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Advanced Accounting AFTERSCHOOOL DEVELOPING CHANGE MAKERS CENTRE
FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME World Most
Comprehensive programme in social entrepreneurship & spiritual
entrepreneurshipOPEN FOR ALL FREE FOR ALL
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
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Advanced Accounting
Dr. T.K. Jain.AFTERSCHOOOLCentre for social
entrepreneurshipBikanerM:
9414430763tkjainbkn@yahoo.co.inwww.afterschool.tkwww.afterschoool.tk
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
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Dividends are paid on which:Authorised capital (mentioned in
memorandum of association)Paid up capitalCalled up capital
Answer: paid up capital
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Amount set aside to meet losses due to bad debt is ?
Provision
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If proposed dividend is 20%, how much amount has to be set aside
as reserve?7.5% answer.
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Corporate dividend tax rate is ?10% answer.
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Securities premium is shown as ? it is shown as security premium
account in liabilities side of balance sheet in the heading
reserves and surplus.
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Profit prior to incorporation is transferred to ?General
reserveCapital reserveP & L accountAnswer: Capital reserve.
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What are the methods of preparing cash flow statement?Direct
method (here you directly add all gross cash receipts and cash
payments)Indirect method (here you adjust profit earned from P&
L account).
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There are 3 types of cash flow activities - which are those?
Operating activities (purchase sale etc.)Investment activities
(plant, machinery etc.)Financing activities (issue of shares,
debentures, bonds etc.).
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What is clause 32 of listing agreement? It has been amended in
2000. It says:every company shall give a cash flow statement along
with balance sheet and P& L account.
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Interest paid by bank is what ?Operating activity.
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In cash flow statement, cash and cash equivalent
include?BankCashShort investmentAll theseAnswer: all these.
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I have sold my old plant for Rs. 300000 (depreciated value Rs.
200000). What should I show in operating activity in Cash flow
statement?NilI shall show the amount in investing activity.
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What will you do with loss prior to incorporation?You can do any
of these:Show as goodwillShow as loss prior to incorporation in
asset sideWrite off in P& L Account
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How will you distribute income and expenses in pre and post
incorporateion category?Based on timeDistributed expenses on the
basis of sales (turnover).
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Can a company convert its fully paid shares into stocks?Yes
under sec 94 .
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What are SEBI requirements for issue of Bonus shares?The company
should not have defaulted in payment of interest. The articles
should permit capitalisation of reservesHas to give bonus shares in
6 months of time from date of approval by board of
directorsReserves created by revaluation of assets cannot be used.
Partly paid shares should be fully paid.Such benefit should also be
extended to convertible debenture holders.Only cash capital reserve
can be utilised.
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What is employee stock option?The option given to employees
directors, etc. for purchasing shares at a predetermined price.
(sec. 2, clause 15A)ESOS
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What is buy back?Sec. 77 A of companies act 56 (amended in 99)
give permission to company to buy back its shares out of :
Free reservesSecurity premium accountProceeds of any shares /
securities.
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Buy back when not permitted?If it is not permitted by
articlesSpecial resolution not passedDebt more than 2 times
equityBuy back is less than 25% of paidup equity.
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Suppose you go abroad to purchase some plant. Your expenses
amount to Rs. 100000. What type of expenses are these? Capital
expenses (will be added to the cost of the plant). (all the
expenses incurred to purchase any plant / machinery are called
capital expenses).
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Suppose you spend Rs. 3 crore on advertisements which will give
you benefits over next 10 years. What type of expenses are these?
Deferred Revenue Expenses (because the benefit will be available
for a long time.)
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You have received Rs. 10 Lakh from insurase company against a
claim regarding fire in your factory. What kind of receipt is
it?Capital receipt (because it is against loss of some assets).
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You have received A loan from SBBJ as Working capital term loan
to augument your working capital. It is in addition to your cash
credit loan. What type of receipt is it? Capital receipt
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You have received a subsidy of Rs. 200000 from govt. for
starting a plant in backward area. What type of receipt is it?
Revenue receipt.
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You had given goods on credit to Ramu in 1999. You had
considered a bad debt. Ramu made the payment in 2008. How will you
treat receipt?Revenue receipt. Cash A/c DebitBad debt recovered
account credit.
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You have given Diwali advance to your employees, what type of
expense is it?It is not expense. It is only an advance (neither
revenue nor expense).
