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Spring%202013_MGT101_1.pdf

FINANCIAL ACCOUNTING (MGT101)
ASSIGNMENT NO. 01
DUE DATE: 2nd May 2013
MARKS: 20
TOPIC TO BE TESTED:
• Application of “Rules of debit and credit”
LEARNING OBJECTIVES:
• To develop an understanding for applying the rules of debit and credit
On 1st March 2013, Mr. Adnan organized a business called A.R Rentals. Mr. Adnan’s new business was able to begin operations immediately by purchasing the assets and taking over the location of Ammar Rentals, an equipment rental business. Below are the transactions for the month of March 2013:
Date
Transactions
2013
March 01
Mr. Adnan deposited Rs. 900,000 cash in the name of his business - A. R Rentals in the bank.
March 01
Paid Rs. 90,000 to Mr. Irfan as three month’s advance rent for the rental yard and originally recorded this payment as an asset as per policy.
March 01
Purchased for Rs. 280,000 all the equipment from Ammar Rentals and paid Rs. 170,000 cash and issued a 3 months note payable for Rs. 110,000.
March 04
Purchased office supplies and office furniture from Ashar & Co. amounting to Rs. 5,000 and Rs. 50,000 respectively.
March 08
Received Rs. 10,000 cash from Mukhtar Construction Co. as rent of equipment
March 10
Sent an invoice for Rs. 5,000 to M/S ABC for rental services provided.
March 17
Rs. 3,400 paid for maintenance of equipment to Raza & company
ASSIGNMENT QUESTION
Required:
Fill the appropriate boxes of table given below
(1st transaction is given as sample attempt in the table)
Date
Accounts involved
Debit
Rs.
Credit
Rs.
Applied Rule of Debit and Credit with respect to the nature of account
2013
March 01
Bank
Capital
900,000
900,000
Increase in asset a/c
Increase in Owner’s equity a/c
March 01
?
?
90,000
90,000
?
?
March 01
?
?
?
280,000
170,000
110,00
?
?
?
March 04
?
?
?
5,000
50,000
55,000
?
?
?
March 08
?
?
10,000
10,000
?
?
March 10
?
?
5,000
5,000
?
?
March 17
?
?
3,400
3,400
?
?
March 27
?
150
?
March 27
Bank charges of Rs. 150 deducted by bank from bank account of business
March 30
Received a cheque of Rs. 10,000 from M/S ABC against rental services
March 31
Paid salaries for the month of March amounting to Rs. 3,600
?
150
?
March 30
?
?
10,000
10,000
?
?
March 31
?
?
3,600
3,600
?
?
IMPORTANT:
Grace period of extra 24 hours after the due date is usually available to overcome uploading difficulties. This extra time should only be used to meet the emergencies and above mentioned due dates should always be treated as final to avoid any inconvenience.
IMPORTANT INSTRUCTIONS
• Take help from internet for collecting the information.
• Carefully watch relevant lectures and consult the relevant material from handouts along with recommended books.
• Attempt the assignment by yourself and it will be entertained positively.
OTHER IMPORTANT INSTRUCTIONS:
DEADLINE:
• Make sure to upload the solution file before the due date on VULMS.
• Any submission made via email after the due date will not be accepted.
FORMATTING GUIDELINES:
• Use the font style “Times New Roman” or “Arial” and font size “12”.
• It is advised to compose your document in MS-Word format.
• You may also compose your assignment in Open Office format.
• Use black and blue font colors only.
REFERENCING GUIDELINES:
• Use APA style for referencing and citation. For guidance search “APA reference style” in Google and read various website containing information for better understanding or visit http://linguistics.byu.edu/faculty/henrichsenl/apa/APA01.html
RULES FOR MARKING
Please note that your assignment will not be graded or graded as Zero (0), if:
• It is submitted after the due date.
• The file you uploaded does not open or is corrupt.
• It is in any format other than MS-Word or Open Office; e.g. Excel, PowerPoint, PDF etc.
• It is cheated or copied from other students, internet, books, journals etc.
• Accounts involved are incorrectly mentioned in the given table of assignment even if the rules of debit and credit are correctly mentioned. So be careful to mention the accounts involved against each transaction.
Note related to load shedding: Please be proactive
Dear students!
As you know that Pre Mid-Term semester activities have been started and load shedding problem is also prevailing in our country now a days. Keeping in view the fact, you all are advised to post your activities as early as possible without waiting for the due date. For your convenience; activity schedule has already been uploaded on VULMS for the current semester, therefore no excuse will be

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U have solve assignment no 1 2013 MGt 101.so if u have.

MGT101 Assignment#01 Solution Spring 2013

See the attached please 

Please correct if i am wrong 

Attachments:

tariq bhai main new student hn word main kaisy convert krn mgt ki file

kisi ne assignment start ki mgt-101 ki :(

Please Discuss here about this assignment.Thanks

Our main purpose here discussion not just Solution

We are here with you hands in hands to facilitate your learning and do not appreciate the idea of copying or replicating solutions.

