ACCOUNTS ANSWER IN ONE SENTENCE

61. What is noting of bill of exchange?

When the bill is dishonoured notary public records the fact and reasons of dishonoured bill and issues noting certificate, it is called noting of bill.

62. What is draft?

A bill of exchange before acceptance is called a draft.

63. What is the relation between drawer and drawee?

The relation between the drawer and drawee is that of creditor and debtor.

64. What are days of grace?

Three additional days allowed for payment of bill are known as days of grace.

65. What do you mean by renewal of a bill?

Renewal of bill means cancellation of old bill and drawing of a new bill. 

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EXTRA NON - TEXTUAL OBJECTIVES 

Define partnership.

What do you understand by 'partners', 'firm' and 'firms' name ?

Write any four main features of partnership.

What is the minimum and maximum number of partners in all partnership?

What is the status of partnership from an accounting viewpoint?

What is meant by partnership deed?

State any four contents of a partnership deed.

In the absence of a partnership deed, how are mutual relations of partners governed?

Give any two reason in favour of having a partnership deed.

State the provision of 'Indian partnership Act 1932' relating to sharing of profits in absence of any provision in the partnership deed.

What is partnership?

State the meaning of Balance sheet?

Write the meaning of bad debts?

What do you mean by ‘Not for Profit’ concern?

Which account ‘Not for Profit’ concerns prepares instead of Cash account?

State the meaning of Revenue expenditure.

What do you mean by Capital expenditure?

What is Legacy?

What do you mean by capital fund?

Which account is prepared by the ‘Not for Profit’ concerns for finding out surplus or deficit of the financial year?

What is an ‘Endowment Fund’?

State the meaning of Capital Receipts.

Write the meaning of Revenue Receipts.

What is ‘Life Membership Fee’?

What do you mean by Single Entry System?

Which accounts are normally kept under the single entry system?

Which statement is prepared under the single entry system to ascertain the capital?

What is Statement of Affairs?

Which statement is prepared under the single entry system to ascertain profit?

What do you mean by qualified acceptance?

What is the term of the bill of exchange?

Which account shows Net Profit or Net Loss of the business?

What do you mean by accrued income?

To which account is gross profit transferred?

A person who is engaged in day – to – day activities of the business.

What type of institutions / concerns prepares Income and Expenditure Account?

What do you mean by non – recurring expenses?

What do you mean by recurring expenses?

Which ‘Final Accounts’ do the ‘Not for Profit’ Concerns prepare?

If the partnership deed is silent, what is the profit sharing of the partners?

What do you mean by direct expenses?

What do you mean by Fluctuating Capital Method?

What is Trial Balance?

What do mean by ‘Special donation’?

State the meaning of closing stock.

How is closing stock valued?

When are partners’ current accounts opened?

What is partnership deed?

What are ‘Final Accounts’? Why they are so called?

What is the purpose of Trading, Profit and Loss Account and Balance Sheet?

What is the meaning of ‘Marshalling of Assets and Liabilities’?

What is the need of ‘Opening Entries’?

Why ‘Closing Entries’ are required to be made?

What is the need of ‘Adjustment Entries’?

What is the difference between outstanding expenses and prepaid expenses?

What is depreciation? What adjustment entry is made for it?

 What is the need for providing depreciation, when there is no cash outgo?

What is a contingent liability?

 On which side of the balance sheet does contingent liability appear? Explain with an example?

‘Balance Sheet is a ‘Snap Shot’. Why it is so called?

A businessman’s daughter comes to father’s garments shop and takes the clothes ofher choice for her personal use. Why this transaction is to be accounted forwhen the business belongs to the proprietor? In what manner, the transaction isto be recorded? What impact it would have on the financial statements, if the transaction is not recorded?

What are Final accounts? Why are they prepared?

What do you understand by closing entries? Give illustrations to explain them.

What is Trading Account? Give a specimen of Trading Account.

What do you mean by Profit and Loss Account? Give its specimen. Why is it prepared?

What is a Balance Sheet? Why it is prepared? Give its specimen.

What is Manufacturing Account? Give a specimen of the Manufacturing Account.

Distinguish between Trial Balance and Balance Sheet.

What is the purpose of making adjustments in the final accounts?

Why is it important to have a partnership deed in writing ?

What do you understand by fixed capital of partners?

What do you understand by fluctuating capital of partners ?

Give two circumstances in which the fixed capital of partners may change.

List the items that may appear on the debit side and credit side of a partner's fluctuating capital account.

If the partners capital accounts are fixed, where will you record the following items.

Ramesh, a partner in the firm has advanced a loan of a Rs. 1,00,000 to the firm and has demanded on interest @ 9% per annum. The partnership deed is silent on the matter. How will you deal with it ?

Admission of a Partner

At the time of change in profit sharing ratio among the existing partners, where will you record an unrecorded liability ?

Anand, Bhutan and Chadha are partners sharing profits in ratio of 3:2:1. On 1st April 2007, they decided to share profits equally. Name the partners who is gaining on consequence of such change.

Give two characteristics of goodwill.

Name any two factors affecting goodwill of a partnership firm.

In a partnership firm assets are Rs.5,00,000 and liabilities are Rs. 2,00,000. The normal profit rate is 15%. State the amount of normal profits.

State the amount of goodwill, if goodwill is to be valued on the basis of 2 years’ purchase of last year’s profit. Profit of the last year was Rs.20,000.

Where will you record ‘increase in machinery’ in case of change in profit sharing ratio among the existing partners?

Name two methods for valuation of goodwill in case of partnership firm.

Give formula for calculating goodwill under ‘super profit method’.

Pass the journal entry for increase in the value of assets or decrease in the value of liabilities in the Revaluation A/c?

P,Q and R are partners in a firm sharing profits in the ratio of 2:2:1 on 1.4.2007 the partners decided to share future profits in the ratio of 3:2:1 on that day balance sheet of the firm shows General Reserve of Rs 50,000. Pass entry for distribution of reserve.

“The gaining partner’s should compensate to sacrificing partner’s with the amount of gain.” Journalize this statement.

What are the two main rights acquired by the incoming new partner in a partnership firm?

A and B are partners, sharing profits in the ratio of 3:2. C admits for 1/5 share . State the sacrificing ratio.

How should the goodwill of the firm be distributed when the sacrificing ratio of any of the existing partner is negative (i.e. he is gaining)

In case of admission of a partner, in which ratio profits or loss on revaluation of assets and reassessment of liabilities shall be divided?

Give journal entry for distribution of ‘Accumulated Profits* in case of admission of a partner.

At the time of admission of partner where will you record ‘unrecorded investment’?

The goodwill of a partnership is valued at Rs.20,000. State the amount required by a new partner, if he is coming for 1/5 share in profits.

What journal entries should be passed when the new partner brings his share of goodwill in kind?

What journal entries will be passed when the new partner is unable to bring his share of goodwill in cash?