Accounting

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Accounting
Dr. T.K. Jain. AFTERSCHOOOL Centre for social entrepreneurship Bikaner M: 9414430763 tkjainbkn@yahoo.co.in www.afterschool.tk www.afterschoool.tk
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Suppose you go abroad to purchase some plant. Your expenses amount to Rs. 100000. What type of expenses are these?
 Capital

expenses (will be added to the cost of the plant).  (all the expenses incurred to purchase any plant / machinery are called capital expenses).

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Suppose you spend Rs. 3 crore on advertisements – which will give you benefits over next 10 years. What type of expenses are these?
 Deferred

Revenue Expenses (because the benefit will be available for a long time.)

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You have received Rs. 10 Lakh from insurase company against a claim regarding fire in your factory. What kind of receipt is it?
 Capital

receipt (because it is against loss of some assets).

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You have received A loan from SBBJ as Working capital term loan – to augument your working capital. It is in addition to your cash credit loan. What type of receipt is it?
 Capital

receipt

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You have received a subsidy of Rs. 200000 from govt. for starting a plant in backward area. What type of receipt is it?
 Revenue

receipt.

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You had given goods on credit to Ramu in 1999. You had considered a bad debt. Ramu made the payment in 2008. How will you treat receipt?
 Revenue

receipt.  Cash A/c Debit  Bad debt recovered account credit.

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You have given Diwali advance to your employees, what type of expense is it?
 It

is not expense. It is only an advance (neither revenue nor expense).

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You have received interest on Bond. Rupees 5000 received will be treated as?
 Revenue

receipt.  Cash Account debit  Interest on bond account credit.

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Yours is a CA /CS professional club. There is entrance fees of Rs. 10000 and annual fees Rs. 5000. Rishabh has joined the club. How will you do accounting?
 Entrance

fees is capital receipt but annual fees is revenue expenses.  Cash account Debit  Entrance Fees Fund a/c credit  Annual fees account credit.
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In order to take a tender, you have deposited Rs. 1 crore as earnest deposit. What type of expense is it?
 It

is not an expenditure, it is only a deposit.

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You have spent Rs. 50000 on repairs of your old plant. What type of expenses is it?
 Revenue

expenses.

 Repairs

and maintenance account debit  Cash account credit.

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You have a furniture showroom. You sell furniture of Rs. 10 lakh and you havent received payment yet. What will be accounting treatment?
 It

is a revenue receipt (although you havent yet received money.)  Sale is recognised as soon as it is made. So entry will be :  Party name a/c debit  To sales account credit.

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You have purchased paper of Rs. 1000 to be used a stationery. How will you treat it?
 Revenue

expenses  Stationery account debit  To cash account credit.

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You have spent Rs. 1 crore on advertisement and Rs. 50 lakh on distribution of free samples. This has been done to launch a new product. How will you treat it?
 Deferred

revenue expenses

 Advertisement

& publicity a/c debit  Purchase account credit.  Bank account credit.
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You have spent Rs. 2 00000 on overhaul of second machines so that you use those machines. What type of expense is it?
 Capital

Expenses.

 Machinery

account debit  Bank account credit.

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You have opened the LOOTS showroom. You spent Rs. 100000 on inauguration. How will you treat it?
 Deferred

revenue expenses (because it will benefit you for many years). Expenses Debit

 Inauguration  Bank

credit

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You have spent Rs. 100000 on wages of workers for installation of machinery. How will you treat it?
 Capital

account

 Entry:  Machinery

account debit  Bank account credit

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Where do you show contingent liability in balance sheet?
 You

don’t show it in balance sheet. It is added as footnote with balance sheet.

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Differentiate provision & reserve?
 Provision

is a liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation. Reserve is to set aside some money for future requirements. Provision is present liability, but reserve is to set aside some profit.

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If any economic benefit is probable, what will you call it and how will you treat it?
 It

is contingent asset. It is not shown in balance sheet / financial statements.  Directors may mention about it in their report.

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Total of sales day book had been undercast by Rs. 2000. how will you rectify it?
 We

will undertake credit entry in Sales Account of Rs. 2000 more.

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Rs. 200 paid as wages for installing new machinery has been shown as wages. Is it ok?
 It

is error of principle  Rectify it :  Machiinery account debit  Wages account credit.

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We purchased old plant and spent rs. 10000 on its repairs and debited repairs account. Is it ok?
 It

is also error of principle

 Plant

account debit  Repairs account credit.

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I am the owner of my company. I take away goods of Rs. 1000 for home use and don’t make any entry of it. Is it ok?
 Error

of omission

 Drawing

account debit  Purchase account credit.

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I have distributed Rs. 10000 worth of goods as charity. I don’t believe in recording charity. Is it OK?
 Error

of commission

 Charity

account debit  Purchase account credit.

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I have sold my office computer in Rs. 2000. since its value was completely depreciated, so we didn’t make any entry. Is it OK?
 Error

of commission

 Cash

account debit  Computer account credit.

