Railway Accounts Department Examinations

Showing posts with label Book keeping. Show all posts
Showing posts with label Book keeping. Show all posts

Monday, July 20, 2020

Short questions on Depreciation




Looking at Depreciation Expense Accounting Methods - dummies


2016 Book Keeping (5 x 2 Marks)
Short questions on Depreciation

1. Why Depreciation is not charged on Land?
Ans: For calculating depreciation, the life of the asset is required. Since Land is assumed have an unlimited useful life, there is no question of Depreciation on the Land.
The other assets which are not required to depreciate are:
A.      Collectibles like Art, Coins or Memorabilia
B.      Investments like Stocks or Bonds
C.      Any asset put into use for less than one year.

2. Is Depreciation is the result of fluctuations in the value of Assets?

Ans: No. Fluctuations in the value of Asset is concerned with the Market value of Assets, where as Depreciation is concerned with the Historical cost (i.e., cost of acquiring Fixed Asset)
 
3. Should be Depreciation be provided even if there is loss in any financial year?
Ans:  Yes. Depreciation is charge against Profit, not an appropriation of the Profit. Depreciation should be provided compulsorily irrespective of the fact, whether the company is in profit or loss.

4. Should Depreciation be provided on a fixed asset of which the market value is higher than the book value?
Ans:  Yes.  Depreciation should be provided whether the Assets have higher market value or not.

5.  Should Depreciation be charged on a machine even if it has not been used in a financial year?
Ans:  Yes.  Depreciation has nothing to do with whether the asset in use or not. It related to the value of an asset, but not whether used or not.
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Differences between Journal and Ledger


Difference Between Journal and Ledger (with Comparison Chart ...


2016 Appendix3 exam – Book keeping paper-5 Marks

Differences between


Journal
Ledger
1.Definition
The Book where all transactions are recorded
The Ledger, where all the journal entries are classified account wise and posted.
2. Nature
Subsidiary Book
Principal Book
3. Another name
Book of Original Entry and thus precedes the Ledger.
Book of Secondary Entry and prepared after the Journal
4. Recording
Chronological
Account  wise
5. Process
Journalizing
Posting
6. Narration
Required
Not required
Balancing
Not required
Required
7. Base for
It is the base for preparation of Ledger
It is the base for preparation of Trial Balance, then Final Accounts



Monday, May 20, 2019

Differences between Cash accounting and Accrual Accounting


Differences between
Item
Cash Accounting
Accrual Accounting
1. Basis
Cash is the basis for recognition of Income or expense. That means actual cash received or paid is the basis.
Revenue earned for income and expense incurred is the basis.  That means Cash received or paid is immaterial
2. Nature
Simple
Complex
3. Matching concept
No.
 Example : Advance Rs. one Lakh received in 2018 December, for which service is not delivered in FY 2018-19.  But Rs. One lakh is accounted in Fy 2018-19 as income only, though service is not rendered.  That means Income received, but corresponding expense is not incurred in that particular year. Hence No matching concept.
Yes.  Advance Rs. one Lakh received in 2018 December, for which service is not delivered in FY 2018-19.  Here Rs. One lakh is accounted in Fy 2018-19 as Creditor/Advance income only .  If service delivers in FY 2019-20, advance income shown in 2018-19 FY is adjusted as income earned in the year FY 2019-20.  Because service delivered and income earned are matched in FY 2019-20.
4. Recognition of Revenue
Cash is received
Revenue is earned
5. Recognition of Expense
Cash is paid
Expense is incurred
6. Accuracy
Low
High

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Differences between Single Entry and Double Entry


Differences between
Item
Single Entry
Double Entry
1. Meaning
Accounting system in which only single entry requires for every financial transaction
Accounting system in which two entries requires for every financial transaction.
For every debit, there is equaling credit is posted
2. Nature
Simple
Complex
3. Preferable for
Small enterprises
Big enterprises
4. Preparation of Financial Statements ( such as P & L Account and Balance Sheet)
Difficult
Easy
5. Suitable for Tax purpose
No
Yes
6. Knowledge of Book keeping
Not required
Required
7. Existing from
Since time immemorial
Since 1494 *
8. Detection of errors
Difficult
Easy

* Double entry book keeping was developed by Luca Pacioli, an Italian mathematician.  He is referred as "Father of Accounting and Book Keeping". He described book keeping along with other accounting topics in 9th chapter (150 pages) in his book  "The Summa de arithmetica"
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Wednesday, November 21, 2018

Important questions - Book keeping - Differences between compiled by Shri Uday, SSO(A)/Secunderabad


Important questions - Book keeping - Differences between
compiled by Shri Uday, SSO(A)/Secunderabad

1.       Interest & Dividend  click

2.       Shares & Debentures

3.       Memorandum of Association & Articles of Association

4.       Hire purchase & Installment payments

5.       Trading Account & Profit and Loss Account

6.       Single Entry & Double Entry

7.       Joint Venture & Partnership

8.       Fixed Assets & Current Assets

9.       Trade bills & Accommodation bills  Click

10.   Trial balance & Balance sheet

11.   Straight line method & Written down method (Diminishing balance method)

Sunday, September 30, 2018

Differences between Bad Debts and Doubtful Debts in Book keeping


Book Keeping  - 5 marks question asked in 1983 & 2004
Differences between
Bad debts
Doubtful debts
1. There is no possibility that a money will be collected from the Debtors.
1. There is a possibility that the money will be collect from Debtors.
2. Bad debt has a direct relation with the doubtful debt because when the possibility to collect money ends, a bad debt occurs.
2. Doubtful debt doesn’t depend on the bad debt.
3. A bad debt is written off and it is accounted as an expense in the Profit and Loss account duly deduct from Sundry Debtors in the Balance Sheet or adjust in the Provision for Bad and Doubtful Debts.
3. As a precaution, Company creats a Provision/ Reserve (certain percentage of Total debtors value) by debited to Profit and Loss Account and deduct the Same from Sundry Debtors.  Here it is not an expense, but as a Reserve.

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Saturday, September 29, 2018

Differences between Journal & Ledger


Book Keeping  - 5 marks question asked in 1995 & 2016
Differences between
Journal
Ledger
 1. Book of Original entry
1. Book of Final entry
2. It is a Subsidiary Book
2. It is a Principal Book
3.  It is prepared from the  vouchers, receipts, bills, etc
3. It is prepared from the Journal.
4. Transactions are recorded in the journal in chronological order.
4. Transactions are posted in the ledger in classified form.
5.Narration is required
5. Narration not required
6.There is no scope for balancing the Journal
6. Balancing the Ledger is must
7. Journal is the Basis for Ledger.
7. Ledger is the basis for Final Accounts i.e., Profit & Loss Account and Balance Sheet.
8. In journal, ledger folio (L.F.) is written.
8. In ledger,  journal folio (J.F.) is written.
9. Recording of the transactions in the journal is called journalizing.
9. Recording of transactions in the ledger is called posting.

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