Accounting Concepts

FINANCIAL ACCOUNTING QUESTION ANSWERS Accounting Fundamentals  Bills of Exchange, Consignment, Joint Venture  Preparation of Final Accounts of Commercial Organisations, Not-for-Profit Organisations and Incomplete Records Preparation of Financial Statements of Commercial Organisations  Preparation of Financial Statements of Not-for-Profit Organisations  Preparation of Financial Statements from Incomplete Records  Partnership Accounting  Lease Accounting  Branch (including Foreign Branch) and Departmental […]

CMA Inter Financial Accounting MCQs Question 1.From the four alternative answers given against each of the following cases, indicate the correct answer:(i) Realisation account is opened at the time of(A) Admission of a new partner(B) Retirement of a partner(C) Dissolution of the Firm(D) In all the above situationsAnswer:(C) Dissolution of the FirmDissolution of the firm: […]

Lease Accounting – CMA Inter Financial Accounting Question 1. Write short note:Operating Lease and Finance Lease (Dec 2017, 4 marks)Answer:Operating Lease and Finance LeaseA lease is an agreement whereby the lessor conveys to the lessee in return for a payment or sones of payments the right to use an asset for an agreed period of […]

Partnership Accounting – CMA Inter Financial Accounting Question 1.Write short note:Guaranteed Partnership. (June 2013, 5 marks)Answer:In a partnership, there may be special agreement by virtue of which partner may get the guarantee of earning a minimum amount of profit. The guarantee may be given by one partner in particular or by the firm. It is […]

Preparation of Financial Statements of Not-for-Profit Organisations Question 1.Write short note on the following:Features of Income and Expenditure Account (June 2019, 5 marks)Answer:Features of Income and Expenditure Account: It follows Nominal Account. All expenses of revenue nature for the particular period are debited to this Account on accrual basis. Similarly, all revenue incomes related to […]

Preparation of Financial Statements of Commercial Organisations   Question 1.Write short note on the following:Provision for Discount on Debtors (June 2019, 5 marks)Answer:Provision for Discount on Debtors:We know that cash discount is allowed by the suppliers to customers for prompt settlement of cash. Naturally a provision is created for this purpose. Thus, the provision which […]

Bills of Exchange CMA Inter Financial Accounting  Question 1.Write short flotes on the following:(a) Accommodation Bill (June 2016, 5 marks)(c) Rebate on Bills Discounted (June 2016, 5 marks)Answer:(a) Accommodation Bill: An Accommodation Bill is a bill of exchange signed by-a party as drawer, drawee, endorser to accommodate another party whose credit is not strong enough […]

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 […]

Depreciation – CA Foundation Accounts  Question 1.Meaning of depreciation.Answer:Meaning of depreciation:An expenditure which results into enduring benefit (long-term benefit) are treated as capital expenditure/fixed assets. Fixed assets are those assets which are held for use in the business and not for sale or consumption in the course of production. Fixed assets which have a limited […]

Accounting as a Measurement Discipline-Valuation Principles, Accounting Estimates Question 1.Historical CostAnswer:Historical Cost: It means acquisition price. According to this base, assets are recorded at an amount of cash or cash equivalent paid or the fair value of consideration given at the time of acquisition. Liabilities are recorded at the amount of proceeds received in exchange […]