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SUBJECT :
Principels Of Accounting
SUBMITTED TO:
Prof.Afzal Raza
SUBMITTED BY:
Almas Ahmad
ROLL NO:-
W2F18MCOM0021
DATE:-
28-01-2019
Q#1 Difference between reserves and provision
Reserves:
● Reserve is created only the company earn profit.
● It is utilize for future purpose.
Provision:
● Provision are required even in the absence of profit.
● It is used for that purpose.
COMMISSION:
WAGES:
a fixed regular payment earned for work or services, typically paid on a daily or
weekly basis.
"we were struggling to get better wages"
Q#4 Difference between bonds and debenture.
BONDS:
SHARES:
A share is defined as the smallest division of the share capital of the company
which represents the proportion of ownership of the shareholders in the company.
The shares are the bridge between the shareholders and the company. The shares
are offered in the stock market or markets for sale, to raise capital for the company.
The shares are movable property which can be transferred in a manner specified in
the Articles of Association of the company
STOCK:
EXPENSE:
Expense on the other hand is a cost incurred or expired. For example you have
utilized the services of your employees, whether you have paid them or not is an
expense. Cost of goods sold is also an example of expense because it was incurred
to earn revenue during the accounting period. Depreciation of fixed asset is also an
expense because fixed assets were used to generate revenue.
EXPENDITURE:
Expenditure means a payment made. Now this payment could be for many
purposes. Payment could be for settlement of a liability, buying an asset or
payment for any expense like salary, rent or electricity bill.
Q#7 Who is the father of cost accounting?
A contra account is a general ledger account which is intended to have its balance
be the opposite of the normal balance for that account classification
EXAMPLES:
1. Accumulated depreciation.
2. Owners drawing account
3. Allowance for doubtful account
4. Credit balance is contra to debit balance.
5. Discount on not receivable and payable.
FINANCIAL ACCOUNTING:
MANAGEMENT ACCOUNTING:
COST ACCOUNTING:
Cost accounting is a process of recording, classifying, analyzing, summarizing,
allocating, and evaluating various alternative courses of action for the control of
costs. Its goal is to advise the management on the most appropriate course of action
based on the cost efficiency and capability. Cost accounting provides the detailed
cost information that management needs to control current operations and plan for
the future
RECTIFYING ENTRY:
if the error is identified at a later stage, the correction should be made by passing a
suitable journal entry, such entries used to fix an accounting error are called
rectification entry
Q#11 Clearing account?
A clearing account is usually a temporary account containing costs or amounts that
are to be transferred to another account. An example is the income summary
account containing revenue and expense amounts to be transferred to retained
earnings at the close of a fiscal period
EXAMPLES:
● Sales account
● Income summary account
● Revenue account
● With drawing account
Q#20 YZ limited used the depreciation fund account for divided purpose .it is
legal?
It is used for dividend purpose and not legal.
Q#21 All the fixed assets are recorded at cost but not the good will .why?
Goodwill is an intangible asset when a buyer existing business goodwill represents
assets that are not separately identifiable so it is the reason goodwill is not recorded
at historical cost.
Q#22 Why the fixed assets are recorded at cost but not at market value?
The fixed assets are recorded at cost because it is purchased for long term benefit.
Q#23 Can we say capital of business is contigent liability?
Yes, we can say capital of business is contigent liability because we can use it for
unexpected events in future.
Q#24 According to which law banks prepared their financial statement?
According to company ordinance 1982 or banking company ordinance 1962
Q#25 Is general journal and general are different or same?
Both are different to each other.
Q#26 Can a corporation use secret reserve for dividend purpose?
If corporation used secret reserve for dividend than company must tell the share
holders that it is a secret reserve dividend .anyway it is legal.
Q#27 Which accounting type is used for internal / external reporting?
Managerial accounting is used for internal and external accounting.
Q#28 Notes receivable and promissory note are same or not? Explain
Note receivable and promissory notes are the same.
Q#29 Which corporation create capital redemption reserves?
Those companies that are listed in stock exchange they can purchase their own
shares can create capital redemption reserves.
Q#30 According to which principle provision is created?
● Prudence principle
● Conservatism principle.