Students and Teachers Forum

1. In the beginning of the current year, you have assets and liabilities of the following value. Overdraft Rs. 10,000 creditors Rs. 12,000 Stock Rs. 25,000 cash in hand Rs. 2,000 Loan from friends Rs. 4,000 fixed assets Rs. 52,000 Required; Opening entry showing the amount of capital.

We can prepared the opening entry amount of capital as follws;- First of all, we find out the asets and liability items from the above questions.  After than , we should debited the assests items and credited the liabilities items.  In .....

2. From the following information a. Depreciation on machinery Rs. 5,000 b. Prepaid rent Rs. 2,000. c. Outstanding salary Rs. 3,000 Required: - Adjustment entries

a.  when we calculate the depreciation of machinery ,  depreciation a/c is debited and machinery a/c is credited . b.  prepaid rent is paid in advance to house owner. so, it is an expenses for the firm. prepaid rent a/c is debited .....

3. Explain the effect of prepaid expenses or advance paid in the final account.

Prepaid expenses is the asset of an enterprise. Thus in the trading/ p&l a/c, wherever applicable, prepaid expenses is reduced from the respective head. In the same way, it appears in the assets side of Balance .....

4. Explain the effect of accrued incomes in final account.

Accrued income is the asset of an enterprise. It is the income earned but not received. Thus in the p&l a/c, accrued income is added to the respective head. In the same way, it appears in the assets side of Balance .....

5. Differentiate between the capital receipt and revenue receipt.

Capital Receipt aren't available for distribution as .....

6. You are given the following information. a. Outstanding wages Rs. 10,000 b. Purchased furniture Rs. 1, 00,000. c. Sold machinery costing Rs. 10,000 at Rs. 15,000. d. Bought office equipment Rs. 10,000 on credit. Required: - journal entries

For the first transaction, it involves .....

7. You are given the following transactions:- a. Business started with Rs. 50,000. b. Purchased goods from hari RS20,000 c. Sold goods to Ram Rs. 30,000 d. Salary paid Rs 20,000. Required: - journal entries

For the first transaction, it involves capital and .....

8. Consider the following transactions ; a. Business started with machinery Rs. 30,000, cash Rs. 100,000 and bank Rs. 40,000. b. Commission paid Rs. 5,000 c. Salary still payable Rs. 4,000 d. Furniture costing Rs. 20,000 was sold on Rs. 15,000.

For the first transaction, it involves capital and .....

9. What are two sides’ errors?

The errors that do not affect the agreement of the trial balance are called two sides errors.  Such errors are not replaced by the trial .....

10. What do you mean by convertible debentures?

Debentres are issued by the compaines as an instrument of raising funds. It is in the form of debt. Those debentures which has the options of conversion into stocks of the company are the convertible .....

11. What do you mean by pre-rata allotment?

Issuing shares is a method of raising funds for the company. The money raised through shares  forms the capital of the company. Sometimes what happens is that  the shares applied for by the public is  more than the offered/issued .....

12. From the following calculate (i) Re-order level and (ii) Minimum level Minimum Usage 100 units per week Normal Usage 200 units per week Maximum Usage 300 units per week Re-order period 4 to 6 weeks.

We can find out hte minimum level by using the  this formula ; minimum level = Re- order level - ( avearge rate of consumption *average re order time period )  re oder level = maximum rate of consumption * maximum oder time  here, .....

13. A factory required 3000 units of an item per month, each costing Rs. 15. The cost per order is Rs. 100 and the inventory carrying charge is 20% of average inventory. Req: i) EOQ ii) No. of orders per year iii) Total cost at EOQ

we can calculateds the EOQ =  root under 2AO by C    where, A means annual requirement(3000 Units) , 0  means ordering cost ( RS100 ) , C means carrying cost ( 20% of Rs 15 0B  now we can find out the EOQ by this .....

