Appendix: Formulas, Standards, Budget Codes, Glossary and Model Question Paper
Subject: Accountancy (Principles of Accounting — Grade XI) | Subject Code: Acc. 103
Appendix A: Master Formula & Accounting Rules Reference Sheet
1. Accounting Equation (Unit 1.1)
- Basic Equation: Assets (A) = Capital (C) + Liabilities (L)
- Expanded Equation: Assets = [Opening Capital + Additional Capital + Revenues/Profits - Expenses/Losses - Drawings] + Liabilities
2. Rules of Debit and Credit (Unit 1.2)
- Personal Account: Debit the Receiver, Credit the Giver.
- Real Account: Debit what comes in, Credit what goes out.
- Nominal Account: Debit all expenses and losses, Credit all incomes and gains.
- Modern Approach (DEALER):
- Drawings, Expenses, Assets → Normal Debit balance (Increase = Dr., Decrease = Cr.).
- Liabilities, Equity (Capital), Revenues → Normal Credit balance (Increase = Cr., Decrease = Dr.).
3. Depreciation Formulas (Unit 2.3)
- Total Capitalized Cost of Asset (C): Purchase Price (net of Trade Discount) + Import Duty/Freight + Installation & Erection Wages
- Straight Line Method (SLM):
- Annual Depreciation = (Total Cost (C) - Scrap Value (S)) ÷ Estimated Useful Life in Years (N)
- Rate of Depreciation (%) = Annual Depreciation ÷ Total Cost (C) × 100
- Diminishing Balance Method (DBM / WDV):
- Annual Depreciation = Opening Written Down Value (WDV) × Rate ÷ 100 × Months Used ÷ 12
- Profit or Loss on Sale of Fixed Asset:
- Book Value on Date of Sale = Original Cost of Sold Asset - Total Depreciation Charged up to Date of Sale
- Selling Price - Book Value = +Profit on Sale (Dr. Asset A/c) or -Loss on Sale (Cr. Asset A/c).
4. Provision for Bad and Doubtful Debts (Unit 2.4)
- Good Debtors: Closing Sundry Debtors - Further Bad Debts (in Adjustment)
- New Provision Required: Good Debtors × Rate of Provision ÷ 100
- Net Charge to Profit & Loss A/c: Bad Debts (TB) + Further Bad Debts (Adj.) + New Provision - Old Provision (TB)
5. Financial Statements Formulas (Unit 3.1)
- Net Sales = Gross Sales - Sales Return (Return Inward)
- Net Purchases = Gross Purchases - Purchase Return (Return Outward) - Goods Withdrawn/Lost/Free Samples
- Cost of Goods Sold (COGS) = Opening Stock + Net Purchases + Direct Expenses (Wages, Carriage Inward, Custom Duty) - Closing Stock
- Gross Profit = Net Sales - Cost of Goods Sold (COGS)
- Operating Profit (EBIT) = Gross Profit + Other Operating Income - Distribution/Selling Expenses - Administrative Expenses
- Net Profit = Operating Profit + Finance Income - Finance Costs (Interest on Loan) - Income Tax Expense
6. Non-Profit Organizations (Unit 3.2)
- Opening Capital Fund = Total Opening Assets (including Cash b/d & Opening O/S Subscription) - Total Opening Liabilities
- Current Year’s Subscription Income = Subscription Received in Cash + Closing O/S Subscription (for current yr) + Opening Advance Subscription - Opening O/S Subscription (received this yr) - Closing Advance Subscription
7. Single Entry System (Unit 3.3)
- Opening Capital = Opening Assets - Opening Liabilities
- Closing Capital = Closing Assets - Closing Liabilities
- Unadjusted Profit = Closing Capital + Drawings - Additional Capital - Opening Capital
- Net Profit = Unadjusted Profit + Unrecorded Incomes/Prepaid Expenses - Unrecorded Expenses/Depreciation/Bad Debts/Provisions
Appendix B: Summary of Nepal Accounting Standards (NAS) & NFRS Relevant to Grade XI
| Standard Code | Title of Standard | Key Relevance to Grade XI Curriculum |
|---|---|---|
| NAS 01 | Presentation of Financial Statements | Prescribes the components of Financial Statements (Statement of Financial Position, Statement of Profit or Loss, Cash Flow Statement, Statement of Changes in Equity, and Notes), going concern, accrual basis, and current vs. non-current classification. |
| NAS 02 | Inventories | Requires Closing Stock (Inventories) to be valued at the lower of Cost and Net Realizable Value (NRV) using FIFO or Weighted Average Cost method. |
