Accoutancy 320 NIOS Free Solved Assignment 2022 – 23 (English Medium)

NIOS Free Solved Assignment 2022 – 2023

NIOS Accoutancy 320 Solved Assignment 2022 – 23

Tutor Marked Assignment (TMA) 

Senior Secondary

Max. Marks: 20

Note:

(i) All questions are compulsory. The marks allotted for each question are given beside the questions

(ii) Write your name, enrollment numbers, Al name, and subject on the first page of the answer sheet.

1. Answer any one of the following questions in about 40-60 words.         2

a) Classify the following items of expenditure into capital expenditure revenue expenditure and deferred revenue expenditure     (See Lesson-31)

i) Amount spent on purchase of plant and machinery.

ii) Expenditure incurred on repairs of building.

iii) Heavy expenditure on research and development to introduce a new product in the market.

iv) Salaries paid.

Ans: i) Amount spent on purchase of plant and machinery: It is a capital expenditure

ii) Expenditure incurred on repairs of building.: It is a revenue expenditure.

iii) Heavy expenditure on research and development to introduce a new product in the market.: It is a deferred revenue expenditure.

iv) Salaries paid.: It is revenue expenditure

b) Explain the procedure of managing Text in excel.    (See Lesson-35)

Ans: Managing text in MS-Excel is a very simple. First of all, format the cells you wish to work with as text by selecting them and clicking the “Format Cells” option in the Home tab, then select “Text” in the “Number” tab. This will ensure that Excel will not attempt to convert any text you enter into another data type.

Next, you can enter the text you wish to use. To edit the text in a cell, simply double click the cell to enter edit mode and make your changes. You can also use the “Find & Select” option in the Home tab to search for specific text in your spreadsheet.

2. Answer any one of the following questions in about 40-60 words.          2

a) The concept of realisation states that revenue is realized at the time when goods or services are actually delivered. Cite two examples to ascertain the correct amount of revenue realised for a year. (See Lesson-2)

Ans: Answer any one question

b) Visit a business unit, and discuss with the accountant to find out how do they deal with the following while preparing the books of accounts:  (See Lesson-3)

1. Valuation of the stock.

2. At what intervals do they close their account books?

3. What method of depreciation did they use in the last three years?

Analyse and conclude if they are following some accounting concepts or not. If yes, name the accounting conventions/ accounting concepts.                    

Ans: I visited M/s Cash Computers and met Mr. Anuj killa and discuss about their accounting system. He is a very good accountant and we discuss on the following points:

1. Valuation of Stock: Stock of M/S Cash Computers are valued at cost or market price whichever is lower. They are following convention of conservatism while valuing stocks at the end of accounting year.

2. Closure of books of accounts: They close their books of account as on 31^st March every year. They follow accounting period concept while closing their books of accounts.

3. Method of depreciation: There are main two methods of charging depreciation – SLM method and WDV method. They charge depreciation on the basis of book value at the end of accounting year. They following WDV method of charging depreciation every year. Convention of Consistency in charging depreciation is followed by M/s Cash Computers.

3. Answer any one of the following questions in about 40-60 words.             2

a) From the following particulars of Radhika Traders, prepare a bank reconciliationstatement on June 30, 2020.

1. Balance as per the cash book Rs. 35,750.

2. Rs. 250 charges for credit card fee is debited by bank, which is not recorded in cash book.

3. Cheques for Rs. 7,550 are deposited in the bank, but not yet collected by the bank.

4. There was also a debit in the pass book of Rs. 3,500 in respect of a discounted bill dishonoured.   (See Lesson-10)

Ans:

Bank Reconciliation Statement of Radhika Traders

As on June 30, 2020

Particulars	Amount	Amount
Balance as per Cash Book Less: a) Cheques deposited but not yet collected by the bank b) Bank charges debited by bank c) Discounted bill dishonoured	7,550 250 3,500	35,750 11,300
Balance as per Pass book		24,450

b) Prepare notes regarding your receipts and payments for a month, and prepare aCash Book on the basis of the information noted.      (See Lesson-7)

Ans: I have started a business last year and incurred the following receipts and payments:

Triple Column Cash Book

Date	Particulars	LF	Cash	Bank	Dis.	Date	Particulars	LF	Cash	Bank	Dis.
2020 April.1 2 4 12 25	To Capital A/c To Cash A/c To Ram To Cash A/c To Banks A/c		25,000 500 200	10,000 800	25	2020 April.2 3 12 20 25 30 30	By Bank A/c By Purchases A/c By Bank A/c By Hari By Cash A/c By Wages A/c By Balance c/d		10,000 800 400 14,500	150 545 200 9,905	5
			25,700	10,800	25				25,700	10,800	5
	To Balance b/d		14,500	9,905

 4. Answer any one of the following questions in about 100-150 words.          4

a) Ananya received the following Bills of Exchange. Record them in Bills Receivable Book, and post them into the Ledger: (See Lesson-11)

(i) Jan. 1 Drawn on Reema a Bill of Exchange at 3 months which was accepted and returned by him on January 1, 2020. The amount of the bill is Rs. 10,000.

