Explore topic-wise InterviewSolutions in Current Affairs.

(i) (b) print(df.max())

(ii) (a) df1=df[df[‘rollno’]==4]

print(df1)

(d) df1=df[df.rollno==4]

print(df1)

(iii) (a) both (i) and (ii)

(iv) (d) both (i) and (ii)

(v) (b) df [‘Grade’]=[’A’,’B’,’A’,’A’,’B’,’A’]

The term Financial Statements generally refers to two statements prepared at the end of an accounting period for an enterprise. These are Trading and Profit and Loss Account, showing profitability of the business operations and Balance sheet, showing the financial position of the enterprises.

EBIT stands for Earning before interest and tax.

Gross profit = Sales – Cost of goods sold

= 40,000 – 28,000 = Rs. 12,000

Net profit = Operating profit – Non-operating expenses + Non operating income = 1700000 – 375000 + 150000 Net Profit =Rs. 1475000

Free samples distributed among customer's will be credited to Advertisement account.

In order to increase sales, goods may be distributed among customers free of cost. Such free goods are in the form of samples for test use. It is in the form of advertisement expense. The amount is to be deducted from the purchases in the trading account. The cost of the sample is to be shown as an expenses in the profit and loss account.

Opening stock = Sales + Closing stock – (Purchases + Direct Expense + Gross Profit)

= 1,00,000 + 30,000 – (60,000 + 7,000 + 20,000)

= 1,30,000 – 87,000 = 43,000

Profit and Loss a/c is an account prepared to find out the net profit earned or net loss incurred by a business during an accounting period. It is debited with all operating expenses and losses and credited with incomes and profit. This account begins with the Gross Profit or Gross Loss brought down from Trading A/c.

If the total of the credit side of this account is more than the total of the debit side, the difference is net profit. If the total of the debit side exceeds the total of the credit side, the difference is net loss. The amount of net profit or net loss transferred to capital account.

Correct answer is (a) Trading Account

• Operating Profit = Gross Profit – (Operating expenses + Operating income)
• Gross Profit = Net sales – Cos of goods sold = 7,50,000-5,00,000 = 2,50,000
• Operating Expenses = Administration expense + Selling and Distribution exp.
• Operating Profit = 2,50,000 – (25,000+ 35,000) = Rs. 1,90,000

Correct answer is (c) Financial Position

Correct answer is (c) Sales and cost of goods sold

Correct answer is (b) Capital Account

Every transaction has two aspects which are equal in value but opposite in nature. One of the aspects will form part of liability and the other one asset. Because of this feature of accounting equation, a balance sheet is always tallied.

Treatment of prepaid expenses, depreciation and closing stock at the time of preparing the final account.
1. When Given Inside the Trial Balance Prepaid Expenses:

When prepaid expenses are given in the trial balance itself it will be treated as current assets only and will be posted in the Assets Side of the balance sheet. No further adjustment will be required in this case.

Depreciation:

When depreciation is given in the trial balance it will be treated as an expenditure and will be shown in the debit side of the Profit and Loss Account. No further adjustment will be required in this case.

Closing Stock:

When closing stock is given in the trial balance it will purely be treated as assets and will be shown only in the Assets Side of the Balance sheet. No further adjustment will be required in this case.

2. When Given Outside the Trial Balance Prepaid Expenses:

When prepaid expenses are given outside the trial balance it will be treated as an Adjustment and will be posted at two places, first of all, it will be deducted from the concerned expenses in the debit side of Profit and Loss Account and after that, it will be treated as current assets and will be posted in the Assets side of the Balance Sheet.

Depreciation:

When depreciation is given outside the trial balance be treated as an adjustment and will be posted at two places to comply with the rules of the double-entry bookkeeping system. First of all the amount of depreciation will be shown in the debit side of Profit and Loss account as an expenditure and the amount of depreciation will be deducted from the concerned assets in the assets side of Balance Sheet.

