Distribution of profit & loss – Short Question and Answers

1. Define Partnership.
Hide answer
The relation between persons who have agreed to share the profits of a business carried on by
all or any of them acting for all.

2. Write any "Four" essential elements of partnership.

Hide answer
(1). There must be at least two persons.
(2). There must be an agreement between/among the partners.
(3). It is created to run lawful business.
(4). The business is assumed to earn profit.

3. write any four advantages of partnership.

Hide answer
(1). Easy to form
(2). Large capital.
(3). Tax advantages.
(4). Easy dissolution.

4. how many "Kinds of partners" in partnership business?

Hide answer
There are three kinds of partners.
1. General partners

 Active partners

 Sleeping partners
2. Special partners
3. Other partners

 Secret partners

 Normal partners

 minor partners

 Partner at will

 Partner in profit only

 partner by estoppels

5. Define the following?

1. Active partner
2. Sleeping partner
3. Nominal partner
Hide answer
1. Active partner: Partner actively participate in the conduct of business is known as active
partner.
2. Sleeping partner: A partner who does not take active part in the conduct of partnership
business in known as sleeping partner.
3. Nominal partner: One who neither contribute any capital not takes any active part in the
management, but mainly lends his name and credit to firm is known as nominal partner.

6. Explain partnership deed/agreement.

Hide answer
Partnership deed is a document which is signed by all the partners and which contains all the
matters determining and governing the mutual rights, duties and liabilities of the partners in the
conduct and management of the affairs of the partnership. Partnership agreement in writing is
called partnership deed.

7. Describe the methods of maintaining capital account in partnership business.

Hide answer
There are following two methods of maintaining the capital account in partnership business:.
Fixed Capital method: No adjustment is made in the capital account at all. All adjustments are
made in the partner's current account. Original amount of capital invested by the partners
remains in the capital account.
Fluctuated capital method: In this method all adjustments with regard to interest on capital,
profit and loss of the year, drawings and interest on drawing, are made in capital account.
Capital account fluctuates year to year. If nothing is mentioned these fluctuating capital method
should be applied.

8. What do you mean by capital Ratio?

Hide answer
If profit or loss of partnership business is divided in the ratio of capital it is known capital ratio,
The capital ratio may be of the following types.
1. Beginning capital ratio
2. Ending capital ratio
3. Average capital ratio

9. Define goodwill.
Hide answer
The aggregate of those itangible attributes of a business which contribute to the higher earning
capacity over a normal rate of return on investment is called goodwill.

Non-trading concern – Short Question and Answers

1. Define non-trading concern?.
Hide answer
Non-trading concerns are those operated for the benifit of the society as a whole rather than for
the benefit of a individuals or group or partners. Such as libraries, govr. hospital, govt.
educational institutions, athletic clubs etc.

2. Give any four characterstics of non-trading concerns?

Hide answer
1. Non-profit making. (2). Provide goods or services to fulfil a social need. (3). Main source of
income are fees, subscriptions, donations etc. (4). Prepare receipts and payment account
instead of cash book.

3. Explain receipts and payments account.

Hide answer
It is a consolidated summary of cash book. All cash receipts are recorded on the debit side and
all cash payments are recorded on the credit side. It starts with the opening balance and ends
with closing balance. It is prepared at the end of the accounting period.

4. Explain income and expenditure account?

Hide answer
Trading concers prepare profit and loss account where as non-trading concerns prepare income
and expenditure account. All expenses paid or payable of the current year are recorded on the
debit side and all incoms received or receivable are recorded on the credit side. It excludes all
the capital items and also revenue items of the previous or subsequent period.

5. Describe the main points for conversion of receipts and payment account to an income and
expenditure account?
Hide answer
(1). Exclude the opening and clasing balance of cash and bank. (2). Exclude all items of capital
nature. (3). Exclude income of the previou$ year and incoming year. (4). Exclude expenditures
of previous year and incoming year. (5). Include income of the current period, but not recorded.
(6). Include expenditure of the current period, but not paid. (7).Provisiorvfor bad debits and
depreciation on fixed assets of the current year should be included.

6. Define capital fund?

Hide answer
The excess of assets over the liabilities will indicate the capital found. It will be found out by
prepering a statement of assets and liabilities at the beginning of the year .

7. What is the treatment Of new asset?

Hide answer
If any new asset is acquired its payment appears is the credit side of receipts and payment
account. Such asset will also appear in balance sheet

8. What do you means by "LEGACY"?

Hide answer
It is the account given to a non-trading concerns as per the will of deceased persons. It is like
donations. It is capital recept and appear in receipts and payment account.

9. What is the accounting treatment of deficit?

Hide answer
It is treated as liability in the balance sheet.

10. What do you mean by"Special. subscription"?

Hide answer
Any member of the non-trading concerns participate in a particulars activity and pay/contribute
subscription for it, is called special subscription.
Special Journal – Short Question and Answers
Test your learning about ‘Special Journal’ chapter by answering 9 short questions given below.
We suggest you try to answer each question yourself before clicking on the ‘see answer’ button.

If you find difficulty in answering these questions, read ‘Special Journal‘ chapter thoroughly from
explanation section of the website.

1. Define a Purchase Book?

Hide answer
It is a book in which all credit purchases are recorded. it is also called purchase day book.

2. What do you mean by Sales Book?

Hide answer
It is a book of original entry in which all credit sales are recorded.

3. What is purchase return or returns outwards book?

Hide answer
It is a book in which merchandise returned to supplier are recorded which were purchased on
credit.

4. What is sales return or return inwards book?

Hide answer
It is a book in which merchandise returned by customer are recorded which were sold to him on
credit.

5. What is Bills Receivable Journal?

Hide answer
This book is used to record the bills received from the debtors.

6. What is Bills Payable Book?

Hide answer
It is a book which is used to record bill of exchange drawn by customer and accepted by the
concern.

7. What is General journal?

Hide answer
It is used to record all those transactions for which there is no subsidiary or special book.

8. What is Debit Note?

Hide answer
When goods are returned or an allowance is claimed from the supplier on account of receipt of
unsatisfactory goods, a doucment is prepared and sent to supplier which is known as debit note.

9. What is Credit Note?

Hide answer
When the good are returned or allowances claimed by the customers, a document is prepared
and sent to them, which is known as credit note.
Depreciation – Short Question and Answers
Test your learning about ‘Depreciation’ chapter by answering 10 short questions given below.
We suggest you try to answer each question yourself before clicking on the ‘see answer’ button.

If you find difficulty in answering these questions, read ‘Depreciation‘ chapter thoroughly from
explanation section of the website.

1. Define depreciation?
Hide answer
When the value of assets gradually reduces due to use and wear and tears, it is called
depreciation.

2. Give any three objects of providing depreciation?

Hide answer
1- To found out net profit or loss for a specific period.
2- To present a true and fair view of the state of afairs of the business.
3- To replace the asset.

3. Name the methods of calculating depreciation?

Hide answer
1- Straight line method.
2- Disminishing balance method.
3- Sum of years digits method.
4- Revalution method.