 (ii) Jan. 10 Drawn on Sukanya a Bill of Exchange for Rs. 5,000 at 2 months, which was accepted on the same day. The bill is payable at Punjab National Bank.

(iii) Jan. 12 Reema’s acceptance endorsed in favour of Hari Kumar in full settlement of a debt of Rs. 10,250.

Ans: Answer any one

b) ‘Agreement of Trial Balance is not the conclusive proof of the accuracy of accounts’. Justify the statement. What should the accountant do if Trial Balance does not agree?           (See Lesson-9)

Ans: After posting the accounts in the Ledger, a statement is prepared to show separately the debit and credit balances and to check the arithmetic accuracy of the accounts of a certain period such a statement is known as the Trial Balance.

The agreement of a Trial balance ensures arithmetical accuracy only.  A concern can prepare Trial balance at any time, but its preparation as on the closing date of an accounting year is compulsory.

According to M.S. Gosav “Trial balance is a statement containing the balances of all ledger accounts, as at any given date, arranged in the form of debit and credit columns placed side by side and prepared with the object of checking the arithmetical accuracy of ledger postings”.

The Trial balance can be prepared only in those concerns where double entry system of book- keeping is adopted. This system is too costly.It the Trial balance is wrong, the subsequent preparation of Trading, P&L Account and Balance Sheet will not reflect the true picture of the concern. The main objective of trial balance is to check the arithmetical accuracy of books of account. It both side of trial balance is tallied, it is assumed that books of accounts of arithmetically correct. But matching of Trial balance is not a conclusive proof of the arithmetical accuracy of the books of account because there are of errors which cannot be disclosed by trial balance such as:

i)      Error of principle.

ii)    Error of omission.

iii)   Errors of Commission.

iv)  Recording wrong amount in the books of original entry.

v)    Compensating errors.

Whenever a trial balance disagrees the following steps can be taken to discover the errors:

1.    Divide the difference by two and find out if some figure equal to that (half the difference) appears in the trial balance. It is possible that such item might have been recorded on the wrong side of mal balance, causing double the difference.

2.    If the mistake is not located, the difference should be divided by 9 and if difference is evenly divisible by 9 the error be due to transportation of figures, e.g. Rs. 590 wrongly recorded as 950, the difference is (950-590) 360 and it is evenly divisible by 9.

3.    The next step is to recheck the debit and credit totals of trial balance to satisfy that trial balance has been cast correctly.

4.    If mistake remains undetected, make sure that balances or totals of all the ledger accounts have been correctly shown in the trial balance. Special care should be taken to ensure that cash or bank balances have been duly incorporated in the mal balance.

5.    The next step should be to recheck that all the closing balances from preceding year’s balance sheet were correctly carried forward and recorded in respective accounts in the ledger.

6.    Further the totaling and balancing of the ledger accounts should be redone so as to be sure that there is no mistake on that account.

7.    Check the totals of schedule of debtors and creditors and find out that the balances have been included in the list.

8.    If difference is round sum, it is advisable to check casting and carry forwards. But if the difference is odd sum the balancing should be checked minutely.

9.    Even then if error is not located, all the accounts should be checked thoroughly.

5. Answer any one of the following questions in about 100-150 words.                 4

a) Discuss the two methods of providing depreciation. Explain their merits and demerits. Your parents make some savings every month from their regular income for the known or unknown expenses/ liability to meet out in future. Prepare a list of past three months’ savings with reasons, and differentiate if they are reserves or provisions.      (See Lesson-14 & 15)

Ans: Methods of charging depreciation:

Straight Line method or Fixed installments method: This method of charging depreciation is each to understand and simple to calculate. Under this method depreciation is charged on original cost of the assets on uniform basis every year. The value of the assets can be reduced to ‘O’ under this method.

Merits:

(1) It is simplest to understand and easy to apply.

(2) The value of the assets can be reduced to zero under this method.

Demerits:

(1) Under this method, same amount of Depreciation is charged from year to year, irrespective of use of the assets.

(2) With the passage of time efficiency of assets decreases but the amount of Depreciation remains the same.

Diminishing Balance method OR Written down value method: Under this method a fixed rate of depreciation is charged each year on the diminishing value of the assets till the amount is reduced to scrap value. This method involves more calculation as compared to SLM and value of assets cannot be reduced to zero under this method.

Merits:

(1) The amount of depreciation decreases continuously with the decrease in the life of assets.

(2) High amount of Depreciation is provided in earlier year thus reducing the impact of Obsolescence

Demerits:

(1) The book value of assets can never be zero.

