(i) Cost of goods available
for sale = Opening stock + Net purchase
= 25,000 + 7,50,000 + 3,00,000 - 10,000
= Rs.11,65,000
[Net purchase = Totalpurchase - Purchase Return]
(ii) Cost of goods sold during the year = Cost of goods available - Closing stock
= 11,65,000 - 30,000
= Rs.11,35,000
(iii) 

(i) Amount paid to Vendor of Mach

(ii) Amount debited to Machinery Account:

(iii)

Every transaction is recorded in the original book of entry (journal) in order of their occurrence; However, if we want to know that how much we receive from our debtors or how much to pay to the creditors, it is not possible to determine at a single movement. Hence, we prepare accounts to know the position of business activities in the meantime.
There are some steps to record transactions in accounts; it can be easily understood with the help of an example. Sold goods to Mr. A worth Rs.50,000 on 12th April and received payment Rs.40,000 on 25th April. The following journal entries will be recorded

Step (i): Locate the account m ledger, t.e., Mr. A's Account.
Step (ii): Enter the date of transaction in the date column of the debit side of Mr. As Account.
Step (iii): In the 'Particulars' column of the debit side of Mr. A's Account, the name of corresponding account is to be written, i.e., 'Sales'.
Step (iv): Enter the page number of the ledger in the Journal Folio O.F.) column of Mr. A's Account.
Step (v): Enter the amount in the 'Amount' column.
Step (vi): " Same steps are to be followed to post entries in the credit side of Mr. A's Account.
Step (vii): After entering all the transactions for a particular period, balance the account by totaling both sides and write the difference in shorter side, as 'Balance c/d'.
Step (viii): Total of account is to be written on both sides.

Two objectives of IFRS are given below:
(i)To develop, in the public interest, a single set of high quality, understandable, enforceable and globally accepted financial reporting standards based upon clearly articulated principles. These standards should require high quality, transparent and comparable information in financial statements and other financial reporting to help investors, other participants in the world's capital make economic decisions.
(ii)To promote the use and rigorous application of those standards.
(iii)To promote and facilitate adoption of IFRSs,being the standards and interpretations issued by the IASB, through the convergence of national accounting standards and IFRSs.

(i) Account: An account is a basic way of recording/ posting business transactions in terms of 'Debit' and 'Credit'.
(ii) Sales : The term 'Sales' is used only for the sale of goods which are purchased with the purpose of resale. The term 'sales' includes both cash sales and credit sales. In accounting terminology, sale of assets are not sales. Sales should be a regular feature.
(iii) Goods: Articles purchased for sale or for use in the manufacturing of other products as raw material are known as 'Goods'. For example: furniture will be the goods for the firm dealing in furniture but it will be an asset for the firm dealing in stationery.
(iv) Voucher: A voucher is an evidence, in writing, of a transaction that has taken place.

"A bill of exchange is an instrument in writing containing an unconditional order signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument." (Section 5 of the Negotiable Instruments Act, 1881).
Advantages of Bills of Exchange: The following advantages accrue from bills of exchange:
(i) Purchase and sale of goods on credit:
With the help of bills of exchange, goods can be sold and purchased on credit without difficulty since the bills of exchange contains an unconditional promise to pay.
(ii) Discounting facility:
The bills of exchange can be discounted at a bank, so that the firm allowing the credit can receive cash immediately without the debtor having to pay before time.
(iii) Easy to recover the amount:
If a bill of exchange is dishonoured, it would be easier to recover the amount legally than in the case of an ordinary debt.
(iv) Endorsement:
A bill of exchange can be endorsed to other parties; thus they serve almost the same purpose as cash.
(v) Certainty as to payment:
The date of payment is certain, so the firm which has to pay and that which has to receive the amount, can thus plan cash operations.
(vi) No reminder to debtor:
The recovery of the debt is possible without having to remind the debtor.
(vii) Convenient means of remittance in foreign trade:
In foreign trade, bills of exchange are of great assistance in enabling firms to make and receive payment. It, thus, avoids the risks of carrying the currency to different places of trade.

