Practical Questions and Numerical Problems

 1. Journal Entries

Q1: A business owner started a company with an initial capital of ₹1,00,000 in cash. Record the journal entry.

  • Answer:
    • Debit: Cash ₹1,00,000
    • Credit: Capital ₹1,00,000

Q2: Record the following transactions in journal entries:

  1. Purchased office supplies worth ₹5,000 in cash.
  2. Paid rent of ₹8,000 for the office.
  3. Sold goods worth ₹15,000 on credit to a customer.
  4. Paid ₹3,000 for advertisement.
  • Answer:
    1. Debit: Office Supplies ₹5,000; Credit: Cash ₹5,000
    2. Debit: Rent Expense ₹8,000; Credit: Cash ₹8,000
    3. Debit: Accounts Receivable ₹15,000; Credit: Sales ₹15,000
    4. Debit: Advertising Expense ₹3,000; Credit: Cash ₹3,000

2. Ledger and Trial Balance

Q3: Prepare a trial balance using the following transactions:

  • Cash ₹50,000

  • Furniture ₹10,000

  • Accounts Payable ₹20,000

  • Sales ₹30,000

  • Rent Expense ₹5,000

  • Answer:

    • Trial Balance:
      • Cash: Debit ₹50,000
      • Furniture: Debit ₹10,000
      • Accounts Payable: Credit ₹20,000
      • Sales: Credit ₹30,000
      • Rent Expense: Debit ₹5,000
      • Total Debit = Total Credit = ₹65,000

3. Depreciation Calculation

Q4: A company purchased a machine for ₹1,00,000 with a useful life of 5 years. Calculate the annual depreciation using the Straight Line Method (SLM).

  • Answer:
    • Depreciation per year = ₹1,00,000 / 5 = ₹20,000

Q5: Using the Written Down Value (WDV) Method, calculate the depreciation for the first two years for the same machine with a depreciation rate of 10%.

  • Year 1: ₹1,00,000 x 10% = ₹10,000

  • Year 2: (₹1,00,000 - ₹10,000) x 10% = ₹9,000

  • Answer:

    • Year 1 Depreciation = ₹10,000; Year 2 Depreciation = ₹9,000

4. Preparation of Financial Statements

Q6: Given the following information, prepare a simple Profit & Loss Statement for the month:

  • Sales: ₹50,000

  • Cost of Goods Sold (COGS): ₹30,000

  • Rent Expense: ₹5,000

  • Salary Expense: ₹10,000

  • Answer:

    • Profit & Loss Statement:
      • Sales: ₹50,000
      • Less: COGS: ₹30,000
      • Gross Profit: ₹20,000
      • Less: Rent Expense: ₹5,000
      • Less: Salary Expense: ₹10,000
      • Net Profit: ₹5,000

Q7: Using the information below, prepare a Balance Sheet:

  • Assets: Cash ₹25,000, Accounts Receivable ₹15,000, Equipment ₹30,000

  • Liabilities: Accounts Payable ₹10,000

  • Owner’s Equity: ₹60,000

  • Answer:

    • Balance Sheet:
      • Assets:
        • Cash: ₹25,000
        • Accounts Receivable: ₹15,000
        • Equipment: ₹30,000
        • Total Assets: ₹70,000
      • Liabilities and Equity:
        • Accounts Payable: ₹10,000
        • Owner’s Equity: ₹60,000
        • Total Liabilities and Equity: ₹70,000

5. Forensic and Carbon Accounting

Q8: Imagine a case where an employee is suspected of embezzling funds. List two accounting techniques that could help in forensic accounting to detect fraud.

  • Example Answer:
    • Reviewing journal entries and suspicious transactions
    • Analyzing unusual patterns in financial statements

Q9: If a company wants to measure its carbon footprint, list two ways it can do so.

  • Example Answer:
    • Calculating emissions from energy usage
    • Tracking transportation emissions for logistics

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