| NAS 08 | Accounting Policies, Changes in Accounting Estimates and Errors | Governs how prior-period errors and changes in accounting estimates (such as change in useful life or depreciation method of assets) are accounted for. |
| NAS 16 | Property, Plant and Equipment (Fixed Assets) | Governs recognition of initial acquisition cost of tangible fixed assets, subsequent capital vs. revenue expenditure, and systematic allocation of depreciation over useful life. |
| NAS 37 | Provisions, Contingent Liabilities and Contingent Assets | Defines a Provision as a liability of uncertain timing or amount recognized when a present obligation exists from a past event and a reliable estimate can be made. |
| NAS 38 | Intangible Assets | Governs recognition and amortization of identifiable non-monetary assets without physical substance (Patents, Software, Copyrights, Goodwill). |
| NFRS for SMEs / NAS for NPOs | Reporting Standards for SMEs and Non-Profit Organizations | Guides simplified financial reporting for small and medium enterprises and fund-based accounting for Non-Profit Organizations in Nepal. |
Appendix C: Quick Reference of Government Budget Heads & AGF Forms
1. Frequently Asked Government Budget Expenditure Head Codes
| Code | Head of Expenditure | Code | Head of Expenditure |
|---|---|---|---|
| 21111 | Remuneration (Employee Salary) | 22314 | Books, Newspapers & Materials |
| 21121 | Uniform / Clothing Allowance | 22411 | Service and Consultancy Fees |
| 21131 | Local Allowance | 22522 | Program Expenses (Training / Seminar) |
| 21132 | Dearness Allowance | 22611 | Monitoring and Evaluation Travel |
| 21212 | Contributory Pension / PF (10% Govt. Addition) | 22612 | Travel and Daily Allowance (TADA) |
| 22111 | Water and Electricity Charges | 22711 | Miscellaneous Expenses |
| 22112 | Communication Charges (Phone/Internet) | 28142 | House Rent |
| 22211 | Fuel (for Vehicles) | 31112 | Non-Residential Building Construction |
| 22212 | Operation & Repair/Maintenance | 31121 | Vehicles (Cars, Motorbikes) |
| 22213 | Insurance & Vehicle Renewal | 31122 | Machinery and Equipment (Computers/Tools) |
| 22311 | Office Materials and Services (Stationery) | 31123 | Furniture and Fixtures |
2. Cross-Reference of AGF Form Numbers (New OAG Series vs. Legacy Series)
| Form Title | New AGF No. | Old AGF No. | Purpose |
|---|---|---|---|
| Cash Receipt | AGF 101 | AGF 11 | Issued when receiving cash/revenue in a government office. |
| Goswara Voucher (Journal Voucher) | AGF 203 | AGF 10 | Primary voucher for recording all operating-level government transactions. |
| Payment Order Statement | AGF 204 | — | Sent to DTCO authorizing payment from the Treasury Single Account. |
| Budget Sheet | AGF 208 | AGF 8 | Tracks Annual Budget, Budget Release, and Budget Expenditure by head. |
| Bank Cash Book | AGF 209 | AGF 5 | Multi-column ledger tracking Cash, Bank, Budget Exp., Advance, and Misc. |
| Statement of Expenditure | AGF 210 | AGF 13 | Monthly report of budget head-wise expenditure and fund status. |
| Monthly Statement of Outstanding Advance | AGF 211 | AGF 14 | Monthly list of uncleared advances showing name, date, and amount. |
Appendix D: Glossary of Accounting Terms
| Term | Concise Meaning |
|---|---|
| Accrual Basis | Recording revenues when earned and expenses when incurred. |
| Accumulated Depreciation | Total depreciation charged on a fixed asset since its acquisition. |
| Advance (Imprest) | Money given ahead of work/purchase to be settled later by submitting bills. |
| Assets | Economic resources owned/controlled by an entity yielding future benefits. |
| Bad Debts | Irrecoverable amount lost from a debtor. |
| Bank Overdraft | Facility of withdrawing more money from a current account than deposited. |
| Bank Reconciliation Statement | Statement reconciling Cash Book bank balance with Passbook balance. |
| Bills of Exchange | Unconditional written order to pay a certain sum on a future date. |
