Page 89 - DMGT403_ACCOUNTING_FOR_MANAGERS

Accounting for Managers

Notes 13. Interest received is an asset.
14. Interest accrued is an asset.
15. Bad Debts are personal account.

4.8 Review Questions

1. What do you mean by Trading Account? Give the proforma of Trading Account and
explain why it is prepared.
2. What is the importance of Balance Sheet? Give a form of Balance Sheet in Liquidity order
with imaginary examples.
3. What do you mean by adjustment? Explain the different adjustment entries.
4. Write short notes on the following:
(a) Net Profit
(b) Manufacturing Accounts
(c) Capital and Revenue Expenditures
(d) Capital and Revenue Receipts
5. Illustrate the interrelationship between the accounting statements and statement of position.
6. Highlight the effect of the following entries in the:

(a) Closing stock
(b) Interest received in advance
(c) Rent outstanding
7. From the following information extracted from the books of Jain & Co, prepare Trading,
Profit & Loss A/c for the year ended and Balance Sheet as on dated.
Dr. Cr.
Particulars
Purchase 90,300
Sales 1,37,200
Return inward 2,200
Stock 1.1.2009 40,000
Drawing 5,000
Building 30,000
Machinery 20,000
Furniture 8,000
Debtors 25,000
Wages 3,000
Carriage inwards 2,000
Rent and Rates 1,500
Bad debts 1,000
Cash 3,500
Investment 10,000

Postages 2,500
Contd...
Insurance 2,000
Return outwards 1,300
Capital 50,000
84 LOVELY PROFESSIONAL UNIVERSITY
Creditors 24,000
Interest 500
Commission 3,250
Provision Bad debts 750
Bank O/d 40,000
Salaries 11,000
Total 2,57,000 2,57,000