Subject
BCOM
First Sem
, BACHELOR OF COMMERCE
ASSIGNMENT
FIRST SEMESTER
BCOM 101 (FUNDAMENTALS OF ACCOUNTING)
Q.1 Discuss about the provision for discount on debtors.
Answer
Discount likely to be allowed to customers in an accounting year can be
estimated and provided for by creating a provision for discount on debtors.
Here, it is to be remembered that provision for discount is made on good
debtors which are arrived at by deducting further bad debts and the
provision for doubtful debts.
Q.2 Why do companies depreciate long-term assets?
Answer
Depreciation of Long Term Assets
As with most types of assets, long term assets needs to be depreciated over
the course of their useful life. It is because a long term asset is not expected to
generate a benefit for an infinite amount of time. In the automobile factory
example, machines will become old and may experience breakdowns or fall
victim to obsolescence.
There are many accounting treatments a company can use to depreciate its
assets, such as the double-declining balance method, the units of production
method, or the straight-line depreciation method. It is important to note that
depreciation is not considered a cash expense for the company.
Q.3 Explain the concept of Financial Statements?
Answer
Financial statements are written records that convey the business activities
and the financial performance of a company. Financial statements are often
audited by government agencies, accountants, firms, etc. to ensure accuracy
and for tax, financing, or investing purposes. For-profit primary financial
statements include the balance sheet, income statement, statement of cash
BCOM
First Sem
, BACHELOR OF COMMERCE
ASSIGNMENT
FIRST SEMESTER
BCOM 101 (FUNDAMENTALS OF ACCOUNTING)
Q.1 Discuss about the provision for discount on debtors.
Answer
Discount likely to be allowed to customers in an accounting year can be
estimated and provided for by creating a provision for discount on debtors.
Here, it is to be remembered that provision for discount is made on good
debtors which are arrived at by deducting further bad debts and the
provision for doubtful debts.
Q.2 Why do companies depreciate long-term assets?
Answer
Depreciation of Long Term Assets
As with most types of assets, long term assets needs to be depreciated over
the course of their useful life. It is because a long term asset is not expected to
generate a benefit for an infinite amount of time. In the automobile factory
example, machines will become old and may experience breakdowns or fall
victim to obsolescence.
There are many accounting treatments a company can use to depreciate its
assets, such as the double-declining balance method, the units of production
method, or the straight-line depreciation method. It is important to note that
depreciation is not considered a cash expense for the company.
Q.3 Explain the concept of Financial Statements?
Answer
Financial statements are written records that convey the business activities
and the financial performance of a company. Financial statements are often
audited by government agencies, accountants, firms, etc. to ensure accuracy
and for tax, financing, or investing purposes. For-profit primary financial
statements include the balance sheet, income statement, statement of cash