| Budget Sheet | AGF 208 ledger maintaining budgetary control over government spending. |
| Capital Expenditure | Expenditure incurred to acquire or improve long-term fixed assets. |
| Capital Fund | Excess of assets over liabilities in a Non-Profit Organization. |
| Contra Entry | Cash Book entry affecting both Cash and Bank columns simultaneously (C). |
| Depreciation | Gradual and permanent decrease in the book value of a fixed asset. |
| Goswara Voucher | AGF 203 Journal Voucher used as primary record in government accounting. |
| Honorarium | Token payment made to a non-employee guest for voluntary services. |
| Liabilities | Financial obligations or debts payable to outsiders. |
| Provision | Charge against profit created for a known liability of uncertain amount. |
| Reserve | Appropriation of net profit retained to strengthen financial position. |
| Revenue Expenditure | Routine operational expense whose benefit expires within one year. |
| Statement of Affairs | Statement of assets and liabilities prepared under Single Entry System. |
| Statement of Expenditure | AGF 210 monthly report of government expenditure and budget balance. |
| Subscription | Periodic membership fee collected by a Non-Profit Organization. |
| Suspense Account | Temporary account opened to make a disagreed Trial Balance tally. |
| Treasury Single Account (TSA) | Centralized government banking payment system operated via DTCO. |
| Trial Balance | Statement of debit and credit ledger balances prepared to test accuracy. |
Appendix E: NEB Grade XI Model Question Paper (75 Marks)
National Examinations Board (NEB)
Grade: XI | Subject: Accountancy (Acc. 103)
Full Marks: 75 | Time: 3 Hours
Group A: Very Short Answer Questions (11 × 1 = 11 Marks)
Attempt all questions.
- What is Book-keeping?
- State the Dual Aspect Concept of accounting.
- What is a Debit Note?
- Why is a Bank Reconciliation Statement prepared?
- Define Errors of Principle with an example.
- A machine costing Rs. 2,50,000 has an estimated scrap value of Rs. 30,000 and a useful life of 10 years. Calculate annual depreciation under the Straight Line Method.
- Give any two examples of Capital Reserve.
- Distinguish between Capital Receipt and Revenue Receipt in one point.
- How is Endowment Fund treated in the final accounts of a Non-Profit Organization?
- Write the formula for determining Unadjusted Profit under the Single Entry System.
- Write the 5-digit Budget Head Numbers for (a) Remuneration and (b) Machinery and Equipment in Nepal Government Accounting.
Group B: Short Answer & Practical Questions (8 × 5 = 40 Marks)
12. Define Accounting and explain any four major functions of accounting. [5]
OR
Explain the Business Entity Concept, Going Concern Concept, and Conservatism Convention with examples. [5]
13. From the following transactions of Lumbini Mart, prepare a Double Column Cash Book (with Cash and Bank Columns): [5]
- Baishakh 1: Cash in hand Rs. 30,000 and Cash at bank Rs. 50,000.
- Baishakh 6: Purchased goods for Rs. 25,000 and paid by cheque.
- Baishakh 12: Cash sales Rs. 40,000, out of which Rs. 25,000 was deposited into the bank immediately.
- Baishakh 19: Withdrew Rs. 10,000 from bank for office use and Rs. 4,000 for personal use.
- Baishakh 28: Paid salary Rs. 12,000 in cash.
14. On the last day of Ashadh, the Cash Book of Everest Traders showed a debit bank balance of Rs. 64,000. Prepare a Bank Reconciliation Statement from the following particulars: [5]
- Cheques issued for Rs. 28,000, out of which cheques of Rs. 18,000 only were presented for payment.
- Cheques of Rs. 20,000 were sent for collection, but a cheque of Rs. 7,000 was credited only in Shrawan.
- Bank collected dividend of Rs. 4,000 directly and debited bank charges of Rs. 500.
- A customer directly deposited Rs. 9,500 into the bank account.
15. Rectify the following errors discovered after preparing the Trial Balance: [5]
- Credit sale of goods to Ramesh Rs. 8,500 was recorded in the Sales Book as Rs. 5,800.