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Can error of principles be identified by preparing trial balance?
 NO

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Can compensatory errors be identified by preparing trial balance?
 NO

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Can Error of commission be identified by preparing trial balance?
 Yes

– if there is wrong posting or wrong balancing or wrong casting  If the amount has been written wrong in subsidiary – it is difficult to identify it though trial balance.

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Can error of ommission be identified by preparing trial balance?
 Yes

or NO.  Yes – if posting to ledger has been left (only one side).  No – if the entry has been completely omitted.

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I treat purchase of machinery as regular purchase. What type of error is it?
 Error

of principle.

 Rectify

it :  Machinery account debit  Purchase account credit.

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Which errors may affect trial balance?
 Error

of partial omission  Error of principle  Error of complete omission Answer: Error of partial omission

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Total of sales day book is posted to ?
 Credit

side of sales account.

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Cash account is ?
 Real

Account

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Purchase account is ?
 Real

account

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Sales account is?
 Revenue

account.

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What is goodwill?
 Intangible

fixed assets

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ABO UT A FTERSCH OOO L
Afterschoool conducts three year integrated PGPSE (after class 12th along with IAS / CA / CS) and 18 month PGPSE (Post Graduate Programme in Social Entrepreneurship) along with preparation for CS / CFP / CFA /CMA / FRM. This course is also available online also. It also conducts workshops on social entrepreneurship in schools and colleges all over India – start social entrepreneurship club in your institution today with the help from afterschoool and help us in developing society.

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Why such a programme?

To promote people to take up entrepreneurship and help develop the society To enable people to take up franchising and other such options to start a business / social development project To enable people to take up social development as their mission To enable people to promote spirituality and positive thinking in the world
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Who are our supporters?
 Afterschoolians,

our past beneficiaries, entrepreneurs and social entrepreneurs are supporting us.  You can also support us – not necessarily by money – but by being promotor of our concept and our ideas.

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About AFTERSCHOOOL PGPSE – the best programme for developing great entrepreneurs
    

Most flexible, adaptive but rigorous programme Available in distance learning mode Case study focused- latest cases Industry oriented practical curriculum Designed to make you entrepreneurs – not just an employee Option to take up part time job – so earn while you learn The only absolutely free course on internet
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Workshops from AFTERSCHOOOL
        

IIF, Delhi CIPS, Jaipur ICSI Hyderabad Branch Gyan Vihar, Jaipur Apex Institute of Management, Jaipur Aravali Institute of Management, Jodhpur Xavier Institute of Management, Bhubaneshwar Pacific Institute, Udaipur Engineering College, Hyderabad
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Flexible Specialisations:
         

Spiritualising business and society Rural development and transformation HRD and Education, Social Development NGO and voluntary work Investment analysis,microfinance and inclusion Retail sector, BPO, KPO Accounting & Information system (with CA / CS /CMA) Hospital management and Health care Hospitality sector and culture and heritage Other sectors of high growth, high technology and social relevance

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Salient features:
The only programme of its kind (in the whole world)  No publicity and low profile course  For those who want to achieve success in life – not just a degree  Indepth knowledge and expertise  Professional approac: World class approach  Strong intellectual and business capabilities  Flexible – you may stay for a month and continue the rest of the education by distance mode. / you may attend weekend classes  Scholarships for those from poor economic background  Latest and constantly changing curriculum – keeping pace with the time  Placement for those who are interested  Admissions open throughout the year  Latest and most advanced technologies, books and study www.afterschoool.tk AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS material

Components
             

Pedagogy curriculum and approach based on IIM Ahmedabad and ISB Hyderabad (the founder is alumnus from IIMA & ISB Hyderabad) Meditation, spiritualisation, and self development Essential softwares for business Business plan, Research projects Participation in conferences / seminars Workshops on leadership, team building etc. Written submissions of research projects/articles / papers Interview of entrepreneurs, writing biographies of entrepreneurs Editing of journals / newsletters Consultancy / research projects Assignments, communication skill workshops Participation in conferences and seminars Group discussions, mock interviews, self development diaryng Mind Power Training & writing workshop (by Dr. T.K.Jain)
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Pedagogy
         

Case analysis, Articles from Harvard Business Review Quiz, seminars, workshops, games, Visits to entrepreneurs and industrial visits Presentations, Latest audio-visuals Group discussions and group projects Periodic self assessment Mentoring and counselling Study exchange programme (with institutions out of India) Rural development / Social welfare projects

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Branches
 AFTERSCHOOOL

will shortly open its branches in important cities in India including Delhi, Kota, Mumbai, Gurgaon and other important cities. Afterschooolians will be responsible for managing and developing these branches – and for promoting social entrepreneurs.

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Case Studies
 We

want to write case studies on social entrepreneurs, first generation entrepreneurs, ethical entrepreneurs. Please help us in this process. Help us to be in touch with entrepreneurs, so that we may develop entrepreneurs.

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Basic values at afterschoool
       

Share to learn more Interact to develop yourself Fear is your worst enemy Make mistakes to learn Study & discuss in a group Criticism is the healthy route to mutual support and help Ask fundamental questions : why, when, how & where? Embrace change – and compete with yourself only
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www.afterschoool.tk social entrepreneurship for better society

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