(2) The determination of a suitable rate of Depreciation is also difficult.

b) A company has issued 3000, 9% debentures of Rs. 1,000 each at a discount of 10%. If the debentures are to be redeemed in five equal annual installments, calculate the amount of Discount on Issue of Debentures to be written off each year, and prepare Discount on Issue of Debentures A/c.    (See Lesson-30)

Ans: Discount on issue of debentures = 30,00,000*10% = 3,00,000

Amount of discount in issue of debentures to be written off each year

= Amount of loss on issue of debentures/No. of years

=3,00,000/5

= 60,000

Discount on issue of Debentures A/c

Date	Particulars	Rs.	Date	Particulars	Rs.
Year 1	To 9% Debentures A/c	3,00,000	Year 1	By Profit and Loss A/c By Balance c/d	60,000 2,40,000
		3,00,000			3,00,000
Year 2	To Balance b/d	2,40,000	Year 2	By Profit and Loss A/c By Balance c/d	60,000 1,80,000
		2,40,000			2,40,000
Year 3	To Balance b/d	1,80,000	Year 3	By Profit and Loss A/c By Balance c/d	60,000 1,20,000
		1,80,000			30,000
Year 4	To Balance b/d	1,20,000	Year 4	By Profit and Loss A/c By Balance c/d	60,000 60,000
		1,20,000			1,20,000
Year 5	To Balance b/d	60,000	Year 5	By Profit and Loss A/c	60,000
		60,000			60,000

6. Prepare any one project out of the given below.         6

a) Discuss with a shareholder of a company or do a desktop survey to find annual report of any company. Find out the following:

1. Name of the company.

2. Mention the amount of capital:

a. Authorised.

b. Issued.

c. Called up.

d. Call in Arrears.

e. Reserve capital.

Explain the above terms with the help of annual report of the company analysed and differentiate between a limited company and a private limited company.    (See Lesson-26)

Ans: Answer Any One Question

b) Discuss with partners of a firm, and find out the characteristics of partnership. Also enquire with them if they have a partnership deed between them and what will happen in case of absence of a partnership deed. (See Lesson-22)

Ans: My friend Pankaj is doing a partnership business with Narendra. I meet him and discuss about his business. After detailed discussion, I understand the concept of partnership business.

Meaning of Partnership: Partnership is an association of two or more persons who agreed to do business and share profits and losses arises from it in an agreed ratio. The partners act both as agents and principals of the firm.

In India, Partnership firm is governed by the Indian Partnership Act 1932. Section 4 of this act defines partnership as: “The relationship between persons, who have agreed to share the profits of a business carried on by all or any one of them acting for all.”

Characteristics of Partnership

a) Agreement: Partnership is the result of an agreement, either written or oral, between two or more persons. It arises from contract and not from status or process of law.

b) Number of Persons: In a partnership firm there must be at least two people to form the business. Partnership Act 1932, does not specifies the maximum numbers of persons, but the Indian Company Act 2013, restricts the number of Partners to 100 for a partnership firm. But in case of limited liability partnership there is no maximum limit.

c) Business: There must be a legal business. Business includes trade, vocation and profession.

d) Profit-Sharing: The agreement between/amongst the partners must be to share profit or losses arise from the business.

e) Agents and principals: The partners act both as agents and principals of the firm. Partnership firm can be carried on by all or any of them acting on behalf of all the partners.

f) Separate legal entity: Partnership is a separate legal entity from the accounting point of view. But from the legal view point firm is not separate from its partners. If a firm is bankrupt, private estate of the partners is liable to meet firm’s obligations.

Partnership deed: Meaning

A partnership is formed by an agreement. This agreement may be oral or in writing. Though the law does not expressly require that the partnership agreement should be in writing, it is desirable to have it in writing. A written agreement, which contains the terms of partnership, as agreed to by the partners is called ‘Partnership Deed.’

Importance: It is a very important document of the firm which defines relationship amongst the partners. It is necessary to avoid disputes amongst the partners and can be presented in the court as evidence.

Contents (Clauses) of the Deed:

a) Name and address of the firm.

b) Names and addresses of the partners.

c) Nature of Business.

d) Amount of capital to be contributed by each partner.

e) Profit or loss sharing ratio.

f) Date of commencement of partnership.

g) Interest of Capital, if provided the rate of interest must be specified.

h) Partner’s salaries and commission, if provided.

i) Interest on Drawings, if charged, the rate of interest should also be specified.

Rules to be followed in the absence of Partnership agreement between partners:

According to Indian Partnership Act 1932 (sec. 4), the following provision are applicable in the absence of partnership deed:

a) Profit Sharing Ratio: In the absence of partnership deed all partners will share Profit or losses in equal ratio.

b) Interest on Capital: No interest will be given to any partner on his capital in the absence of partnership deed. In case, there is a partnership deed, which allows interest on capital, it will be allowed in case of profit but not in case of loss in the business.

c) Interest on Drawings: No interest will be charged on drawing in the absence of partnership deed.

d) Partner’s Salary/Commission: No salary or commission will be given to any partner in the absence of partnership deed.

e) Interest on Partner’s Loan: Interest on partner’s loan will be given @ 6% p.a. Such interest is payable even if there are losses.

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