[Type text] [Type text] SRN : PES1202201925

1A) 1)conservatism

The cost of products is more than their market value. Hence conservatism is
violated here.
2)Matching: the condition in accounting is that expenses involved
throughout a period be reported within the same period as the corresponding
revenues are collected .This rule suggest that firms must spend money in order
to make money.
3)Accounting period :Every organisation selects a particular timeline to
finish an accounting cycle based on its demands.

2A)Accounting concepts with examples:

1)ENTITY CONCEPT: According to this concept, business or organisation
is considered to be separated from its owners.
EXAMPLE: If pavithra rents a building which have four floors for 20,000
per month. she uses one floor for her purpose.so only 15,000 is an expense of
the business and only that should be included.
2)MONEY MEASUREMENT CONCEPT: In this concept ,transactions which
can be measured in terms of money or monetary are recorded.
EXAMPLE: Received rent of 5000 rupees
3)PERIODICITY CONCEPT :This concept specifies that transactions should
be recorded after every certain and specific period.
EXAMPLE: Accounting period generally starts from 1 st april to end of 31st
march of the year.
4)ACCURAL CONCEPT: In this concept, transactions and events are
recorded when they occur and not when the cash is not paid.
EXAMPLE: Brought goods on credit –the transactions is recorded in the
books when goods are sold and not when invoice is generated.
5) MATCHING CONCEPT: This concept states that revenue and expenses
occurred in that same year should be matched.
EXAMPLE: Biscuits shop
Purchased 120 packets of biscuits for 120 rupees each
Sold 100 packets of biscuits for 160 rupees each
RENT: 1000 rupees
PROFIT: 600 rupees.
6) GOING CONCERN CONCEPT: In this concept, business or firms
continue, even if owner dies.
EXAMPLE: If CEO of apple INC. dies ,the entity or business will
continue in future.
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7 ) COST CONCEPT: It states that assets should be recorded at what price

they are purchased despite of their current marketing value.
EXAMPLE: Chris purchased furniture for 5000 rupees ,but market value
for that furniture is 7000.here 5000 rupees should be recorded.
8) REALIZATION CONCEPT: In this concept, revenue should be recorded
only when it is realised.
EXAMPLE: Rahul received 10,000 on 24 th july as an advance for the
goods that are going to be purchased on 2nd august, amount of 20,000.goods
are delivered on 6th august.
Advance receipt -24 th july
Date of purchase -2nd august
Delivery date -6th august
Here revenue should be recorded on 6t , so that we say revenue is realised
on 6th august.
9 )DUAL ASPECT CONCEPT : It is based on double entry system. Here records
of transactions is made in two different accounts. Here debit is equivalent to
credit.
EXAMPLE: Purchases A/C – (Debit) ---- 5,700
To
Arjun A/C –(credit) _5,700

3A) 1) LEGAL FEES ON THE ACQUISITION OF THE LAND : Capital

REASON : Capital expenditures are expenses that lead to the acquisition of
long-term assets.
2)COMPLETE REPAINT OF EXISITING BUILDING : Capital
REASON : Long-term assets are acquired, improved, or maintained by
capital expenditures. An existing structure's lifespan will be extended by
repainting it. The advantages of repainting won't disappear after a year. Thus,
these are not revenue-related expenses.
3)REPAINTING OF A DELIVERY VAN : Revenue
REASON: The cost of repainting a delivery van will be considered a revenue
expense because it is done frequently.
4)PROVIDING DRAINING FOR A NEW PIECE OF WATER EXTRACTION
EQUIPMENT : Capital
REASON: A capital expenditure is the purchase of new equipment
because it will increase the firm's ability to earn money.
5)CARRIAGE COSTS ON REPLACEMENT PART FOR A PIECE OF
MACHINERY: Revenue
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REASON: Carriage expenditures spent on machinery replacement parts do

not improve its earning potential; rather, maintenance or travel costs do. As a
result, it is a revenue expense.

4A) Manohar should first double-check the bank statements. Bank statements
are an excellent tool for helping people keep check of their money. It aids in
the tracking of their financial transactions. Another method is valuing the assets.
Accounting valuation is essential for producing accurate financial statements .he can
also check the It returns of that particular year. There is also another way i. e;
analysing the GST paid on that particular year. From above these he can prepare
the final accounts and close the accounts.

5A) 1) Plant and machinery : asset and real account

Reason: Every company has assets and each assets seems to have an account .As
a result an asset account is referred to an real account.
2)purchases: Nominal account ,expense
Reason: The credit account is really a personal account, while the purchasing
account to be a nominal account. By applying the golden rule we can get that debit
the expenses or loses.
3) Sales : Nominal account , revenue
Reason :Accounts relating with expenditures ,losses, incomes ,gains, are refferd to
as nominal account.
4)Rent : Nominal account , expense
Reason : Anything related to expenses or gains it is a nominal account.
5)Land and building :Real account, asset account
Reason : It is an asset ,so it is classified as a real account
6)Cash :Real account, asset account
Reason : It is an asset ,can be touched ,intangible.so it is analysed as real account.
7)Sam capital : Personal account ,equity
Reason :It keep track on individual transactions ,organisations and firms
8)Loan from a city bank : personal account ,liability
Reason: It represents from whom loan is obtained and who obtained.it is represative
loan account.

PRN : PES1202201925
NAME: K.REECHA
[Type text] [Type text] SRN : PES1202201925