CommPass. Oxford University Press. An Essential Companion to B Com (Semester I) Oxford University Press. All rights reserved.

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1 CommPass An Essential Companion to B Com (Semester I). All rights reserved.

2 3 is a department of the University of Oxford. It furthers the University s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford is a registered trademark of in the UK and in certain other countries. Published in India by Ground Floor, 2/11, Ansari Road, Daryaganj, New Delhi , India 2018 The moral rights of the author/s have been asserted. First published in 2018 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of, or as expressly permitted by law, by licence, or under terms agreed with the appropriate reprographics rights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department,, at the address above. You must not circulate this work in any other form and you must impose this same condition on any acquirer. ISBN-13: ISBN-10: Typeset in Helvetica Narrow by Ideal Publishing Solutions, Delhi and Cameo Corporate Services Limited, Chennai Printed in India by Magic International (P) Ltd., Greater Noida Cover image: bizvector / Shutterstock, ImageCORE / Shutterstock, pedrosek / Shutterstock, Arporn Seemaroj / Shutterstock Third-party website addresses mentioned in this book are provided by in good faith and for information only. disclaims any responsibility for the material contained therein.. All rights reserved.

3 Contents Note to Students iii Unit 1: Introduction MODULE I: FINANCIAL ACCOUNTING I Unit 2: Concepts for Determination of Business Income Unit 3: Introduction to Accounting Standard and Accounting Theory Unit 4: Final Accounts of Trading Concern Unit 5: Financial Statements from Incomplete Records and Financial Statements of Non-Profit Organizations Unit 6: Accounting for Special Sales Transaction, Sectional and Self-Balancing Ledger, Insurance Claim: Loss of Stock and Loss of Profit Unit 1: Introduction Unit 2: Planning Unit 3: Organizing Unit 4: Directing, Staffing and Leadership Unit 5: Motivation, Coordination and Control Unit 1: Demand and Consumer Behaviour Unit 2: Production and Cost Unit 3: Perfect Competition Unit 1: Fundamentals Unit 2: Measures of Central Tendency Unit 3: Measures of Dispersion Unit 4: Moments, Skewness & Kurtosis Unit 5: Interpolation MODULE II: PRINCIPLES OF MANAGEMENT Module III (Part I): MICROECONOMICS 1 Module III (Part II): Statistics MI-3 MI-13 MI-37 MI-41 MI-61 MI-91 MII-3 MII-15 MII-21 MII-33 MII-41 MIII-3 MIII-9 MIII-17 MIII-25 MIII-33 MIII-41 MIII-47 MIII-53. All rights reserved.

4 vi Contents Module IV: BUSINESS LAWS Unit 1: The Indian Contract Act, 1872 Unit 2: Sale of Goods Act, 1930 Unit 3: The Indian Partnership Act, 1932 Unit 4: Limited Liability Partnership Act, 2008 Unit 5: Negotiable Instrument Act, 1881 Unit 6: Consumer Protection Act, 1986 MIV-3 MIV-27 MIV-33 MIV-39 MIV-47 MIV-53. All rights reserved.

5 Double Entry Book-keeping System 2 Syllabus: Basic Accounting Equation; Meaning of Assets, Liabilities, Equity, Revenue and Expenses; Accounting Cycle Recording of Transaction: Journal, Ledger and Preparation of Trial Balance. Theoretical Short Answer Type Questions [Max. 5 Marks] 1. What do you mean by Double Entry System of book-keeping? Discuss its features. 2. State the advantages of Double Entry System of book-keeping. Meaning of Assets, Liabilities, Equity, Revenue and Expenses 3. What is an Asset? 4. How are assets classified? (a) On the basis of the period of usage; and (b) On the basis of certainty of realisation from an asset. 5. When is an asset considered as a current asset? 6. What is a Non-current asset? Give two examples. 7. State the points of difference between Current and Non-current asset. 8. What do you mean by a monetary asset? Give two examples. 9. What do you mean by a non-monetary asset? Give two examples. 10. What are the different categories of Non-Current Assets? 11. What is a Fixed Asset? Give two examples. 12. What is an Intangible Asset? Give two examples. 13. What is a Fictitious Asset? Give two examples. 14. Goodwill is a fictitious asset True/False. Give proper reasoning. 15. What do you mean by Contingent Asset? Give examples. 16. What do you mean by an internal liability? Give two examples. 17. What do you mean by an external liability? Give two examples. 18. State the points of difference between Current and Non-current liabilities. 19. What do you mean by Contingent Liability? Give two examples. 20. What do you mean by Equity? How is it calculated? 21. What do you mean by Revenue? State any two sources of revenue of a business organisation. 22. What do you mean by Gains? Give two examples. 23. What do you mean by Expenses? Give two examples. 24. What do you mean by Loss? 25. What is a Normal Loss? Give two examples. 26. What is an Abnormal Loss? Give two examples.. All rights reserved.