- Repair of machinery Rs. 4,000 was debited to Machinery Account.
- Purchase Return Book was undercast by Rs. 2,000.
- Cash paid to creditor Sita Rs. 5,000 was credited to her account.
- Goods costing Rs. 3,000 taken by proprietor for personal use were not recorded at all.
16. Distinguish between Reserve and Provision on any five bases. [5]
OR
On 1st Shrawan 2081, the Provision for Doubtful Debts of Gandaki Traders stood at Rs. 8,000. Bad debts of Rs. 5,500 were written off during 2081/82. On the last day of Ashadh 2082, Sundry Debtors stood at Rs. 1,26,000, out of which a further Rs. 6,000 proved bad. The firm keeps a provision of 5% on good debtors. Prepare the Bad Debts Account and the Provision for Doubtful Debts Account. [5]
17. From the following Receipts and Payments Account and adjustments of Gyanodaya Library, prepare an Income and Expenditure Account for the year ended the last day of Ashadh 2082: [5]
- Receipts: Balance b/d Rs. 25,000; Subscription Rs. 90,000; Membership Admission Fees Rs. 14,000; Government Operational Grant Rs. 30,000; Endowment Fund Rs. 80,000; Sale of Old Magazines Rs. 2,000.
- Payments: Librarian’s Salary Rs. 48,000; Rent Rs. 18,000; Purchase of Books Rs. 60,000; Purchase of Furniture Rs. 40,000; Newspapers & Journals Rs. 8,000; Printing & Stationery Rs. 5,000; Balance c/d Rs. 62,000.
- Adjustments: (a) Subscription outstanding for current year Rs. 10,000 and received in advance for next year Rs. 4,000; (b) Salary outstanding Rs. 4,000; (c) Depreciate Furniture @ 10% and Books @ 10%; (d) Capitalize 50% of Admission Fees.
18. Ms. Sunita started a business on 1st Shrawan 2081 with a capital of Rs. 2,00,000. On the last day of Ashadh 2082, her position was: Cash Rs. 30,000, Debtors Rs. 80,000, Stock Rs. 95,000, Machinery Rs. 1,20,000, Furniture Rs. 40,000, Creditors Rs. 55,000, and Bills Payable Rs. 20,000. During the year she withdrew Rs. 25,000 for personal use and introduced Rs. 15,000 as further capital. Depreciate Machinery and Furniture @ 10% p.a. and provide 5% on Debtors for doubtful debts. Prepare (a) Closing Statement of Affairs and (b) Statement of Profit or Loss. [5]
19. Prepare a Statement of Expenditure (AGF No. 210) for the month of Chaitra from the following data: [5]
| Budget Head | Annual Budget (Rs.) | Expenditure up to Falgun (Rs.) | Expenditure of Chaitra (Rs.) |
|---|---|---|---|
| Remuneration (21111) | 12,00,000 | 8,00,000 | 1,00,000 |
| House Rent (28142) | 2,40,000 | 1,60,000 | 20,000 |
| Office Materials (22311) | 1,00,000 | 60,000 | 10,000 |
| Furniture (31123) | 2,00,000 | 1,20,000 | 30,000 |
An advance of Rs. 20,000 given to Mr. Hari in Falgun for furniture (included in the expenditure up to Falgun) is still uncleared.
