course module

1. Punjab College of Technical Education Ludhiana
COURSE - PLAN
Course Instructor: Shweta Miglani
E-mail : k_shweta81@yahoo.co.in
Subject Name: Basic Accounting
Subject Code: BC-103
Total Lectures: 51
Assignments: 3
Activities: 3
Case Studies: 3
Max. Marks: 100
External Marks: 60
Internal Marks: 40
The 40 marks will be divided as follows:
MSE 15 marks
Presentation: 6 marks
Hourly test 1: 5 marks
Hourly test 2: 5 marks
Assignments: 5 marks
Class Test:5 4 marks
Lecture Course Contents Assignment Case
No. Study
1 Introduction of accounting
2 Need, functions, advantages and
disadvantages.
3 Basic terms of accounting
4-6 Accounting equation
7-8 Accounting concepts and conventions
9 GAAP Case-
1
10 Double entry system
11 Class Test-1
12-15 Journal Assignment-1
16-17 Ledger
18-19 Subsidiary books
First Hourly Test
20-25 Cash book
Single column cash book
Double column cash book
Three column cash book
26 Tutorial
27 PC Depot Case-
2
28-30 Trial balance
31-33 Final accounts

2. Second Hourly Test
34-37 Final accounts with adjustments Assignment-2
38 Tutorial
MSE
39-43 Company accounts- share capital Assignment-3
44 Tutorial
45 Case study based on final accounts Case-
3
46 Management accounting
47 Application of computers in accounting
48 Tutorial
49 Class Test-2
50 Tutorial
51 Tutorial
ASSIGNMENT-1
ASSIGNMENT OF JOURNAL ENTRIES
1. Pass the following journal entries:
1. Motilal started business with Rs.10,000 cash and a building worth Rs.50,000.
2. Purchased goods worth Rs.20000 out of which goods worth Rs.12,000 was on credit from
shyamlal.
3. Sold goods on credit worth Rs.16,000 to Ramnath.
4. Received Rs.15,900 from Ramnath in full settlement of his account.
5. Paid Rs.11, 800 to shyamlal in full settlement of Rs.12000 due to him.
6. Paid wages Rs.500 and salaries Rs.2,000.
7. Purchased a machinery from Marshal and Sons for Rs.2,000.
8. Machinery depreciated @ 5% p.a. at the year end.
9. Withdrew goods worth Rs.5,000 and cash Rs.1,000 from the business for personal use.
10. A debtor from whom Rs.5,000 were due became insolvent. Only 45% of the amount is
realized.
11. Purchased goods worth Rs.10,000 from Sudhir less trade discount 10%.
12. Salary due for the month Rs.1,500.
13. Goods lost by fire Rs.6,500. Stock insured against fire to the extent of 80%.
14. Gave away as charity goods costing Rs.1,500 and cash Rs.500.
15. Rent accrued due on building let-out amounting to Rs.5,000.
2. Enter the following transaction in a three column cash book
2007
Jan1 Cash in hand Rs.5374; Balance at bank Rs.15490
Jan3 Cash sales Rs.6400
Jan5 Paid Rs.7000 into bank
Jan6 received a cheque for Rs.700 from Sneh.
Jan8 paid into bank Sneh’s cheque.
Jan10 Paid to Anurag by cheque Rs.980 and discount allowed by her Rs.20.
Jan12 Cash purchases Rs.2500.
Jan14 Withdraw from bank for office use Rs.5000.