6 Double Entry Book-keeping System MI-7 Basic Accounting Equation 27. What do you mean by Accounting Equation? State its features. 28. State the accounting equation when there is neither any profit nor any loss. 29. Accounting equation is the British approach to rules of debit and credit Comment. 30. Accounting equation is the modern approach to rules of debit and credit Comment. 31. Explain the rules of debit and credit under the Accounting Equation approach. 32. How are the following items dealt with in the Accounting Equation? (a) Outstanding expenses; (b) Accrued income. 33. Pass the journal entries for the following transactions applying the Accounting Equation approach: (a) Cash introduced into the business `2,00,000 (b) Goods purchased in cash worth `48,000 (c) Wages & Salaries paid `64,000 (d) Cash sales to Z Ltd. `48,000 (e) Credit sales to Alpha Ltd. `75,000 (f) Sold goods for cash to Gamma Ltd. for `43,000 (g) Borrowed `4,00,000 from SBI (h) Purchased a plant costing `82,000 for cash Accounting Cycle Recording of Transaction: Journal, Ledger and Preparation of Trial Balance 34. What do you mean by Accounting Cycle? Explain its various stages. 35. What do you mean by journal? Discuss its features. 36. Why journal is called the Book of Original Entry? 37. What do you mean by Special Journal and General Journal? 38. What are the different categories of Special Journal? 39. Why Cash Book is called journalised ledger? 40. What do you mean by Contra Entry? Give examples. 41. What do you mean by imprest system of petty cash? 42. What do you mean by Day Books? State any three such day books that are maintained by a trading organisation. 43. What are the different kinds of day books that may be maintained by an entity? 44. State two points of difference between Purchase Day Book and Purchase A/c. 45. What do you mean by Debit Note? 46. Credit Note is prepared by the buyer on return of goods to the seller Comment. 47. State the different types of entries that are recorded in the General Journal. 48. State the points of difference between Opening & Closing entries. 49. What do you mean by Transfer Entry? Give two examples. 50. What do you mean by ledger? Discuss its features. 51. Why is ledger called the Book of Final Entry? 52. A ledger is sub-divided into two categories Comment. 53. Though ledger is the principal book of accounts, yet journalisation is necessary Explain.. All rights reserved.

7 MI-8 CommPass (Semester I) 54. What is an Account? State its features. 55. State the classification of ledger accounts. 56. What is a Representative Personal Account? Give two examples. 57. What is a Real Account? Give two examples. 58. What is a Nominal Account? Give two examples. 59. What do you mean by Balancing of an Account? Explain its significance in accounting. 60. When is an account said to have debit balance? State any two accounts that usually reflect debit balance. 61. When is an account said to have credit balance? State any two accounts that usually reflect credit balance. 62. What is Trial Balance? State its features. 63. A tallied Trial Balance is not a conclusive proof of the accuracy of books of accounts Comment. 64. A Trial Balance is only a prima facie evidence of the arithmetical accuracy of records Comment. 65. State the errors that are identified by drafting a Trial Balance. 66. State the errors that are not identified by drafting a Trial Balance. 67. What is an Error of Principle? Explain with an example. 68. What is meant by Compensating Error? Explain with an example. 69. What is a Suspense Account? 70. Suspense Account is, by nature, a temporary account Comment.. All rights reserved.