Functions of a Trial Balance: (i) Ascertaining arithmetical accuracy: To act as a device to check the arithmetical accuracy of the accounting process culminating in the ledger accounts. If the Trial Balance agrees, it may be taken that arithmetical errors do not exist, even though this cannot be conclusively stated.
(ii) Summary: To afford a summarised version of the position of each account and accounts in general. Scanning the Trial Balance enables one to know the assets that one possesses, the amounts that are owing to others and the amounts due from others, etc.
(iii) Facilitates preparation of financial statements: To act as a starting point for the preparation of the final accounts, viz., the Profit & Loss Account and the Balance Sheet. The final accounts are made on the basis of the Trial Balance. The various adjustments that are to be made can be made only after the Trial Balance is ready.
(iv) Facilitating audit: To enable the auditor to see whether any corrections were made after the accounts were checked. The Trial Balance establishes figures relating to various accounts as on a particular date. Any correction that becomes necessary should be made later by specific journal entry. A correction made in the accounts already checked, without such a journal entry, will be easily known as it will necessitate a change in the balance of the account concerned.
The Trial Balance, thus, is a very useful device to control and check inaccuracies and act as a basis for further accounting work, mainly preparation of the Profit and Loss Account and the Balance Sheet.

It is a normal practice in the business to allow cash discount to those debtors from whom the payment is received promptly or within a fixed period. Discount thus, allowed will be an expenses of the business and is therefore, debited to the Profit & Loss Account. Since there will be certain debtors who will make early payment in the next accounting year and will be allowed such discount, a provision for such discount is created in the current year itself. The process of creating a provision for discount is the same as for the provision for doubtful debts. The following entry will be passed for this purpose:
Profit & Loss A/c Dr.
To Provision for Discount on Debtors A/c
Treatment in Final Accounts : Such provision is shown on the debit side of the Profit & Loss account and is also deducted from Sundry Debtors on the Assets. side of the Balance Sheet.
If should be noted that, discount willbe allowed only to those debtors who will make prompt payment. As such, the provision for discount is calculated on good debtors left after deducting further bad debts given in adjustments and the provision for doubtful debts required to be made at the end of year.

The term 'obsolescence' refers to the economic deterioration of assets, due to change in technology invention of improved equipment, market decline due to change in taste and fashion, etc. or inadequacy of existing plant to meet the increased business. Depreciation is affected by obsolescence as it decreases the value of assets.

All cash transactions, for the first time are recorded in the cash book and there after directly transferred in ledger accounts, Thus it is a book of original entry or a subsidiary book. A cash book represent cash account also. As cash balance from cash book is directly transferred to trial balance. Hence it in treated as a principal book of accounts. The cash book is thus, both a subsidiary book and a principal book.

Transaction processing system serves the organization at the operational level for which it records the daily routine transactions which are very important to conduct business.
Examples of Transaction Processing System.
(i) Payroll Application:
Earlier they were used to run on a computer system with punched card using batch processing. Nowadays, they are running using terminals and online processing.
(ii) ATM's:
Automatic Teller Machines use a number of specialized computer programs to handle bank transactions.
(iii) Order processing:
 It collects and process order from customer through mail or telephone or staff. Once order taken invoicing, Nc receivable and stock control processing applications are started.

Difference between bills of exchange and Promissory note:

Capital Receipts Vs Revenue Receipts: There is no specific test to draw a clear cut demarcation between a capital receipt and a revenue receipt, in order to determine whether a receipt is capital or revenue in nature. One has to look into its true nature and substance over the form in the hands of its recipient. For example, sale proceeds of a land in the hands of a dealer in real estate is revenue receipt whereas the same in the hands of a dealer in cars is a capital receipt. The examples of capital receipts include sale of fixed assets, capital contribution, loan receipts and the examples of revenue receipts include sale of stock-in-trade, revenue from services rendered in the normal course of business, revenue from permitting others to use the assets of the enterprise, such as interest, rent, royalty, etc.

Rajhans Traders paid Rs 25,000 to Preetpal Traders (a supplier of goods). This transaction was correctly recorded in the cash book, but while posting to the ledger, Preetpal's account was debited with Rs 2,500 only. This constitutes an Error of Commission.

Cash basis of accounting is the system of accounting under which revenues and expenses are recorded when they are received or paid in cash. Cash basis of accounting is not popular due to following reasons:
(i) It does not make clear cut distinction between revenue items and capital items.
(ii) It is not in line with matching principle because revenues and costs are recognised not on the basis of incurrence but on the basis of receipt and payment. As a result, incomes include unearned incomes and exclude accrued incomes. Similarly, expenses include expense, paid in advance but does not include outstanding expenses.
(iii) It is not recognised under Companies Act.

