ASSIGNMENT

NAME HARISH JG
ROLL NUMBER 2414102089
PROGRAM BACHELOR OF BUSINESS ADMINISTRATION
(BBA)
SEMESTER II
COURSE CODE & NAME DBB1202–FINANCIAL ACCOUNTING
 Assignment Set – 1
Q 1. Explain different types of accounting concepts in detail.
Ans: both commonsense and theory-based is built on a few bookkeeping standards. There are
a few bookkeeping conditions that bolster these as well. And these bookkeeping standards are
built on a few presumptions that we call bookkeeping concepts. These thirteen bookkeeping
concepts discover wide acknowledgment over the world by bookkeeping experts and
reviewers.
Types of bookkeeping concepts incorporate cash estimation, going concern, double angle,
bookkeeping period, coordinating, realization, gathering, consistency, materiality, and
conservatism.
Going concern concept
Accountants accept that a commerce will proceed to work for the predictable future when
planning budgetary articulations. The going concern concept accept that a commerce will
proceed to work inconclusively. So it expect that for the predictable future the commerce will
not be winding up. This leads to the presumption that the commerce will not have to offer its
resources any time before long and it will meet all its commitments as well.

So it legitimizes the money related articulations as a portion of a nonstop arrangement of

explanations. The current explanations are conditional and as it were reflect the money related
position of that specific period of time.
Business Substance Concept
This bookkeeping concept isolates the commerce from its proprietor. As distant as
bookkeeping is concerned the proprietor and the commerce are two partitioned substances.
This will offer assistance the bookkeeper distinguish the trade exchanges from the individual
ones. All shapes of commerce organizations (proprietorship, organization, company, AOP,
etc) must take after this assumption.

So for illustration, if the proprietor brings in extra capital into the trade, we will treat this as a
risk on the adjust sheet of the business.
Money Estimation Concept
This bookkeeping concept states that as it were monetary exchanges will discover a put in
bookkeeping. So as it were those commerce exercises that can be communicated in money
related terms will be recorded in bookkeeping. Any other exchange, no matter how
noteworthy, will not discover a put in the budgetary accounts.

So for illustration, if the company experienced a major administration update this would have
no impact on the bookkeeping records. This concept is really one of the major downsides of
accounting..
Accrual concept
Considers all incomes and costs for the period in which they are caused or earned,
notwithstanding of when cash is paid or gotten.
Materiality concept
Focuses on fabric realities, and maintains a strategic distance from recording or displaying
irrelevant truths that are not vital for deciding a business's pay.
Matching concept
Recognizes both costs and income in the same bookkeeping cycle. For each income passage,
an break even with cost passage must be made to precisely gauge an bookkeeping period's
benefit or loss
Consistency concept
 Once a commerce chooses an bookkeeping strategy, it ought to proceed to utilize it reliably.
This permits monetary articulations from distinctive periods to be dependably compared.
Objectivity concept
Accounting exchanges must be backed by adequate prove, such as solicitations or vouchers,
that is free from inclination.
Cost accounting
Records, summarizes, analyzes, and apportions costs over the prepare of fabricating a item or
giving administrations. This bookkeeping concept states that all resources of the firm are
entered into the books of account at their buy cost (fetched of procurement + transport +
establishment etc). In the ensuing a long time to, the cost remains the same (short deterioration
charged). The advertise cost of the resource is not taken into consideration.

Q2. Journalize the following transactions –

Jan 1st – Mr. Harshit started his business with Rs. 80,000/- which he brought as his capital
in cash.
Jan 10th – He purchased goods worth Rs.30,000/- in cash and Rs. 20,000/- on credit.
Jan 12th - He paid wages Rs. 500/-
Jan 15th – Sold goods for Rs. 20,000/- in cash and Rs. 25,000/- on credit
Jan 16th – Paid to suppliers Rs. 8,000/- for goods purchased on credit
Jan 20th – Received Rs. 15,000/- from his debtors
Jan 31st – Paid rent Rs. 1,000/- in cash

Ans: Journalizing transactions is the process of recording a business's financial events in a

journal, in chronological order. A journal is a book of original entry, and is the primary book
of account where the first entries for a business's transactions are recorded.
Here are some steps for journalizing a transaction:
➢ Identify the transaction
➢ Identify the accounts affected by the transaction
➢ Determine the debits and credits
➢ Record the journal entry
➢ Review and check
A journal entry records both sides of a transaction as a debit and credit value. A debit is any
value that increases an account, while a credit is any value that decreases an account. Debits
and credits should cancel each other out, which is known as "balanced books".
The type of journals used for bookkeeping depends on the type of business, but they are
generally categorized as general journals or special journals. The general journal is for entries
that don't fit into the special journals, while special journals are used for common, day-to-day
transactions.
When a business starts with cash, the journal entry debits the Cash account and credits the
Owner's Capital account. This is because cash is an asset that increases, and the Owner's
Capital account represents the owner's equity in the business, which also increases.
Here are some other journal entries for the transactions in the example:
• Purchase goods
When goods are purchased, the Purchases account is debited and the Accounts Payable
account is credited.
• Cash sales
When goods are sold for cash, the cash sales journal entry records the payment received from
the buyer.
• Cash paid
When cash is paid, the journal entry shows a debit and a credit to reflect the transaction.
Capital
Debit Credit
Particulars Date Investment
Value Value Value
Initial Capital Invested
1st Jan 80,000.00
By Harshit
10 th
Purchased goods Cash 30,000.00
Jan
10 th
Purchased goods Credit 20,000.00
Jan
Paid wages 12th Jan 500.00
Sold goods Cash 15th Jan 20,000.00
Sold goods Credit 15th Jan 25,000.00
Paid to suppliers 16th Jan 8,000.00
Received from Debtors 20th Jan 15,000.00
Paid Rent 31st Jan 1,000.00
Total
59,500.00 60,000.00 80,000.00