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You have received interest on Bond. Rupees 5000 received will be
treated as?Revenue receipt.Cash Account debitInterest on bond
account credit.
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Yours is a CA /CS professional club. There is entrance fees of
Rs. 10000 and annual fees Rs. 5000. Rishabh has joined the club.
How will you do accounting?Entrance fees is capital receipt but
annual fees is revenue expenses.Cash account DebitEntrance Fees
Fund a/c creditAnnual fees account credit.
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In order to take a tender, you have deposited Rs. 1 crore as
earnest deposit. What type of expense is it?It is not an
expenditure, it is only a deposit.
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You have spent Rs. 50000 on repairs of your old plant. What type
of expenses is it?Revenue expenses.
Repairs and maintenance account debitCash account credit.
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You have a furniture showroom. You sell furniture of Rs. 10 lakh
and you havent received payment yet. What will be accounting
treatment? It is a revenue receipt (although you havent yet
received money.)Sale is recognised as soon as it is made. So entry
will be :Party name a/c debitTo sales account credit.
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You have purchased paper of Rs. 1000 to be used a stationery.
How will you treat it?Revenue expensesStationery account debitTo
cash account credit.
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You have spent Rs. 1 crore on advertisement and Rs. 50 lakh on
distribution of free samples. This has been done to launch a new
product. How will you treat it?Deferred revenue expenses
Advertisement & publicity a/c debitPurchase account
credit.Bank account credit.
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You have spent Rs. 2 00000 on overhaul of second machines so
that you use those machines. What type of expense is it?Capital
Expenses.
Machinery account debitBank account credit.
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You have opened the LOOTS showroom. You spent Rs. 100000 on
inauguration. How will you treat it?Deferred revenue expenses
(because it will benefit you for many years).
Inauguration Expenses DebitBank credit
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You have spent Rs. 100000 on wages of workers for installation
of machinery. How will you treat it?Capital account
Entry:Machinery account debitBank account credit
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Where do you show contingent liability in balance sheet?You dont
show it in balance sheet. It is added as footnote with balance
sheet.
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Differentiate provision & reserve?Provision is a liability
of uncertain amount, which can be measured reliably by using a
substantial degree of estimation. Reserve is to set aside some
money for future requirements. Provision is present liability, but
reserve is to set aside some profit.
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If any economic benefit is probable, what will you call it and
how will you treat it?It is contingent asset. It is not shown in
balance sheet / financial statements.Directors may mention about it
in their report.
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Total of sales day book had been undercast by Rs. 2000. how will
you rectify it?We will undertake credit entry in Sales Account of
Rs. 2000 more.
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Rs. 200 paid as wages for installing new machinery has been
shown as wages. Is it ok?It is error of principleRectify it
:Machiinery account debitWages account credit.
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We purchased old plant and spent rs. 10000 on its repairs and
debited repairs account. Is it ok?It is also error of principle
Plant account debitRepairs account credit.
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I am the owner of my company. I take away goods of Rs. 1000 for
home use and dont make any entry of it. Is it ok?Error of
omission
Drawing account debitPurchase account credit.
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I have distributed Rs. 10000 worth of goods as charity. I dont
believe in recording charity. Is it OK?Error of commission
Charity account debitPurchase account credit.
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I have sold my office computer in Rs. 2000. since its value was
completely depreciated, so we didnt make any entry. Is it OK?Error
of commission
Cash account debitComputer account credit.
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Can error of principles be identified by preparing trial
balance?NO
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Can compensatory errors be identified by preparing trial
balance?NO
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Can Error of commission be identified by preparing trial
balance?Yes if there is wrong posting or wrong balancing or wrong
casting If the amount has been written wrong in subsidiary it is
difficult to identify it though trial balance.
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Can error of ommission be identified by preparing trial
balance?Yes or NO.Yes if posting to ledger has been left (only one
side). No if the entry has been completely omitted.
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I treat purchase of machinery as regular purchase. What type of
error is it?Error of principle.
Rectify it : Machinery account debitPurchase account credit.
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Which errors may affect trial balance?Error of partial
omissionError of principleError of complete omission
Answer: Error of partial omission
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Total of sales day book is posted to ?Credit side of sales
account.
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Cash account is ? Real Account
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Purchase account is ?Real account
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Sales account is?Revenue account.
