DMBA116 FINANCIAL ACCOUNTING

Description

SESSION	JULY AUGUST 2026
PROGRAM	MASTER OF BUSINESS ADMINISTRATION (MBA)
SEMESTER	I
COURSE CODE & NAME	DMBA116 FINANCIAL ACCOUNTING

 

 

 

Assignment Set 1

 

Q.1. What is Accounting? Discuss its objectives, scope, advantages, and limitations. Also explain the basic terminologies commonly used in accounting. (10 Marks)

Ans 1.

Purpose of accounting and what it means

Accounting is the recording of the transactions through identification, classification and summarisation and the interpretation and communication of the results. It transforms data from transactions to information that enables users to know the performance and financial standing of a business.

Its primary aims are to keep a systematic record, to determine the profit or loss and to present the assets, liabilities and equity

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Q.2. Journalize the transactions as per format:
•           January 1: Ramesh started the business with cash 1,50,000
•           January 3: Goods purchased for cash 25,000
•           January 5: Furniture purchased on credit from Rajesh 40,000
•           January 7: Rent paid in cash 12,000
•           January 9: Goods sold for cash 50,000
•           January 10: Goods sold on credit to Shyam 35,000
•           January 12: Salaries paid 15,000 (10 Marks)

Ans 2.

The journal entries are based on the following:

The amount of each transaction is debited and credited equally. The following entries are based on the periodic inventory approach where the inventory items purchased for resale are recorded in Purchases Account. Question does not specify tax information and no separate tax entry is

 

Q.3. What are Accounting Policies and Accounting Standards? Explain the concepts of GAAP and IFRS. Also discuss the circumstances and implications of changes in accounting policies. (10 Marks)

Ans 3.

Accounting policies and standards

An entity’s accounting policies are the specific principles, bases and practices that are applied in preparing and presenting financial statements. They determine such things as what basis to use to measure assets and what is an acceptable cost formula to use for inventory. Policies are required to be within the reporting framework.

Accounting Standards provide guidance on the recognition, measurement, presentation and disclosure of

 

 

Assignment Set 2

Q.4. Explain the Double-Entry System of Accounting and discuss the rules of Debit and Credit. Illustrate the preparation of Journal Entries, including adjustment entries, with suitable examples. (10 Marks)

Ans 4.

Double entry system as used in accounting.

Double Entry System accounts for all transactions with equal debits and credits. A transaction impacts at least two accounts, but may involve more for compound entries. The system maintains the accounting equation and gives a uniform foundation to prepare ledger accounts and financial statements.

Assets = Liabilities

 

Q.5. Prepare a Trial Balance from the following balances as on 31 March 2026: (10 Marks)

Particulars	Amount (₹)
Cash	10,000
Capital	50,000
Purchases	30,000
Sales	45,000
Rent	5,000
Salaries	8,000
Debtors	20,000
Creditors	12,000
Furniture	15,000
Total	1,95,000

 

Ans 5.

Provisional Trial Balance as on 31 March 2026

A Trial Balance reports the balances of the ledgers on their normal debit or credit side. Normally, the balances of assets and expenses are DEBITS and the balances of capital, liabilities and income are CREDITS. Below are the categories that the figures provided will be classified into without any

 

Q.6. Explain the preparation and components of Final Accounts. Discuss the various methods of Depreciation, the concept of Window Dressing, and the importance of Non-Financial Reporting. (10 Marks)

Ans 6.

Final accounts and preparation of final accounts

Final accounts provide information about the performance during a period and the financial position at the end of the period. Preparation starts by reviewing the Trial Balance and making adjustments like closing stock, outstanding expenses, prepayments and depreciation. The statements are