Institute of Business Management: Important Assignment
Institute of Business Management: Important Assignment
Institute of Business Management: Important Assignment
Important Assignment
Cash 50,000
notes receivable 65,000
notes payable 10,000
salaries payable 8,000
merchandise inventory 75,000
notes receivable 12,000
equipment 20,000
5. If assets= Rs 50000 and liabilities=Rs 10000. What is the net worth of the business?
6. If a business has liabilities in excess of its assets. The owner ‘s equity will be Positive or Negative:
11. Sales revenue should be recognized when goods and services have been supplied, costs are incurred when
goods and services have been received. Which accounting concept governs the above?
12. Which of the following transactions would result in an increase in capital employed?
Current assets: 50,000, Inventory: 15,000 , Payables: 10,000 , Receivable: 5,000 , Bank: 11,0000 ,
Allowance for bad debts: 1,000. What is the figure for current asset?
16. Lux had net purchases of $50,000, ending inventory of $25,000, net sales of $100,000, and gross profit of
$32,000. How much was Lux's beginning inventory?
18. A/c Receivable had a normal balance of Rs.1,500 on May 31. There were debit postings of RS.900 and credit
postings of Rs.700 during June. What was the Account Receivable balance on June 30?
19. Accounts Payable had a normal beginning balance of Rs. 1,000. There were debit postings of Rs. 600 and credit
postings of Rs. 400 during the period What was the ending balance?
21. For the current period, the following data were taken from the ledger:
Purchases $40,000
Purchases Returns and Allowances $600
Purchases Discounts $300
Freight-in $200
Beginning inventory was $8,000 and ending inventory was $13,000. What was cost of goods sold?
22. For the current year, the following data were taken from the accounting records:
Sales $900,000
Sales Returns and Allowances $30,000
Purchases $500,000
Purchase Returns and Allowances $8,000
Discount received $4,000
Freight-in $2,000
Beginning Inventory $90,000
Ending Inventory $130,000
23 What are the effects of the following transactions on the on accounting equation in terms of + , - and
0?
a) Paid cash to creditors
b) Received cash from debtors.
c) Sold merchandise costing Rs. 5,000 at Rs. 8,000.
d) Purchased merchandise on credit.
e) Received commission by cheque.
f) Paid salaries by cheque
g) The owner paid tuition fee of his son from the business cash
24. Calculate the net profit of a trader when his beginning capital is Rs. 25,000, drawings is Rs. 23,000 and capital at
end was Rs. 31,000. He did not introduce new capital during the year.
25. Using the following information, What will be the amount of Net Income?
a) 34. The three main financial statements are Balance sheet, Income statement & ______.
b) 35. An economic unit engaged in business activities is called ____________.
c) 36. Assets - ____________ = Liabilities.
d) 37. The recording of assets at their original cost is known as ____________.
e) 38. Investment of cash and other assets increase ___________.
f) 39. Increase in revenue is recorded in __________ side.
g) 40. Decrease in expense is recorded in _________ side.
h) 41. Net income directly affects _________ account.
27.Narrate the transaction after looking at the following Accounting equation.
28. Following is the Partial Trial Balance of M/s Alex Traders for the year ended 31, 2016.You
are required to prepare Statement of Cost of goods sold and calculate the amount of gross
profit .
a) What will be the value of Assets if the liabilities are Rs. 38,570 and Capital is Rs. 111,430.
b) What will be the value of Capital if the Assets of the firm are Rs 800,000 which are 160% of the
liabilities of the firm.
c) Assess the value of the capital of the firm after looking at the following position of the business:
Cash Rs. 89,000 , Accounts receivable Rs 60,000 , Allowance for Bad Debts Rs. 13,000, Accrued
expenses Rs. 24,000,Accrued Income Rs.12,480. Purchases Rs. 150,000, Bank over draft Rs.
9,750 and prepaid salaries Rs. 6,000.
d) Asses the value of Opening stock if COGS = 530,000, Closing Stock Rs. 26,140 and Purchases
486,970.
e) Assess the value of net profit if COGS is Rs. 500,000 that is 80% of net sales and the expenses of
the firm are Rs. 80,000.
30. Explain all GAAP Principles with examples