4. What do you mean by scrap value?

Hide answer
The amount which will be realized at the end of useful life of a asset is called scrap value.

5. What do you mean by depletion?

Hide answer
The process of measuring and recording the exhaustion of natural resources due to their use is
called depletion.

6. Define the term "Amortization"?

Hide answer
The term amortization is used in respect of intangible assets like goodwill copy right, patents
etc. The process of writing off their calue is called Amortization.

7. Explain the term "Tangible plant Assets"?

Hide answer
The term tangible denotes physical substance, such as machinery, furniture, motor car, building
etc.

8. Explain the term "Intangible assets"?

Hide answer
The assets which are used in the operation is called intangible assets such as goodwill, copy
right, patents etc.
9. Define "original cost method" of depreciation?
Hide answer
When depreciation is calculated under equal portion of the asset's cost as depreciation
expenses in each period of the asset's useful life is called original cost method or straight line
method

10. Explain diminishing balance method of depreciation?

Hide answer
Under this method the amount of depreciation is calculated as fixed percentage of the reducing
or diminishing value of the asset standing in the book at the beginning of the year, so as to bring
down the book value of asset to its resdual value. The amount of depreciation is decreasing
every year.

Cash Book – Short Question and Answers

Test your learning about ‘Cash Book’ chapter by answering 6 short questions given below. We
suggest you try to answer each question yourself before clicking on the ‘see answer’ button.

If you find difficulty in answering these questions, read ‘Cash Book‘ chapter thoroughly from
explanation section of the website.

1. What is Cash Book?

Hide answer
The Cash Book is a book of original entry in which all cash receipts and payments are recorded.

2. What are the different kinds of Cash Book?

See answer

3. What is three column Cash Book?

Hide answer
A cash book of three columns on both receipt and payment side, these are cash, bank and
discount columns.

4. What is contra entry?

Hide answer
An entry which is recorded on both sides of cash book at the same time. The example of contra-
entry is depositing of cash in bank and withdrawing of cash from bank for business use.

5. What is Petty Cash Book?

Hide answer
The book, in which small payments are recorded is called petty cash book.

6. What is meant by imprest system of petty cash book?

Hide answer
A system in which a fixed sum of money is given to cashier in advance to meet petty expenses
is called imprest system.
Adjusting entries – Short Question and Answers
Test your learning about ‘Adjusting entries’ chapter by answering 10 short questions given
below. We suggest you try to answer each question yourself before clicking on the ‘see answer’
button.

If you find difficulty in answering these questions, read ‘Adjusting entries‘ chapter thoroughly
from explanation section of the website.

1. What is an adjustment?
Hide answer
An adjustment means to make a correct record of a transaction which has not been entered or
which has been entered in an incomplete or wrong way.

2. What is the purpose of adjustments?

Hide answer
Adjustments are made to obtain accurate results from financial statements. It includes profit and
loss for a particular accounting period and financial position of the business at the end of the
period etc.

3. What are outstanding expenses?

Hide answer
The expenses whose benefit has been utilized during the current year but have not been paid till
the end of the current year are called outstanding expenses.

4. How are prepaid expenses and outstanding expenses shown in the balance sheet?
Hide answer
Prepaid expenses are categorized as current assets and are shown under the heading Current
Assets in the balance sheet. Outstanding expenses are categorized as current liabilities and are
shown under the heading Current Liabilities in the balance sheet.

5. What do you mean by prepaid expenses?

Hide answer
The expenses which have been paid in advance but benefit for which is still to receive are called
prepaid expenses, unexpired expenses or expenses paid in advance.

6. What is accrued income/revenue?

Hide answer
It is the income/revenue which has been earned during the year but has not been actually
received till the end of the accounting period.

7. What is unearned income/revenue?

Hide answer
The income/revenue which has been received in advance but the services has not yet been
provided.

8. Rent paid in advance amounting to $1,500 on January 1, 2016. During the month of January,
$500 of rent was expired. What adjusting entry would be made on January 31, 2016.
Hide answer
Rent expense $500 - Dr.
Prepaid rent $500 - Cr.
The above adjusting entry would convert prepaid rent of $500 into rent expense.

9. At the end of the accounting year 2016, salaries amounting to $2,500 are outstanding. What
adjusting entry would be made for it at the end of the accounting year.

Salaries expense $2,500 - Dr.

Outstanding salaries $2,500 - Cr.

10. During the period A, John Advertising Company receives $1,200 cash from a client. The
advertising services valuing $600 are provided in period A and the rest will be provided in period
B. What adjusting entry should be made by John Advertising Company at the end of the period
A.
Unearned advertising service revenue $600 - Dr.
Advertising service revenue $600 - Cr.

Trial balance – Short Question and Answers

Test your learning about ‘Trial balance’ chapter by answering 8 short questions given below. We
suggest you try to answer each question yourself before clicking on the ‘see answer’ button.

If you find difficulty in answering these questions, read ‘Trial balance‘ chapter thoroughly from
explanation section of the website.

1. What is a trial balance and why is it prepared?

Hide answer
A trial balance is a statement comprised of balances of ledger accounts. It has two columns - a
debit column in which all debit balances are recorded and a credit column in which all credit
balances are recorded. It is basically prepared to check the arithmetical accuracy of
bookkeeping work done in a particular accounting period. It also provides necessary information
for the preparation of financial statements.

2. When do businesses prepare a trial balance?

Hide answer
A trial balance can be prepared at any time however it is mostly prepared at the end of an
accounting period.

3. If an account has a debit balance, where will you place it in the trial balance?
Hide answer
All debit balances are placed in debit column of the trial balance.

4. If an account has a credit balance, where will you place it in the trial balance?
Hide answer
All credit balances are placed in credit column of the trial balance.
5. What does an agreed trial balance tells us?
Hide answer
An agreed trial balance tells us that the books of accounts are arithmetically correct. But it does
not mean that every transaction in journal and ledger has been correctly recorded and there is
no error in the books. A trial balance may agree and still there may be one or more errors in
books of accounts. For example, a trail balance will not detect the omission of a transaction
because the omitted transactions don't affect the agreement of trial balance.

6. What does a disagreed trial balance tells us?

Hide answer
A disagreed trial balance indicates the presence of one or more errors in the books of accounts.
It may also be the result of incorrect total of debit or credit column or both.

7. Which accounts don't need to be transferred to the trail balance?

Hide answer
The accounts with zero balance don't affect trial balance and are therefore not needed to be
transferred to trial balance.

8. What are the two methods of preparing trial balance?

Hide answer
The two methods of preparing trial balance are balance method and total method. Balance
method is more popular whereas total method is less popular.

General ledger – Short Question and Answers

Test your learning about ‘General ledger’ chapter by answering 10 short questions given below.
We suggest you try to answer each question yourself before clicking on the ‘see answer’ button.

If you find difficulty in answering these questions, read ‘General ledger‘ chapter thoroughly from
explanation section of the website.

