What are the main features of AIS ?

Prepare Trading, Profit and Loss A/c and Balance Sheet from the following balances, relating to 31st March, 2022.

| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
|---|---|---|---|
| Capital | 10,000 | Wages | 5,000 |
| Creditors |

Question

What are the main features of AIS ?

Prepare Trading, Profit and Loss A/c and Balance Sheet from the following balances, relating to 31st March, 2022.

| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
|---|---|---|---|
| Capital | 10,000 | Wages | 5,000 |
| Creditors | 1,200 | Bank | 1,000 |
| Return Outward | 500 | Repairs | 50 |
| Sales | 16,400 | Stock (1-4-2021) | 2,000 |
| Bills Payable | 500 | Rent | 400 |
| Plant and Machinery | 4,000 | Manufacturing Expenses | 800 |
| Sundry Debtors | 2,400 | Trade Expenses | 700 |
| Drawings | 1,000 | Bad Debts | 200 |
| Purchases | 10,500 | Carriage | 150 |
| Return inward | 300 | Fuel and Power | 100 |

The Closing Stock was valued at Rs. 1,450

Depreciate Plant and Machinery Rs. 400

Allow 5 % Interest on capital.

A sum of Rs. 40 is due for repairs.

Accepted Answer

>

> [!TLDR]
> **Part (a):** The main features of an Accounting Information System (AIS) are listed below. **Part (b):** Preparing the Trading A/c, Profit and Loss A/c, and Balance Sheet from the given balances (after the stated adjustments) gives a **Gross Loss of Rs. 500**, a **Net Loss of Rs. 2,790**, and a Balance Sheet that totals **Rs. 8,450** on each side.
>
> ### Part (a) — Main features of an Accounting Information System (AIS)
>
> 1. **Relevance:** It provides information that is useful and relevant to the decisions users need to make.
> 2. **Reliability/Accuracy:** The information generated is accurate, verifiable, and free from material error.
> 3. **Timeliness:** Information is made available quickly enough to be useful for decision-making.
> 4. **Completeness:** All material financial information is captured and reported.
> 5. **Understandability:** Reports are presented in a form that is clear and usable by the intended users.
> 6. **Confidentiality and security:** Access to sensitive financial data is controlled and protected.
> 7. **Flexibility/Scalability:** The system can be adapted or expanded as the organisation's needs grow or change.
> 8. **Integration:** It links data from different functional areas (sales, purchases, inventory, payroll, etc.) into one coherent accounting record.
>
> ### Part (b) — Trading, Profit & Loss Account, and Balance Sheet
>
> *(Note: the item "Carriage" (Rs. 150) in the Trial Balance, not being specified as inward/outward, is treated here as Carriage Inward — a direct, trading-account expense — following the standard convention for unspecified "Carriage" in such problems.)*
>
> **Trading Account for the year ended 31st March, 2022**
>
> | Dr. | Rs. | Cr. | Rs. |
> |---|---|---|---|
> | To Opening Stock | 2,000 | By Sales | 16,400 |
> | To Purchases | 10,500 | Less: Return Inward | (300) |
> | Less: Return Outward | (500) | Net Sales | 16,100 |
> | Net Purchases | 10,000 | By Closing Stock | 1,450 |
> | To Wages | 5,

Date	Particulars	Debit (₹)	Credit (₹)
March 31	Salary A/c Dr.	50,000
	To Outstanding Salary A/c		50,000
	(Being salary for March due but not paid)

Date	Particulars	Debit (₹)	Credit (₹)
April 10	Outstanding Salary A/c Dr.	50,000
	To Cash/Bank A/c		50,000
	(Being outstanding salary paid)

Date	Particulars	Debit (₹)	Credit (₹)
March 31	Accrued Commission A/c Dr.	20,000
	To Commission Income A/c		20,000
	(Being commission earned but not received)

Date	Particulars	Debit (₹)	Credit (₹)
April 15	Cash/Bank A/c Dr.	20,000
	To Accrued Commission A/c		20,000
	(Being accrued commission received)

Date	Particulars	Debit (₹)	Credit (₹)
March 31	Prepaid Insurance A/c Dr.	9,000
	To Insurance A/c		9,000
	(Being insurance prepaid for the remaining period)

Concept understanding — Accrual Basis Accounting

Accrual Basis Accounting – A First Look

The Precise Meaning

Why It Matters

Accounting Treatment – The Journal Entries

1. Outstanding Expenses (Expense incurred but not yet paid)

2. Accrued Income (Income earned but not yet received)

3. Prepaid Expenses (Expense paid in advance)

4. Unearned Income (Income received in advance)

Part (a) — Main features of an Accounting Information System (AIS)

Part (b) — Trading, Profit & Loss Account, and Balance Sheet

Particulars	Amount (Rs.)	Particulars	Amount (Rs.)
Capital	10,000	Wages	5,000
Creditors	1,200	Bank	1,000
Return Outward	500	Repairs	50
Sales	16,400	Stock (1-4-2021)	2,000
Bills Payable	500	Rent	400
Plant and Machinery	4,000	Manufacturing Expenses	800
Sundry Debtors	2,400	Trade Expenses	700
Drawings	1,000	Bad Debts	200
Purchases	10,500	Carriage	150
Return inward	300	Fuel and Power	100

Dr.	Rs.	Cr.	Rs.
To Opening Stock	2,000	By Sales	16,400
To Purchases	10,500	Less: Return Inward	(300)
Less: Return Outward	(500)	Net Sales	16,100
Net Purchases	10,000	By Closing Stock	1,450
To Wages	5,000
To Manufacturing Expenses	800
To Carriage (inward)	150
To Fuel and Power	100
To Gross Loss c/d (balancing figure)	—
Total	18,050	Total	17,550

Dr.	Rs.	Cr.	Rs.
To Gross Loss b/d	500
To Rent	400
To Trade Expenses	700
To Bad Debts	200
To Repairs (50 + 40 outstanding)	90
To Depreciation on Plant & Machinery	400
To Interest on Capital (5% of 10,000)	500

Part (a) — Main features of an Accounting Information System (AIS)

Part (b) — Trading, Profit & Loss Account, and Balance Sheet

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