3. Jan15 Received cheque for Rs.950 from lucky’s & Co. allowed him discount Rs. 50.
Jan18 Cash sales Rs.7500.
Jan19 Paid into bank Luck’s & Co. cheque for Rs.950 and cash Rs.4000.
Jan21 Cash paid for stationery Rs.120
sJan23 Paid commission to Rakesh by cheque Rs.500.
Jan25 Received cheque for Rs.1000 from Chander Mohan and paid the same into bank.
Jan27 Lucky & Co. cheque dishonoured.
Jan29 Drew a cheque for Rs.800 for personal use.
Jan31 Paid salaries by cheque Rs.1500 and by cash Rs.500.
Jan31 Bank charges Rs.20 and insurance premium Rs.520 as shown in pass book.
Assignment 2
Assignment (students will know how accounts are to be prepared practically)
Practice problem of Financial Accounts
1. From the following ledger balances extracted at the close of trading year ended 31st March
1998 Prepare a trading Account, Profit and Loss Account and balance sheet at that date
after giving effect to the undermentioned adjustments.
Capital on 1-4-2007 50000 Business Premises 55000
Stock on 1-4-97 8000 Furniture and fixtures 2500
Purchases 20000 Bills Receivables 3500
Sales 80000 Bills Payable 2500
Return Inwards 1500 Sundry Debtors 20000
Returns Outwards 400 Sundry Creditors 15800
Wages 6900 Packing Machinery 4500
Advertisements 5500 Smith’s Loan ( Dr. ) @
Apprenticeship 1200 10% on 1-4-2007 5000
Premium
Interest on Smith’s 300 Investment 3000
Loan
Proprietor’s 3000 Cash in Hand 250
Withdrawals
Office Expenses 8050 Cash at Bank 3500
Adjustments to be Made for the current period are :
I) Stock in hand at 31st March 1998 7000.ii) Apprenticeship Premium is for three years, paid in
advance on 1st April 1997. iii) Interest on Capital to be allowed at 5% for the year. Iv) Interest on
drawings to be charged to him as ascertained for the year Rs.80. v) Rs.5000 out of the
advertisement expenses are to be carried forward. Vi) Stock valued at 3000 destroyed by the fire
on 25-3-2008 but the insurance Co. admitted a claim of Rs.2000 only and paid it in April 2008. vii)
The managers is entitled to a commission of 10% of the Net Profit calculated after charging such
commission.
viii) Included in sales is an amount of Rs.10000 representing goods on ‘sale or return’ the
customer still having the right to return the goods. The goods were invoiced charging a profit of

4. 20% on sales. Ix) The stock included material worth Rs.1000 for which bills had not been received
and therefore not yet accounted for.
Assignment 3 (students will learn how the shares are to be applied for & how the
accounting of the same takes place in the books of company’s)
1. DEF Co. Ltd. Issued prospectus inviting applications for 20000 shares of each at a premium of 2
per share payable as follows:
On application Rs.2
On allotment Rs.5 (including premium)
On first call Rs. 3
On second call Rs. 2
Applications were received for 30000 shares and allotment made pro-rata to the applicants of
24000 shares. Money over paid on application was employed on account of sums due on allotment.
Mr. Bhat to whom 400 shares were allotted, failed to pay the alloment money; on his subsequent
failure to pay the first call , his shares were forfeited. Mr. Lokesh the holder of 600 shares, failed to
pay both calls and his shares were forfeited after the second call.
Of the shares forfeited , 800 shares were issued to Mr. Seetharam credited as fully paid, for 9 per
share, whole of Mr. Bhat’s shares being included.
Pass the necessary journal entries to give effect to the above and prepare Bank Account Forfeited
Shares Account and Balance Sheet.
PRESENTATION TOPICS:
1.) ATM cards:
• procedure of issue
• how to use ,
• problems being faced in using these
• How safe is it to use ATM cards
2.) Credit Cards:
• procedure of issue
• how to use ,
• problems being faced in using these
• How safe is it to use Credit cards
3.) Mutual funds:
• Introduction and history
• Mutual Fund industry in India
• Classification of mutual funds
• Advantages of investing in Mutual Funds

5. 4.) Different Types of Accounts in Bank
• Fixed Deposit Account: Procedure of opening, operating, Rate of interest allowed by
different banks on it.
• Saving Account: Procedure of opening, operating, Rate of interest allowed by different
banks on it.
• Recurring Deposit account: Procedure of opening, operating, Rate of interest allowed by
different banks on it.
• Current Account: Procedure of opening, operating, Rate of interest allowed by different
banks on it.
5) Home Loans: Procedure of Applying For it, repayment of amount, Rate of interest being
charged by different banks on it, problem faced by banks in recovering these loans, Steps taken by
banks in case of default on account of borrower.
6) Educational Loan: Procedure of Applying For it, repayment of amount, Rate of interest being
charged by different banks on it problem faced by banks in recovering these loans. Steps taken by
banks in case of default on account of borrower.
7) Conveyance Loan : Procedure of Applying For it, repayment of amount, Rate of interest being
charged by different banks on it, problem faced by banks in recovering these loans, Steps taken by
banks in case of default on account of borrower.
8) Agricultural Loan : Procedure of Applying For it, repayment of amount, Rate of interest being
charged by different banks on it, problem faced by banks in recovering these loans, Steps taken by
banks in case of default on account of borrower.
9) Personal Loans: Procedure of Applying For it, repayment of amount, Rate of interest being
charged by different banks on it, problem faced by banks in recovering these loans, Steps taken by
banks in case of default on account of borrower.
10) Equity Shares: procedure of issue, allotment, surrender, forfeiture, and reissue of shares.
11.) Miscellaneous services provided by Mobile Co. in addition to main telecom facilities.
12) Preference shares
13) Debentures

