Chapter 5: Accounting for Inventories and Cost of Good Sold

Very Short Question Answer What is inventory? An inventory is a merchandise of goods or other items owned by a firm and held for sale or for processing before being sold, as part of a firm’s ordinary operations. What is cost of goods sold? An inventory accounting, which determining the cost of merchandise that has […]

Chapter 4: Accrual Basis of Accounting

Very Short Question Answer The financial position of Kalika & Bros. on Baishakh 01, 2076 is as below: Cash in hand: Rs.20,000 Furniture: Rs.50,000 Accounts receivable: Rs.74,000 Outstanding expenses: Rs.4,000 Cash at bank: Rs.36,000 Accounts payable: Rs.34,000 Stock of goods: Rs.26,000 Prepaid expenses: Rs.8,000 Required: Opening entry SOLUTION   The following information is provided to […]

Chapter 3: Accounting Process

Very Short Question Answer Define source of document with suitable example. The source documents are the piece of papers, which are required to keep record of any transaction with full evidence. All accounting records have to be based on facts and carefully supported by documentary proof. These documents provide the authenticity of happening of transaction […]

Chapter 1 : Basic Understanding of Financial Accounting

Very Short Question Answer What is cash basis of accounting? When transactions are recorded on the basis of actual flow of cash in and out of the business, it is known as cash basis of accounting. Under this method, incomes are recorded when they are received and expenses are recorded when they are paid. Define […]