Rules of debit and credit are as under:

Increase in asset is debit
Decrease in asset is credit

Increase in expense is debit
Decrease in expense is credit

Increase in income is credit
Decrease in income is debit

Increase in liability is credit
Decrease in liability is debit

Increase in capital is credit
Decrease in capital is debit

What are the rules for debit and credit in accounting?

There are three Golden Rules for Debit & Credit, whole accounting is depend on these three rules :- 1. Debit what comes in & Credit what goes out. 2. Debit the receiver & Credit the giver. 3. Debit all loss/expenses & Credit all gains/profits. Regards Jawad
increase in asset is debit & decrease in asset is credit

The above rules do not always apply, It is not as simple as Debit is what comes in and Credit is what goes out. If you pay a bill, yes you "Credit" the cash that is going out, but you also Debit the expense account (the opposite side).

The basic rules are, for every Debit there must be an equal Credit and (of course) for every Credit there must be an equal Debit. Debits and Credits MUST BALANCE, ALWAYS!

The terms Debit and Credit literally mean

Debit = Left side of the accounting columns
Credit = Right side of the accounting columns

Also look at Revenue, if you GET money for doing a job or selling a product, there are TWO Sides that must Equal, if you receive cash you (Debit) Cash, but at the same time you must also (Credit) Income (Revenue).

Assets increase with a Debit (as do expense accounts)
Liabilities increase with a Credit (as do Owners Equity or Capital accounts)

Debit Credit Rules



In financial accounting debit and credit are simply the left and right side of a T-Account respectively. They are used to indicate the increase or decrease in certain accounts. When there is a change in an account, that change is indicated by either debiting or crediting that account according to following rules:

Assets and Expenses
An increase is recorded as debit (left side)
A decrease is recorded as credit (right side)
Liabilities, Equities and Revenues
A decrease is recorded as debit (left side)
An increase is recorded as credit (right side)
Contra-accounts
Contra-accounts behave exactly in opposite way to the respective normal accounts.
Examples

The owner brings cash from his personal account into the business
Analysis:
Cash (an asset) is increased thus debit Cash
Owner capital (an equity) is increased thus credit Owners' Capital
Office supplies are purchased on account
Analysis:
Office Supplies (an asset) is increased thus debit Office Supplies
Accounts Payable (a liability) is increased thus credit Accounts Payable
Wages payable are paid
Analysis:
Wages Payable (a liability) is decreased thus debit Wages Payable
Cash (an asset) is decreased thus credit Cash
Revenue is earned but not yet received
Analysis:
Accounts Receivable (an asset) is increased thus debit Accounts Receivable
Revenue (a revenue) is increased thus credit Revenue

thanks Sir..

 

Date

 

Accounts involved

Debit

 

Rs.

Credit

 

Rs.

Applied Rule of Debit and Credit with respect to the nature of account

2013

 

March 01

 

 

Bank

 

Capital

 

 

900,000

 

 

 

 

 

900,000

 

 

Increase in asset a/c

 

Increase in Owner’s equity a/c

March 01

Advance Rent

 

Bank

90,000

 

 

90,000

Increase in Asset Account

 

Decrease in Asset Account

March 01

Equipment

 

Cash

 

Ammar Rental

280,000

 

 

170,000

 

110,00

Increase in Asset Account

 

  Decrease in Asset Account

 

Increase in Liability Account

March 04

Office Supplies

 

Office Supplies

 

Ashar & Co.

5,000

 

50,000

 

 

 

 

 

55,000

  Increase in Asset Account

 

Increase in Asset Account

 

Increase in Liability Account

March 08

Cash

 

Rent Received

10,000

 

 

10,000

Increase in Asset Account

 

Increase in Income Account

March 10

M/s ABC

 

Rent

5,000

 

 

5,000

Increase in asset Account

 

Increase in Income Account

March 17

Repairing & Maintenance

 

Cash

3,400

 

 

3,400

Increase in Expense Account

 

Decrease in Asset Account

March 27

Bank Charges

150

 

 

150

Increase in Expense Account

 

Decrease in Asset Account

Bank

March 30

Bank

 

M/s ABC

10,000

 

 

10,000

Increase in Asset Account

 

Decrease in Asset Account

March 31

Salaries

 

Cash

3,600

 

 

3,600

Increase in Expense Account

 

Decrease in Asset Account

kindly help me out if i am wrong any where... thanks

March 4:  Office Supplies are not asset, these are consumable items, Expense Increase, moreover, these are purchase from Ashar  & Co. (no cash mention) so it is Account Payable (Liability) Increase and Ashar & co. credit.

March 8, No Account Receivable created in above mentioned entries, so here, Rent, Income increase and credit.

March 10, Income generated for invoice generated so Rent (Income) credit.

March 30, Same as March 8, Rent (Income) increase instead of A/R decreased.

Please correct me if i am wrong.

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