THIRUVALLUVAR UNIVERSITY VELLORE

FINANCIAL ACCOUNTING UBA21/SBA32 (KEY)

SECTION A (10X2=20)

1. A subsidiary account is an account that is kept within a subsidiary ledger, which in

turn summarizes into a control account in the general ledger. A subsidiary account is
used to track information at a very detailed level for certain types of transactions, such
as accounts receivable and accounts payable.
2. Business entity concept, money measurement concept, accounting period concept,
accounting cost concept, accrual concept, matching concept, realisation concept.
3. The trial balance is a report listing the ending debit and credit balances in all accounts
at the end of a reporting period.
4. A method of allocating the cost of a tangible asset over its useful life.
Businesses depreciate long-term assets for both tax and accounting purposes. 2. A
decrease in an asset's value caused by unfavourable market conditions.
5. Expenses which have been incurred during the year and whose benefit has been
derived during the year, but not paid for yet are called outstanding expenses. At the
end of the accounting year, all such expenses must be brought into the books;
otherwise the profit will be overstated.
6. an account in the books of an organization to which incomes and gains are credited
and expenses and losses debited, so as to show the net profit or loss over a given
period, a financial statement showing a company's net profit or loss in a given period.
7. A single-entry bookkeeping system or single-entry accountingsystem is a method of
bookkeeping relying on a one sided accountingentry to maintain financial
information.
8. No fixed rules, incomplete system, cash book, personal account, variation in
application.
9. With a share allotment, the shares are created and issued by the company to the
people who become the company's shareholders.Shares will generally be issued by
the company at the start of its life and some companies will issue more shares later
on.
10. If debentures are issued at a price more than its nominal value (face value) such an
issue is called issue at a premium. For example, if a debenture of Rs. 1000 is offered
at 1,050, it is a case of issue of debentures at premium. The excess of issue price over
face value is premium.
Section B (5x5=25)
11. A) 1. Cash A/c
Dr
9500
To Sales A/c
9500
( Being goods sold by cash)
2. Mugunthan A/c
Dr
7000
To Sales A/c
7000
( Being goods sold on credit )
3. Cash A/c
Dr
12000
To Sales A/c
12000
(Being cash sales made)
4. Purchase A/c
Dr
3500
To Murthy A/c
3500
(Being purchased goods from murthy on credit)
5. CashA/c
Dr
14000
To Machinery A/c
14000
(Being purchased goods from murthy on credit)

19.

20.
Share Capital A/c Dr. [ No. of shares forfeited x Amount called up per share]
To Forfeited Share A/c [Amount already received]
To Share Allotment A/c [Amount due but was not Or/and received]
To Share (first / second/ third) Call A/c
Forfeited Shares A/c Dr
To Capital Reserve A/c (Profit on reissue of forfeited shares transferred to capital reserve)