IGNOU| ACCOUNTANCY-I (ECO - 02)| SOLVED PAPER – (DEC - 2023)| (BDP)| ENGLISH MEDIUM
BACHELOR'S DEGREE PROGRAMME
Term-End Examination
December - 2023
ELECTIVE COURSE: COMMERCE
ECO-02
ACCOUNTANCY-I
Time: 2 hours
Maximum Marks: 50
Note: Attempt any four questions. Question no. 1 is compulsory.
हिंदी माध्यम: यहां क्लिक करें
1. From the following transactions, make accounting
equation and prepare the Balance Sheet from the balances of new equation: 14
(i) Sudhanshu
started business with cash Rs. 90,000
(ii) Purchased
goods for cash Rs. 30,000
(iii) Purchased
goods on credit Rs. 20,000
(iv) Purchased
furniture for cash Rs. 7,000
(v) Rent
Received Rs. 5,000
(vi) Commission
paid Rs. 900
(vii) Withdrew
cash for personal use Rs. 3,000
(viii) Sold
goods on credit (Cost price Rs. 15,000) Rs. 20,000
(ix) Paid to
Creditors Rs. 21,000
(x) Received
from Debtors Rs. 16,000
2. Explain the following concepts with suitable example:
6+6
(i)
Accounting Period Concept
Ans:- Concept
of accounting period:-
The accounting
period concept is a fundamental principle in accounting that states that a
business should divide its financial activities into regular periods for
reporting purposes. This concept ensures that financial statements are prepared
at frequent intervals such as monthly, quarterly or annually to provide timely
and relevant information about the company's performance to stakeholders.
Example:-
Imagine that a
company, ABC Inc., chooses to follow a calendar year as its accounting period.
In this scenario, ABC Inc. would prepare its financial statements from January
1 to December 31 of each year. This concept allows ABC Inc. to track its
financial progress, analyze trends, and systematically compare performance over
different periods.
(ii)
Conservation Concept
Ans:- Concept
of conservatism:-
The concept of
conservatism in accounting emphasizes prudence and caution in financial
reporting. This suggests that when faced with uncertainty, accountants should
err on the side of understating assets and revenues while overstating
liabilities and expenses. The purpose of this approach is to prevent
overestimation of profits and assets, while ensuring a more realistic
representation of the company's financial position.
Example:-
Consider a
scenario where a company, XYZ Corp., is estimating the value of its inventory
using the conservatism principle. If XYZ Corp. has inventory whose market value
has fallen below its historical cost, the company will report the lower of the
two values to reflect a more conservative estimate of its assets. By applying
this principle, XYZ Corp. Takes a prudent approach to financial reporting,
protecting against potential overstatement of its financial health.
By following
the accounting period concept and conservatism concept, businesses can increase
the transparency and reliability of their financial reporting, providing
stakeholders with accurate insight into the company's financial performance and
position.
3. Why do some persons prefer to keep their accounts in
the form incomplete records? State the salient features of such records. 6+6
Ans:- Some individuals prefer to keep their accounts
as incomplete records for various reasons. A primary reason is the lack of
accounting knowledge, where the person maintaining the accounts may not have a
proper understanding of accounting principles and concepts, leading to
selective recording of transactions based on perceived importance.
Additionally, cost-cutting measures play a role, as some businesses opt for
incomplete records to save expenses by not hiring a professional accountant to
maintain complete records. Time saving is another factor, where maintaining
only a few books under a single-entry system of bookkeeping can save time for
the business owner. Finally, the convenience of recording transactions
according to the owner's needs and preferences is an important driver for
choosing incomplete records as it allows flexibility in documenting only the
necessary transactions.
Some individuals
prefer to keep their accounts as incomplete records for various reasons.
The main
features of such records include:-
(i)
Disorganized recording: Transactions are recorded in a disorganized manner
without following specific bookkeeping rules.
(ii) Lack
of uniformity: There is a lack of uniformity, making it challenging to
compare accounts of different businesses.
(iii)
Inaccuracy: Finding of profit and loss may be incorrect due to incomplete
information.
(iv)
Convenient recording: Records are easily maintained keeping in mind the
needs and preferences of the business owner.
These
characteristics highlight the nature of incomplete records, demonstrating the
challenges and limitations associated with this method of accounting.
4. Durga of Ambala consigns goods to Sudheer of Panchakula
to be sold at or above invoice price. Sudheer is entitled to a commission of 8%
on sales at invoice price and 29% of any surplus realized beyond invoice price.
Sudheer accepted a bill of exchange drawn by Durga amounting to Rs. 50% of the
invoice price. During the year 2022 goods considgned by Durga were invoiced at Rs.
3,00,000 and the cost of such goods was Rs. 2,25,000 (including freight) to
Durga. Sales made by Sudheer during the year amounted to Rs. 2,00,000. On 31st
December 2022, goods unsold with Sudheer represented at invoice value of Rs.
35,000. During the year Durga had received from Sudheer Rs. 15,000 by bank
drafts, certain remittances being in transit on 31st December 2022. Prepare
necessary ledger accounts in the books of both the parties. 12
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