PRACTICE PROBLEMS
1. A __________________ statement shows the resource position of a firms as on a
date.
2. The above statement shows three group of figures. They are the
a) ___________ and b) _____________________ c) _________________
3. The above is represented by an Accounting Equation __________________________
4. ._______________ assets are acquired for long term use in the business
5. __________________ include assets that are used during the operating cycle of the
business.
6. The shareholders / the owners of the company invests money in the business. They
are part of the _______________ in the ______________________ report
7. Money owed to outsiders consists of
8. b)_________________________
9. ___________________ liabilities have to be paid in the short term (usually period of
1 year)
10. Current Assets less current liabilities are called as _________________
11. The total assets of a company are Rs.100. Long-term loans are 20 lacs and the
current liabilities are 12.5. The capital would be :
____________________________________________________________
12. If you want to assess the operating performance of a company we refer to the
___________________________ statement.
13. The performance report is usually prepared for a period of _______ months. For
internal purpose these can be prepared for _____________________
14. Give 3 Important concept related to P&L (what are your learnings from the coffee
example)
___________________________________
---------------------------------------------------
-------------------------------------------------------
15. Preparation of profit and loss account to include items of expenses not paid and also
income (when billed, but not collected from customers is called as
_________________________accounting as against Cash basis of accounting
16. Classify the following into Assets, Liabilities & Equity , Incomes and Expenses
Inventory of finished goods Advance received from customers
Interest earned Auditors Fees
Land Borrowings from Banks
Sale of goods Depreciation
Amortization of “Franchise fee” Share Capital
Electricity Payable Trade Payable
Raw Materials Consumed Income tax expenses
Vehicles
Advertisement Other Expenses
Interest payale Profit on sale of old Machinery
Interest received from FD Rent deposit
Cash in Hand Repairs and maintenance
Advertisement Trade Receivable
Stores and Spares Sales
Furniture Retained Earnings
Salary Cost of goods sold
Loans given to employees
17. Abraham Company’s balances for the balance sheet had the following items:
Capital, Abraham Rs. 1,27,500
Loan Payable Rs 12,000
Creditors Payable ?
These were all the assets:
Office Equipment Rs 39,000
Land Rs 21,000
Inventory Rs 9,000
Building Rs 52,000
Cash Rs. 5,000
Receivables Rs. 39, 000
18. Here are a list of transactions. Explain their effect on the asset, liability equity and
retained earnings ( use equation 2)
a. Narrow Head Limited purchased a computer for Rs. 32,000, making a down payment
of Rs. 7,000 cash and balance of Rs. 25,000 is payable in 60 days.
b. ABC Company limited sells CD for Rs. 1,00,000 to a customer and immediately
receives a payment Rs.40,000 by cheque from the customer balance later
c. PQR Limited pays Rs. 50,000 (10k per month) as rent on December 10th, 2021 for 5
months in advance. The accounting year end is March.
[Link] Journal entries
Reena start a private ltd company called Jewels of India Enterprises. The transactions
during the first month are as follows.
1. Reena contributed Rs.500,000 as capital. The amount is deposited in the bank
account of JIE.
2. Rs.200,000 is paid for Rent Deposit by cheque.
3. Reena bought goods worth Rs.175,000 on credit.
4. Goods costing Rs.150,000 are sold for 170,000 in cash.
5. Loan taken from the bank for the purchase of machinery Rs.100,000@ 12% interest
per annum payable end of each month.
6. Machinery purchased for Rs.100,000.
20. Answer the following questions related to ABC
Sun TV, a cable services company, provided services to a client on November 30,
2020. The client promised to pay Sun TV ₹ 1,200 on January 5, 2021 for the
services provided. For the year ended 31st November how will the transaction
reflect in the financial statements.
Aero Ltd recorded a ₹ 8,000 telephone bill related to March 2022 on March 31,
2022. Aero paid the bill in April 2022. The journal entry in April 2022 for the
payment should be
The following information is available for the month of May 2022
Purchase of goods from suppliers ₹ 5,20,000
Goods returned to suppliers as it was defective ₹ 8,000
Trade Payable balance as on 1st May 2022 ₹ 191,000
Trade Payable balance as on 31st May 2022 ₹ 254,000
From the above, calculate the total amount paid to the suppliers during the month of May.