Closing Stock:

When closing stock is given outside the trial balance it will purely be treated as an adjustment and will be posted at two places first of all the amount of closing stock will be shown at the credit side of Trading Account and after that it will be shown as an assets in the Assets side of the Balance Sheet.

Correct answer is (b) Expenses

Investment Fluctuation Fund is created to make for decline in the value of investment due to market fluctuation.

1. Wear and Tear 

2. Obsolescence 

3. Passage of time 

4. Depletion 

5. Accident.

The welfare state is a way of governing in which the state or an established group of social institutions provides basic economic security for its citizens. By definition, in a welfare state, the government is responsible for the individual and social welfare of its citizens.

Provision is a charge against profit.

Revenue Reserves are usually created out of business profits which are available for distribution of dividend.

Profit on sale of fixed assets is a Capital profit.

Calculation of Loss on sale of machinery

 Calculation of total depreciation as on 31/12/2002

Reserve is an appropriation from the profit.

There are three basic factors which are required to charge depreciation, 

they are: 

1. Cost of Assets 

2. Estimated Net Residual value or Scrap value or salvage value 

3. Estimated Useful life

Reserve created for maintaining a stable rate of dividend is termed as Dividend Equalisation Reserve.

Correct answer is (a) Asset

Purpose of Provision is to meet a Liability.

The provision means any  amount set aside as a charge against profit to meet a loss, the amount of which cannot be determined with substantial accuracy. Reserve refers to amount set apart from profit and loss account to meet unforeseen contingencies. 

The following are the difference between provision and reserve.

Depreciation is the operating expenses of a physical asset. It should be considered in arriving at the true profit earned during each year.

1. Revenue Reserve: Revenue reserve are usually created out of business profits which are available for distribution of dividend. It is further classified in to: 

a. Specific Reserve: An amount set aside for meeting a specific purpose or objective is called specific reserve. 

Eg: Debenture redemption reserve, dividend equalisation reserve, Investment fluctuation reserve, etc. 

b. General Reserve: The amount kept aside is used for the overall improvement of business, it is called general reserve. 

Eg: Contingency reserve 

2. Capital Reserve: 

A reserve created out of capital profit is called capital reserve. Usually such reserves are not available for dividend to shareholders. The following are some of the capital profit usually kept as capital reserve. 

• Profit on sale of fixed assets 
• Premium on issue of shares 
• Profit prior to incorporation 
• Profit on reissue of shares 
• Profit made on purchase of a business.

1. Trade expense – It is an indirect expense, all others are direct expenses.

2. Income tax paid – It is a personal expense of the Proprietor, all others are business expenses.

The need for providing depreciation in accounting records arises from conceptual, legal and practical business considerations. Though depreciation is not paid it has to be identified as important business expenditure. 

The consequence of not providing depreciation as 

1. Timely replacement of fixed assets become impossible. 

2. Cost of production cannot be exactly calculated. 

3. Paying dividend out of capital.

Correct answer is (b) Written down value

Installation, freight, and transport expenses are a part of Acquisition cost.

The main objectives of providing depreciation are: 

1. To ascertain the true result of the business. 

2. To present true Balance sheet. 

3. To retain funds for replacement. 

4. To avoid excess payment of income tax 

5. To fulfill the legal requirements

Calculation of loss of sale of plant

Obsolescence implies to an existing asset becoming out-of-date on account of the availability of better type of asset.

A. Depreciation

Depreciation is a Non-cash expense.

1 – c 

2 – d 

3 – g 

4 – f 

5 – a 

6 – b 

7 – e 

8 – i

Correct answer is (a) Depletion

Provision  for Depreciation a/c

Note

In case of depreciation, there is no payment or outflow occurring.

Correct answer is (b) Wear and Tear

Deficient demand refers to the situation when aggregate demand is short of aggregate supply corresponding to full employment level in the economy. Aggregate supply being perfectly elastic, it converges with aggregate demand at a lower level of output lower than the full employment level of output in the economy. This is a situation of underemployment equilibrium.

Correct option is (c) (i)-1; (ii)-2 

(b). Cash Book