Q3. Define Bank Reconciliation Statement. Discuss various reasons for difference in
balance of cash book and pass book.
Ans: A bank reconciliation is a archive arranged by a company that appears its recorded bank
account adjust matches the adjust the bank records. This articulation incorporates all
exchanges, such as stores and withdrawals, from a given time period.
A bank compromise articulation (BRS) is a report that compares a company's bank adjust with
the adjust on its cash book. It's a device that makes a difference guarantee a company's cash
records are precise and that all bank-related exchanges are recorded legitimately.
A BRS incorporates:
• All exchanges, such as stores and withdrawals, from a given timeframe
• The closing adjust of the bank account
• Any exceptional installments or withdrawals
• Any expenses charged by the bank on the account
• Interest earned on the bank balance
A BRS can offer assistance:
• Identify blunders in recording transactions
• Spot bizarre or unpredictable installments that might demonstrate fraud
• Confirm that installments have been handled and cash collections have been stored into a
bank account
• Provide unwavering quality and consistency in accounting
Companies ought to perform bank compromises at slightest once a month. Bookkeeping
computer program can offer assistance decrease the chance of blunders on a company's
budgetary articulation.
The adjust in a cash book and a passbook may contrast for a number of reasons, including:
• Cheques: Cheques paid into the bank may not be cleared however, or a cheque issued may
not have been displayed for installment.
• Bank charges: Bank charges may have been turned around but not recorded in the cash book.
• Errors: Blunders may have been made in recording exchanges by the firm or the bank. For
illustration, a stored cheque may have been recorded twice, or an sum may have been posted
inaccurately.
• Interest: Intrigued permitted by the bank may not have been recorded in the cash book
however.
• Direct charges: The bank may have made coordinate charges on sake of the client.
• Deposits: Sums may have been specifically kept into the bank account.
• Dividends: Profits collected by the bank may not have been recorded in the cash book
however.
At the conclusion of an bookkeeping period, a company's book adjust is accommodated with
the bank adjust utilizing the month to month bank statement

Assignment Set – 2
Q 4. Describe in detail different types of shares.
Ans: There are a few sorts of offers that companies issue, each with diverse characteristics:
• Equity offers: Too known as standard offers, these offers allow shareholders voting rights
and the plausibility of capital appreciation. The most common sort of share, these donate
shareholders voting rights and a parcel of the company's benefits and resources. In any case,
they get profits after inclination shareholders.
• Preference offers: These offers deliver shareholders particular rights over standard offers,
counting the right to settled profits and need in accepting profits and capital in the occasion
of liquidation.These offers give a settled profit and have need over conventional offers in
profit installments and liquidation. There are a few sorts of inclination offers, counting:
o Cumulative inclination offers: Shareholders get profit payouts indeed when the company
isn't making a benefit.
o Non-participating inclination offers: Shareholders as it were get the pre-fixed profit and do
not share in the company's additional profit or overflow resources amid liquidation.
o Non-convertible inclination offers: These offers can't be changed over into value offers and
have a settled profit rate.
o Convertible inclination offers: Shareholders can trade their offers for standard offers at
indicated interims.
• Non-voting offers: These offers do not deliver shareholders voting rights, but may still offer
profits. They are regularly given to workers as a tax-efficient way to pay compensation.
• Redeemable offers: The company can purchase back these offers at a afterward date. These
offers can be bought back by the company at a future date, either on a settled date or at the
tact of the directors.
• Bonus offers: These offers offer one of a kind benefits to existing shareholders. These offers
are given to existing shareholders at no taken a toll, and may supplant cash dividends
• Sweat value offers: These offers offer one of a kind benefits to employees.
• Convertible offers: These offers can be changed over into common offers after a
foreordained period.
• Rights offers: These offers donate existing shareholders the to begin with opportunity to
purchase extra offers some time recently open offerings.

Q 5. Define debentures and summarize the classification of debentures.

