash Column 

Cash paid

Credit

 

 

 

 

Assignment Set – 2

Questions

4. Rishabh & Co. purchased a fixed asset (Machinery) on 1.10 2020 for Rs.1,40,000 and spent Rs 10,000 on its installation. Depreciation is to be provided @10% annually according to the Straight-line method. The books are closed on 31st March every year. Pass the necessary journal entries, prepare Fixed asset Account and Depreciation Account for three years till 31^st March 2023.

Ans: To account for the purchase of machinery, the installation cost, and the annual depreciation, we’ll need to make several journal entries and prepare the relevant accounts for three years (from 1st October 2020 to 31st March 2023).

Let’s walk through the process step by step.

 

Journal Entries

 

1. **Purchase of Machinery: **

   “`

Date          Account                          Debit      Credit

01.10.2020    Machinery Account                Rs.1,40,000

Cash/Bank

 

 

5. a. Explain the different types of Errors in accounting.

Ans: Errors in accounting can be classified into two types: 

Errors of Omission: These errors occur when a transaction is completely omitted from the accounting records.

For example, if a sale transaction is not recorded in the sales journal, it will be considered an error of omission. 

Errors of

 

 

6. From the given information, prepare the final accounts of ST Ltd.

Debit	Rs.	Credit	Rs.
Drawings	6,300	Capital	1,50,000
Cash at bank	13,870	Discount received	2,980
Bills receivable	1,860	Loans	15,000
Loan and Building	42,580	Purchases return	1,450
Furniture	5,130	Sales	2,81,500
Discount allowed	3,960	Reserve for bad debts	4,650
Bank charges	100	Creditors	18,670
Salaries	6,420
Purchases	1,99,080
Stock (opening)	60,220
Sales return	1,870
Carriage	5,170
Rent and Taxes	7,680
General expenses	3,630
Plant and Machinery	31,640
Book debts	82,740
Bad debts	1,250
Insurance	750
	4,74,250		4,74,250

 

Adjustments:

1. Closing stock Rs. 70,000
2. Create a reserve for bad and doubtful debts @ 10% on book debts
3. Insurance prepaid Rs. 50
4. Rent outstanding Rs. 150
5. Interest on loan is due @ 6% p.a.

Ans: