| 1. | (a) | In each of the following one of them is correct. Indicate the correct answer. | 2x5=10 | |
| | | (i) | Salaries due for the month of March will appear | (a) | On the Receipt side of the Cash Book | | (b) | On the Payment side of the Cash Book | | (c) | As a contra entry | | (d) | Nowhere in the Cash Book |
| | (0) |
| | | (ii) | Goods bought for Rs. 25,000 passed through Sales Day Book will result in | (a) | Increase in Gross Profit | | (b) | Decrease in Gross Profit | | (c) | No effect on Gross Profit | | (d) | Either (a) or (c) |
| | (0) |
| | | (iii) | When the concept of conservation is applied to the Balance Sheet, it results in | (a) | Overstatement of Capital | | (b) | Understatement of Capital | | (c) | Overstatement of Assets | | (d) | Understatement of Assets |
| | (0) |
| | | (iv) | Liabilities of business are Rs. 11,220 and owner’s equity is Rs. 15,000. The assets of the business will be | (a) | Rs. 3,780 | | (b) | Rs. 26,220 | | (c) | Rs. 11,220 |
| | (0) |
| | | (v) | An entry of Rs. 320 has been debited to Eknath’s account at Rs. 230. If is an error of | (a) | Principle | | (b) | Omission | | (c) | Commission |
| | (0) |
| | (b) | State with reasons whether the following statements are true or false: | 2x5=10 | |
| | | (i) | Partnership deed is different from Partnership agreement. | | (0) |
| | | (ii) | A Trial Balance will not balance if correct journal entry is posted twice. | | (0) |
| | | (iii) | The owner of the consignment stock is consignee. | | (0) |
| | | (iv) | Closing stock is valued at cost price or market price whichever is more. | | (0) |
| | | (v) | A limited liability company is one in which the number of shareholders is limited. | | (0) |
| | (c) | Fill up the blanks: | 2x5=10 | |
| | | (i) | __________ days are allowed as grace days. | | (0) |
| | | (ii) | A partner who does not take active interest in the conduct of business is __________ partner. | | (0) |
| | | (iii) | Net profit is decided between the partners in their __________ ratio. | | (0) |
| | | (iv) | Accounting __________ are __________ in nature. | | (0) |
| | | (v) | __________ __________ sends the bank statement to its __________. | | (0) |
| 2. | (a) | An accountant could not tally trial balance. The difference was temporarily placed to a suspense account for preparing the final accounts. The following errors were later discovered: | (i) | The sales book was undercast by Rs. 750. | | (ii) | Entertainment expenses Rs. 195, through entered in the Cash Book, were omitted to be posted in the ledger. | | (iii) | Discount column of the receipt side of the Cash Book was wrongly added Rs. 140 instead of Rs. 120. | | (iv) | A purchase from Sachin of Rs. 192, though correctly entered in the purchases book, was wrongly debited to his personal account. | | (v) | Commission of Rs. 25 paid was posted twice. Once to discount amount and once to commission account. | | Your are required to: | | (1) | Pass the necessary rectifying entries. | | (2) | Prepare suspense account. |
| 5 | (0) |
| | (b) | Following is the Balance Sheet of V.A. Sah as at 31.3.2007: | Balance Sheet as at 31.3.2007 | | Liabilities | Rs. | Assets | | Rs. | Creditors
Bills Payable
Capital | 5,000
400
9,000 | Building
Machinery
Less: Provision for Dep.
Debtors
Less: Provision for Bad Debts
Stock
Cash |
3,500
500
2,300
300 | 8,000
3,000
2,000
1,000
400 | | 14,400 | | 14,400 |
You are asked to show the opening entry as on 1.4.2007. | 4 | (0) |
| 3. | (a) | Vijay draws a bill for Rs. 60,000 and Anand accepts the same for the mutual accommodation of both of them to the extent of Vijay 2/3 and Anand 1/3. Vijaya discounts the same for Rs. 56,400 and remits 1/3 of the proceeds to Anand. Before the due date. Anand draws another bill for Rs. 84,000 on Vijay in order to provide funds to meet the first bill. The second bill is discounted for Rs. 81,600 with the help of which the first bill is met and Rs. 14,400 are remitted to Vijay. Before the due date of the second bill, Vijay becomes bankrupt and Anand receives a dividend of 50 paise in the rupee in full satisfaction. Pass necessary journal entries in the books of Vijay. | 9 | (0) |
| | (b) | From the following you are required to determine the amount of total sales and the gross profit:
Opening Stock
Closing Stock
Purchases
Rate of G.P. on Sales | Rs.
