Advanced Accounting

AFTERSCHOOOL – DEVELOPING CHANGE

MAKERS
CENTRE FOR SOCIAL ENTREPRENEURSHIP
PGPSE PROGRAMME –
World’ Most Comprehensive programme in social
entrepreneurship & spiritual entrepreneurship
OPEN FOR ALL FREE FOR ALL

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 Advanced Accounting
Dr. T.K. Jain.
AFTERSCHOOOL
Centre for social entrepreneurship
Bikaner
M: 9414430763
tkjainbkn@yahoo.co.in
www.afterschool.tk
www.afterschoool.tk

www.afterschoool.tk AFTERSCHOOOL MATERIAL F

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Dividends are paid on which:
 Authorised capital (mentioned in
memorandum of association)
 Paid up capital

 Called up capital

Answer: paid up capital

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Amount set aside to meet
losses due to bad debt is ?
Provision

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If proposed dividend is 20%, how
much amount has to be set aside as
reserve?
 7.5% answer.

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Corporate dividend tax rate is ?
 10% answer.

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Securities premium is shown
as ?
 it is shown as security premium account
in liabilities side of balance sheet in the
heading reserves and surplus.

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Profit prior to incorporation is
transferred to ?
1. General reserve
2. Capital reserve

3. P & L account

Answer: Capital reserve.

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What are the methods of
preparing cash flow statement?
1. Direct method (here you directly add all
gross cash receipts and cash
payments)
2. Indirect method (here you adjust profit
earned from P& L account).

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There are 3 types of cash flow
activities - which are those?
1. Operating activities (purchase sale etc.)
2. Investment activities (plant, machinery
etc.)
3. Financing activities (issue of shares,
debentures, bonds etc.).

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What is clause 32 of listing
agreement?
 It has been amended in 2000. It says:
 “every company shall give a cash flow
statement along with balance sheet and
P& L account. “

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Interest paid by bank is what ?
 Operating activity.

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In cash flow statement, cash
and cash equivalent include?
1. Bank
2. Cash

3. Short investment

4. All these

Answer: all these.

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I have sold my old plant for Rs.
300000 (depreciated value Rs.
200000). What should I show in
operating activity in Cash flow
statement?
 Nil
 I shall show the amount in investing
activity.

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What will you do with loss prior
to incorporation?
You can do any of these:
1. Show as goodwill

2. Show as loss prior to incorporation in

asset side
3. Write off in P& L Account

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How will you distribute income and
expenses in pre and post
incorporateion category?
 Based on time
 Distributed expenses on the basis of
sales (turnover).

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Can a company convert its fully
paid shares into stocks?
 Yes – under sec 94 ©.

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What are SEBI requirements for
issue of Bonus shares?
 The company should not have defaulted in payment
of interest.
 The articles should permit capitalisation of reserves
 Has to give bonus shares in 6 months of time from
date of approval by board of directors
 Reserves created by revaluation of assets cannot be
used.
 Partly paid shares should be fully paid.
 Such benefit should also be extended to convertible
debenture holders.
 Only cash capital reserve can be utilised.

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What is employee stock option?
 The option given to employees directors,
etc. for purchasing shares at a
predetermined price. (sec. 2, clause
15A)
 ESOS

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What is buy back?
 Sec. 77 A of companies act 56
(amended in 99) give permission to
company to buy back its shares out of :
1. Free reserves
2. Security premium account
3. Proceeds of any shares / securities.

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Buy back – when not permitted?
 If it is not permitted by articles
 Special resolution not passed
 Debt more than 2 times equity
 Buy back is less than 25% of paidup
equity.

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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).

 Inauguration Expenses Debit

 Bank credit

www.afterschoool.tk AFTERSCHOOOL MATERIAL F

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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.

www.afterschoool.tk AFTERSCHOOOL MATERIAL F

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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.

www.afterschoool.tk AFTERSCHOOOL MATERIAL F

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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.

www.afterschoool.tk AFTERSCHOOOL MATERIAL F

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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.

www.afterschoool.tk AFTERSCHOOOL MATERIAL F

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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.

www.afterschoool.tk AFTERSCHOOOL MATERIAL F

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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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 ABOUT AFTERSCHOOOL
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 material

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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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