1. What is a ledger?
Hide answer
Ledger is a book in which all the accounts of the business enterprise are maintained. These
accounts are called ledger accounts to which entries from general journal are periodically
transferred.

2. What is meant by posting?

Hide answer
Posting is the process of transferring entries from jounal to ledger accounts.

3. What is meant by balancing?

Hide answer
The process of finding out the balance of a ledger account is known as balancing an account.
An account may have debit balance, credit balance or zero balance.

4. What are are the methods of preparing ledger accounts?

Hide answer
The two methods of preparing ledger accounts are (1). Periodic balance method and (2). Self
balancing or running balance method.

5. What is meant by balance?

Hide answer
The difference of the totals of the two sides (debit side and credit side) of an account is known
as balance.

6. What is difference between debit balance and credit balance?

Hide answer
If the debit side of the account is heavier, the balance would be a debit balance. If, on the other
hand, credit side of the account is heavier, the balance would be a credit balance.

7. What is meant by zero balance?

Hide answer
If the two sides of an account are equal, the account will show a zero balance.

8. What abbreviations are used for debit and aredit?

Hide answer
The abbreviation Dr. is used for debit and Cr. is used for credit.

9. A ledger account has two sides - left side and right side. What are book-keeping/accounting
names of these two sides?
Hide answer
The left side of the account is termed as debit (Dr.) side and the right side of the account is
termed as credit (Cr.) side.

10. What is meant by posting reference (P.R) in relation to a ledger account?

Hide answer
Posting reference represents the page number of the general journal.

General journal – Short Question and Answers

Test your learning about ‘General journal’ chapter by answering 10 short questions given below.
We suggest you try to answer each question yourself before clicking on the ‘see answer’ button.

If you find difficulty in answering these questions, read ‘General journal‘ chapter thoroughly from
explanation section of the website.

1. What is a journal?.
Hide answer
Journal is a book in which business trnsactions are recorded in chronological order (in order in
which they occur).

2. What is meant by a journal entry?

Hide answer
Journal entry means recording business transactions in general journal strictly in accordance
with the rules of double entry system of book-keeping.
3. What is meant by narration of the journal entry?
Hide answer
The explanation or detail which is written under each journal entry to explain the transaction is
known as narration.

4. What is a compound journal entry?

Hide answer
A journal entry that involves more than two accounts is called compound entry or compound
journal entry. Whenever two or more transactions of the same nature take place on the same
date, a compound entry, instead of two or more separate entries, may be made to record such
transactions

5. What is meant by the term journalizing?

Hide answer
The term journalizing refers to the process of recording journal entries in the journal. The person
who is responsible for this process, needs to know the certain principles of double entry system
of book-keeping.

6. How trade discount is recorted in the journal?

Hide answer
No entry is made for the trade discount. Merchandise are priced net of trade discount so it is not
recorded in books.

7. Why journal is called the book of original entry?

Hide answer
Journal is a book in which business transactions are recorded at first instance as they occur, so
journal is called the book of original entry.

8. $950 cash is received from Mr. Z (an account receivable) in full settlement of his account of
$1,000. How would you record this transaction in general journal?
Hide answer
This transaction would be journalized as follows:
Cash $950--Dr.
Discount allowed $50--Dr.
Accounts receivable - Mr. Z $1,000--Cr.

9. $480 cash is paid to Mr. Y (an account payable) in full settlement of his account of $500. How
would you journalize this transaction?
Hide answer
This transaction would be journalized as follows:
Accounts payable - Mr. Y $450--Dr.
Cash $480--Cr.
Discount received $50--Cr.

10. What is the purpose of posting reference column of journal?

Hide answer
Posting reference column shows the page number where a particular account resides in general
ledger. For example, if we see 12 written with the sales account in general journal, the sales
account would be found on page 12 in the general ledger.
Transaction analysis – Short Question and Answers
Test your learning about ‘transaction analysis’ chapter by answering 10 short questions given
below. We suggest you try to answer each question yourself before clicking on the ‘see answer’
button.

If you find difficulty in answering these questions, read ‘transaction analysis‘ chapter thoroughly
from explanation section of the website.

1. What are two popular approaches to classify accounts?

Hide answer
The two popular approaches to classify accounts are traditional (or British) approach and
modern (or American) approach.

2. What are the types of accounts according to traditional classification (or British approach)?
Hide answer
According to traditional or British approach, accounts are classified as: (1). Real accounts (2).
Nominal accounts and (3). Personal accounts.

3. What are real accounts?

Hide answer
The accounts which keep the records of properties or things owned by a business are called
real accounts. Examples of real accounts are building account, machinery account and cash
account etc.

4. What are nominal accounts?

Hide answer
These are the accounts which record revenues, expenses, gains and losses. Examples include
sales account, salary account and commission account etc.

5. What are personal accounts?

Hide answer
Accounts relating to persons, firms or companies are called personal accounts. For example,
John's account, Sam's account or A & Co. account etc.

6. What are different types of accounts according to accounting equation approach (also known
as American approach)?
Hide answer
According to accounting equation or American approach, there are five types of accounts.
These are (1). Assets accounts (2). Liabilities accounts (3). Capital/Owner's equity accounts (4).
Revenue accounts (5). Expense accounts.

7. What is meant by debiting or crediting an account?

Hide answer
Debiting an account means making an entry on the debit (left) side of the account whereas
crediting an account means making an entry on the credit (right) side of the account.
8. What is meant by the analysis of business transaction?
See answer

9. Mr. Sam invests $50,000 cash in his business. How would you analyze this transaction?
Hide answer
The two accounts involved in this transaction are cash account and capital account. Both are
increasing. According to rules of debit and credit, cash would be debited because any increase
in an asset account is debited whereas capital would be credited because any increase in
capital account is credited.

10. Mr. Sam pays $950 cash to a creditor and receives $50 cash discount. How many accounts
are involved in this transaction?
Hide answer
This transaction involves three accounts - cash account, accounts payable account and
discount received account.

Accounting equation – Short Question and Answers

Test your learning about ‘accounting equation’ chapter by answering 10 short questions given
below. We suggest you try to answer each question yourself before clicking on the ‘see answer’
button.

If you find difficulty in answering these questions, read ‘accounting equation‘ chapter thoroughly
from explanation section of the website.

1. What is accounting equation?.

Hide answer
An equation which expresses the assets and claims against those assets is called accounting
equation. In the form of a formula it is written as: Assets = Liabilities + Owner's equity.

2. What is owner's equity?

Hide answer
The ownership interest of the owner in the business is called owner's equity or capital. It is
equal to total assets less total liabilities.

3. If total assets are $50,000 and total liabilities are $20,000, what is the amount of owner's
equity?
Hide answer
The amount of owner's equity is $30,000 ($50,000 - $20,000).

4. If total liabilities are $40,000 and owner's equity is $60,000, what is the amount of total
assets?
Hide answer
The amount of total assets is $100,000 ($40,000 + $60,000).
5. If total assets are $20,000 and owner's equity is $15,000, what is the amount of total
liabilities?
Hide answer
The total liabilities of the business are $5,000 ($20,000 - $15,000).

