FINANCIAL ACCOUNTING

 FINANCIAL ACCOUNTING

(Very Short Answer Questions)

1. (i) Explain entity Concept.

ans- An Entity is a distinct objector concept in database, representing real-world items with attributes. It facilitates organized data storage and relationships between objects.

(ii) ‘‘Debit the receiver credit the giver’’ this role is related to which type of account?

ans- This role is related to the double-entry bookkeeping system, specifically for recording transactions in financial accounts , such an asset and liablity accounts.

(iii) When suspense account is opened?

ans-  A suspense account is opened when there is uncertainty about a transaction or its proper classification. It is a temporary account that holds the entry until it is resolved.

(iv) Give any two examples of capital loss.

ans- Here are two examples of capital loss.

• Selling a factory for less than its purchase price.
• Losing fixed assets due to accidents or natural disasters

(v) Explain ‘‘Error of Commission".

ans- An error of commission is a mistake that consists of doing something wrong, such as including a wrong amount, or including an amount in the wrong place.

(vi) Give the formula of findingout depreciation on the basis of fixed instalment method.

ans- Depreciation using the fixed installment method can be calculated using the formula:

Depreciation = (Cost - Salvage value) / Estimated useful life.