6. CASE STUDIES:
Case Study 1 - Generally Accepted Accounting Principles
On auditing the accounts of AB Ltd. Certain mistakes were being found and due to which correct
financial position of the concern couldn’t be ascertained. The concern was started on 1st April 05
and is dealing in the trading of readymade garments. The financial accounts are closed on 31st
march every year. For the current year the accounts were closed on 31st Dec 07. Machinery was
purchased on 1st July 05 for Rs.100, 000 from Mumbai. The transportation cost incurred on it was
Rs.15, 000, and the wages paid on the installation of the machinery were Rs.10, 000.This
machinery is recorded in the books at Rs.100, 000.Depreciation @10%p.a is being charged on
this value. For the first two years the concern was charging depreciation @10%p.a on diminishing
balance method, but in year 2008 the depreciation is charged at 5%p.a on straight line method.
The trader withdrew an amount of Rs.10, 000 from the business for buying a bicycle for his son
and the same amount is included in the purchases of the financial year and the amt. of sales
include a amt. of Rs.5,000 taken by the trader for his personal use.
The advertisement expenses shown in the P&L A/c are of Rs.15, 000, out of which an amount of
Rs.5, 000 is being paid for the next year. There was an amt. of Rs.3, 000 paid last year in
advance for the current year the same has not been adjusted in Advertising expenses in P & L A/
C. The salaries shown in P&L A/C are Rs.50, 000 which does not include the amount of Rs.4, 000
which is outstanding for the financial year.
The amount of sales includes an item of Rs.2, 000 for which only order has been placed and it is
to be delivered on 10th April 09.
The closing stock at cost is of Rs.8, 000 but its market value is Rs.10, 000. It has been shown in
the balance sheet at market value.
You are required to:-
1. Find out the problem and correct it.
2. Name the concept or convention to be applied to correct each problem.
Case Study-2
PC Depot
PC Depot was a retail store for personal computers and hand held calculators, selling several
national brands in each product line. The store was opened in early Sept. by Jenia, a young woman
previously employed in direct computer sales for a national firm specializing in business
computers.
Zenia knew the importance of adequate records. One of her first decisions, therefore, was to hire
Ramesh a local accountant, to set up her bookkeeping system.
Ramesh wrote up the store’s pre opening financial transactions in journal form to serve as an
example. Zenia agreed to write up the remainder of the store’s Sept. financial transactions for
Ramesh’s later review.
At the end of Sept. Zenia had the following items to record:
Entry Dr.(Amt.) Cr. (Amt.)

7. No. account
1 Cash 1,65,000
To Bank Loan payable (15%) 100,000
To Proprietor’s Capital 65,000
2 Rent Expense (Sept) 1,485
To cash 1,485
3 Merchandise inventory 137,500
To Accounts payable 137,500
4 Furniture and fixture(10yrs life) 15,500
To cash 15,500
5 Advertising expenses 1,320
To cash 1,320
6 Wages expenses 935
To Cash 935
7 Office supplies expenses 1,100
To cash 1,100
8 Utilities expenses 275
To cash 275
9 Cash sales for Sept. 38,000
10 Credit sales for Sept. 14,850
11 Cash received from credit customers 3,614
12 Bills paid to merchandise suppliers 96195
13 New merchandise received on credit from 49,940
suppliers
14 Ms. Zenia ascertained the cost of merchandise 38,140
sold was
15 Wages paid to assistant 688
16 Wages earned but un paid at the end of Sept. 440
17 Rent paid for Oct. 1,485
18 Insurance bill paid for one year (Sept. 1- 2,310
Aug.31)
19 Bills received, but unpaid from electric Co. 226
20 Purchased typewriter, Paying Rs.660 cash and 1,760
agreeing to pay the Rs.1,100 balance by Dec 31
a. Explain the events that probably gave rise to journal entries 1 through 8
b. Set upto a ledger account for each account. Post entries 1 through 8 to these accounts.
c. Analyze the facts listed as 9 through 20, resolving them into debit and credit elements.
Prepare journal entries and post to ledger accounts.
d. Consider any other transaction that should be recorded. Why are these adjusting entries
required? Prepare journal entries for them and post to ledger accounts.

8. CLASS ACTIVITIES:
1 This activity will make the students to take interest in stock market which will
encourage and help them for investment in future Every student will be given a Co. &
he will have to keep a watch on the share price of that Co. for one month and apply trend
analysis on it to study the status of the Co.
2 Students will collect transactions from their business of 1 month and they will prepare
journal, ledger, trial balance and final accounts.
3 There will be bank visit to know about how to open a saving account, current account
and fixed account.