CAP-I Mega Q&A: Accounting • Economics • CMS • Mercantile Law — Long Answers & Highlights (ICAN Nepal 2025)

CAP-I Accounting: Questions & Answers + Student Summary #CAP_I #Accounting #Nepal #Kathmandu #EmpiricalTen

Exam-style Q&A with highlights, SEO-ready hashtags, and a built-in summary box for students. #ICAN #ExamPrep #Blogger #MobileFriendly

In Fundamentals of Accounting, students must master the flow from the Trial Balance to the Trading Account, then the Profit & Loss Account, and finally the Balance Sheet, while applying adjustments like closing inventory valuation (cost vs NRV), depreciation, provisions for doubtful debts, manager’s commission, and rectification entries. This post presents short, exam-style questions followed by concise, high-impact answers so learners can build strong concepts and then write a one-page summary for revision. #TradingAccount #ProfitAndLoss #BalanceSheet #Inventory #NRV #Depreciation #Provision #Rectification #ManagerCommission

Q1) How do you value closing inventory at year-end? #Inventory #NRV #ICAN #CAP_I

Answer (expand/collapse) #Answer #Concept

Rule: Value inventory at the lower of cost and net realizable value (NRV). #LowerOfCostOrNRV

Cost includes: purchase price, import duties (non-recoverable), freight/carriage inward, and conversion costs; exclude abnormal waste. #CostComponents #CarriageInward

NRV equals: estimated selling price minus costs of completion and selling (e.g., packaging, commissions). #SellingPrice #CompletionCosts #Commissions

Impact: If NRV < cost → recognize a loss in P&L; if NRV ≥ cost → carry at cost; disclose method consistently. #Conservatism #Consistency

Q2) Capital vs Revenue Expenditure — what’s the difference? #CapitalExpenditure #RevenueExpenditure #FixedAssets

Answer (expand/collapse) #Answer #Concept

Capital Expenditure: creates/improves a long-term asset and yields benefits beyond one period (e.g., machinery purchase, building extension). Capitalize and depreciate. #Capex #Depreciation

Revenue Expenditure: incurred for day-to-day operations (e.g., repairs, routine maintenance). Expense in the current period. #Opex #Repairs

Installation Wages: add to asset cost (capital), not P&L expense. #InstallationCost

Q3) How to compute manager’s commission on “net profit after commission”? #Commission #NetProfit #AfterCommission

Answer (expand/collapse) #Answer #Formula

Given: commission rate = r% on net profit after commission; profit before commission = P. #Given #Notation

Formula: Commission = (r / (100 + r)) × P. Example: r = 5%, P = 100,000 → Commission = 5/105 × 100,000 = 4,761.90. #WorkedExample

Posting: Debit P&L (expense); credit Commission Payable (liability). #JournalEntry #Liability

Q4) What is the treatment of bad debts, provision for doubtful debts & discount on debtors? #BadDebts #Provision #DiscountOnDebtors

Answer (expand/collapse) #Answer #Adjustments

Bad Debts: write off irrecoverable balances to P&L. #WriteOff #P&L

Provision for Doubtful Debts: create expected-loss buffer (e.g., 5%) on adjusted debtors; debit P&L, credit Provision (contra asset). #ExpectedCreditLoss

Provision for Discount on Debtors: after deducting doubtful provision, apply % for likely cash discounts; debit P&L, credit Allowance. #CashDiscount

Q5) Sales on approval (sale or return): what to reverse at period end? #SaleOnApproval #Cutoff #RevenueRecognition

Answer (expand/collapse) #Answer #Cutoff

If customer hasn’t accepted: reverse sales and cost entries; treat goods as closing stock at cost; show any debtor as a memo only. #Reversal #Inventory

Financial Statement Impact: Sales ↓, Debtors ↓, Stock ↑; correct profit and ratios. #Impact #Ratios

✍️ Write Your Summary (Key Takeaways) #ActiveRecall #Summary #Revision

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