6. Merchandise costing $12,000 are sold for $15,000. How does this transaction impact
accounting equation?
Hide answer
This transaction increases cash by $15,000, reduces merchandise by $12,000, and increases
owner's equity by $3,000.

7. Merchandise costing $15,000 are sold for $12,000. How does this transaction impact
accounting equation?
Hide answer
This transaction increases cash by $12,000, reduces merchandise by $15,000, and reduces
owner's equity by $3,000.

8. Which financial statement is closely related to the accounting equation and why?
Hide answer
The closely related financial statement to accounting equation is the balance sheet. Both
accounting equation and balance sheet communicate information about assets, liabilities and
owners equity (financial postion of the business) in two different formats.

9. What is difference between liabilities and owner's equity?

Hide answer
Both liabilities and owner's equity are obligations of the business. The difference between two is
that the liabilities are the obligations of the business to parties other than owner or owners (i.e.,
creditors) whereas owner's equity is the obligation of the business to its owner or owners.

10. How does depreciation on a fixed asset affects accounting equation?

Hide answer
When depreciation on a fixed asset is recorded or charged, on the assets side of the equation it
reduces that asset by the amount of depreciation. On the other side of the equation, it reduces
owner's equity by the same amount.

Introduction to accounting – Short Question and Answers

Test your learning about ‘introduction to accounting’ chapter by answering 29 short questions
given below. We suggest you try to answer each question yourself before clicking on the ‘see
answer’ button.

If you find difficulty in answering these questions, read ‘introduction to accounting‘ chapter
thoroughly from explanation section of the website.

1. Define accounting.
Hide answer
Accounting is an art of recording, classifying, summarizing, and interpretting the information of
an economic entity.
2. What is book-keeping?
Hide answer
Book-keeping is a systematic way of recording business transactions in the books of accounts.

3. Define business.
Hide answer
Any lawful activity for the purpose of earning profit is called business.

4. What is a business transaction?

Hide answer
A business transaction is an event or occurence that impacts the financial position of a business
entity and that must be recorded in the books of accounts.

5. Who is a proprietor?
Hide answer
The owner of the business who provides capital to the business and is responsible for all profits
and losses of the business is called proprietor.

6. What is capital?
Hide answer
The cash or goods provided/invested by the owner of the business to start a business is called
capital.

7. What are drawings?

Hide answer
The cash or goods taken away by the owner of the business for his personal use are called
drawings

8. What are assets?

Hide answer
The things of value which are possessed by the business and which can be used to generate
revenue are called assets. For example, cash, building, and furniture.

9. What are liabilities?

Hide answer
The debts due by a business to outsiders are called liabilities of the business.

10. What is an account?

Hide answer
The summarized record of transactions relating to a person or thing is called an account.

11. What is separate entity concept?

Hide answer
It is an accounting assumption that the business is separate from its owner.

12. What is trade discount?

Hide answer
It is a deduction from the list price of a product granted by the seller to the buyer at the time of
buying and selling agreement. It is usually not recorded in books.
13. What is cash discount?
Hide answer
It is a deduction granted by the creditor to his debtor for receiving payment before due date
(maturity).

14. What is a voucher?

Hide answer
Any written evidence in support of a business transaction is called a voucher.

15. What is cash system of accounting?

Hide answer
A system of accounting in which transactions are recorded at the time of cash receipt or
payment.

16. What is accrual system of accounting?

Hide answer
A system of accounting in which transactions are recorded at the time of their occurence, not at
the time when cash is paid or received.

17. What is an invoice?

Hide answer
A document given by the seller to the buyer for sale of goods or provision of services on credit.
The invoice usually includes the price and the nature and type of goods and services provided
to the customers.

18. What is single entry system of book-keeping?

Hide answer
A system of book-keeping in which only one aspect of transaction is recorded is called single
entry system of book-keeping.

19. What is double entry book-keeping?

Hide answer
A system of book-keeping in which both debit and credit aspects of a transaction are recorded.

20. What is an expense?

Hide answer
It means any expenditure (spending) whose benefit has expired or is finished such as salary,
rent and commission etc.

21. What are current assets?

Hide answer
Cash and other assets which can be converted into cash within a short period of time (usually
one year) are called current assets. For example, cash, debtors, inventories etc.

22. What are fixed assets?

Hide answer
The assets which are of permanent nature and which are permanently used in business are
called fixed assets, such as furniture, land, building, and machinery etc.
23. What is meant by tangible assets?
Hide answer
The assets which have physical existence and which can be seen and touched, such as cash,
machinery, furniture and land etc.

24. What is meant by intangible assets?

See answer

25. What is a transaction?

Hide answer
Any dealings between two parties or persons which must be recorded and which can be
measured in terms of money is called a transaction.

26. What is a cash transaction?

Hide answer
If the cash is paid immediately at the time of occurence of transaction, it is called a cash
transaction.

27. What is a credit transaction?

Hide answer
If the cash for an exchange is received or paid in future or later period, not immediately, the
transaction is called a credit transaction.

28. What is meant by external transaction?

Hide answer
A transaction taking place with an outside person or organization is called external transaction.
For example, purchase of machinery from a company and sale of goods to a person etc.

29. What is internal transaction?

Hide answer
A transaction in which no outside person or organization is involved is called internal
transaction. For example, loss of goods by fire, and depreciation of furniture etc.

Cash flow statement short questions – Short Question and

Answers
1. Define IAS-7.
Hide answer
IAS-7 formed and explained the rules for the preparation of cash flow statement. It became
effective as january, 1974.

2. What are the objectives of IAS-7?

Hide answer
1. To provide the information for getting cash.
2. To indicate the necessity of cash.
3. What do you mean by operating activities?
Hide answer
The operating activities are the main activities of an institution. It plays a fundamental role in
cash flow statement.

4. Give two examples of operating activities.

Hide answer
1. Cash received from sales of goods
2. Cash paid for supply of goods

5. Explain the term "Investing activities".

Hide answer
All entries regarding the sale and purchase of non-cash assets and other investment are
entered in cash flow statement as investing activities.

6. Give two examples of investing activities.

Hide answer
1. Cash received on the sales of shares
2. Cash paid on the purchase of equipments

7. Explain the term "Financing activities".

Hide answer
The activities which change the capital of the business is called financing activities.

8. Give two examples of financing activities.

Hide answer
1. Cash received on issue of shares
2. Cash payment to bank against loan

Material costing methods – Short Question and Answers

1. Define material requisition.
Hide answer
The store keeper should always issue the material on proper authority to avoid the
misappropriation of material. This authority is usually given by the foreman of the production
department on a form known as material requisition.

2. Explain bill of materials.

Hide answer
A bill of materials gives a complete list of all materials required with quantities for a particular
job, order or process, thus all material required for a particular job, order or process are listed by
the production department on single document.