Group C: Long Numerical Questions (3 × 8 = 24 Marks)
20. On 1st Shrawan 2079, Dhaulagiri Udyog purchased a machine for Rs. 3,60,000 and spent Rs. 40,000 on its installation. On 1st Poush 2080, it purchased another machine for Rs. 2,40,000. On 1st Ashwin 2081, the first machine was sold for Rs. 2,80,000. Depreciation is charged @ 10% p.a. under the Diminishing Balance Method, and the books are closed on the last day of Ashadh every year. Prepare the Machinery Account for 2079/80, 2080/81 and 2081/82. [8]
21. From the following Trial Balance of Kanchenjunga Stores as on the last day of Ashadh 2082 and the adjustments below, prepare the Trading Account, Profit and Loss Account for the year, and the Balance Sheet as on that date. [8]
| Debit Balances | Amount (Rs.) | Credit Balances | Amount (Rs.) |
|---|---|---|---|
| Opening Stock | 60,000 | Sales | 4,60,000 |
| Purchases | 2,80,000 | Sundry Creditors | 55,000 |
| Sales Return | 10,000 | 12% Bank Loan | 50,000 |
| Wages | 25,000 | Commission Received | 9,000 |
| Carriage Inward | 5,000 | Provision for Doubtful Debts | 4,000 |
| Salaries | 48,000 | Capital | 2,39,000 |
| Rent | 18,000 | ||
| Insurance | 6,000 | ||
| Advertisement | 12,000 | ||
| Bad Debts | 3,000 | ||
| Sundry Debtors | 90,000 | ||
| Machinery | 1,50,000 | ||
| Furniture | 50,000 | ||
| Cash at Bank | 45,000 | ||
| Drawings | 15,000 | ||
| Total | 8,17,000 | Total | 8,17,000 |
Adjustments:
- Closing Stock was valued at Rs. 72,000.
- Wages outstanding Rs. 3,000 and insurance prepaid Rs. 1,500.
- Write off further bad debts of Rs. 2,000 and keep a provision of 5% on good debtors.
- Depreciate Machinery and Furniture @ 10% p.a.
- No interest has been paid on the 12% Bank Loan for the year.
- Commission earned but not yet received Rs. 1,000.
22. The following transactions relate to the District Survey Office, Dhading for Shrawan 2082: [8]
- Shrawan 1: Received a budget release of Rs. 4,00,000.
- Shrawan 5: Paid Rs. 12,000 for Water and Electricity (22111) and Rs. 30,000 for House Rent (28142) through TSA payment order.
- Shrawan 10: Gave an advance of Rs. 50,000 to Store Keeper Mr. Ram Thapa for purchasing Furniture and Fixtures (31123).
- Shrawan 18: Purchased stationery (Office Materials, 22311) for Rs. 9,000 through TSA payment order.
- Shrawan 25: Mr. Ram Thapa submitted a furniture bill of Rs. 56,000 to clear his advance; the extra Rs. 6,000 was paid to him through TSA payment order.
- Shrawan 31: Distributed salary for Shrawan: Basic Salary Rs. 1,20,000 (21111), with the Government adding 10% to the Provident Fund (21212). Provident Fund of 20% (Rs. 24,000) and Social Security Tax of Rs. 1,200 were deducted, and the net salary was paid through TSA payment order. The deductions are to be remitted later.
Prepare Goswara Vouchers (AGF No. 203) for the above transactions.
OR
Prepare a Bank Cash Book (AGF No. 209) for the above transactions.
Full worked answers to every question in the paper, including both options where a question offers a choice, are in Model Question Paper Solutions.
Appendix F: Practical and Project Work Guidelines (25 Marks Internal Evaluation)
As prescribed by the Curriculum Development Centre (CDC) for Grade XI Accountancy (Acc. 103), 25 Marks are allocated to Internal Assessment and Practical Project Work:
| S.N. | Evaluation Area | Marks Allocated | Student Activity / Deliverable |
|---|---|---|---|
| 1. | Attendance, Class Participation & Learning Attitude | 5 Marks | Regular attendance, active participation in numerical lab sessions, and neat maintenance of accounting registers. |
| 2. | Practical File / Portfolio of Accounting Documents & Vouchers | 10 Marks | Collecting and filling real/specimen Nepalese source documents: • Tax Invoice (13% VAT Bill), Cash Memo, Debit Note, Credit Note. • Bank Deposit Slip, Crossed Cheque, ABBS Voucher, Bank Reconciliation Statement. • Filled Government AGF Forms: Goswara Voucher (AGF 203), Bank Cash Book (AGF 209), Budget Sheet (AGF 208), and Statement of Expenditure (AGF 210). |
| 3. | Field Visit Report / Case Study & Viva-Voce | 5 Marks | Visiting a local Sole Proprietorship, Cooperative, Non-Profit Club/Hospital, or Local Government Ward/Municipality Office to prepare a 5–8 page report on their accounting cycle, followed by oral defense (Viva). |
| 4. | Terminal Examination Performance | 5 Marks | Average score achieved across First, Second, and Pre-Board internal examinations. |
| Total | Internal / Practical Assessment | 25 Marks |