Thursday, April 26, 2012

JOURNAL ENTRIES


Journal Entries
                “Journal” is the word  came from Latin word, It means daily recorded book. Recording is the basic function of accounting.
                “Entry” means a summary of business transaction. Journal entries also called prime entries, because the transactions of business starts from this book only.


Golden - Rules for journal entries

            Accounts broadly divided into two categories. They are 
(i) Personal Accounts 
(ii) Impersonal Accounts 
Again Impersonal Accounts divided into a) Real Account b) Nominal Account.
Various rules and types of Accounts showed in a diagram format as follows
Personal Accounts
Natural Personal Accounts : Sreenivas , Raju, Ramu, Shoban etc.
Artificial Personal  Accounts: R.S.Brothers, J.C Brothers, Bomma College etc.
Representative Personal Accounts: Prepaid Salaries, outstanding Wages etc.
Rule
                                                    Debit the Receiver        and              Credit the Giver

                                                                                 Ex: Rs 5,000/- Deposited in  S.B.H
                                                                     S.B.H A/c             Dr           5,000
                                                                                                   To Cash A/c                        5,000
Impersonal Accounts
Real Account: Cash, Buildings, Land, Machinery etc.

Rule
    Debit what comes into the  and  Credit what goes out from org.
                                                                                                                  
                                                                         Ex: Computer  Purchased Rs 20,000/-
                                                                               Computer A/c   Dr           20,000
                                                                                                    To Cash A/c                        20,000

Nominal Account: Salaries paid, commission received, Discount allowed etc
Rule
             Debit all expenses and losses     & Credit all incomes and gains


Entries in Personal Accounts
1.       Rs 20,000/- deposited in Andhra Bank on 23-06-2010
2.       Rs 20,000/- withdrawn from I.C.I.C.I on 24-06-2010
3.       Srinivas commenced business with cash Rs 1,00,000
4.       Received cash from Goyal  Rs 8,000 on account
5.       Issued cheque to shoban Rs 7,500
6.       Cash withdrawn from office for personal use Rs 1,000 and withdrawn Rs 15,000 from Bank
7.       Goods withdrawn for personal use Rs.2,000
8.       Goods returned to Ajay 2,000
9.       Goods returned by Deepak 1500
10.   Received cash from Vishwanadam, Allowed discount 4,400 and 100.
11.   Paid Raja gopalan by cheque and discount allowed by him 4,900 and 100 respectively
12.   Outstanding for Salaries Rs 3,000
13.   Paid to Suresh Rs 1500
Compound Entries: Some times there are a number of transactions on the same date relating to one particular account or of one particular nature. Such transactions may be recorded by means of a single Journal entry instead of passing several Journal entries.
14.   Payment made to Ram Rs 1,000. He allowed a cash discount of Rs 50.
15.   Cash received from sreenivas Rs 800 and allowed him Rs 50 as discount.
16.   A running business was purchased by mohan with the following Assets & Liabilities.
Cash Rs 2,000; Land Rs 4,000; Furniture Rs 1,000; Stock Rs 2,000; Creditors Rs 1,000; Bank overdraft Rs 2,000

“Journal Book”
Dr                                                                                                                                                                           Cr

Date
Particulars
L.F
Debit
Credit
23-06-10
Andhra Bank A/c           Dr
To Cash A/c
[Being cash deposited in Andhra Bank]

20,000


20,000
24-06-10
Cash A/c          Dr
To ICICI A/c
[Being cash withdrawn from ICICI]

20,000


20,000
25-06-10
Cash  A/c                                          Dr
To Sreenivas Capital     A/c  
[Being commencement of Business]

1,00,000


1,00,000
26-06-10
Cash  A/c                      Dr
To Goyal  A/c
[Being cash received from Goyal]

8,000


8,000
27-06-10
Shobhan   A/c                    Dr
To Bank  A/c
[Being cheque issued to Shobhan]

7,500


7,500
28-06-10
Drawings  A/c                Dr
To Cash  A/c
[Being cash withdrawn from office for personal use]

1,000


1,000
28-06-10
Drawings  A/c                    Dr
To Bank  A/c
[Bing cash withdrawn from bank for personal use]

15,000


15,000
29-06-10
Drawings  A/c                 Dr
To Goods  A/c
[Being goods withdrawn for personal use]

2,000


2,000
30-06-10
Ajay  A/c                                          Dr
To Purchase Returns A/c
[Being purchase returns to Ajay]