3. What journal entry is required, when material is issued from store?

Hide answer
Materials issued from the store are directed to the job or work order which received them and
credited to the materials account. These jobs are debited with the value of materials issued to
them.
4. Write down the most important methods of pricing material issues.
Hide answer
There are many methods of pricing material issues, the most important are:
1. ost price methods
2. Markete price method
3. Standard price method

5. Define the cost price methods.

Hide answer
Use can divided cost price method in to seven following methods.
1. First in first out
2. Last in last out
3. Average cost
4. Inflated price
5. Specific price
6. Basic stock
7. Highest in first out

6. Explain the FIFO method of material costing.

Hide answer
Under this method material is first issued from the earliest consignment on hand and priced at
the cost at which that consignment was placed in the store. In other words, materials received
first are issued first. The units in the opening stock of materials are treated as if they are issued
first.

7. Write down the 3 advantages of FIFO method.

Hide answer
1. It is simple to understand and easy to operate.
2. It is logical method.
3. Under this method the cost of jobs is correctly ascertained.

8. Define LIFO method of material costing.

Hide answer
Under this method the price of the material issued are latest available consignment is taken.
This method is some times known as the replacement method because the materials are issued
at the current cost to the job.

9. State the 3 advantages of LIFO method.

Hide answer
1. This is simple to operate
2. This method recovers cost from production
3. This method shows correct profit

10. Define the average cost method.

See answer
The principle on which the average cost method is based is that all of the materials in the store
are so mixed up that an issue can not be made from any particular lots of purchases and,
therefore, it is proper if materials are issued at the average cost of materials in store. Average
may be of two types:
1. Simple arthimatic average
2. Weighted arithmatic average

Manufacturing accounts – Short Question and Answers

1. What do you mean by manufacturing concern?
Hide answer
Manufacturing concern means those business organisations which manufacture goods. These
organisations purchase raw material and make finished goods. For example, sugar mills
purchase sugarcane and sale sugar.

2. Define trading concern.

Hide answer
Those merchants who sale goods in the smae shape and condition in which they had
purchased them such as general store, medical store etc.

3. Define direct material.

Hide answer
The material used in the course of manufacturing which enters into and becomes part of the
product i.e. wheat used in milling flour is direct material.

4. Define direct labour cost.

Hide answer
The labour force employed by an enterprise will generally fall in two categories i.e. direct labour
and indirect labour.

5. Explain direct labour.

Hide answer
The labour employed is performing work directly upon a saleable article is called direct labour.

6. Explain indirect labour.

Hide answer
Labour employed on such work as sweeping and clearing, supervising and inspecting, issuing
materials and internal transportation, empowering the plant and machinery and other work not
directly concerned with physical production is called indirect labour.

7. Define factory overhead.

Hide answer
Factory overhead may be defined as those costs which are indirectly related with production
and are incurred before the goods are put in to finished goods store room or supplied to
customers.

8. What is prime cost?

Hide answer
According to some cost accountants the prime cost is the sum of direct materials, direct albour
and direct factory overhead costs.
9. What is conversion cost?
Hide answer
It is the cost of converting raw materials into prepared material or finished goods exclusive of
the cost of raw materials. The direct labour and factory overhead.

10. What is factory cost?

Hide answer
It is the figure by which completed goods are shown in the factory. This is also known as total
work cost, or total manufacturing cost.

Issuance of shares and debenture – Short Question and

Answers
1. What is a share?
Hide answer
An authorized capital of company is divided in to equal units which are called shares.

2. Describe kinds of share.

Hide answer
The shares of company are of the following types:
1. ordinary shares
2. preference shares
3. deferred shares

3. Explain the following.

1. Ordinary shares
2. Preference shares
3. deferred shares
Hide answer
Ordinary shares: Ordinary shares are also called equity shares. They are the real owners of
the company. They have voting rights in the meeting of the company. They received dividend as
is desclared by the board of directors. They cannot be redeemed during the life time of the
company.
Preference shares: Those shares of a company on which fixed rate of dividend is paid before
ordinary shares are called preference shares.
Deferred shares: Deferred shares also called founders shares are used to be issued to the
promoters of the company. Dividend on deferred shares were paid after the claims of all the
share holders have been met including equity share holders. The deferred share-holders has
one vote. These shares enabled the promoters to control the working of the company with a
small investment.

4. What is dividend?
Hide answer
A profit of a company which is distributed among share holders is called dividend.

5. Define the term under-writer.

Hide answer
When a person guarantees that the shares or debentures offered by the company to the public
for subscription, if not taken up, he would be responsible to take those shares or debentures, he
is called under-writer.

6. Define debentures.
Hide answer
The word debenture is used to signify the acknowledgment of a debt, given under the seal of
the company. It may be defined as a certificate issued by a company under its seal
acknowledging a debt due by it to its holder.

7. Write the different kinds of debentures.

Hide answer
There are three kinds of debentures.
1. Bearer debenture
2. Registered debenture
3. Redeemable debenture

8. What do you mean by under subscription?

Hide answer
If a company receives less applications for issued capital, this is called under subscription.

9. What is over subscription?

Hide answer
If a company received more application than issued capital this situation represent over
subscription.

10. What is a debenture stock?

Hide answer
A converted debenture into share represents debenture stock.

11. Write down the different types of debenture.

Hide answer
1. Ordinary or naked debetures
2. Mortgage debentures
3. Redeemable debentures
4. Irredeemable debentures
5. Registered debentures
6. Bare debentures
7. Equipment trust debentures
8. Convertible debentures

12. Write four features of debentures.

Hide answer
The main features of debentures are as under:
1. It is an instrument including the indebtedness of the company.
2. It has a nominal value like the share.
3. It is a document issued under the seal of the company.
4. The term of issue, the repayment of the principal are specified on the back of the document.

13. What do you mean by transmission of shares?

Hide answer
In the case of the death insolvency or lunacy of a share holder, the title or property in share is
transferred to the legal successor of the deceased share holder by the operation of law. The
process of transfer of shares to legal successor by operation of law is termed as transmission of
shares.

14. Explain the following terms.

1. Share issue at par
2. Share issue at premium
3. Share issue at discount
Hide answer
Share issue at par: If the share is issued at actual price it means at price equal to the niminal
value. For example, Share of $10 is issued at $10.
Share issue at premium: If the share is issued at the price above than its nominal value such
issued price is called at premium. For example, share of $10 is issued at $15.
Share issued at discount: If a share or $10 is issued for $8(less than its nominal valueof $10)
it is called share issue at discount.

Formation and organization – Short Question and

Answers
1. Define company.
Hide answer
Company may be defined as a voluntary association for profit with capital divisble into
transportable shares with limited liability, having a corporate body and common seal.

2. Write down four characteristics of a company.

Hide answer
1. Creation by law
2. Separate legal entry
3. Limited liabilities
4. Transportable shares

3. Explain the formation of a company.

Hide answer
A company is formed by law for the purpose of carrying on any object such as business and
sports, research, charity etc. However, most companies are formed for the purpose of
conducting business. The process of formation of a company can be divided into three stages.
1. Promotion
2. Registration
3. Commencement of business

4. Explain the kinds of companies.

Hide answer
There are following kinds of companies.
1. Chartered company
2. Statutory company
3. Registered company
5. Define memorandum of association.
Hide answer
A document which is set out the constitution of the company and as such the foundation upon
which the structure of the company is based is called memorandum of association.