Profit : The excess of revenues of a period over its related expenses during an accounting year is profit. Profit increases the investment of the owners.
Gain : A profit that arises from an event or transaction which are incidental to business such as sale of fixed assets, wining a court case etc.

Working Note:

They will be treated in final accounts as :
(i) Sale proceeds of goods: It is a revenue receipt and credited to Trading A/c. Sales of goods is normal and regular feature.
(ii) Commencement of business with Rs 60,000 : It is a capital receipt and shown at the liabilities side of the Balance Sheet.
(iii) Rent received from premises sublet: It is a revenue receipt because it is a regular income. It will be posted at the credit side of Profit & Loss A/c.
(iv) Profit on sale of building: It is capital receipt and posted at the credit side of Profit and Loss A/c. It should not be treated as operating income.
(v) Sale proceeds of assets: Amount received from the sale of an asset is a capital receipt. Excess of amount received over the book value of assets is revenue receipt. Loss on sale of assets is treated as revenue loss.
(vi) Sale proceeds from scraps : It is revenue receipts and posted at the credit side of Profit & Loss A/c because its amount is very nominal and it is a routine affair.

In the Books of Priyanka Hotels Trading Account for the year ended 31^st March, 2014

It is a fact that more than 80% of computers have been used to process business data. Business users were one of the earliest users of computers. The accounting department is generally the first one to get computerized.
Following are the main benefits of using AIS:
(i) The computers are more efficient in processing numeric data as compared to humans. As accounting work mainly deals with numeric data, computers are faster in processing accounting data. Moreover, accounting deals with basic mathematical calculations and it is very easy to develop software for processing accounting data on computers.
(ii) Accounting calculations are carried out in a step by- step manner and by following accounting rules. Every transaction is entered as per its type. As the nature of accounting data is algorithmic, softwares can be easily designed to process accounting data.
(iii) The basic methods and rules for processing accounting data are same regardless of size and type of the business. Due to this reason a general type of accounting information system can serve every type of business. If some organizations need to have some customized control, a customized package can be developed after minor
modifications.
(iv) The performance of computers remain unaffected by the size and volume of data to be processed. Computers will not make mistakes with increase in volume of data nor will they get bored when same process is repeatedly processed. Therefore, computers are better in processing accounting data than humans.
(v) It is much easy to maintain accounting standards and control the accounting data of an organization.

When we look at the various items that normally cause the difference between the pass book balance and the cash book balance, we find a number of items which appear only in pass book why not record such items in the cash book work out the adjusted balance (also known as amended balance) of the cash book and then prepare bank reconciliation statement. This shall reduce the number of items responsible for the difference and have the correct figure of balance at bank in the balance sheet. In fact, this is exactly what is done in practices. Whereby only those items which cause the difference on account of the time gap in recording appear in bank recondition statement these are as
(i) cheques issued but not yet presented,
(ii) Cheques deposited but not yet collected and
(iii) Due to an error in the pass book

The concept of money measurement states that only those transactions and happenings should be recorded in organisation which can be expressed in terms of money such as sale of goods or payment of expenses or receipt of income, etc. are to be recorded in the books of account. All those transactions or happenings which cannot be expressed in monetary terms, for example, the appointment of a manager capabilities of its human resources or creativity of its research department or image of the organisation among people in general do not find a place in the accounting records of a firm.
Change in prices, the value of money does not remain the same over a period of time. The value of rupee today on account of rise in prices is much less than what it was, say ten years back. Therefore, in the Balance Sheet, when we add different assets bought at different points and different time, say building purchased in 1995 for Rs 2 crore, and plant in 2005 for Rs 1 crore we are in fact adding heterogenous values, which can not be clubbed together. As the change in the value of money is not reflected in the books of accounts, the accounting data does not reflect the true and fair view of the affairs of an enterprise.

                                                     Accounting Equation: Assets = Liabilities + Capital

(i) Rs 5,00,000
(ii) Rs 1,00,000
(iii) Rs 2,00,000
(iv) Mr. Peace, Rs 1,50,000
(v) Rs 5,000
(vi) 50,000
(vii) Rs 30,000
(viii) Mr. Ravi Rs 1,00,000
(ix) Rs 35,000
(x) Assets : debtors; Liabilities : creditors; Revenues: sales: Expenses: discount, salary: None of the these: Drawing.