Principles of Accounting

1. Introduction
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Define accounting? 2009,2008,2007 What is the importance of accounting in business? 2010 Distinguish between bookkeeping and accounting. Who are the users of accounting information? 2009,2008 What is GAAP?2007 Discuss various important principles. Describe four accounting principles with example. Who are the internal users of accounting data? How does accounting provide relevant data to these users? Discuss the ethical issues of accounting. Accounting is a very responsible profession- explain. What is the basic accounting equation?2008,2007 Discuss the elements of accounting equation. 2010 What items affect owners equity?2008, 2007 What is owners equity? Discuss the elements of owners equity. Define the terms of assets liabilities and owners equity.2007 Briefly describe four assumptions that underlie the financial accounting structure.2010 State two generally accepted accounting principles that relate to adjusting the accounts.2009 Why is ethics a fundamental business concept?2007 Explain the monetary unit and economic entity assumptions.2007 The primary purpose of accounting is to produce information that is useful in making investment and credit decisions Explain.2004 Describe the two main qualitative characteristics of useful financial information? Explain.2004

2. The Recording Process

1.What are the basic steps in the recording process? 2.Outline the rules of Debit and Credit under the double entry system. 3.What is accounting cycle? 2007State the steps of accounting cycle.2010 4.What is journal? What are the advantages of using a journal in the recording process? 5.What is Posting? What is Trial Balance. What are the limitation of a trail balance? 2007 6. Depreciation is the allocation of cost Do you agree? Why? 2009 7. What is the purpose of an adjusted trial balance? How is an adjusted trail balance prepared?2004

3. The Adjustment Process

1.What is adjusting entries? What are the purposes of adjusting entries? 2.State two generally accepted accounting principles that relate to adjusting the accounting.? 3.What is closing entries? 4.What is income statement? Mention its uses? 5.Explain the terms fiscal year, calendar year and interim periods. 6.Why does the accrual basis financial statements provide more useful information than that of the cash basis financial statement? 2004 7. What are the different type of adjusting entries? Explain with examples.2010,2008,2007 8. Distinguish between cash basis and accrual basis of accounting. 2009,2008,2007

4. Completion of Accounting Cycle (Work Sheet)

1.What is work sheet? What are the objects of preparing work sheet? 2004 Is it mandatory in accounting? 2008 2.What is post closing trial balance? What is reversing entries ? 3.Distinguish between reversing entry and adjusting entry. 4. What is closing entries? Discuss in brief the closing process of temporary accounts.2010 5.Is worksheet a part of accounting cycle? Explain the purpose of worksheet.2009 6. What are the entries an organization needs to prepare for closing its books of accounts at the end of each accounting period? 2009

5. Accounting for Merchandising Operations

1 2 3 4 5 6 7 8 9 10 11 12 13 What is income statement? Mention its classes. What do you mean by financial statements? What is cash flow statement? Discuss its importance. How does the Single-step form of income statement differ form the multi-step form? What is a classified Balance sheet? Discuss the different categories of assets according to classified balance sheet. 2010,2008 What is periodic Inventory system? Mention its various advantages. What is perpetual inventory system? Mention its various advantages. Distinguish between perpetual and periodic inventory method. Define FOB shipping point, FOB destination and Contra revenue accounts.2010 Describe the different systems to account for merchandise inventory. 2010 Why the merchandise inventory account is usually required to adjust at end of the year? Explain.2009 Explain the meaning of the credit terms i) 2/10,n/30, ( ii) 1/10, EOM, (iii) n/30. 2009, 2007 What are the main difference between accounting for merchandise operations and accounting for service oriented organization?2004

6. Inventories 1. What are some of the reasons that may cause management to use gross profit method and
retail method of estimating inventory?2009 2.Discuss the importance of inventory valuation.2099 3.What are the methods of issuing materials? When and Why we will use LIFO or FIFO method? 2009 4.FIFO2007

7. Accounting Information Systems

1.What is an accounting information system? What is subsidiary ledger? Discuss the nature and advantages of subsidiary ledger.2010,2008 Discuss the principles of accounting information systems. 2.Distinguish between mechanized accounting system and manual accounting system. 3.What is special Journal? Mention its classes and uses. 4.What is subsidiary and General ledger? 5. Describe the two constraints inherent in the presentation of accounting information.2004 8. Internal Control and Cash 1.Discuss the principles of internal control used generally by business organization.2010 2. What is reconciliation of bank accounts? Why reconciliation is required?2010 3. What is internal control? Briefly explain the principles of effective internal control?2008