6. Define articles of association.

Hide answer
Articles of association is the second important document of the company. All rules and
regualtions which deals with the internal management of the company are mentioned in articles
of association.

7. Explain the term preliminary expenses.

Hide answer
Expenses which are incurred by the promoters in the process of formation of a company are
called preliminary expenses.

8. Define the term "Promotion".

Hide answer
Promotion of a company means planning, its establishments, negotiation of preliminary
contracts, drafting of memorandum and articles of association, prospectus and other matters
relating the formation of the company or corporation. The person who initiate others in the
matter of forming a company and organizing it, is known as promoter.

9. Describe share capital.

Hide answer
The amount invested by the shareholder is known as share capital of the company. Share
capital may be divided into the following classes:
1. Authorised, registered or nominal capital
2. Issued capital
3. Subscribed capital
4. Called-up capital
5. Paid up capital

10. What do you mean by call in arrear.

Hide answer
The unpaid amount of called-up capital is known as call-in-arrear

Dividend and bonus – Short Question and Answers

1. Define the dividend.
Hide answer
Dividend is a part of profit of the company distributed among the shareholders. The decision
regarding dividend is made in the annual meeting of shareholders. After the annual general
meeting, declaration of dividend in it is sanctioned by the board of directors.

2. Explain the term "Interim dividends".

Hide answer
Dividend paid by the company to the shareholder at any time between two annual general
meetings are know as interim dividend.
3. Describe final dividend.
Hide answer
The directors of company may recommended an other dividend after declaration of interim
dividend called final dividend.

4. Define scrip dividend. Hide answer

Investment companies which primarily deal in stocks and securities distribute shares and
debenture of other companies by way of dividend, instead of paying the same in cash, such
dividend is called scrip dividend.

5. Define un-claimed dividend.

Hide answer
Certain shareholders for any reason do not claim their declared dividends such dividends are
called as unclaimed dividend. These are shown as liability in the balance sheet.

6. What are the mode of payment of dividend?

Hide answer
Dividend can be paid in the following two ways.
1. Cash dividend
2. Share dividend

7. Explain the term cash dividend.

Hide answer
If there are suffcient cash balance is available for the payment of dividend. The dividend is paid
in the shape of cash, it is called cash dividend.

8. What journal enteries are passed when dividend paid in cash?

Hide answer
When a dividend is declared
Retaining earnings DR
Dividend payable CR
When dividend is paid in cash
Dividend payable DR
Bank CR

Financial statement – Short Question and Answers

1. State the different types of finanacial statements of joint stock company.
Hide answer
The joint stock company almost prepare following three types of financial statements.
1. Income statement or expense and revenue summary
2. Statement of retained earings
3. Balance sheet

2. What are the objectives of financial statements?

Hide answer
At the end of financial year every joint stock company want to know his profit and loss and
financial position, for this purpose the financial statements are prepared.
3. Define income statement of joint stock company.
Hide answer
The joint stock company prepare a financial statement to know the profit and loss after the
expiry of a fix time, in known as financial statement.

4. Define retained earning.

Hide answer
A statement in which the net income of the company for a specific period is transferred known
as retained earnings. This statement is used for different objectives in joint stock company. The
balance is shown in the liability side of balance sheet.

5. Define the term "Reserve".

Hide answer
A part of the net income set aside for a particular purpose is called reserve. Reserve may be
used for the following purposes.
1. Reserve for expenses
2. Reserve for contigences
3. Reserve for taxation
4. Reserve for replacement of machinary etc.
5. Reserve for plant expansion

Admission of new partner – Short Question and Answers

1. Why and how new partner is admitted in partnership business?
Hide answer
A new partner can be admitted in partnership firm when all the existing partners are
unanimously agreed. New partner is admitted on account of the reason that the firm is in need
of more capital or special skill of a person for the benefit of the firm.

2. What kind of accounting treatment is required at the time of admission of new partner?
Hide answer
1- New profit sharing ratio
2- Treatment of goodwill
3- Revalution of assets and liabilities

3. What do you mean by old ration?

Hide answer
A ratio betwean existing partners which they were enjoying at the time of new partner's
admission is called orl ratio.

4. What do you mean by new ratio?

Hide answer
After the admission of the new partner the ratio of existing partners is changed, it is called new
ratio.

5. What do you mean by Sacrificing ratio?

Hide answer
A ratio in which old partners give their part of existing shares to new partner is called sacrificing
ratio.
Sacrificing ratio = old ratio - new ratio

6. Define revaluation.
Hide answer
When a partnership is dissolved due ro admission, retirement and death of a partners, the
existing assets and liabilities are to be revalued. There may be increase or decrease in the
value of assets and liabilities. For this purpose a separate account known as revalution account
is opened.

7. Who will enjoy the profit of revaluation of assets and liabilities?

Hide answer
The old partner will enjoy the profit of revaluation of assets and liabilities..

8. State the usual methods of computing the value of goodwill.

Hide answer
There are following three methods of computing goodwill.
1. Average profit method
2. Super profit method
3. Capitalization method

9. What do you mean by amalgamation?

Hide answer
When two or more than two partners carrying on similar type of business, combine their
resources in a way that their individual identity is finished and a new partnership is formed, this
is known as amalgamation.

10. What general entry will be passed for transfer of general reserve?
Hide answer
General reserve debited
Old partner's capital a/c credited

Retirement or death of a partner – Short Question and

Answers
1. Describe the procedure to be followed at the time of retirement of a partner.
Hide answer
A partnership agreement should contain provision that describes the procedure to be followed
when a partner retires. Specially these procedures should indicate how to compute the price to
be paid by the partnership for the retiring partner's equity interest.

2. What types of matters are to be decided at the time of retirement?

Hide answer
Following matters should be decided at the time of retirement.
1- Ascertain the amount due to the retirement
2- Calculate of new profit sharing ratio between remaining partners
3- Revaluation the assets and liabilities
4. Determination of the value of goodwill
5. Determination of mode of payment to the out going partner
3. How to ascertain the amount due to the retiring partner?
Hide answer
Retiring partner will be entitled to:-
1. Capital balance on the date of retirement
2. Share of profit from last balance sheet to date of retirement
3. Share of profit from the last balance sheet to date of retirement
4. Share of profit or loss due to revaluation of assets and liabilities
5. Share of goodwill or bonus

4. What journal entry for transfer of gerneral reserve will be passed at the time or retirement?
Hide answer
General reserve a/c debited
Old partner's capital a/c credited

5. What do you mean by gaining ratio?

Hide answer
A ratio in which share of retiring or decreased partner is taken by remaining partners is called
gaining ratio.

