PRESIDENCY UNIVERSITY

AZIMUR RAHMAN SCHOOL OF ENGINEERING

Department of Civil Engineering.
Final Examination of Fall Semester-2020.
Course Code & Name: ACT201 - Principles of Accounting-II

Student Name: Abu Salek Md. Nasim ID: 191 306 046

Full Marks: 25
 General Instructions for the examinees:
 It is an Open-Book Exam.
 Deadline for submission: 19th December, 2020.
 Must be in MS Word.
 Plz mention: “Final Exam-Principles of Accounting” at the subject bar.
 Late submission will not be accepted.
 40% similarities between two answer-scripts will be penalized by a deduction of 50% marks.

 Answer any two (02) questions from question no. 01 to 03.

 Attempting question no. 04 is compulsory.
 Parts of each question must be answered consecutively.

Answer to Question No: 1(a)

The users of accounting information systems: Accounting is an information system that

identifies, records, and communicates the economic events of an organization to interested
users.

Users associated with accounting: The major users and uses of accounting are as follows:

(a) Management uses accounting information to plan, organize, and run the business.

(b) Investors (owners) decide whether to buy, hold, or sell their financial interests on
the basis of accounting data.

(c) Creditors (suppliers and bankers) evaluate the risks of granting credit or lending
money on the basis of accounting information.

Other groups that use accounting information are taxing authorities, regulatory agencies,
customers, and labor unions.

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 PRESIDENCY UNIVERSITY
AZIMUR RAHMAN SCHOOL OF ENGINEERING
Department of Civil Engineering.
Final Examination of Fall Semester-2020.
Course Code & Name: ACT201 - Principles of Accounting-II

Student Name: Abu Salek Md. Nasim ID: 191 306 046

Answer to Question No: 1(b)

Asset: In financial accounting, an asset is any resource owned or controlled by a business or an

economic entity. It is anything (tangible or intangible) that can be utilized to produce value and
that is held by an economic entity and that could produce positive economic value. Simply
stated, assets represent value of ownership that can be converted into cash (although cash itself is
also considered an asset).

Different types of assets: Assets are generally classified in three ways,

1. Convertibility: Classifying assets based on how easy it is to convert them into cash.
If assets are classified based on their convertibility into cash, assets are classified as
either current assets or fixed assets.

2. Physical Existence: Classifying assets based on their physical existence (in other
words, tangible vs. intangible assets). If assets are classified based on their physical
existence, assets are classified as either tangible assets or intangible assets.

3. Usage: Classifying assets based on their business operation usage/purpose. If assets

are classified based on their usage or purpose, assets are classified as either operating
assets or non-operating assets.

Answer to Question No: 1(c)

Definition of Property, plant, and equipment: Property, plant, and equipment are physical or
tangible assets that are long-term assets that typically have a life of more than one year. They are
assets with relatively long useful lives that a company is currently using in operating the
business. This category includes land, buildings, machinery and equipment, delivery equipment,
and furniture.
Property, plant, and equipment assets are also called fixed assets, which are long-term physical
assets. Industries that are considered capital intensive have a significant amount of fixed assets,
such as oil companies, auto manufacturers, and steel companies.

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 PRESIDENCY UNIVERSITY
AZIMUR RAHMAN SCHOOL OF ENGINEERING
Department of Civil Engineering.
Final Examination of Fall Semester-2020.
Course Code & Name: ACT201 - Principles of Accounting-II

Student Name: Abu Salek Md. Nasim ID: 191 306 046

Answer to Question No: 2

The role of accounting in Civil Engineering:

Accounting has rightly been termed as the language of the business. The basic function of a
language is to serve as a means of communication Accounting also serves this function. It
communicates the results of business operations to various parties who have some stake in the
business viz., the proprietor, creditors, investors, Government and other agencies. Though
accounting is generally associated with business but it is not only business which makes use of
accounting. Persons like the engineers, Government and other individuals also make use of an
accounting.

For example, an engineer has to keep a record of the money received and spent by him during
a particular period. He can record his receipts of money on one page of his "Project
Management Diary" while payments for different items such as materials, labor cost, overhead
cost, transport cost, etc. on some other page or pages of his diary in a chronological order.

Such a record will help him in knowing about:

(i) The sources from which he received cash and the purposes for which it
was utilized.
(ii) Whether his receipts are more than his payments or vice-versa?
(iii) The balance of cash in hand or deficit, if any at the end of a period.

Accounting helps an engineer,

How to interpret financial data properly

How to prepare, appraise, evaluate and approve financial plans

How to understand the economic viability of engineering decision etc.

As an engineer have to apply a combination of math and science to solve technical problems. As
accountants we also solve problems - financial, tax and business planning problems.

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 PRESIDENCY UNIVERSITY
AZIMUR RAHMAN SCHOOL OF ENGINEERING
Department of Civil Engineering.
Final Examination of Fall Semester-2020.
Course Code & Name: ACT201 - Principles of Accounting-II

Student Name: Abu Salek Md. Nasim ID: 191 306 046

Over the years Engineers have become a niche area within our firm. Everybody need to be
creative, great communicators and organized to scope a project then priorities the tasks and
manage the build and the budget. It can be a pressure cooker environment dealing with
deadlines and stringent safety standards not to mention the people, processes and machinery.
Of course, satisfying governments, developers and construction companies is never easy.

Cost accounting is one the branches of accounting. It helps a civilian to find out the cost of
goods produced or services rendered by a business. It also helps the business in controlling the
costs by indicating avoidable losses and wastes.

When a civil engineer intimates to be entrepreneur or opens a business or does duty on project
management, Accounting plays an important and useful role by developing the information for
providing answers to many questions faced by an engineer of accounting information:

 How good or bad is the financial condition of the business?

 Has the business activity resulted in a profit or loss?
 How well the different departments of the business have performed in the past?
 Which activities or products have been profitable?
 Out of the existing products which should be discontinued and the production of which
commodities should be increased?
 Whether to buy a component from the market or to manufacture the same?
 Whether the cost of production is reasonable or excessive?
 What has been the impact of existing policies on the profitability of the business?
 What are the likely results of new policy decisions on future earning capacity of the
business?
 In the light of past performance of the business how should it plan for future to ensure
desired results?

After all, as per above discussion we can say Accounting plays an important role for the civil
engineers.

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 PRESIDENCY UNIVERSITY
AZIMUR RAHMAN SCHOOL OF ENGINEERING
Department of Civil Engineering.
Final Examination of Fall Semester-2020.
Course Code & Name: ACT201 - Principles of Accounting-II

Student Name: Abu Salek Md. Nasim ID: 191 306 046

Answer to Question No: 4

Difference between “Revenue & Gain” are given below:

Revenue Gain
Revenue is the amount earned from a company's In accounting, a gain is the result of a peripheral
main operating activities, such as a retailer selling activity, such as a retailer selling one of its old
merchandise or a law firm providing legal services.. delivery trucks.
A gain occurs when the cash amount (or its
When goods or services are sold on credit, they are
equivalent) received is greater than the asset's
recorded as revenue.
carrying amount.
Gains and losses are the opposing financial results
Revenue describes income earned through the
that will be produced through a company's non-
provision of a business's primary goods or services.
primary operations and production processes.
For examples, a shoe company had a good month
and sold 1,000 pieces of shoes at $200 per piece. For example, if the company receives $3,000 for
Revenue of this shoe company for the month would the old delivery truck, and the truck's carry
be $200,000. However, if their customers returned amount (book value) at the time of the sale was
200 of those products, their net revenue would be $600, the company will have a gain of $2,400.
$160,000.

The End