14. The following information is given: Normal Lead Time 10 days Maximum lead time 15 days Minimum Lead Time 7 days Minimum usage 200 units Maximum Usage 350 units Normal Usage 250 units Re-order quantity 3500 units Req: i) Re-order level ii) Minimum Stock level iii) Maximum Stock level

Minimum level = Re- order level - ( avearge rate of consumption *average re order time period )  Re oder level = maximum rate of consumption * maximum oder time  here, Re-oder level =  350* 15 Maximum rate of consumption means .....

15. Following information is given for month of March: Jan 1 Stock in hand 1000 units @ Rs. 5 per unit 8 Purchased 1000 units @ Rs. 5 per unit 14 Purchased 600 units @ Rs. 7 per unit 15 Issued 1300 units 21 Purchased 200 units @ Rs. 6 per unit 24 Issued 500 units 27 Returned from work issued on 15Mar100 units 28 Issued 200 units @ Rs. 14 per unit 30 Issued 300 units Req: Stores Ledger under FIFO

Under this method, sotcks sold out first which stocks  were purchase at first . first purchased assets are sold out at first on this method.  When we purchased stocks, we should recorde in the purchased column , when we sold out the .....

16. Following information is given for month of January: Jan 1 Stock in hand 500 units @ Rs. 10 per unit 10 Purchased 1000 units @ Rs. 12 per unit 12 Issued 600 units 20 Issued 300 units 22 Purchased 1200 units @ Rs. 11 per unit 25 Issued 500 units 28 Returned from work issued on 20 Jan 50 units 30 Purchased 200 units @ Rs. 14 per unit 31 Issued 800 units Req: Stores Ledger under LIFO

When we make the stores ledger under LIFO method, we should isseud the stocks which are last comes or purchased . Under this method, we should recorded  the stock in the balanced figure in the ledger of LIFO.  when we purchased the .....

17. Potato Co. Ltd. issues 40,000, 7% debentures of Rs. 20 at 10% discount, redeemable at 20% premium. Journalize.

Regarding journal for issue; Amount received needs to be calculated considering discount. discount is always calculated on the face value. Journal Entry for issue is: Bank a/c -Dr (Amount after discount) Discount on issue of debentures .....

18. XL Ltd. issued 25,000, 15% debentures of Rs. 10 each at 20% premium, redeemable at 10% discount. Journalize.

Regarding journal for .....

19. PQR Ltd. issued 2, 00,000, 12% debentures of Rs. 15 at par, redeemable at 10% premium. Journalize

Regarding journal for issue; Journal Entry is: Bank a/c -Dr    (Amount received) Loss on issue of debentures a/c -Dr (Redeemable premium) To debentures (Amount is par value) To premium on redemption of debentures a/c (Redeemable .....

20. Langtang Ltd. issues 12,000, 5% debentures of Rs. 10 at 10% discount, redeemable at par. Journalize

Regarding journal for .....

21. Y Ltd. issued 40,000, 8% debentures of Rs. 100 each at 10% premium, redeemable after 10 years at par. Journalize.

Regarding journal for .....

22. Pratima Co. Ltd. issued 12000 shares of Rs. 30 at a premium of 20% to purchase the business of a firm consisting of the following assets and liabilities: Stock in trade 78000 Sundry Debtors 73000 Sundry Creditors 56000 Land 100000 Bills payable 38000 Plant & accessories 90000 Bank Loan 50000 Req: Journal Entries

When we jornalize the transctions , all asssts items are debited  and all liability items are credited. stock, sundry debtors , land , plant and accessories accounts are debited and    creditors, bank loan , and remainong na\balance .....

23. B Ltd. purchased the following assets and liabilities of A Co. by issue of 20,000 shares of Rs. 10 each. Machinery 96000 Furniture 60000 Stock 56000 Bills Receivable 32000 Creditors 54000 Bills Payable 46000 Req: Journal Entries.

When we journalize the transactions, we must find out the transactions according to the nature or accounts.    when we starting the business , we should  machinery ,furniture, stoch, and bills receivable acounts are debited  and .....

