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MB0041 Set 1
MB0041 Set 1
Name:
Roll No:
Learning Centre:
Subject: MB0041 Financial and Management Accounting
Assignment No: Set 1
Date of Submission at the Learning Centre:
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MB0041 Set1
Answer:
Accounting information is used by various stakeholders. Since all the stakeholders should
understand the accounting languages in the same sense, certain principles, concepts and
policies of accounting have been laid down.
f) Modifying principle
g) Principle of materiality
h) Principle of consistency
c) Principle of historical cost: All the assets are recorded at the cost of acquisition and
this cost is the basis for all subsequent accounting for the assets.
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MB0041 Set1
a) Business entity concept: Business is separate entity and it is different from the
owner or the proprietor.
b) Going concern concept: The business entity will continue fairly for a long time to
come
d) Periodicity Concept: The accounting period be half year or even a quarter. The
financial statement should be prepared at the end of each accounting period so that
income statement shows profit of loss for the accounting period.
e) Accrual Concept: Profit earned or loss suffered for an accounting period is the result
of cash and credit transactions.
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MB0041 Set1
Q.2 Pass journal entries for the following transactions [10 Marks]
1. Madan commenced business with cash Rs. 70000
2. Purchased goods on credit 14000
3. Withdrew for private use 3000
4. Goods purchased for cash 12000
5. Paid wages 5000
SL Credi
No Contents Debit t
D 7000
1 Cash A/c r 0
7000
To Madan’ Capital A/c 0
( Being Capital brought in)
D 1400
2 Purchase A/c r 0
1400
To Creditors’s A/c 0
(Being good purchase on credit)
D
3 Madan’s Capital A/c r 3000
To Drawings A/c 3000
(Being cash withdrawn for
private use)
D 1200
4 Purchase A/c r 0
1200
To Cash 0
(Being cash purchase made)
D
5 Wages A/c r 5000
To cash A/c 5000
( Being Wages paid)
Tot 1030 1030
al 00 00
Those errors that can be disclosed by trail balance can easily be located. As soon as the trail
balance does not tally, the accountant can proceed to find out the spots where the errors
might have been committed. The following are the errors which are disclosed by trial
balance
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MB0041 Set1
a) Posting a wrong amount: This mistake may occur while posting an entry for
subsidiary book of ledger.
b) Posting to the wrong side of an account: This error is committed while posting
entries from subsidiary books of ledger
c) Wrong totaling: Both under casting and over casting are detected by trial balance.
d) Omitting to post an entry from subsidiary book of ledger. If an entry made in the
subsidiary book does not get posted to ledger, the trial balance does not tally.
f) Posting an amount to a correct account more than once. This results in imbalance in
the trial balance.
g) Posting an item to the same side of two different ledger account. If two accounts are
debited / credited for the same transaction , this type of error occur.
Q.4 From the following balances extracted from Trial balance, prepare Trading
Account.
The closing stock at the end of the period is Rs. 56000
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MB0041 Set1
Sales 250000
Answer:
Particular Rs Particular Rs
7070 By sales
To Opening stock 0 250000
To Purchases Less: Returns inward
102000 3000
Less: returns outward 2470
3000 00
9900
0
5600
By Closing Stock 0
To Fire insurance on
Stock 2000
To Wages to worker 8000
To Gas, Electricity and Water 4000
To Royalty Paid to extract
materials
1000
To import duty 0
To Clearing charges 6000
To Carriage inward 7000
To Gross Profit 5000
9130
0
3030 3030
Total 00 Total 00
Answer:
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MB0041 Set1
Q.6 Following is the Balance Sheet of M/s Srinivas Ltd. You are required to prepare a
Fund Flow Statement
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MB0041 Set1
Balance as on
200 200 Incre Decre
6 7 ase se
Current Assest
100 130
Cash 00 00 3000
250 270
Deptors 00 00 2000
370 390
Stock 00 00 2000
Total current assest, say 720 790
A 00 00
Current Liabilities
290 310
Trade Creditors 00 00 2000
150 165
Short term loans 00 00 1500
800 750
Accrued expenses 0 0 500
Total current liabilities 520 550
say B 00 00
200 240
Working Capital(A-B) 00 00
Net increase in Working 200 240
capital 00 00
400
Net increase in Working 0 - 4000
capital
240 240
Total 00 00 7500 7500
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MB0041 Set1
Loss Account
To By
175 147
Depreciation 0 Balance b/d 50
500 Funds generated 125
Goodwill 0 from 00
operation(Balancing
figure)
350
Divident 0
170
Balance c/d 00
272 272
Total 50 Total 50
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