2,000


2,000
30-06-10
Sales Returns  A/c                Dr
To Deepak  A/c
[Being Sales Returns from Deepak]

1,500


1,500
01-07-10
Rajagopal A/c                Dr
To Bank A/c
[Being cheque issued to Raja Gopal]

4,900


4,900
01-07-10
Rajagopal  A/c             Dr
To Discount A/c
[Being Discount allowed by him]

100


100
02-07-10
Cash  A/c                                  Dr
To Vishwanadam  A/c
[Being cash received from vishwanadam]

4,400


4,400
02-07-10
Discount A/c                            Dr
To Vishwanadam A/c
[Being Discount allowed to vishwanadam]

100


100
03-07-10
Salaries  A/c                                          Dr
To Outstanding Salaries A/c
[Being Salaries outstanding ]

3,000


3,000
04-07-10
Suresh  A/c                Dr
To Cash A/c
[Being cash paid to Suresh]

1,500


1,500
05-07-10
Ram  A/c                               Dr
To Cash        A/c
To Discount A/c
[Being payment to Ram Rs 1,000 and he allowed Rs 50 as discount]

1,050



1,000
50
06-07-10
Cash  A/c                            Dr
Discount  A/c                    Dr
To Suresh  A/c
[Being cash received from Suresh Rs 800 and discount allowed Rs 50]

800
50



850
07-07-10
Cash  A/c                      Dr
Land A/c                      Dr
Furniture  A/c             Dr
Stock A/c                     Dr
To Creditors   A/c
To Bank O.D   A/c
To Capital       A/c
[Being commencement of Business by mohan by taking over a running business]
Note: The difference between Assets & Liabilities is called Capital.

2,000
4,000
1,000
2,000









1,000
2,000
6,000


Tuesday, April 17, 2012

IMPORTANT QUESTIONS FOR MEFA SUBJECT

 Unit-1
1) What is Managerial Economics, Explain the Nature and Scope of Managerial Econmics?
2) What is Managerial Economics,Explain the importance of Managerial Economics?
3) What is the Law of Demand, What are the factors determining the Demand, assumptions and exceptons?
 Unit-2
1)  What is Elasticity of Demand, Explain the factors which are governing Elasticity of Demand?
2)  What is Elasticity of Demand, Exlain various types of Elasticity of Demand with graphical representation?
3) What is Demand Forecasting, what are the factors governing Demand forecasting?
Unit-3
1) What is Theory of Production, Production function,Explain the relationship between Input-Output?
2) Explain the difference between one variable input, law of returns and Two variable?
3) What is Cost, Cost Analysis and explain various types of costs( With Cost Curves)?
Problems: PROBLEMS ON BREAKEVEN POINT(READ 12 FORMULAS)
 Unit-4
1) What is Market, Explain classification of Market or types of Markets?
2) What is Perfect competition, Explain its features and price-output relationship?
3) What is Monopoly market, Explain the basic features, types of Monopoly and price-output determination?

 Unit-5
1) What is Business, Explain the various types of Non-corporate enterprises(Sole Trader,Partnership,Co-operative Societies) Features, Advantages and Limitaions?
2) What is Company, Explain the characteristics of Company and Explain the differences between public company and private company?
3) Explain the features of 1991 Industrial policy(LPG,Disinvestment,MRTP Act) clearly?
Unit-6
1)  What is Capital Budgeting, Explain the Nature, Scope , Features of Capital Budgeting?
2) What is Capital Budgeting, Explain various Techniqes of capital Budgeting with formulas?
3) What is Working Capital, Explain the factors governing working capital requirement?
Problems: PBP,ARR,DPBP,NPV,PI AND IRR(TABLE VALUES REQUIRED)
 Unit-7
1)  What is Accounting, Explain the Functions, objectives, Advantages and Limitations of Accountig?
2)  What is Accounts, Explain various types of Accounts(Golden Rules of Acconting) with examples?
3) What is Accounting system, Explain the Double entry system Advantages and Accounting Cycle procedure?
Problems: JOURNAL ENTRIES,LEDGER POSTING,TRIAL BALANCE AND BALANCE SHEET PROBLEMS


Unit-8
1)  What is Ratio Analysis, Explain the Advantages and Limitations of Ratio Analysis?
2) What is Ratio Analysis, Explain various types of Ratios with formlas?
Problems: PROBLEMS ON SOLVENCY RATIO,CAPITAL GEARING RATIO,GROSS PROFIT RATIO