8,000
7,000
40,000
1/6 |
| 5 | (0) |
| 4. | The following information were obtained from the books of Young Bengal Club as on 31.3.2007 at the end of first year of the club. You are required to prepare Receipts and Payments Account, Income and Expenditure Account for the year ended 31.3.2007 and a Balance Sheet as at 31.3.2007 on mercantile basis. (i) Donations received for Building and Library Books – Rs. 2,00,000. (ii) Other revenue incomes and actual receipts: | Rev. Income (Rs.) | Actual Receipts (Rs.) | Entrance Fees
Subscription
Locker Rents
Sundry Income
Refreshment Account | 17,000
20,000
600
1,600
— | 17,000
19,000
600
1,060
16,000 |
(iii) Other revenue expenditure and actual payments: | Rev. Exp (Rs.) | Actual Payments (Rs.) | Land (Cost Rs. 10,000)
Furniture (Cost Rs. 1,46,000)
Salaries
Maintenance of Play Ground
Rent
Refreshment Account | –
–
5,000
2,000
8,000
– | 10,000
1,30,000
4,800
1,000
8,000
8,000 |
Donation to the extent of Rs. 25,000 was utilized for the purchase of Library Books, balance was unutilized. In order to keep it safe, 9% Gov. Bonds of Rs. 1,60,000 were purchased on 31.3.2007. Remaining amount was put in the Bank on 31.3.2007 under term deposit. Depreciation at 10% p.a. was to be provided for the whole year on Future and Library Books. | 5+5+4 | (0) |
|
| 5. | Following information is available from records kept by Mr. Akash on Single Entry basis. | 1.1.2006 | 31.12.2006 | Cash
Bank
Debtors
Stock
Fixed Assets
Creditors
Loan | 40,000
60,000
34,000
80,000
58,000
1,04,000
20,000 | 36,000
66,000
50,000
1,20,000
58,000
64,000
20,000 |
Rs. 10,000 p.m. was withdrawn by the proprietor for household expenses during 2006. Interest on drawing is charged on total amount withdrawn during the year @ 18% p.a. for six months. Rs. 60,000 realised by the proprietor as maturity value of National Saving Certificates was invested in the business. He further introduced in the business Rs. 30,000 borrowed from his wife. Manager was given salary for the month of January, 2007 in advance. Manager is entitled to a salary @ Rs. 12,000 p.m. An unrecorded liability of Rs.10,000 relating to year 2005 was paid during the year 2006. Depreciate fixed assets @ 15% p.a. Provide Rs. 2,000 for doubtful debts. Prepare a statement showing Net Profit (or net loss) for the year 2006 and prepare Balance Sheet as at 31.12.2006. | 8+6=14 | (0) |
| 6. | Pradip and Parimal are equal partners, Pradip, by agreement, retires and Gopal joins the firm on the basis of one third share of profits on 1.4.2007. The balances of the books as on 31st March, 2007 were: | Dr.
Rs. | Cr.
Rs. | Goodwill
Fixed Assets at Cost
Current Assets:
Stock
Debtors
Bank Balance
Creditors
Provision for Depreciation
Capital Accounts:
Pradip
Parimal | 10,000
1,20,000
60,000
40,000
8,000
–
–
–
– | –
–
–
–
–
20,000
12,000
1,04,000
1,02,000 | | 2,38,000 | 2,38,000 |
Goodwill and Fixed Assets valued at Rs. 30,000 and Rs. 1,40,000 respectively and it was agreed to be written up accordingly before admission of Gopal as partner. Sufficient money is to be introduced so as to enable Pradip to be paid off and leave Rs. 5,000 Cash at Bank; Parimal and Gopal are to provide such sum as to make their Capitals proportionate to their share of profits. Assuming the agreement was carried out, show the Journal entries required and prepare the Balance Sheet after admission of Gopal. All working should form part of your answer. | 5+5+2
+2=14 | (0) |
| 7. | (a) | From the following particulars prepare a Bank Reconciliation Statement as on 31st March, 2007 of CD & Associates. | Rs. | | (i) | Balance as per Cash Book | 11,600 | | (ii) | Cheques issued but not presented for payment upto 31st March, 2007 | 4,000 | | (iii) | Cheques sent for collection but not collected upto 31st March, 2007 | 3,000 | | (iv) | The Bank had wrongly debited the firm's account by Rs. 400
which was rectified by them in April, 2007 | | (v) | Interest on securities Rs. 800 collected by the Bank direct credited by the
Bank to the firm’s Account within 31st March, 2007 but not entered in
the Cash Book. |
| 7 | (0) |
| | (b) | A sends goods worth Rs. 50,000 to B for sales for 5% commission. He incurs Rs. 1,500 for freight and Rs. 500 for insurance. The goods are sold for Rs. 60,000, consignee incurs Rs. 500 unloading expenses and Rs. 500 rent. B sends a draft after deducting his expenses and commission. Prepare necessary accounts in the books of A. | 4+2+1=7 | (0) |
| 8. | Write notes on: | 4+5+5 | |
| | (a) | Issue of Shares to Promoters; | | (0) |
| | (b) | Marshalling of Balance Sheet; | | (0) |
| | (c) | Imprest System of Maintaining Petty Cash. | | (0) |
