INFORMATION FOR BLOG READERS

IF YOU WANT SOLVED QUESTION PAPERS OF:
1. DIBRUGARH UNIVERSITY
2. GUWAHATI UNIVERSITY
3. NIOS
4. IGNOU AND
5. AHSEC
IN YOUR WHATSAPP NUMBER, THEN JOIN MY BROADCAST LIST BY SENDING YOUR CONTACT INFO AND CLASS TO MY WHATSAPP NUMBER 9577097967.
******************************************************
JOB INFO AND SOLVED QUESTION PAPERS OF COMPETITIVE EXAM WILL ALSO BE PROVIDED.
******************************************************
I AM ALSO BUYING QUESTION PAPERS AND HAND WRITTEN NOTES OF DIBRUGARH UNIVERSITY FOR MY BLOG(ARTS AND SCIENCE STREAM). INTERESTED STUDENTS CAN CONTACT ME.

Monday, February 04, 2013

IGNOU SOLVED ASSIGNMENT: ECO - 02 (2014-15) - DEMO

TUTOR MARKED ASSIGNMENT
Course Code : ECO - 02
Course Title : Accountancy – I
Assignment Code : ECO – 02/TMA/2014-15
Coverage : All Blocks
Maximum Marks: 100
Answer of Q.N.1.
Bank Reconciliation Statement
Business concern maintains the cash book for recording cash and bank transactions. The Cash book serves the purpose of both the cash account and the bank account. It shows the balance of both at the end of a period. Bank also maintains an account for each customer in its book. All deposits by the customer are recorded on the credit side of his account and all withdrawals are recorded on the debit side of his account. A copy of this account is regularly sent to the customer by the bank. This is called ‘Pass Book’ or Bank statement. It is usual to tally the firm’s bank transactions as recorded by the bank with the cash book. But sometimes the bank balances as shown by the cash book and that shown by the pass book/bank statement do not match. If the balance shown by the pass book is different from the balance shown by bank column of cash book, the business firm will identify the causes for such difference. It becomes necessary to reconcile them. To reconcile the balances of Cash Book and Pass Book a statement is prepared. This statement is called the ‘Bank Reconciliation Statement.

How to Prepare Bank Reconciliation Statement: 
To reconcile the bank balance as shown in the pass book with the balance shown by the cash book, Bank Reconciliation Statement is prepared. After identifying the reasons of difference, the Bank Reconciliation statement is prepared without making change in the cash book balance. We may have the following different situations with regard to balances while preparing the Bank Reconciliation statement. These are:

1. Favourable balances
(a) Debit balance as per cash book is given and the balance as per pass book is to be ascertained.
(b) Credit balance as per pass book is given and the balance as per cash book is to be ascertained.

2. Unfavourable balance/overdraft balance
(a) Credit balance as per cash book (i.e. overdraft) is given and the balance as per pass book is to be ascertained.
(b) Debit balance as per pass book (i.e. overdraft) is given and the balance as per cash book is to be ascertained.

The following steps are taken to prepare the bank reconciliation statement:
(i) Favourable balances: When debit balance as per cash book or credit balance as per pass book is given:
(a) Take balance as a starting point say Balance as per Cash Book.
(b) Add all transactions that have resulted in increasing the balance of the pass book.
(c) Deduct all transactions that have resulted in decreasing the balance of pass book.
(d) Extract the net balance shown by the statement which should be the same as shown in the pass book.
In case balance as per pass book is taken as starting point all transactions that have resulted in increasing the balance of the Cash book will be added and all transactions that have resulted in decreasing the balance of Cash book will be deducted. Now extract the net balance shown by the statement which should be the same as per the Cash book.

(ii) Unfavourable Balance/Overdraft: Sometimes a businessman withdraws excess amount from the bank account and the closing bank balance of a month is a debit balance. This balance amount is called ‘overdraft balance’ as per Pass Book. This is shown in the cash book as a credit balance.  Overdraft balance is to be shown in the minus column of statement as the starting point. The other steps shall remain the same as mentioned above. The following illustration helps to understand dealing with the unfavourable balance as per cash book and pass book.

