|Time allowed : 3 hours||Maximum marks : 100|
|Total number of questions : 8||Total number of printed pages : 3|
Note:Answer SIX questions including Question No. 1 which is compulsory. All working notes should be shown distinctly.
|1.||(a)||Explain any two of the following :|
|(i)||Objectives of accounting||(0)|
|(ii)||Business entity concept||(0)|
|(iii)||Errors of principle||(0)|
(5 marks each)
|(b)||State, with reasons in brief, whether the following statements are true or false. Attempt any five :|
|(i)||The allowance for prompt payment is called trade discount.||(0)|
|(ii)||Temporary shed put up at project-site to house materials is a capital expenditure.||(0)|
|(iii)||The sales day book is a part of the ledger.||(0)|
|(iv)||Discount columns in the cash book are balanced.||(0)|
|(v)||A retired partner is entitled to get interest only if the amount due to him by way of his capital has not yet been settled.||(0)|
|(vi)||Weighted average method of valuation is not recognised by Accounting Standard–2, Valuation of Inventories.||(0)|
|(vii)||A joint venture is not a going concern.||(0)|
(2 marks each)
|2.||(a)||Re–write the following sentences after filling–up the blank space with appropriate word(s)/figure(s) so as to convey the correct meaning :|
|(i)||A person named in a negotiable instrument to whom or to whose order the amount mentioned in the instrument is directed to be paid is called the______________.||(0)|
|(ii)||While preparing final accounts, outstanding expenses appearing in the trial balance will be shown in ___________.||(0)|
|(iii)||When the partners’ capital accounts are fixed, as per the decision in the Garner vs. Murray case, any loss arising due to the capital deficiency in the insolvent partners’ capital accounts is to be borne by solvent partners in the ratio of __________.||(0)|
|(iv)||At the end of the accounting year, bad debts written off during the year are transferred to either __________ or ___________.||(0)|
|(v)||__________ discount is recorded in cash book.||(0)|
|(vi)||Credit sales of goods in trade are first recorded in _________ book.||(0)|
|(vii)||A cheque whose payment can be collected by any person presenting it is called a ___________ cheque.||(0)|
|(viii)||Patents and trade marks are classified as ________ assets.||(0)|
(1 mark each)
|2.||(b)||Distinguish between any two of the following :|
|(i)||'Single entry system' and 'double entry system'.||(0)|
|(ii)||'Receipts and payments account' and 'income and expenditure account'.||(0)|
|(iii)||'Bill of exchange' and 'promissory note'.||(0)|
(4 marks each)
|3.||(a)||Choose the most appropriate answer from the given options in respect of the following :|
|(i)||In consignment, unsold stock is valued at cost and –– |
(a) proportionate recurring expenses.
(b) proportionate non-recurring expenses.
(c) all proportionate expenses whatever the nature.
(d) no portion of any expenses.
|(ii)||In case of annuity method, the amount of depreciation –– |
(a) increases every year.
(b) remains fixed for all the years.
(c) decreases every year.
(d) fluctuates from year to year.
|(iii)||In case a Sports Fund is maintained, expenses on account of sports events should be –– |
(a) charged to the sports fund.
(b) charged to income and expenditure account.
(c) taken to balance sheet on assets side.
(d) taken to balance sheet on liabilities side.
|(iv)||Income-tax paid by a sole proprietor on his business income should be — — |
(a) debited to trading account.
(b) debited to profit and loss account.
(c) deducted from the capital account on the liabilities side of balance sheet.
(d) credited to profit and loss account.
|(v)||Branch account under debtors system is a –– |
(a) personal account.
(b) real account.
(c) nominal account.
(d) a combination of real account and nominal account.
|(vi)||Provision is –– |
(a) an appropriation of profits.
(b) a charge against revenue.
(c) a surplus.
(d) a deficit.
(1 mark each)
|(b)||Elucidate any two of the following:|
|(i)||Balance sheet is a statement of sources and uses of capital.||(0)|
|(ii)||Columnar cash book is a combination of cash account and bank account.||(0)|
|(iii)||Consignor remunerates consignee by way of commission for sale, remittances and surpassing targets.||(0)|
|(iv)||Perpetual and periodic inventory systems are the two sides of a same coin.||(0)|
(5 marks each)
|4.||(a)|| A company purchased raw materials during the month of March, 2006 as stated below : |
While preparing the final accounts on 31st March, 2006, the company had 2,600 units of raw material in its godown.
|(b)|| From the following data, you are required to prepare the trading and profit and loss account for the year ended 31st March, 2006 and a balance sheet as on that date: |
The following are the details relating to transactions during the year :
|5.||(a)|| From the following particulars, prepare a bank reconciliation statement as on 31st March, 2007 : |
|(b)|| Before preparing the final accounts, an accountant prepared a trial balance which did not agree. He transferred the difference to a suspense account. Before preparing the final accounts, he was able to locate the following errors : |
Pass journal entries to rectify the abovementioned errors and prepare suspense account assuming that all the errors have been located.
|6.|| The balance sheet of X, Y and Z who were sharing profits and losses in the ratio of their capitals stood as follows on 31st March, 2007 : |
Y retired and the following adjustments of assets and liabilities were agreed upon before the ascertainment of the amount payable by the firm to Y – –
Prepare necessary ledger accounts to give effect to the above arrangements and the balance sheet of X and Z transferring Y’s share of capital to his loan account.
|7.|| On 1st April, 2006, Bombay Transport Ltd. purchased from Delhi Motors five trucks costing Rs.3,00,000 each on the hire-purchase system. The payment was to be made as follows : |
The payment due on 31st March, 2007 could not be made and hence the trucks were seized by the vendor. But after negotiation, the hire-purchaser was allowed to keep three trucks on the condition that the value of other two trucks would be adjusted against the amount due, the trucks being valued at cost less 25% depreciation. Bombay Transport Ltd. closes its books on 31st March each year and the depreciation is charged at 15% per annum on the original cost of trucks.
|8.|| Mahesh and Naresh jointly agreed to underwrite the subscription at par of 1,00,000 shares of Rs. 10 each in Mona Ltd. and to pay all expenses upto allotment. The consideration in return for the guarantee was 5,000 other shares of Rs.10 each fully paid to be issued to them. They were to share profits in the ratio of 3:1. |
Mahesh provided the funds to meet the following expenses :
Applications fell short of the full issue by 10,000 shares. Naresh took over on joint–account and paid for the same in full. The guarantee having been fulfilled, Mona Ltd. handed over 5,000 shares to Mahesh and Naresh. They sold all their shares at Rs.15 per share. The proceeds were shared by Mahesh for 4,000 shares and by Naresh for the balance.