6. How to calculate gaining ratio?

Hide answer
New ratio - old ratio = gaining ratio

7. Define surrender value.

Hide answer
An amount which the insurance company is ready to pay immediately in cash after suspension
of further payment of premium is called surrender value.

8. On the retirement of a partner, how the value of goodwill be determined?

Hide answer
At the time of retirement of a partner the goodwill will be valued in the following methods.
1. Bonus method
2. Goodwill method

9. At the time of retirement, who pay the bonus?

Hide answer
At the time of retirement of a partner bonus is made in following ways:
1. Retiring partner by the remaining partner
2. Remaining partner by the retiring partner

10. When goodwill method is used to determine value of goodwill under goodwill method?
Hide answer
Goodwill method is used when remaining partners decided not to reduce their capital. The
Dissolution of partnership – Short Question and
goodwill m

Answers
1. What do you mean by dissolution of partnership?
Hide answer
When all the partners decided to dissolve the partnership, the dissolution of the firm occurs i.e.
the firm is wound up. If the business is comes to an end, it is said that the firm has been
dissolved, dissolution of the firm means the wind up of the business.

2. Why and how partnership dissolved?

Hide answer
A dissolution of a partnership take place due to any of the following causes:
1. By the mutual agreement between the partners to dissolve
2. At the death of a partner
3. If any partner become insolvent
4. After the completion of a project
5. At the expirey of a specific period

3. What steps are necessary in the dissolution of partnership?

Hide answer
On the dissolution of the firm following steps are necessary:
1. The partnership assets are sold
2. Pay off the debts and liabilities of the firm
3. Pay the loan of the partner
4. Pay the capital of the partner
5. If there is any surplus arising from the realisation of asset and left after the above payment
the same will be dividend among the partner in profit sharing ratio.

4. Explain realisation account?

Hide answer
The process of disposing off the assets and paying off the liabilities is called realisan. The
realisation account is the account operated to find out profit or loss resulting from the sale of
assets and the payment of liabilities.

5. Explain the term "When all partners are solvent"?

Hide answer
When a partnership business dissolved and books of account is closeed. If there is any
deficiency in capital account of any partner, he has sound final position to pay the said
deficiency, it is called all partners are solvent.

6. What do you mean by "When one partner is insolvent"?

Hide answer
During dissolution, if a partner might not have any additional cash to cover his obligators to the
partnership, this is know as one partner is insolvent.

7. If one partner become insolvent, in what ratio solvent partners born the deficiency?
Hide answer
If a partner is insolvent, then such a capital deficiency is born by the solvent, partners is the ratio
of their capital as stand just before the liquidation.

8. State the decision of justice Joyce, in the case of Garner vs Murray.

Hide answer
Capital deficiency of inslovent partner is a capital loss and is to be shared by the solvent
partners, in capital ratio, just before dissolution.
9. Explain the trem "When all partners are insolvent".
Hide answer
When the liabilities of a firm cannot be paid in full, then all the partners are said to be insolvent.
If all the partners of the firm are inslovent, then creditors cannot be paid in full, obviously
creditors will have to bear the loss.

10. What will be passed, for creditor's liabilities at the time of dissolution, when all partners are
insolvent?
Hide answer
Laibilities a/c debited
Cash a/c credited
Deficiency a/c credited

ay be recorded
1. at full value
2. equal to retiring partner's share

More useful signposts

Here are some examples of other useful signposts you can use to organise your answers in the
IELTS Speaking test.

Sequence ideas

 First (firstly)
computers have increased
 Next,
our ability to get a job done
 Finally, faster.
 The main reason is
 Another point is
 Another reason is

Give an Example
 For example,
 For instance,
 Namely,
 Specifically,
 That is,
now I can make overseas
orders by e-mail and the goods
are here in only a few days.

 ...such as... ...such as making overseas

orders by email.

Add another idea

 Also, they allow us to get a job done

 In addition, more efficiently.
 Moreover,
 Besides,

Introduce a similar idea

 Likewise, computers can be a lot of fun to

 Similarly, use.

Introduce a different idea

 However, some people find computers

 In contrast, very boring to use.
 On the other hand,

 Although some people find computers

boring, I am fascinated by
them.

Introduce a new idea

 With regard to other kinds of technology, it is

 When it comes to clear that they have improved
 On the question of working conditions as well.

Summarise your ideas

 All in all, I think the increased use of

 In brief, computers has improved our
 On the whole, lives dramatically.
 Give a cause

 Due to my parents’ nervousness, they

 Because of never turn on the computer.

Give an effect

 Therefore, the computer sits in the study

 As a result, without being used.
 For this reason,
 Consequently,

Emphasise a point

 Certainly, I understand their fear of

 Indeed, technology.
 In fact,
 Of course,
 Actually,
 As a matter of fact,
 Naturally,

Generalise

 Usually, younger people are more

 In general, comfortable using computers.
 On the whole,
 As a rule,
 In most cases,
 Broadly speaking,
 Generally speaking,
 For the most part,
 To some extent

Using signpost phrases to respond to the question

When answering questions during the Speaking test you can organise what you say by using
signpost phrases in your answer. Let’s look at some phrases you can use to:

 express your opinion

 compare and contrast
 evaluate
 suggest
 give a preference
  predict or speculate.

Giving an opinion

Phrases to express an
Opinion
opinion

 I believe that ...

... couples should be free to
 I think that ...
divorce if they have tried to
 As far as I’m concerned solve the problems in their
... relationship without success.
 In my opinion ...
 In my view ...
 It seems to me that ...
 I strongly believe that ...

Comparing and contrasting

Phrases to compare and Comparing and

contrast contrasting

Some similarities between ... fresh fruit and vegetables

(buying food in my country are cheap and they are also
and here) are that... easily available.
(Buying food in my country
and here) is similar because
...
... meat is almost twice as
Some differences between expensive here as in my
(buying food in my country country and there is less
and here) are that... variety here.
(Buying food in my country
and here)
is different because ...

Evaluating

Phrases to evaluate Evaluation

 ... this type of assessment
I believe that (assignments) are
gives students the time and
more
effective/better/fairerbecause opportunity to
... produce better quality
work.
(Assignments) are definitely
more suitable for (tertiary
students) because ...

Note that in order to evaluate something, you may have to compare it with something else in
order to decide if it is better/worse etc. You may therefore need to use comparative or
superlative adjectives such as those used in the above examples:

 more successful/the most

 more effective/the most successful
effective  more important/the most
 better/the best important
 fairer/the fairest.  more popular/the most
popular.

Giving suggestions

Phrases to give
Suggestion
suggestions

(The government) could... ... encourage tourism in our

Perhaps (the government)
could ...
A good idea would be for (the
government) to...
Maybe (the government)
should ...
country by spending more
money on worldwide
advertising to promote our
tourist attractions and our
culture.

One way (the government) ... encourage tourism in our

could ... country is by spending more
Another way (the government) money on worldwide advertising
could ... to promote our tourist
attractions and our culture.

Giving preferences
.
 Phrases to give
Preference
preferences

I much prefer to ... ... study with a friend or a

In general I would rather ... group of people.
I usually like to ...
On the whole I usually
choose to ...
Sometimes I prefer to...

