Bachelor of Business Administration-BBA Semester 1 BB0006 Financial Accounting - 4 Credits (Book ID: B0429) Assignment Set- 1 (60 Marks)

Note: Answer all the questions. 1. Explain how accounting as an information system aids business and economic decisions. Explain the functions of accounting. (10 Marks)
The committee on Terminology of the American Institute of Certified Public Accountants (AICPA) formulated the following definition, which was widely quoted for many years Accounting is the art of recording, classifying and summarizing in a significant manner, and in terms of money transactions and events which are in part at least, of a financial character, and interpreting the results there of. In 1966, the American Accounting Association (AAA) emphasized a broader prospective of accounting as Accounting is the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information. From the above definitions, it is cleared that accounting is the process of identifying, measuring, recording, classifying, summarizing, interpreting and communicating the financial transactions of an organization or a concern to the interested users of the information. In short accounting is the recording, classifying, summarizing, of business transactions and interpreting the results thereof. In 1970, AICPA of the US defined accounting with reference to the concept of information Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, and about economic activities, that is intended to be useful in making economic decisions. Todays accounting focusses on the ultimate needs of those, who use accounting information, whether these users are inside or outside the business itself. Fig 1 displays how accounting as an information system aids business and economic decisions made by user decision makers.

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2. Accounting Equation concept states that for every debit there is a credit. Substantiate this concept with examples. (10 Marks) 3. Enter the following transactions in the cash book with discount, cash and bank columns (10 Marks)

4. What steps must you follow to locate the errors in financial statement? (10 Marks) 5. The following Trial Balance is extracted from the books of a merchant on 31-12-2004. (20 Marks)

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The following adjustments are to be made. 1. Stock in hand on 31-12-2004 was Rs.3250 2. Depreciate Buildings at the rate of 5%, Furniture and fittings @ 10% and Motor Vehicles @ 20%. 3. Rs.85 is due for interest on bank overdraft. 4. Salaries of Rs300 and taxes Rs.120 are outstanding. 5. Insurance amounting to Rs.100 is prepaid 6. One-third of the commission received is in respect of work to be done next year 7. Write off a further sum of Rs.100 as bad debts and provision for bad and doubtful debts to be made equal to 10% on sundry debtors. Prepare Trading Account and Profit and Loss Account.

BB0006 Financial Accounting - 4 Credits (Book ID: B0429) Assignment Set- 2 (60 Marks)

Note: Answer all the questions. Each question carries 10 marks. 1. Explain the meaning of accounting concepts, accounting conventions, accounting policies, accounting standards and GAAP with relevant examples

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2. Bank balance as per the cash book and the bank statement usually does not tally due to various reasons. Highlight only the important and the most common reasons for it. 3. Explain the characteristics of a bill of exchange. What do you mean by acceptance of a bill? 4. Explain the meaning of term Asset. Discuss various types of assets. 5. What is Punched Card Processing Machine? 6. What is Depreciation Accounting?