NIOS Free Solved Assignments (2019 - 2020) | Accountancy 320 English Medium

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

a) Which account is debited in the following transactions: (i) Rent Paid (ii) Purchased goods from Nithin (Lesson-5)

Ans: (i) When rent is paid in cash, Rent account is debited because it is a nominal account and cash account is credited.

(ii) When goods are purchased on credit, purchases account is debited and Nithin (Creditors) account is credited.

b) What does the 'Convention of Full Disclosure' say? (Lesson-3)

Ans: According to this principle, all accounting statements should be honestly prepared and all information of material interest to proprietors, creditors, investors, etc. should be disclosed in the accounting statements. Moreover, books of accounts should be prepared in such a way that they become reliable, informative and transparent.

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

a) If we start the preparation of Bank Reconciliation Statement with balance as per Cash Book, what
effect does the following have in it?

(i) Interest allowed by Bank

(ii) Dividends on share collected by Bank (Lesson 10)

Ans: (i) When bank reconciliation started with balance as per cash book, then interest allowed by bank is added with cash balance because it increases pass book balance.

(ii) When bank reconciliation started with balance as per cash book, then dividends on share collected by bank is added with cash balance because it increases pass book balance.

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b) State the meaning of business transaction. How is Office Machine purchased for cash for Rs.13,500/- shown in Accounting Equation? (Lesson - 4)

Ans: Transaction: Transaction means the exchange of money or money’s worth from one account to another account. It is an economic activity of the business that causes a change in an organization’s financial position or net worth, resulting from normal business activity.

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

a) How should Closing Balance of Furniture appear in Furniture A/c? (Lesson-6) 2 marks

Ans: Since Furniture is a real account and it is shown as an asset, its closing balance is shown on the credit side as By Balance C/d and is shown as an asset in the balance sheet.

b) Postage is paid by business organization. Explain the rule of Accounting in this transaction.

Ans: Postage paid is an expense and rule of nominal account is applicable on all types of expenses. According to Traditional rule of nominal account, all the expenses and losses are debited. Hence, here Postage account is debited and cash paid is credited.

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

a) Prepare the Trial Balance of Mr. Yellow's business as at 31st December. (Lesson-9)

Capital 26,900, Bank 2,500 , Purchases 4,400, Sales 26,000, Akshay (Debtor) 1,700, Rent 2,200, Electricity 1,850, Motor Van 40,250.

Ans: 

Trial Balance

b) Post the following transactions in the ledger. 2016

August 16 Purchased goods on credit from Biju Rs.25,000

August 18 returned goods to Biju Rs. 5,000. (Lesson 6)

Biju’s

Purchases a/c

Return Outward a/c

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

a) What is a 'Contra Entry'? Show a 'Contra Entry' in the 'Bank Column in Cash Book'. (Lesson 7)

Ans: Contra entry: When both the debit and credit aspects of a transaction are recorded simultaneously in the same book but in different columns, each entry on the debit side and on the credit side is called a contra entry. The question of contra entry arises only when cash book is prepared with cash and bank column.

Example of contra entry: a) Cash deposited into bank Rs. 10,000

b) Cash withdrawn from bank for office use: Rs. 5,000

Cash book with Cash and Bank Column

b) How do the entries relating to insolvency apear in the books of the drawer? (Lesson11)

Ans: When a bills of exchange is dishonoured due to insolvency the drawee, two entries are passed in the books of the drawer:

(i) For dishonour of a bill when the drawee is declared insolvent:

Drawee’s account Dr

To Bills receivable a/c/Bank a/c/Endorsee a/c/Bill for collection a/c

(ii) For final dividend received from drawee’s estate:

Cash account Dr

Bad debts account Dr

To Drawee’s account

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

a) Go to any shop. Prepare a Purchases Book on the basis of transactions of that organization. (Minimum details of 3 suppliers are needed). (Lesson 8)

Ans: Credit purchases are given below:

a) Purchases from dynamic 10 books @ Rs. 200, trade discount @ 10%.

b) Purchases from Suhani store 200 note books @ Rs. 50, trade discount @10%.

c) Purchases from Navin 200pcs pen @ Rs. 20 , trade discount @ 5%.

Purchase day book

b) Visit any nearby business establishment and prepare a Simple Cash Book from the transactions of that business organization with minimum of four items each on the receipt side and on the payment side. (Lesson 7)

Ans: I have visited a nearby shop “Suhani Store” and got the following transactions:

Simple Cash Book