Fundamentals of Accountimg-
1) Unrealised profit will be debited to –Profit_Loss Account--as per self assessment CD-
However text book, Chapter 1, Pg 1.34-Realisation Concept-Accountants
follow a more conservative approach. THEY TRY TO COVER ALL PROBABLE
LOSSES BUT DO NOT COUNT ANY PROBABLE GAIN.
Therefore the answer in CD may be incorrect.
2) What entry would the supplier pass when the customer accepts goods ?
Dr Sale on approval basis, Credit Sales A/c. --as per self assessment CD-
However text book, Chapter 7 , pg 7.99-7.100-
When goods are sent on approval or on sale or approval basis
Dr Sundry Debtors A/c To Sales A/c
When goods are accepted at invoice price-No entry.
3) In which of the following type, suspense A/c is opened ?
Ans-Errors before preparation of trial balance. --as per self assessment CD-
However text book, Chapter 2, Rectification of errors, Pg 2.116, the trial balance is artificially made to agree inspite of errors by opening a suspense account and putting the difference in the trial balance to the account-i.e. AFTER TRIAL BALANCE BUT BEFORE FINAL ACCOUNTS.
4) What entry would the customer pass when it purchases goods on approval basis ?-Answer-No entry. How ?? --as per self assessment CD-
What entry would the customer pass when it accepts the goods purchased on approval basis ? Ans- Dr Purchase A/c & Cr Supplier A/c--as per self assessment CD-
The entries to be passed in the supplier’s books are given in text book, Chapter 7 , pg 7.99-7.100- however the entries in purchaser’s books are not given in text book. What is the difference between these 2 questions ? How are the CD answers correct ??
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