Illustration.1. On December 31, 2013, the cash book of the M/s. X shows the credit balance Rs.6, 500. Cheques amounting to Rs.3, 500 deposited into bank but were not collected by the bank. Firm issued cheques of Rs. 1,000 which were not presented for payment. There was a debit in the pass book of Rs.200 for interest and Rs.400 for bank charges. Prepare Bank Reconciliation Statement.
Solution: Bank Reconciliation of M/s. X as on 31st Dec, 2013
Particulars
Plus (Amount)
Minus (Amount)
Overdraft as per cash book
1. Cheque issued but not presented for payment
2. Cheque deposited but not credited by bank
3. Bank charges and Interest charged
Overdraft as per pass book

1,000


9,600
6,500

3,500
600

10,600
10,600

Illustration.2. Prepare Bank Reconciliation Statement of M/s. X on 31st Dec, 2013, from the following information:
Overdraft as per pass book 16,500,
Interest on overdraft 1,600,
Insurance premium paid by the bank 800,
Cheques deposited but not yet credited 5,500,
Cheques issued but not present for payment 6,000,
Wrongly credit to firm account by the bank 1,000
Solution: Bank Reconciliation of M/s. X as on 31st Dec, 2013
Particulars
Plus (Amount)
Minus (Amount)
Overdraft as per pass book
1. Interest on overdraft
2. Insurance Premium paid by bank
3. Cheque deposited but not credited by bank
4. Cheque issued but not presented for payment
5. Wrongly credited by bank
Overdraft as per cash book

1,600
800
5,500


15,600
16,500



6,000
1,000

23,500
23,500

Answer of Q.N.2.
COMPLETE SOLVED ASSIGNMENTS ARE AVAILABLE FOR ONLINE MEMBERS ONLY.
BECOME ONLINE LEARNING MEMBER BY PAYING A NOMINAL FEE OF Rs.300 ONLY.
SOME SOLVED QUESTION PAPERS WILL ALSO BE PROVIDED.
FOR DETAILS CONTACT:
KUMAR NIRMAL PRASAD, TINSUKIA (ASSAM)
CONTACT NO. 9577097967


Answer of Q.N.3.
(a) Treatment of Outstanding Subscription
Subscription is received by the non-trading organisations from its members regularly each year. It is a recurring receipt of revenue nature and hence treated as a main source of income. This is shown to the debit side of Receipts and Payments Account and to the credit side of the Income and Expenditure Account. It is shown on cash basis in the Receipts and Payments Account and on accrual basis in the Income and Expenditure Account i.e., outstanding subscription and advance subscription is to be adjusted.
Subscription can be outstanding both in the beginning and at the end of the accounting year. Outstanding subscription at the beginning is that amount of subscription which due in previous year and not received in previous year. Therefore, it is deducted while ascertaining subscription income during the current year and on the other hand, it is shown on the assets side of opening balance sheet. Again, Subscription outstanding at the end is that sum which is due in current year and yet not received. It is related to current year, therefore it is added while ascertaining subscription income during the current year and on the other hand, and it is shown on the assets side of closing balance sheet.
(b) Treatment of Donation:
In Income and Expenditure Account: It is the amount received from some person, firm, company or any other body by sway of a gift. It is shown in receipts and payments accounts of the year. If a donation is received for a specific purpose (donation for building, donation for conducting specific events – sports, annual day celebration etc.) It is in the nature of a capital receipt credited to a separate Fund account and shown in the balance sheet. The non trading concern has to fulfill the purpose for which the donation is received. If the donation is not for a specific purpose, it is known as a general donation. General donation of a big amount is capitalized and not shown as income as it is non-recurring in nature. Donations of a small amount may be expected every year. So this may be considered as income during the year.
In Receipts and Payments Account: Donation is shown in the receipts side of Receipts and Payments Account whether it is of general purpose or specific purpose.

(c) Legacy:
In Income and Expenditure Account: It is the amount received by the nonprofit organizations as per the will of a deceased person. It is a capital receipt and is shown on the liability side of the balance sheet, but if the amount is small it may be treated as income and may be shown on the credit side income and expenditure account In the absence of any specific information legacy must be preferably be capitalized and added with capital fund.
In Receipts and Payments Account: It is the amount which is received by organisations as per the will of a deceased person. It is treated as a capital receipt and shown on the receipts side of Receipts and Payments Account.

(d) Treatment of Tournament Fund:
In non trading concerns, Tournament funds are created for conducting tournaments. It a specific fund and invested in specific securities by non-trading organisations. The income derived from the investment is added to that fund and is not treated as income. Incomes are normally added with the fund. Again, expenditure incurred on conducting tournament is deducted with tournament fund and is not shown as expense. For example:
Tournament Fund - 20,000;
Tournament fund investment - 15,000;
Interest on Tournament Fund Investment for the year - 2,000;
Expenditure on Tournament - 8,000.
Now the total Tournament fund is Rs. 22,000 (20,000 + 2,000) the interest of Rs. 2000 is added with the Prize fund. The expenses incurred out of fund are deducted from the fund itself. In the previous example the accumulated Prize fund is Rs. 22,000. The Prize given for of Rs. 8,000 is deducted from the Prize fund and the balance fund of Rs. 14,000 will be shown in the Balance sheet.

