Recording of Transactions Test - 7

Total assets = Cash + Machinery 

Total assets=  200000+300000

Total Assets= 500000

Now basic accounting equation ;

Assets = Capital + liabilities

500000=300000+ Liabilities

Liabilities= 500000-300000

Liabilities= 200000

Yes on the cash basis of accounting revenue and capital item can not be differentiated.

Closing Assets= Closing Capital+ Closing Liabilities

65000= Closing Capital+6000

Closing Capital= 65000-6000

Closing Capital = 59000

Now, Profit = closing capital+ Drawings -opening capital- addtional capital

Since there is no additional capital and drawing so,

Profit= 59000-50000

Profit = 9000

The basic accounting equation is:- 

Assets = Capital + Liabilities

60000= 45000+ Liabilities

Liabilities = 60000-45000

Liabilities= 15000

IASC Was come into force on 29 june 1973.It was responsible for developing accounting standard and Uses and application of these standards.

Total assets= Capital + Liabilities

25000= 10000+10000

25000 Not equal to 20000.

Hence This is not correct.

The basic accounting equation is:-

Assets = Capital+ Liabilities

Assets = 7000+3000

Assets = 10000

Total assets= Liabilities+ capital

Total assets= 4000+10000

Total assets= 14000

True. Because In cash basis of accounting only cash receipt and cash exp. are recorded so a layman can also use this basis. Hence no need to have technical skill or knowledge.

Nominal Rule says Debit all the expenses and losses , Credit all the income and gains.

On the Cash basis of accounting, transaction are recorded only when they are paid or received in cash , credit transaction are ignored. As per matching Concept , Transaction are recorded in the period to which they actually belongs. Hence, Cash basis of accounting ignoreds matching principle.

There are Many types of Vouchers But there is not electronic goods voucher. Hence. Electronic good is not a voucher. Cash voucher records cash transaction And  credit voucher records credit transaction etc

ICAI had constituted ASB on 21April ,1977. 

The basic accounting Equation is, 

Assets = Capital + Liabilities 

Hence, The given equation in this option is not correct.

Liabilities = Creditors + Loan from bank 

Liabilities= 100000+150000

liabilities = 250000

Now, Basic Accounting equation is;

Assets = Capital + Liabilities

600000= Capital +250000

Capital= 350000

Capital(adjusted) = Capital + Revenue - expense

Capital (Adjusted) = 200000+500000-400000

Capital(adjusted) = 300000

Now, Basic accounting equation is;

Assets = Capital + Liabilities

Assets= 300000+50000

Assets= 350000

Source documents are original records containing details of the transaction on basis of which entries are to be recorded in accounts. Like Payin slip, Cash memo ,invoice etc. Hence account is not a Source document.

Total Assets= Onwers equity + Creditors Equity

Total assets= 20000+40000

Total assets= 60000

Accounting equation is result of double entry system. In accounting, every transaction affects atleast two accounts which is expressed by accounting equation Assets = Capital+ liabilities.

Liabilities = bills payables+ bank loan 

Liabilities= 6000+10000

Liabilities= 16000

Now, Basic Accounting equation ;

Assets = Liabilities + Capital 

Total assets= 16000 + 30000

Total assets = 46000

Total Assets= Outside Liabilities + Owners equity

50000 = Outside Liabilities+20000

Outside liabilities= 50000-20000

Outside Liabilities = 30000

On 31st March 2013,

Closing Assets = Closing  Capital + Closing liabilities

50000= Closing Capital+12000

Closing capital= 50000-12000

Closing Capital = 38000

Now, 

Profit = closing capital - opening capital + drawinga -additional capital 

Since ,there is no additions or drawings so,

Profit = 38000-25000

Profit =13000

Voucher is a document which confirms a good purchase or service rendered into business. It is a evidence and legal document which can be used in court .

At 31 march, 2011...

closing Assets=  Closing capital + Closing Liabilities

65000= Closing Capital+6000

Closing Capital= 65000-6000

Closing Capital= 59000

Now, Profit/Loss = Closing Capital+ Drawings - opening capital - Additional Capital

Profit/loss= 59000+2000-50000-5000

Profit= 6000

At year End, 

Closing Assets= Closing Capital + closing Liabilities

65000= closing capital+ 6000

Closing Capital= 59000

Now, 

Profit = closing Capital+ drawings - opening Capital - Additional Capital

Profit= 59000+3000-50000-0

Profit =12000