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Profits and Gains from Business or Profession Question 1.State with reason, whether the following statements are true, or false with regard to the provisions of the Income-tax Act, 1961 for the Assessment year 2021-22: [Nov. 2008, 2 Marks](a) Rural branches of the Cooperative banks are not allowed to claim provision for bad and doubtful debts.(b) […]
Income from House Property Introduction Question 1.Explain the concept of Municipal Value, Fair Rent and Standard Rent. Quality properties for rent Answer:Municipal ValueIt refers to the value that the Municipal Authorities deems as the value of the property for the purpose of assessment of property taxes. Fair RentIt is the rent fetched by a […]
Budget and Budgetary Control 1. Budgetary Control: It is the system of management control and accounting in which all the operations are forecasted and planned in advance to the: extent possible and the actual results compared with the forecasted and planned results. 2. Types of Budget: Capacity wise – Fixed Budget, Flexible Budget, Functions wise […]
Marginal Costing Marginal Costing:It is a costing system where products or services and inventories are valued at variable costs only. It does not consider fixed costs. Total Contribution (C) = Sales Revenue (S) – Total Variable Cost (V)Contribution per unit = Sales price per unit – Variable cost per unit Profit = Contribution – Fixed […]
Standard Costing Standard Costing:A technique which uses standards for costs and revenues for the purposes of control through variance analysis. Variance:A divergence from the pre-determined rates. Process of Standard Costing: Setting standards Ascertaining actual costs Compare standard cost and actual cost Investigate the reasons for variances Disposed-off the variance Types of Variance: Controllable variances: Those […]
Joint Products and By Products Question 1.Narrate the terms ‘Joint Products’ and ‘By-Products’ with an example of each term. [CA Inter Dec. 2021, 5 Marks]Answer:Joint Products: Joint products represent two or more products separated in the course of the same processing operation usually requiring further processing, each product being in such proportion that no single […]
Process and Operation Costing Question 1.Explain the “Equivalent Production.” [CA Inter Nov. 2013, 4 Marks]Answer:Equivalent Production:When opening and closing stocks of work-in-process exist, unit costs cannot be computed by simply dividing the total cost by total number of units still in process. We can convert the work-in-process units into finished units called equivalent production units […]
Job and Contract Costing Question 1.What Is meant by Job Costing? Give example of (any four) industries where it is used. [CA Inter May 2001, Nov. 2016, 4 Marks]Answer:Job costing is the category of basic costing methods which is applicable where the work consists of separate contracts, jobs or batches, each of which is authorised […]
Unit and Batch Costing Question 1.Explain ‘Job Costing’ and ‘Batch Costing’. [CA Inter May 2Q01, May 2018, 5 Maris]Answer:Job costing: Job costing is the category’ of basic costing methods which is applicable where the work consists of separate contracts, jobs or batches, each of which is authorised by specific order or contract. According to this […]