| ACCOUNTING THEORY QUESTIONS(
BUSINESS ACCOUNTING 1 by FRANK WOOD 6th EDITION ) |
PAGE
|
MARKS
|
| Q1 Discuss the use of accounting
information |
2
|
4
|
| Q2 Explain the meaning of double
entry book keeping |
16
|
4
|
| Q3 Discuss the actual meaning
of purchase and sales in terms of accounting |
23
|
2+2
|
| Q4 Briefly explain the following
terms ‘revenue’, ‘profit’, ‘expenses’ and ‘drawing’ |
32
|
2X4
|
| Q5 why a trial balance is drawn
up? |
44
|
2
|
| Q6 Differentiate between
‘gross profit’ and ‘net profit’, ‘fixed assets’ and ‘current
assets’,‘current liabilities’ and ‘long term liabilities’. |
53,59
|
3X2
|
| Q7 Draw up a bank statement and
name its different terms. |
196
|
4
|
| Q8 Differentiate between ‘discount
received’ and ‘discount paid’. |
91
|
4
|
| Q9 What does the word ‘contra’
mean in three column cash book? |
89
|
2
|
| Q10 Explain the meaning of bank
overdraft? |
96
|
2
|
| Q11 Differentiate between cash
discount and trade discount. |
102
|
2X2
|
| Q12 How would you control ‘credit
sales’ of your firm? |
104
|
2
|
| Q13 Define ‘purchase invoice’
and ‘sales invoice’. |
104,108
|
2X2
|
| Q14 Explain the meaning of debit
notes and credit notes in business transactions. |
110,112
|
2
|
| Q15 Why statements are essential
in credit transactions? |
114
|
2
|
| Q16 What does factoring mean?
|
116
|
2
|
| Q17 Why fixed assets such as machinery
are depreciated? Is depreciation an expense? |
140
|
2+2
|
| Q18 Discuss the causes of depreciation.
. |
140
|
3
|
| Q19 Distinguish between straight
line and reducing balance method of depreciation. |
143
|
2+2
|
| Q20 For which type
of assets reducing balance method of depreciation is more
appropriate than straight-line method? |
144
|
4
|
| Q21 Draw up a disposal account
and show its different parts. |
150
|
4
|
| Q22 How would you calculate profit
or loss on disposal of an asset? |
150
|
4
|
| Q23 Differentiate between ‘bad
debts’ and ‘provision for bad debts.’ |
|
2+2
|
| Q24 Write the journal entries
of ‘bad debts recovered’ and ‘provision for discounts on debtors’.
|
166
|
2+2
|
| Q25 Define the following
term ‘accrued expenses’, ‘prepaid expenses’, >‘capital invested’,
‘capital employed’ and ‘working capital.’ |
172,180
|
5X2
|
| Q26 Differentiate between capital
and revenue expenses with examples |
190
|
4
|
| Q27 Identify the need of bank
reconciliation statements |
196
|
4
|
| Q28 Define the following terms
‘standing order’, ‘direct debit’, ‘credit transfer’, ‘bank
lodgements’, ‘dividend’, ‘bank charges’, and ‘unpresented
cheques’ |
(Ch.25)
|
7X2
|
| Q29 Discuss the use / necessity
of petty cash book. |
209
|
4
|
| Q30 Name different types of errors
not affecting trial balance agreement. |
216
|
6
|
| Q31 Explain the requirement of
suspense account. |
223
|
3
|
| Q32 Discuss the need / use of
a control account. Draw up a control account and show its
different parts. |
234
|
2+3
|
| Q33 Write the formulas of mark
up, margin and stock turn and discuss their >uses. |
243
|
3X2
|
| Q34 Differentiate between a balance
sheet and a statement of affairs. |
254
|
4
|
| Q35 Draw up a total debtors and
total creditors account and show its various parts. |
257
|
2X2
|
| Q36 Distinguish between profit
and loss account and income and expenditure >account. |
270
|
2+2
|
| Q37 Explain how accumulated fund
is calculated. |
272
|
3
|
| Q38 Show divisions of cost in
manufacturing account. Differentiate between direct and indirect
costs. |
283
|
2+3
|
| Q39 What is the necessity of preparing
manufacturing account? |
284
|
3
|
| Q40 Define the meaning of work
in progress. |
295
|
3
|
| Q41 Discuss the uses of purchase
analysis book and sales analysis book. |
310
|
2+2
|
| Q42 Discuss the duties/characteristics
of a limited partner |
316
|
3
|
| Q43 List the contents of partnership
agreement. |
317
|
3
|
| Q44 Discuss the use of partners’
current accounts. |
322
|
4
|
| Q43 Define goodwill. Identify
the reasons for payment of goodwill. |
331
|
2+3
|
| Q44 Discuss the need of revaluation
of assets in a partnership business. |
343
|
3
|
| Q45 What is the use of forming
ltd. companies? |
349
|
3
|
| Q46 What does limited liability
imply in the capital of limited company? |
349
|
3
|
| Q47 Define the following
terms: (a) Authorised share capital (b) Issued share capital
(c) Called up capital (d) Uncalled capital (e) Calls in arrears
(f) Paid up capital (g) Debentures (h) Retained profit (i)
General reserve (j) corporate tax . |
352
|
10X2
|
| Q48 Discuss the need for accounting
ratios. Why accounting ratios can not be used in isolation?
|
417
|
2+2
|
| Q49 Discuss the use of following
ratios: (a) current ratio (b) acid test ratio (c) rate of
stock turn (d) debtor/sales ratio (e) creditors/purchases
ratio (f) ROCE (g) GP/NP % of sales (h) P/E ratio (I) EPS
(j) dividend cover (k) capital gearing ratio |
(Ch.44)
|
11X2
|
