Accounts

 ASSIGNMENT ON

Submitted TO -Pro. Nandita Mohapatra

Submitted By - Kiran kumar jena

 2020-2021

Semester 1 notes link👉🏾DOWNLOAD 

1. What is double entry book keeping?

ANS:-Double entry bookkeeping is a system of accounting in which every transaction has a corresponding positive and negative entry (Debit and Credit).

2. Define accounting cycle with diagram?

ANS :-Accounting Cycle is a process of identifying, collecting and summarizing financial transactions of the business with the objective of generating useful information in the form of three financial statements namely Income Statement, Balance Sheet and Cash Flows.  It starts with an accounting transaction and ends when the books of accounts get closed.                                 

                     

  

3.Define accounting system?

ANS :-An accounting system is a system that is employed in a company to organize financial information. It can be either manual or computerized. The main reason why you should be using an accounting system is to keep track of expenses, income, and other activities. Basically keep an eye on all data that affect the finances of a business organization.

4.What do you mean by accounting?

ANS :-Accounting is the language of finance. It conveys the financial position of the firm or business to anyone who wants to know. It helps to translate the workings of a firm into tangible reports that can be compared. So it is essential that we know the meaning of accounting. 

Accounting is the process of recording financial transactions pertaining to a business. The accounting process includes Summarizing, analysing and reporting these transactions to oversight agencies, regulators and tax collection entities.

5.What is fixed asset? Give examples

ANS :- Fixed asset denote those asset of durable nature acquired and retained permanently for the business. For ex:- Land, Building, Machinery, furniture etc...

6.What is liability?

ANS :-A liability is an obligation arising from a past business event. It is reported on a company'  balance sheet.

7. What are debts?

ANS :-Debt is an increase in an asset or expense account, or a decrease in a liability or equity account.

8.What is income statement? Draw the format.

ANS :-The Income Statement is one of a company’s core financial statements that shows their profit and loss over a period of time.  The profit or loss is determined by taking all revenues and subtracting all expenses from both operating and non-operating activities.

Income Statement Format

 Revenue

–  Cost of Goods Sold Expense

= Gross Profit (or Loss)

–  Operating Expenses (R&D, selling & adm., depreciation, etc)

= Operating Income

Other Income/Expenses

+ investment income

– Interest Expense

– Taxes

+/- Non Recurring Events (Extraordinary items)

=  Profit or Net Income

Example -

9. Define profit?

ANS :-  Profit means a business’ excess revenues left over after all expenses have been paid for the period.

10. Define Expenses?

ANS :- An Expense is any cost incurred by the business.

11. What is revenue?

ANS :- Any accretion to capital which results from operation of business is termed as revenue. It is generated by undertaking selling activities and rendering of service.

12. Define transaction?

ANS :- A transaction is a completed agreement between a buyer and a seller to exchange goods, services, or financial assets.

13. What are concepts and conventions?

ANS:- Accounting concept is defined as the accounting assumption which the accountant of the firm follows while recording business transactions and preparing final accounts. 

On the contrary, accounting conventions are the methods and procedure which are followed to give a true view of the financial statement.

14. What is retained earning?

ANS :-  Retained earnings is the amount of net income left over for the business after it has paid out dividends to its shareholders. A business generates earnings  that can be profit and losses.

15.What is reserve?

ANS :- Reserves is also known as retained earnings are portions of a business’s profits which have been set aside to strengthen the business's financial position.

16.Define debit note and credit note?

ANS:- When a debit note is issued the debit balance of the buyer's account increases. It means that more amount is required to be paid by the buyer to the seller to settle his liability. Thus, credit note increases the liability for the buyer.

17. What is capital?

ANS :- The amount of invested by owner in business is called capital. It is difference of total asset and liability.

18.Define equity?

ANS :-  Equity denotes the value left over after liabilities have been removed. Recall the equation Asset= Liabilities + equity. If you take your assets and subtract your liabilities, you are left with equity, which is the portion of the company that is owned by the investor and owner.

19.Write the accounting equation?

  ANS :-Assets = Liabilities + Equity.

Liabilities = Assets – Equity.

Equity = Assets – Liabilities.

Assets = Liabilities + Owner's Equity + Revenue – Expenses – Draws.

20. Equity = assets + liability, can it be an equation. Justify in brief?

ANS:- It can't be an equation because the equation is Asset = Liability + share holders equity.