Description

SESSION JULY/AUGUST 2024
PROGRAM BACHELOR OF BUSINESS ADMINISTRATION
(BBA)
SEMESTER II
COURSE CODE & NAME DBB1202 FINANCIAL ACCOUNTING

Assignment Set – 1

1. Explain different types of accounting concepts in detail. 10
Ans 1.
Different Types of Accounting Concepts
Accounting concepts are fundamental assumptions or principles that serve as the foundation
for accounting practices and ensure consistency, reliability, and comparability of financial
statements. Here are the primary accounting concepts explained in detail:
Business Entity Concept The business entity concept states that a business is separate and
distinct from its owners. All transactions are recorded from the business’s perspective, not the
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2. Journalize the following transactions –
Jan 1st – Mr. Harshit started his business with Rs. 80,000/- which he brought as his capital
in cash.
Jan 10th – He purchased goods worth Rs.30,000/- in cash and Rs. 20,000/- on credit.
Jan 12th – He paid wages Rs. 500/-
Jan 15th – Sold goods for Rs. 20,000/- in cash and Rs. 25,000/- on credit
Jan 16th – Paid to suppliers Rs. 8,000/- for goods purchased on credit
Jan 20th – Received Rs. 15,000/- from his debtors
Jan 31st – Paid rent Rs. 1,000/- in cash
Ans 2.
Journalizing is the process of systematically recording business transactions in the journal,
which is the first step in the accounting cycle. A journal, also known as the book of original
entry, serves as the foundation for maintaining accurate financial records. Each transaction is
recorded in chronological order, ensuring that all business activities are captured and accounted
for. The process involves identifying the accounts affected by a transaction, determining
whether each account increases or decreases, and applying the rules of debit and credit
3. Define Bank Reconciliation Statement. Discuss various reasons for difference in
balance of cash book and pass book.
Ans 3.
Bank Reconciliation Statement
A Bank Reconciliation Statement (BRS) is a document that reconciles the differences between
the balance as per a company’s cash book and the balance as per the bank’s passbook. The cash
book records all cash and bank transactions from the business’s perspective, while the passbook
reflects the transactions recorded by the bank. These two balances may not always match due
to timing differences, errors, or omitted entries. The BRS is prepared periodically to ensure the
Assignment Set – 2
4. Describe in detail different types of shares.
Ans 4.
Different Types of Shares
Shares represent the ownership of a company and provide shareholders with a claim on the
company’s assets and earnings. Companies issue different types of shares to raise capital and
meet the diverse needs of investors. The primary types of shares include equity shares and
preference shares.
1. Equity Shares
Equity shares, also known as ordinary shares, represent the primary form of ownership in a
company. Equity shareholders are entitled to voting rights and a share in the company’s profits
5. Define debentures and summarize the classification of debentures.
Ans 5.
Definition of Debentures
Debentures are long-term financial instruments issued by companies to borrow funds from the
public. They represent a debt that the company agrees to repay along with a fixed rate of
interest, making them a reliable investment option for those seeking steady income. Debenture
holders are creditors, not owners, and do not have voting rights in the company. Debentures
typically come with defined terms for interest payment, principal repayment, and other
6. Discuss different methods used for calculation of depreciation in detail.
Ans 6.
Methods of Depreciation Calculation
Depreciation is the systematic allocation of the cost of a tangible asset over its useful life. It
reflects the wear and tear, obsolescence, or reduction in value due to usage over time. The
accurate calculation of depreciation is essential for fair financial reporting, tax compliance, and
asset management. Different methods are used to calculate depreciation based on the nature of
the asset, the business’s financial strategy, and regulatory requirements.
Straight-Line Method (SLM)
The straight-line method is the simplest and most commonly used method of depreciation.