Earlyface

ACCOUNTING OBJ:
1-10: BCABABBCCC
11-20: ACABACBDDB
21-30: ABBDDC**AD
31-40: BDBADBDACB
41-50: ABBBACCDCB

(2a)Closing entries are journal entries made at the end of an accounting period to transfer temporary accounts to permanent accounts.


(2b)
(i)Branches are separated from the main organization while Department are attached with the main organization under a single roof

(ii)Branches are geographically separated while Department are not  separated rather exist under the same roof

(iii)Allocation of branch common expenses does not arise while allocation of departmental common expenses is a tough job




(2c)
(Pick four)
(i)It enables the organization to determine the branch that is making either profit or loss

(ii)It helps to determine the performance of the organization as a whole

(iii)It allows proper control over the branch by the head office

(iv)it also assists the organization to determine the performance of a branch manager

(v)it prevent wastage and fraud from the staff

*3b*

*•Accrued expenses:* These are expenses that have been incurred before being paid for by the firm.

*•Prepaid expenses:* this is the prepayment for services in advance of their use. Where the payment is made in respect of a period beyond the date of account, it is referred to as prepaid expenses.

*• Accrued income:* This is the revenue that has been earned but for which cash has not yet been received*

(4a)
(i) Insufficient fund
(ii) Wrong signature
(iii) If the cheque is post dated

(4b)
(i)Petty cash float: This is small amount of cash kept at hand for making immediate payments for miscellaneous small expenses.
(ii)Contra entries: This is an entry which is recorded to reverse or offset an entry on the other side of an account. If a debit entry is recorded in an account, it will be recorded on the credit side and vice-versa.
(iii)Imprest system: This is a form of financial accounting system. The most common imprest system is the petty cash system. In other words it is a fixed amount that is reserved, which after a certain period of time or when circumstances require, because money was spent, it will be replenished.

(4c)
(i)Reduction in numbers of transactions: Many expenses of small nature recorded in petty cash book, the number of transactions is reduced in the cash.
(ii)Reduction of errors: As head cashier check the accounts of previous month and gives advance for the coming month, does, errors if any are reduced.
(iii)Savings of time and labour: As the petty expenses are recorded by petty cashier at any time so that the chances of misuse are minimised.

1. Insufficient Funds
Salaries sometimes reach late in accounts leaving insufficient funds in your account which may lead to bouncing of cheque. While writing a cheque, make sure that you have sufficient funds in your bank account.
2. Irregular Signature
Bank will not honour a cheque if the signature of the drawer on the cheque don’t match the specimen signature available with the bank.
3. Alterations
Alterations on cheques are not allowed. Even if you sign the alteration to verify it, the cheque will not be considered as valid and will not be honoured by the bank.
4. Post-dated Cheque
A post-dated cheque is the one on which the date which is mentioned is yet to come. Post-dated cheques are to be presented to the banks on a future date. For instance, a cheque written on 15th Jan 2016 bearing a date of 30th Jan 2016, is a post-dated cheque. A cheque will be dishonoured if it is presented to the bank before the date mentioned on it.
5. Stale Cheque
If a cheque is presented to the bank for payment after three months from the date mentioned on the cheque it is called stale cheque. After expiry of that period, the cheque will be dishounoured and no payment will be made by banks against that cheque.
6. When Payment Is Stopped
If the drawer asks the bank to stop payment and not to pay for a cheque already issued, in that case, the cheque will not be honoured by the bank.
7. Frozen Account
If government or court has ordered that a person’s account has to be frozen, in such case, the bank will dishonour all the cheques bearing that account number.

(9)
Stock turnover Ratio = COGS/Avg stock
= 160,000/(3,0000 + 4,0000)/2)
= 200000 x 2/10000 = 11.43 times

(9b) Gross Profit Margin = Gross Profit/Sales x 100/1
= 160,000/360,000 x 100/1 = 44.44%

(9c) Net Profit Margin = Net Profit/Sales x 100/1
= 40,000/360,000 x 100/1 = 11.11%

(9d) Current Ratio = current Assets/Current Liabilities
Current Assets = 90,000/45,000 = 2:1

(9e) Acid Test Ratio = Current Assets – Stock / Current Liabilities
= 90,000 – 40,000/45,000
= 50,000/45,000 = 10:9

Sir pls the exam have started