24. A company took over the following assets and liabilities at an agreed price of Rs. 14, 40000. Building 380000 Plant & Machinery 539000 Furniture 142000 Debtors 273000 Creditors 331000 Outstanding expenses 37900 Short term loan 114000 Bills receivable 112000 The co. paid the price through issue of shares of Rs. 100 each at a premium of 20%. Prepare Journal entries.

The journal entries shall be .....

25. Bimal Co. Ltd. issued 1200 shares of Rs. 100 at a premium of 20% to purchase the business of a firm consisting of the following assets and liabilities: Stock in trade 72000 Plant & accessories 60000 Sundry Creditors 47000 Sundry Debtors 43000 Land and Building 105000 Bills payable 24000 Bank OD 24500 Req: Journal Entries

The journal entries shall be .....

26. XY Ltd. purchased the following assets and liabilities of ABC Co. by issue of 13,000 shares of Rs. 10 each. Machinery 67000 Furniture 50000 Stock 52000 Bills Receivable 21000 Creditors 46000 Bills Payable 29000 Pass Journal Entries.

When we issued the shares we collect the money or funds from the outsiders.  machinery a/c, furniture a/c, stock a/c , bills receivable a/c are the debited  and creditors a/c , biils payable a/c and share capital a/c is credited in the .....

27. A co. issued 10000 shares of Rs.10 each payable as Application - 2 Allotment - 5 First and final call - 3 Applications received for 16000 shares and allotment made as follows: 6000 shares - full 8000 shares - 4000 shares 2000 shares - Nil Money overpaid during application used towards allotment. A shareholder holding 1200 shares failed to pay call amount. His shares were forfeited and re-issued at par. Req: Journal entries for allotment, forfeiture and re-issue of shares.

Those shareholders who fail to pay the amount .....

28. A co. issued 15000 shares of Rs.10 each at 10% premium payable as Application - 2 Allotment - 5(incl. premium) First and final call - 4 Applications received for 25000 shares and allotment made as follows: 10000 shares - full 10000 shares - 5000 shares 5000 shares - Nil Money overpaid during application used towards allotment. A shareholder holding 600 shares failed to pay call amount. His shares were forfeited and re-issued at par. Req: Journal entries for allotment, forfeiture and re-issue of shares.

Issuing shares for premium means that the value of share is .....

29. A co. issued 13000 shares of Rs.10 each payable as Application - 2 Allotment - 5 First and final call - 3 Applications received for 20000 shares and allotment made as follows: 8000 shares - full 10000 shares - 5000 shares 2000 shares - Nil Money overpaid during application used towards allotment. A shareholder holding 800 shares failed to pay call amount. His shares were forfeited and re-issued at par. Req: Journal entries for allotment, forfeiture and re-issue of shares

Those shareholders who fail to pay the amount .....

30. Shiksha Co. Ltd. has authorized share capital of 1, 00,000 of Rs. 100 each. It offered 30,000 shares for public subscription at a premium of 20% payable as follows: Application - 20 Allotment - 60 (incl. premium) First call - 30 Final call - 10 Applications were received for 45000 shares. No allotment was made to 5000 shares and the rest were allotted on pro-rata basis. All called amount were duly received except one shareholder holding 900 shares who failed to pay first and final call. One shareholder holding 1200 shares paid all amount during allotment. Journalize.

Those shareholders who fail to pay the amount .....

31. JB Co. Ltd. Issued 35,000 shares of Rs.100 each @ 20% premium for subscription. Application was received for 35,000 shares and payment had to be done as follows: Application - 20 Allotment - 50(incl. Premium) First call - 30 Final call - 20 All amount was duly received except for one shareholder holding 5000 shares who failed to pay first and final call amount and another shareholder holding 3000 shares who failed to pay allotment and call money. Journalize.

Journal: .....