Ans: A debenture is a long-term obligation instrument that a company or government issues
to raise capital. It's a way for a company to borrow cash from a moneylender, or debenture
holder, at a settled intrigued rate. In trade, the company guarantees to reimburse the foremost
and intrigued by a certain date.
Here are a few key viewpoints of debentures:
• Funding
Debentures are a financing choice for companies that need to dodge issuing offers or tying up
resources.
• Creditworthiness
Debentures are not secured by collateral, but instep by the issuer's financial soundness and
notoriety.
• Interest
The intrigued paid to debenture holders is a running fetched for the company, and is recorded
in the benefit and misfortune account.
• Balance sheet
The sum owed to debenture holders is a capital account on the company's adjust sheet.
• Trading
 Debentures can be bought and sold on the open showcase, like offers.
• Voting
Debenture holders cannot vote at company common gatherings, not at all like shareholders.
• Types
Debentures can be convertible or non-convertible. Convertible debentures can be traded for
the company's value offers.
The term "debenture" can have diverse implications depending on the locale. For illustration,
in the US, a debenture is regularly an unsecured advance that's sponsored by the company's
notoriety, or maybe than physical resources.
Debentures can be classified in a few ways, including:
• Secured vs unsecured
Secured debentures are sponsored by the company's resources, whereas unsecured debentures
are not. Secured debentures are moreover known as contract debentures.
• Convertible vs non-convertible
Convertible debentures can be changed over into value offers of the company, whereas non-
convertible debentures cannot.
• Redeemable vs irredeemable
Redeemable debentures are reimbursed after a set period of time, whereas irredeemable
debentures are not reimbursed until the company goes into liquidation.
• Registered vs bearer
Registered debentures require a exchange to be went with by archives and records, whereas
conveyor debentures are unregistered and can be conveyed without records.
• Fixed charge vs drifting charge
Fixed charge debentures are secured against particular resources of the company, whereas
drifting charge debentures are secured against nonexclusive resources of the company.
• Perpetual
Perpetual debentures pay intrigued inconclusively without a reimbursement plan for the vital.
Other sorts of debentures incorporate in part convertible debentures.
Q6: Discuss different methods used for calculation of depreciation in detail.

Ans: Depreciation is the orderly allotment of the fetched of a unmistakable resource over its
valuable life. Distinctive strategies are utilized to calculate devaluation, each with its claim
preferences and impediments. Here are a few of the most common methods:
1. Straight-Line Method
• Concept: This is the least complex strategy, where the same sum of deterioration is charged
each year.
• Formula:
o Depreciation Cost = (Fetched - Rescue Esteem) / Valuable Life
• Example:
o A machine costing $10,000 with a valuable life of 5 a long time and a rescue esteem of
$1,000 would deteriorate $1,800 per year ($9,000 / 5).
2. Units-of-Production Method
• Concept: Deterioration is based on the asset's utilization, not the section of time.
• Formula:
o Depreciation Cost = (Taken a toll - Rescue Esteem) / Evaluated Add up to Units * Genuine
Units Produced
• Example:
o A truck costing $50,000 with an evaluated life of 200,000 miles and a rescue esteem of
$5,000 would deteriorate $0.225 per mile ($45,000 / 200,000). If the truck is driven 20,000
miles in a year, the deterioration cost would be $4,500.
3. Declining Adjust Method
• Concept: A settled rate of the asset's book esteem is devalued each year, coming about in
higher deterioration in prior a long time and lower devaluation in afterward years.
• Formula:
o Depreciation Cost = Book Esteem * Deterioration Rate
• Example:
o A double-declining adjust strategy with a 20% rate on a $10,000 resource would devalue
$2,000 in the to begin with year ($10,000 * 20%). In the moment year, the deterioration would
be $1,600 ($8,000 * 20%).
4. Sum-of-the-Years' Digits Method
• Concept: Devaluation is based on a declining division of the asset's cost.
• Formula:
o Depreciation Cost = (Taken a toll - Rescue Esteem) * (Remaining Valuable Life / Whole of
the Years' Digits)
• Example:
o For a 5-year resource, the entirety of the years' digits is 15 (5 + 4 + 3 + 2 + 1). In the to
begin with year, the deterioration would be 5/15 of the depreciable cost.
Choosing the Right Method
The choice of deterioration strategy depends on different components, including:
• Industry hones: A few businesses have particular bookkeeping measures or charge directions
that direct the utilize of certain methods.
• Asset sort: Diverse strategies may be more reasonable for distinctive sorts of resources. For
illustration, the units-of-production strategy is frequently utilized for apparatus, whereas the
straight-line strategy is common for buildings.
• Company approach: Companies may have their possess inside approaches with respect to
deterioration methods.
Additional Considerations
• Salvage esteem: This is the evaluated esteem of the resource at the conclusion of its valuable
life.
• Useful life: This is the assessed period over which the resource is anticipated to be used.
• Accounting guidelines: Distinctive bookkeeping guidelines, such as GAAP (By and large
Acknowledged Bookkeeping Standards) and IFRS (Universal Monetary Announcing
Benchmarks), 1 may have particular prerequisites for devaluation methods.
By understanding these distinctive strategies and their suggestions, businesses can select the
most fitting strategy for their particular needs and precisely reflect the esteem of their
resources on their budgetary statements