Answer of Q.N.4.
COMPLETE SOLVED ASSIGNMENTS ARE AVAILABLE FOR ONLINE MEMBERS ONLY.
BECOME ONLINE LEARNING MEMBER BY PAYING A NOMINAL FEE OF Rs.300 ONLY.
SOME SOLVED QUESTION PAPERS WILL ALSO BE PROVIDED.
FOR DETAILS CONTACT:
KUMAR NIRMAL PRASAD, TINSUKIA (ASSAM)
CONTACT NO. 9577097967

Difference between Provisions and Reserves
1.       Provision is made to meet known liability the amount of which cannot be ascertained with substantial accuracy. Whereas, Reserve is created to meet unexpected losses and contingencies likely to arise in future.
2.       Provision can be used only for meeting the specific purpose for which it has been made. But, Reserve can be used for any purpose unless it is created for a specific purpose.
3.       Provision is a charge on profits and reduces the amount of net profits. But, Reserves is an appropriation of profits and reflects undistributed profits.
4.       Provision is to be made even if there are no profits.                Whereas, Reserve is created only when there are profits.
5.       Provision creation is compulsory. But, Reserves creation is at the discretion of management with the exception of debenture redemption reserve for which the Companies Act has made a provision in certain cases.
6.       Provision is meant for meeting expected losses and cannot be used for dividend distribution.            But, Reserves is a part of owner’s funds and can be used for distribution of dividends.

Answer of Q.N.5.
COMPLETE SOLVED ASSIGNMENTS ARE AVAILABLE FOR ONLINE MEMBERS ONLY.
BECOME ONLINE LEARNING MEMBER BY PAYING A NOMINAL FEE OF Rs.300 ONLY.
SOME SOLVED QUESTION PAPERS WILL ALSO BE PROVIDED.
FOR DETAILS CONTACT:
KUMAR NIRMAL PRASAD, TINSUKIA (ASSAM)
CONTACT NO. 9577097967

Labels

Absorption Costing (1) Accountancy (4) accounting for partnership firms (3) Accounting for Share Capital (3) accounts of non trading concern (3) advanced financial accounting (18) AHSEC (149) ahsec 11 (47) ahsec 12 (60) ahsec notes (136) AHSEC Question Papers (35) Assam Slet (10) bcfm (11) bills of exchange (6) branch accounting (3) Budgetary Control (3) Budgetary Control Notes (2) business communication (28) Business Environment Notes (17) business regulatory framewrok (49) Business Statistics Notes (28) cash flow statement (5) cbse 12 (39) cbse notes (53) commerce (13) company law (23) corporate accounting (33) corporate laws (14) cost accounting (63) cost and management accounting (34) cpt (36) cpt 200 (7) cpt notes (30) dibrugarh university (1179) dibrugarh university notes (611) dibrugarh university question paper (474) dibrugarh university solved papers (267) dibrugarh university syllabus (47) direct tax law (49) eco - 01 (4) ECO - 02 (2) ECO - 03 (2) ECO - 05 (6) ECO - 06 (1) ECO - 07 (1) eco - 08 (4) eco - 09 (1) ECO - 10 (2) ECO - 11 (3) ECO - 12 (7) ECO - 13 (2) ECO - 14 (4) entrepreneurship (14) fianancial accounting (3) financial accounting (48) Financial Accounting Notes (23) financial management (18) Financial statements analysis (14) funds flow statement (3) guwahati university (289) guwahati university syllabus (52) Hire Purchase (5) Human Resource Management (12) icwai (38) icwai notes (39) ignou solved assignments (83) ignou solved question papers (121) income from house property (5) income from salary (4) Income Under the head Salaries (11) information technology (10) Installment Purchase (4) issue of shares (4) kkhsou (13) M.com (62) Management Accounting Notes (31) MCQ (11) paper I (1) paper II (9) paper III (1) principle of business mangement (16) Principles of Marketing Notes (16) royalty accounts (3) sale of goods act (8) semester I (165) Semester II (156) semester III (92) semester IV (149) semester V (136) semester VI (91) slet (13) Slet Ne (10) Small Business Management (7) solved assignments (22) UGC - NET: Commerce (08) (14) UGC - NET: Commerce (08) Paper II (3) UGC - NET: Commerce (08) Paper III (14) ugcnet solved question papers (23) Variance Analysis Notes (1)