Book-Obj
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Completed!
1a)
A trading account can be any investment account containing securities, cash or other holdings. Most commonly, trading account refers to a day trader's primary account. ... The assets held in a trading account are separated from others that may be part of a long-term buy and hold strategy.
1b
i) Closing stock
ii) sales and sales return
iii) purchase related expenses
iv) factory or manufacturing expenses
v) Purchase returns
vi) opening stock
vii) Carriage inward
viii) Wages
2a) What is Discount ? Meaning
In simple terms, Discount is an allowance or
concession in price. Discount is given so that the buyer is induced (lured) to place an order and later to make payment in time.
Discount can be also referred to as a deduction in price. The seller deducts the discount from the gross or total price, and the buyer is supposed to pay the net amount.
2bi
A trade discount is a routine reduction from the regular,
established price of a product. The use of trade
discounts allows a company to vary the final price
based on each customer's volume or status.
2bii (1)Cash discount is an allowance or concession given by the seller to the buyer.
(2) This discount is offered to encourage the buyer for quick payment or settlement.
(3) It is allowed for immediate payment of cash or payment within a short period.
(4) The cash discount is normally shown in the quotation and invoice . It is deductible from the total price and the buyer is requested to pay only to the net amount.
(4a)
Depreciation refers to two aspects of the same concept: The decrease in value of assets The allocation of the cost of assets to periods in which the assets are used. Depreciation is a method of reallocating the cost of a tangible asset over its useful life span of it being in motion.
(4b)
PIck any two
(i) To Calculate the True Profits
(ii) To show true Financial Position
(iii) To make Provision for replacement of assets
(iv) To have some Incidental advantage
(v) To have Tax advantage
(4ci)
*Fixed Instalment*
fixed installment method of depreciation the amount of depreciation each year is fixed and equal. At the end of each year, a fixed amount is removed from the book value of the asset concerned and charged to profit and loss account (or income statement ).
This is the oldest and most commonly used method of depreciation. Here a fixed amount of depreciation is charged every year during the lifetime of the machine. There at the end of its useful life, the value of the asset will be zero. This is also known as straight-line method or original cost method.
(4cii)
*Dimishing Balance*
Diminishing balance depreciation method is one of the three
depreciation methods that mention in IAS 16. This kind of
depreciation method is said to be high charged at the first period, and then subsequently reduce.
This is because the charging rate is applying to the Net Book Value of Assets and the Net Book Value of Assets is reduce from time to time after charging depreciation.
BOOKKEEPING:
(8a)
Journal entry
Sales account
Dr 49,000
Suspense of account being error of principle and now corrected
Cr 49,000
Lammidu's Account
Dr 76,200
Suspense account being error of parties omission now corrected
Cr 76,200
Discount allowed
Dr 57,000
Discount received
Dr 57,000
Suspense account being error of principle of complete
Cr 114,000
Return inward account
Dr 30,000
Suspense account under cast in return inward now corrected
Cr 30,000
(8b)
difference in trial balance recorded
Dr 269,200
Total =269,200
Credit side
Sales 49,000
Lammidu's AK 76,200
Discount allowed 57,000
Discount received 57,000
Return inward 30,000
Total =269,200
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April 09, 2019, 10:23:58 am
