Since in manufacturing concern, goods are produced by machine, it is a direct non-cash expense. Hence, it would be shown in debit side of manufacturing A/c.

 Outstanding salaries would decrease net profit, because it is a liability still to be paid and added in debit side of profit and loss A/c. The items shown in debit side of profit and loss A/c decrease the net profit.

 It is a specific reserve, since it is created to maintain a steady rate of dividend for each year when the profits are low.

 The asset like goodwill, land and building, which are not meant to be sold are written first .As these assets are meant for permanent use and not easily convertible into cash they are written first. 

 It is an asset since it is paid in advance for the next year. It is deducted from the total insurance paid in the debit side of Profit & Loss and shown in assets side of Balance Sheet.

 As total assets are equal to capital plus creditors, we can deduct net worth or capital from total assets to calculate creditors.                       ||||| |---|---|---|---| |Creditors = Total Assets - Capital| | | | | 2,50,000 - 1,80,000 = 70,000| | | | | So, creditors are Rs. 70,000| | | | | | | | | Hence, creditors are Rs 70,000 . Net worth is capital.

 This principle must be followed because the amount has to be debited at one place and credited at the another, otherwise the balance sheet would not tally.

 In this case, the amount of depreciation would be transferred to the debit side of Profit & Loss Account . No further adjustment is necessary, since the concerned asset would appear at the reduced value.

 It is a deferred revenue expenditure, since the expenditure is a large one and the benefits would go beyond the accounting period, in which this expenditure is incurred.

 Cash in hand is the most liquid asset, since we can take out cash from the business very quickly, whenever required.

 The provisions are created for it. For ex; the provision of doubtful debts is not certain, as in,  how much the debtor would not be able to pay, but it is a contingency that some amount may not be paid by the debtors. So, a provision for doubtful debts is made.

 In this method, the totals as well as balances are entered. There are four columns. First one of the totals of the debit side, second one for the totals of credit side, third one for debit balances and fourth one for credit balances.

 As mentioned earlier, it would be shown in the liabilities side as it is the income received in advance for the next year.  2/5 X 4,500 = 1,800.

 If the drawer keeps the bill with himself till the due date,  the drawer is entitled to get its payment on due date. In this case, the drawer and payee are the same person.

 It is a current asset, since the debit balance is the closing balance of cash account. It is shown in assets side of Balance Sheet.

 It is a non-cash voucher, since no cash is involved in it ( incoming or outgoing of cash ). It is issued to a customer, if he returns goods.

 It is not the objective of preparing the Trial Balance, as the assets and liabilities are shown in the balance sheet. Hence, the financial position is ascertained by the balance sheet.

 It is a sales returns as goods have come in. Suppose goods worth Rs 12,000 are sold to Mr C and he returns the goods worth Rs 1,000 to us, the goods worth Rs 1,000 are Returns Inwards as they have come in.

 This is the limitation of journal, since if all the transactions are recorded, it becomes very bulky and lengthy process.

 In this, there are three columns. First one of cash receipts and cash payments, second one of transactions with bank and third one of discount allowed or received. So, a discount allowed of Rs. 150 would be shown in the debit side.

 In this method, the balance in the asset account would reduce to nil at the expiry of working life, as the depreciation is charged on original cost.

Trade discount is allowed on a certain quantity of goods purchased. For ex; a customer purchases 105 pieces of paper rolls then a discount may be given to him as in 5% on the total amount of purchase.

 The bank makes the entries in the pass book for the transactions relating with the customer. On a certain date the pass book and cash book are checked and the differences are tallied.  So, Bank Reconciliation Statement is prepared.

If there is a direct deposit into customer's balance it would credit his account. Suppose Ramseh deposits Rs. 4,000 in cash into customer's account, it would credit  his account.

 It is correct. Closing capital is Rs. 50,000 and profit earned is Rs. 10,000.

Capital= Assets - Liablities 60,000 - 10,000 So, Capital = 50,000 Profit = Closing Capital - Opening Capital 50,000 - 40,000 = 10,000