No preference

I don’t mind doing either (x) or (y).

“ I don’t mind studying either with a group or by myself.”

I like doing both (x) and (y).

“ I like studying both with a group and by myself.”

Speculating (about the past, present or future)

Phrases to speculate Speculation

I’m certain that ...

There’s a good / a reasonable
chance that ...
Most probably ...
It’s quite possible that ...
I hope that ...
Perhaps ...
I’m not sure if ...
There’s little/ not much chance
that ...
I doubt very much that ...

Using conjunctions to link your ideas

A further way of achieving coherence in your answer is the use of conjunctions. Conjunctions
are words such as and, but, so, as and or. They are like signposts in that they are used to link
ideas and are therefore used to organise the ideas in your essay. However, conjunctions are
usually found within the sentence, whereas signposts are usually found at the beginning of a
sentence.
Example
Listen and read the following sample answer for Part 1 of the IELTS Speaking test to hear how
conjunctions are used. The conjunctions have been highlighted.

Let’s talk about health...

 How important is good health?

Good health is extremely important. The main reason is that other things in life
don’t have much value if you don’t have good health. For example, some health
problems can cause pain or tiredness that lasts for a long time and sometimes
you have to stay in bed. As a result, you may not be able to enjoy your
life as you cannot do as many activities as healthy people. Another reason, I
guess, is that if you have good health, you have more energy and so are more
productive in the workplace. Similarly, you have more energy to give to your
family and friends.

This answer uses conjunctions effectively:

 to add another idea - and, or

 to give the cause - as
 to give the effect - so.

Here are some more conjunctions you can use to link your ideas within a sentence.

Function Conjunction

Introduce Cities are polluted but | while |

a contrast whereas the countryside isn’t.

Add another Air pollution is caused by smoke from

idea factories and | as well as | or cars.
Air pollution is caused by smoke from
factories too | also.

Give the cause Cities are polluted because | as there is so

much smoke.

Give the effect There is a lot of smoke in cities so | so

that they become polluted.

Signposts usually found at the beginning of the sentence

 Function Signpost

Introduce a new subject

Regarding
With regard to
As regards
Concerning
Turning to

Sequence ideas
Firstly
The most important reason
Another reason
Finally

Introduce a contrasting idea

However
In contrast
On the other hand
Nevertheless
Although
Yet

Introduce a similar idea

Likewise
Similarly

Add another idea

Also
Moreover
Furthermore
In addition
Besides

Give an example
For example
For instance

Give the cause

Because of
Due to

Give the effect

Therefore
As a result
As a consequence
Consequently
For this reason

Conclude your essay

In conclusion
To sum up
In summary
Table 2 Signposts usually found within a sentence (conjunctions)

Function Signpost

Introduce Cities are

a contrasting idea polluted, but/while/whereas the
countryside is not.

Give an example Urbanisation causes a lot of

pollution such as air, noise and
water pollution.

Add another idea. Air pollution is caused by smoke

from factories and/as well
as cars.

Air pollution is caused by smoke

from factories too/also.

Give the cause Cities are

polluted because/asthere is so
much smoke.

Give the effect There is a lot of smoke in

cities so/so that they become
polluted.

Signpost words Functions

a. however 1. give an example

b. firstly 2. introduce a similar idea

c. and 3. give an example

d. also 4. sequence ideas

e. because 5. sequence ideas

f. for example 6. show contrast

g. such as 7. conclude your essay

 h. finally 8. add another idea

i. similarly 9. give the effect

j. in conclusion 10. give the cause

k. therefore 11. add another idea

Signpost words Functions

a. however 6. show contrast

b. firstly 4. sequence ideas

c. and 8. add another idea

d. also 11. add another idea

e. because 10. give the cause

f. for example 1. give an example

g. such as 3. give an example

h. finally 5. sequence ideas

i. similarly 2. introduce a similar idea

j. in conclusion 7. conclude your essay

k. therefore 9. give the effect

Academic phrases
A further way of achieving cohesion and coherence in your Task 2 essay is the use of academic
phrases. An academic phrase is a group of words that is used to draw the reader's attention to
your ideas making your arguments and ideas clear.

Academic phrases are used to:

Give your opinion

 I think
 I feel
 I believe smoking should be banned in all
 I am of the opinion that restaurants.
 It is my belief that

Show to what extent you agree/disagree with a statement

 I firmly agree/disagree
 I partially agree/disagree that smoking should be banned in
 I totally agree/disagree all restaurants.

Give the opposite side of an argument

 However, I would argue

that everyone should be allowed
 To counter this, I would say
to make their own decision.

Give the opinion of others

 Some people say that smoking in restaurants

 Many people would argue affects non-smokers as much as
smokers.

Give a solution to a problem

 I would recommend
that all restaurants have a special
 A good solution would be
smoking area.

Show the cause followed by the effect

  causes
Smoking cancer.
 is the cause of
 results in
 is the reason for

Show the effect followed by the cause

 is caused by
Cancer smoking.
 is due to
 is the result of
 is the
consequence of

Make a prediction

 I feel confident
 I am certain that restaurants will be forced to ban
 I am sure smoking in the future.

Modal verbs
Modal verbs are a type of auxiliary verb and include verbs such as: can, could, may, might,
will, would, should, ought to, must.

In this section we will look at how:

 can, could, may, might, would, will are used to express possibility

 could, should, ought to, must are used to give suggestions or make
recommendations.

We will also look at how these modal verbs express possibility, give suggestions and make
recommendations

 with certainty

 tentatively.
Using modal verbs in this way will help you to express your ideas in your Task 2 essay more
effectively.

Table 1 Signposts usually found at the beginning of the sentence

Function Signpost

Introduce a new subject

Regarding
With regard to
As regards
Concerning
Turning to

Sequence ideas
Firstly
The most important reason
Another reason
Finally

Introduce a contrasting idea

However
In contrast
On the other hand
Nevertheless
Although
Yet

Introduce a similar idea

Likewise
Similarly

Add another idea

Also
Moreover
Furthermore
In addition
Besides

Give an example
For example
For instance

Give the cause

Because of
Due to

Give the effect

Therefore
As a result
As a consequence
Consequently
For this reason
 Conclude your essay
In conclusion
To sum up
In summary

Table 2 Signposts usually found within a sentence (conjunctions)

Function Signpost

Introduce Cities are

a contrasting idea polluted, but/while/whereas the
countryside is not.

Give an example Urbanisation causes a lot of

pollution such as air, noise and
water pollution.

Add another idea. Air pollution is caused by smoke

from factories and/as well
as cars.

Air pollution is caused by smoke

from factories too/also.

Give the cause Cities are

polluted because/asthere is so
much smoke.

Give the effect There is a lot of smoke in

cities so/so that they become
polluted.

 a section on how to assess your own grammatical range and accuracy using a
checklist
 practice questions for the three parts of the Speaking test with checklists to assess
your answer plus sample answers.