Professional Documents
Culture Documents
Accounts
Involved
Nature of
Account
Affects
Debit/
Credit
Cash a/c
Capital a/c
Real
Personal
Cash is coming in
Sunita is the giver
Debit
Credit
Cash a/c
Loan from
Malathi
Real
Personal
Cash is coming in
Malathi is the giver
Debit
Credit
Furniture a/c
Cash a/c
Real
Real
Furniture is coming in
Cash is going out
Debit
Credit
Furniture a/c
Meenl a/c
Real
Personal
Furniture is coming in
Meenal is the giver
Debit
Credit
Purchase a/c
Cash a/c
Nominal
Real
Purchase is an expense
Cash is going out
Debit
Credit
Purchase a/c
Rams a/c
Nominal
Personal
Purchase is an expense
Ram is the giver
Debit
Credit
Cash a/c
Sales a/c
Real
Nominal
Cash is coming in
Sales is revenue
Debit
Credit
Shyams a/c
Sales a/c
Personal
Nominal
Debit
Credit
Cash a/c
Shyams a/c
Real
Personal
Cash is coming in
Shyam is the giver
Debit
Credit
Rams a/c
Cash a/c
Personal
Real
Debit
Credit
Q3. The following items are found in the trial balance of M/s Sharada Enterprise on 31st December, 2000.
Sundry Debtors Rs.160000
Bad Debts written off Rs 9000
Date
Particulars
2000 Dec,
31st
Debit
Credit
Rs.
Rs.
LF
RBD account
Dr
9000
1800
1400
3040
Dr
Cr
Amount
Date
Particulars
JF
Amount
Date
Particulars
Rs.
2000
Dec, 31
JF
Rs.
2000
st
To Sundry debtors
account
9000
Total
9000
Total
9000
500
Reserve for discount on debtors account
To Discount on Drs A/c
Dec 31st
Dr
1800
1800
P & L Account
Dr
To Reserve for discount
On debtors account
( Being additional reserve made to make the new
Dec 31st
reserve for discount on debtors to 2% of 152000)
1640
1640
NOTE:
1. The amount debited to P&L Account towards RBD is computed as follows
Old RBD
=
Rs.16500
Less Bad debts
=
9000
Balance
=
7500
New RBD @5% on160000 =
8000
RBD to be provided
= 500 (8000-7500)
Cr
Date
Particulars
JF
Amount Date
Rs.
2000
Dec, 31
Particulars
JF
Amount
Rs.
2000
st
To bad debts
To balance c/d
Total
17000
By Balance b/d
By P&L A/C
16500
500
Total
17000
Cr
Amount
Date
Particulars
JF
Amount
Date
Particulars
Rs.
2000
Dec, 31
Rs.
2000
st
To Sundry
JF
Dec 31st
debtors account
on Debtors A/C
1800
Total
1800
1800
Total
1800
Cr
Amount
Date
Particulars
JF
Amount
Date
Particulars
Rs.
2000
Dec, 31st
JF
Rs.
To Discount on Debtors
To balance c/d
1800
3040
2000
Jan, 1st By Balance b/d
Dec 31st By P&L A/C
Total
4840
Total
3200
1640
4840
Conclusion:
In the balance sheet, the Sundry debtors are reduced by bad debts shown outside the trial balance, the new RBD,
discount on debtors shown outside the trial balance and the new Reserve for discount on debtors.
Q4. The reports prepared in financial accounting are also used in the management accounting. But there are few
major differences between financial accounting and management accounting.Explain the differences between
financial accounting and management accounting in various dimensions. (Writing down all the differences
between the financial and management accounting)
Answer:
Dimension
Financial accounting
Management accounting
Users
Purpose
Need
Expression
of
information
Reporting
timing and
frequency
Time
perspective
Management accounting is
oriented towards the future.
Sources of
principles
Financial accounting is a
discipline by itself and has its own
principles, policies and
conventions (GAAP).
Management accounting
makes use of other disciplines
like economics, management,
information system, operation
research, etc.
Reporting
entity
Overall organisation
Form of
reports
MIS reports
Performance reports
Control reports
Cost statements
Variance statements
Budgets
Estimate statements
Flowcharts
Q5 Draw the Balance Sheet for the following information provided by Sandeep Ltd..
a. Current Ratio : 2.50
b. Liquidity Ratio : 1.50
c. Net Working Capital : Rs.300000
d. Stock Turnover Ratio : 6 times
e. Ratio of Gross Profit to Sales : 20%
f. Fixed Asset Turnover Ratio : 2 times
g. Average Debt collection period : 2 months
h. Fixed Assets to Net Worth : 0.80
i. Reserve and Surplus to Capital : 0.50
Assets
Fixed Assets
Inventories
Debtors
Bank
Total
Working Notes:
If Current Liabilities
=1
Current Assets
=2.5
Working Capital(2.5-1)
= 1.5
Therefore Current Assets(2.5/1.5)x300000
Current Liabilities(1/1.5)x300000
=300000
=500000
=200000
Liquidity Ratio
=1.5
Current Liabilities
=200000
Therefore Liquid Assets(200000x1.5)
Inventories(Current asset-Liquid Asset)
=300000
=200000
=1200000
=300000
1500000
=600000
=250000
=750000
=250000
=500000
Rs.
600000
200000
250000
50000
1100000
Q6. Write the main differences between cash flow analysis and fund flow analysis.
Following is the balance sheet for the period ending 31st March 2011 and 2012. If the current years net loss is
Rs.38,000, Calculate the cash flow from operating activities.
(Differences between cash flow and fund flow analysis, Preparation of statement showing cash flow from operating
activities) 4, 6
Difference between Funds Flow Statement and Cash Flow Statement
Basis of Difference
1.
Basis of Analysis
2.
Source
3.
Usage
4.
Schedule of Changes in
Working Capital
5.
End Result
Funds flow statement shows the causes Cash flow statement shows the causes the
of changes in net working capital.
changes in cash.
6.
Principal of Accounting
(38,000)
1,200
2,000
200
200
2,000
+ 5,600
__________
(32,400)
3,000
12,000
22,000
+ 37,000
________
(69,400)