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What is goodwill?Intangible fixed assets
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ABOUT AFTERSCHOOOL Afterschoool conducts three year integrated
PGPSE (after class 12th along with IAS / CA / CS) and 18 month
PGPSE (Post Graduate Programme in Social Entrepreneurship) along
with preparation for CS / CFP / CFA /CMA / FRM. This course is also
available online also. It also conducts workshops on social
entrepreneurship in schools and colleges all over India start
social entrepreneurship club in your institution today with the
help from afterschoool and help us in developing society.
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
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Why such a programme?To promote people to take up
entrepreneurship and help develop the societyTo enable people to
take up franchising and other such options to start a business /
social development projectTo enable people to take up social
development as their missionTo enable people to promote
spirituality and positive thinking in the world
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
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Who are our supporters?Afterschoolians, our past beneficiaries,
entrepreneurs and social entrepreneurs are supporting us.You can
also support us not necessarily by money but by being promotor of
our concept and our ideas.
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
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About AFTERSCHOOOL PGPSE the best programme for developing great
entrepreneursMost flexible, adaptive but rigorous
programmeAvailable in distance learning modeCase study focused-
latest cases Industry oriented practical curriculumDesigned to make
you entrepreneurs not just an employeeOption to take up part time
job so earn while you learn The only absolutely free course on
internet
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
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Workshops from AFTERSCHOOOLIIF, DelhiCIPS, JaipurICSI Hyderabad
BranchGyan Vihar, JaipurApex Institute of Management, JaipurAravali
Institute of Management, JodhpurXavier Institute of Management,
Bhubaneshwar Pacific Institute, UdaipurEngineering College,
Hyderabad
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Flexible Specialisations:Spiritualising business and
societyRural development and transformationHRD and Education,
Social DevelopmentNGO and voluntary workInvestment
analysis,microfinance and inclusion Retail sector, BPO,
KPOAccounting & Information system (with CA / CS /CMA)Hospital
management and Health careHospitality sector and culture and
heritageOther sectors of high growth, high technology and social
relevance
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
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Salient features:The only programme of its kind (in the whole
world)No publicity and low profile courseFor those who want to
achieve success in life not just a degreeIndepth knowledge and
expertise Professional approac: World class approachStrong
intellectual and business capabilitiesFlexible you may stay for a
month and continue the rest of the education by distance mode. /
you may attend weekend classes Scholarships for those from poor
economic backgroundLatest and constantly changing curriculum
keeping pace with the timePlacement for those who are
interestedAdmissions open throughout the year Latest and most
advanced technologies, books and study material
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
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Components Pedagogy curriculum and approach based on IIM
Ahmedabad and ISB Hyderabad (the founder is alumnus from IIMA &
ISB Hyderabad)Meditation, spiritualisation, and self development
Essential softwares for businessBusiness plan, Research
projectsParticipation in conferences / seminarsWorkshops on
leadership, team building etc. Written submissions of research
projects/articles / papersInterview of entrepreneurs, writing
biographies of entrepreneursEditing of journals /
newslettersConsultancy / research projects Assignments,
communication skill workshopsParticipation in conferences and
seminarsGroup discussions, mock interviews, self development
diaryng Mind Power Training & writing workshop (by Dr.
T.K.Jain)
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Pedagogy Case analysis,Articles from Harvard Business Review
Quiz, seminars, workshops, games, Visits to entrepreneurs and
industrial visitsPresentations, Latest audio-visualsGroup
discussions and group projectsPeriodic self assessmentMentoring and
counsellingStudy exchange programme (with institutions out of
India)Rural development / Social welfare projects
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BranchesAFTERSCHOOOL will shortly open its branches in important
cities in India including Delhi, Kota, Mumbai, Gurgaon and other
important cities. Afterschooolians will be responsible for managing
and developing these branches and for promoting social
entrepreneurs.
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Case StudiesWe want to write case studies on social
entrepreneurs, first generation entrepreneurs, ethical
entrepreneurs. Please help us in this process. Help us to be in
touch with entrepreneurs, so that we may develop entrepreneurs.
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
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Basic values at afterschooolShare to learn moreInteract to
develop yourselfFear is your worst enemyMake mistakes to learn
Study & discuss in a groupCriticism is the healthy route to
mutual support and help Ask fundamental questions : why, when, how
& where?Embrace change and compete with yourself only
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS
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www.afterschoool.tk social entrepreneurship for better
society
AFTERSCHOOOL MATERIAL FOR PGPSE PARTICIPANTS