32. P Ltd. issued 10,000 shares of Rs. 10 each at a premium of 10% payable as Rs. 3 during application, Rs. 4 during allotment (incl. Premium), Rs. 2 during first call and balance amount during final call. All amount were duly received. Journalize.

For issue of .....

33. How do you calculate average collection period? What is the objective of its calculation?

Avarage collection period is the approximate amount of the time that it takes for a business to receive payments owned in terms of accounts receivable.  credit sales equal to the total amount of net credit sales during period. the average .....

34. Differentiate Relatively Elastic & Relatively Inelastic Demand.

Now think about this. The price of the book rises from Rs. 100 to Rs.125. The demand of book decreases from 100 books to 98 books. Again calculate the percentage change in price and percentage change in quantity demanded. What do you find? You .....

35. How is perfectly elastic demand different from perfectly inelastic demand?

As you know, elasticity simply means responsiveness; Thus, price elasticity of demand is the demand which is .....

36. If the price falls from Rs. 18 to Rs. 9 and results in the rise of the quantity demanded from 43 units to 73 units; find out price elasticity of demand.

  See price elasticity of demand measures the percentage change in quantity demanded due to the percentage change in price. Right? I hope you know the formula of price elasticity of demand. Ep= % change in quantity demanded / % change in .....

37. If the price falls from Rs. 10 to Rs. 8 and results in the rise of the quantity demanded from 40 units to 60 units; find out price elasticity of demand.

Here, Initial price (P)= Rs. 10 New price (P1)= Rs. 8 Initial quantity (Q)= 40 New quantity (Q1)=60 Here, Change in price = P1 - P = 8 - 10 = -2 Change in quantity = Q1 - Q = 60 - 40 = 20 We know, Ep = Change in quantity/Change in .....

38. What does Perfectly Inelastic Demand, Unitary Elastic Demand and Relatively Elastic Demand mean?

Now look at this example. A 10% increase in price of a product leads to 10% decrease in demand of the product. What do you see here? The percentage of change in price ad demand is same. Right? This is the feature of unitary elastic .....

39. What is cross elasticity of demand?

As we know elasticity is responsiveness to different factors;

.....

40. Who introduced the concept of elasticity of demand in economics? What does Elasticity of Supply mean?

Now about the elasticity of supply, I hope you know the relationship of price with supply. Right? When price increases, quantity supplied also increases. And when price decreases. quantity supplied also decreases. But by how much .....

41. Define an economic problem with context to Nepal

Same is in the context of Nepal. Many years ago Nepal was called "Hariyo Dhan Nepal ko Dhan" Since people started cutting many trees. The resources started getting minimum in number which was scared. So this forest has many usuage for .....

42. What is the main reason behind the origin of an economic problem?

Scarcity/ limited resources to fulfill unlimited wants is the main reason behind the origin of an economic .....

43. What is the meaning of the problem “for whom to produce”?

The problem of “for whom to produce” means the problem of distribution of produced goods and .....

44. What is capital – intensive technique of production?

In factor-combination, if capital has greater proportion than labor, it is called capital-intensive technique .....

45. What is meant by labour intensive technique of production?

Look at the farming style of a nearby village in a rural area. Do you think farmers use any kind of machineries? Yes but then in a limited number. Right? You see more human labor than capital. When any production process involves more of labors .....

46. Economics is a science of wealth. Discuss.

The wealth and richness of a country cannot grow without proper utilization of its .....

47. Explain the interdependence between micro and macro economics.

What do you think is the relationship between an individual and a country? You may take a notice that it is the group of individuals which make society. And the group of societies make a country. Isn't it? So is individual related and .....

48. How is Marshall’s definition different from Robbin’s definition of economics?

According to Robbin's, .....

49. Explain Robbin’s definition of economics. Also mention its criticisms.

According to Robbin's, .....

50. According to Human Development Report, what is the HDI for Nepal?

I will provide you with a hint. Based on the hint, you need to search it in internet. Hint: Based on the HDI, Nepal is ranked 144th position out of 188 .....