NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: Essentials of Financial Accounting
Internal Assignment Applicable for December 2020 examination

1. Virendra decides to open a Sub Way outlet in his locality for which he will need
certain assets and liabilities. But he want to know what asset and liabilities exactly
means? You being a Commerce graduate, discuss and define assets and liabilities, their
composition with five examples for assets and five examples for liabilities.

2. Somaaya is a famous brand for readymade apparels. The company purchased
machinery worth 10 lacs and paid 2 lacs for import charges, transportation charges Rs 1
lacs paid to bring the asset at present location. Additionally, one time installation fees
Rs 50000, is also paid to the engineer for this. The Company will pay regular
maintenance charges Rs20000 per annum, henceforth for the given machine.
You being the accounts manager of the company, needs to classify the above
mentioned transactions in terms of capital and revenue expenditure by providing
suitable reasoning. Additionally calculate depreciation @ 10% per annum on the cost
of the machinery for 12 months period.

(10 Marks)

3. The following details have been extracted from the books of ABC Ltd as on 31st March
2020
Dr. Cr.
Particulars Rs. Rs.
Purchases A/c 600000 Capital A/c 1000000
Rent A/c 60000 Mathew’s A/c 50000
Salaries A/c 110000 Sales A/c 800000
Stationary A/c 7000 Interest A/c 1000
Cash A/c 403000 F Ltd’s A/c 150000
Tom’s A/c 70000
Discount A/c 5000
Furniture A/c 150000
Plant & Machinery A/c 250000

NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: Essentials of Financial Accounting
Internal Assignment Applicable for December 2020 examination
Investments A/c 100000
Bank A/c 246000

2001000 2001000

You are required to-
a. Define and prepare the profit and loss account for the year ended 31st March 2020

(5 Marks)

b. Define and prepare Balance sheet as on that date.