BBA/B.Com Financial Accounting

Description

Financial Accounting

Dec 2024 Examination

 

 

PLEASE NOTE:  This assignment is application based, you have to apply what you have learnt in this subject into real life scenario. You will find most of the information through internet search and the remaining from your common sense. None of the answers appear directly in the textbook chapters but are based on the content in the chapter

Q1. ABC Traders began their business operations on July 1st, 2023. The following transactions were recorded during the first month: [10 Marks]

1. July 1: Owner invested 50,000 in the business bank account.
2. July 3: Purchased office furniture for 8,000 on credit from XYZ Suppliers.
3. July 5: Paid rent for the month, 3,000, by check.
4. July 7: Purchased inventory worth 10,000, paying 60% in cash and the rest on credit.
5. July 10: Made sales of 12,000, of which 7,000 was received in cash and the rest on credit.
6. July 15: Paid 5,000 to XYZ Suppliers for the credit purchase made on July 3rd.
7. July 20: Received 3,000 from debtors for the credit sale made on July 10th.
8. July 25: Paid salaries of 2,500 in cash.
9. July 28: Returned 500 worth of office furniture to XYZ Suppliers due to a defect.
10. July 31: Paid utility bills for the month amounting to 800 by cash.

Questions:

1. Prepare the journal entries for all the above transactions for the month of July.Post the above journal entries to the relevant ledger accounts (Cash, Bank, Sales, Purchases, Debtors, Creditors, Furniture, Rent, Salaries, etc.).After posting the entries to the ledger, prepare a trial balance for ABC Traders as of July 31st, 2023. (10 Marks)

 

Ans 1.

Introduction

Financial accounting is an essential function in any business organization, serving as a systematic process of recording, classifying, and summarizing financial transactions to provide an accurate financial position. This practice ensures compliance with accounting standards and transparency in financial reporting. The case of ABC Traders highlights the importance of financial accounting in real-life scenarios, where accurate journal entries, ledger postings, and trial balance preparation are critical for effective decision-making. The following document provides a detailed analysis of the transactions recorded by ABC Traders during their first month of operations in July 2023. It includes journal entries, ledger postings, and a trial balance to showcase the application of

 

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Q2(A)  ALPHA Ltd., a mid-sized manufacturing company, is preparing to expand its operations internationally. As part of this expansion, the company needs to ensure its financial statements are compliant with both domestic and international accounting standards. ALPHA Ltd. has been following Indian GAAP but is now considering adopting International Financial Reporting Standards (IFRS) and Indian Accounting Standards (Ind AS) due to its international ambitions.

The management of ALPHA Ltd. is faced with several decisions:

1. Current Accounting Policies: The company follows traditional Indian GAAP which may not align with the new standards they are considering. They need to understand the implications of transitioning to Ind AS and IFRS.
2. Implementation Strategy: They are also looking for a structured approach to implement Ind AS and integrate IFRS into their financial reporting system.

Question:

1. Identify and explain the meaning and objectives of accounting standards that ALPHA Ltd. should consider in transitioning from Indian GAAP to Ind AS and IFRS. Discuss the significance of setting accounting standards in the context of ALPHA Ltd.’s international expansion. (5 Marks)

Ans 1.

 

Introduction

Accounting standards are critical frameworks designed to standardize financial reporting and ensure consistency, transparency, and comparability of financial statements across organizations and jurisdictions. For ALPHA Ltd., transitioning from Indian GAAP to Ind AS and IFRS represents a strategic move to align its financial reporting with global practices, ensuring compliance and fostering trust among international stakeholders. This alignment is essential for the company’s

 

 

Q2(B) Refring to the above case:

How would adopting Ind AS and IFRS benefit the company? Outline the key steps in the roadmap for implementing Ind AS in India and how ALPHA Ltd. can align its financial reporting with these standards. (5 Marks)

Ans 2B.

Introduction

Adopting Ind AS and IFRS offers numerous benefits for companies like ALPHA Ltd., particularly as they expand internationally. These standards enhance financial transparency, global comparability, and stakeholder confidence. Transitioning to these frameworks ensures compliance with international expectations, fostering stronger relationships with global investors and partners. This document explores the advantages of adopting these standards and outlines a practical