B.COM SOLVED ASSIGNMENT 1 CODE 438 FOR SPRING 2016
Aiou solved assignment 1 for code 438 principles of accounting for the semester spring 2016. This is the solution of first assignment for principles of accounting code 438 for B.Com students for semester spring 2016.
Q.1 (i) Define the term “Accounting” and “Business”. What are the main branches of Accounting?
Accounting: There are various definition of Accounting. The generally accepted definitions are as follows:-
1. Accounting is the process of identifying measuring and communicating economic information to permit informed judgments and decisions by users of business Information.
2. Accounting is the art and science of recording, summarizing, analyzing and reporting the business transactions in a concise and systematic way; and to calculate the results thereof.
3. Accounting is language of business. Business: Business is a number of regular transactions to earn profit. In other words it is an activity which is undertaken to earn profit.
Main Branches of Accounting,:
Financial Accounting is a specialized branch of accounting that keeps track of a company financials transactions.
The process of identifying, analyzing, interpreting, and communicating information for the pursuit of an organization’s goals. This is also known as “cost accounting”.
The recording of all the costs incurred in a business in a way that can be used to improve its management.
An official examination and verification of accounts and records, especially of financial accounts.
Tax accounting also the main branch of accounting methods that focus on taxes rather than the appearance of public financial statements.
The collections, storage and processing of financial and accounting data that is used by decision makers.
A fiduciary account is a statement of all of the receipts and disbursements of an executor, trustee, or other fiduciary.
The use of accounting skills to investigate fraud or embezzlement and to analyze financial information for use in legal proceedings.
(ii) Give example of transaction that would have the following effect on the elements in the firm’s accounting system.
(a) Sale of any assets. This result increase the cash and decrease the asset.
(b) Purchase of any assets. This result decrease in cash and increase the assets.
(c) Loan from Bank. This result increase in asset (bank) and also increase in liability (loan).
(d) Depreciation on any fixed assets this result increase in expense and decrease the value of the fixed assets.
(e) Full settlement, payment of loan from bank. This result decrease in asset (Bank) and also decrease in liability.
Q 2. The following shows the position of the Lahore library as at 1″ January, 2015.
The Lahore Library
Income and Expenditure account
For the year ended 31′ December, 2015