ST. ANNE’S ARTS AND SCIENCE COLLEGE DEPARTMENT OF ......15 Received cash from Kumar on account 8,000 18 Paid Maran on account 4,000 ... Purchases of sports materials during the year

FINANCIAL ACCOUNTING Page 1

ST. ANNE’S ARTS AND SCIENCE COLLEGE

DEPARTMENT OF ACCOUNTING AND FINANCE

QUESTION BANK (2019-2020)

Course / Branch : ACCOUNTING AND FINANCE Semester / Year : I B.COM(A&F)

Subject Name : FINANCIAL ACCOUNTING Subject Code : CPZ1A

UNIT 1

PART A 1. What is debit and credit?

2. Asset = Liabilities. Explain.

3 What is cash book? Nov18

4 Define accounting.

5 What is ledger? Ap17

6 Define Accounting.

7 What is journal? AP 16

8 What is Petty cash book?

9 Give a short note on Dual aspect concept.

10 What is Subscription?

11 What do you understand by net worth method?

12 Journalize the following transactions 2010 Jan.

1. Commenced business with Rs. 50,000

2. Purchased goods for cash Rs. 10,000

3. Sold goods to Madan Rs. 15,000. N15

13 State any two objectives of accounting.

14 What do you understand by convention of full disclosure?

15 Journalise the following :

1998 Rs.

June 1 Started business with a capital of 60,000

June 2 Paid into bank 30,000 AP15

16 What is matching concept?

17 Give the journal entries :

2013

June 1 Started business with a capital of Rs.60,000

June 4 Purchased goods from Kamal on credit Rs.10,000. N14

PART B

1. From the information below, pass journal entries:

a. Salary paid Rs. 5,000

b. Rent paid to house owner Rs. 1,000

c. Credit purchases from Mr.A Rs. 2,000

d. Discount received Rs.500. N18


2. Prepare trial balance form the following :

Rs

Capital 50000

Stock 15000

Sales 65000

Drawings 8000

Wages 12000

Outstanding rent 3000

Furniture 14000

P/L a/c (Cr) 27000

Purchases 40000

Bills receivable 5000

Bills payable 6000

Loan 26000

Salaries 20000

Building 56000

Return inward 7000 AP17

3. Journalize the following transactions in the books of Sri T.N. of

Coimbatore:

2000

Oct. 1 Commenced business with Rs. 50,000

3 Purchased goods for cash Rs. 10,000

4 Paid carriage Rs. 50

8 Purchased machinery for Rs. 20,000

10 old goods to Madhan on account for Rs. 15,000

4. Prepare Trial Balance from the following:

Rs. Rs.

Capital 9,000 Rent outstanding 1,000

Plant and Machinery 12,000 Opening stock 2,000

Purchases 8,000 Sales returns 4,000

Sales 12,000 Investments 14,000

Sundry Creditors 8,000 Debtors 12,000

Bank Loan 22,000 Ap16

5. What are the objectives of accounting? N15


6. The following Trial balance has been prepared wrongly. You are asked to prepare the Trial

balance correctly.

Name of the account Debit balance Credit balance

Rs. Rs.

Cash in hand 2,000

Purchases returns 4,000

Wages 8,000

Establishment expenses 12,000

Sales returns 8,000

Capital 22,000

Carriage outward 2,000

Discount received 1,200

Commission earned 800

Machinery 20,000

Stock 10,000

Debtors 8,000

Creditors 12,000

Sales 44,000

Purchases 28,000

Bank overdraft 14,000

Manufacturing expenses 14,000

Loan from Ashok 14,000

Carriage Inward 1,000

Interest on Investments 1,000

1,13,000 1,13,000

7. Maintain the cash book of Harish who deposits all receipts into the bank and make all

payments through cheques :

July 1 Started business by opening balance a/c with Rs. 1lakh.

2 Purchase furniture Rs. 12,000 cheque No. 001

3 Bought good from Kareem Rs. 3,000 on credit.

5 Sold goods for cash Rs. 5,000 to Aswin.

6 Paid Kareem Rs. 2,975 in full settlement cheque No.002.

7 Abdullah sent an advance of Rs. 5,000 for goods to be supplied next week. AP15

8. Post the following transactions to Building a/c :

(a) Building purchased for cash Rs.3,00,000

(b) Building purchased for account Rs.30,000

(c) An old building sold for cash to Satish Rs.5,000. There was a loss on sale Rs.1,000.

(d) New rooms added to building costing Rs.20,000 Nov14


PART C

1. Journalise the following transactions and prepare to ledger accounts:

1994 jan

1 Mr.Kumar commenced business with cash Rs.50000, building Rs100000,

bank balance with Rs100000.

3 purchased goods for Rs7000

4 purchased goods for Rs7500 from dhanam & co

5 sold goods to swamy and co Rs9500

6 sold goods to nithya & co Rs6500

7 sold goods Rs2000

8 obtained a loan from Indian Bank 20000

9 purchased furniture Rs2000

10 purchased land by issuing a cheque Rs25000.

2. From the following transactions, prepare a Three column cash book:

1998 Rs.

Jan.

1 Murthy started business 10,000

2 Opened current account with bank 9,000

6 Paid Kannan by cheque (Discount Rs. 100) 4,000

10 Cash sales 4,000

11 Paid into bank 1,000

15 Manickam directly pays into our account 1,000

19 Purchased furniture by cheque 2,000

20 Received from N 500

Allowed discount 50

22 Withdrawn from bank 200

25 Purchased goods and paid by cheque 800

i. Paid salary by cheque 1,200.

3. Record the following transactions completed during the month of March 1999 in the journal.

Mar Rs.

1 Paid rent for the month 600

2 Paid cash for office stationery 60

8 Purchased office equipment on account 10,000

13 Paid advertisement expenses 600

15 Received cash from Kumar on account 8,000

18 Paid Maran on account 4,000

25 Withdrew cash for personal use 2,000

29 Paid telephone bill 600

31 Paid for repairs to typewriters 300

31 aid electricity bill for the month 400


4. Journalise the following transactions, post the same in relevant ledger accounts and balance

the same.

1998

June 1 Karthick commenced business with Rs. 20,000

2 Paid into bank Rs. 5,000

3 Purchased plant worth Rs. 10,000 from Modi and Co

4 Purchased goods worth Rs. 5,000 from Anwar

6 Goods worth Rs. 4,000 sold to Anbu

8 Sold goods worth Rs. 2,000 for cash

10 Goods returned by Anbu Rs. 50

15 Paid rent Rs. 250

18 Withdrawn from bank for office use Rs. 2,500

20 Paid salaries Rs. 1,800

25 Withdrawn for personal use Rs. 250

26 Goods returned to Anwar Rs. 100

27 Paid for office furniture Rs. 1,500 by cheque

28 Received Rs. 3,900 Cash from Anbu and discount allowed Rs. 50

29 Paid Anwar on account Rs. 4,800 and discount allowed by him Rs. 100

5. Journalise the following transactions in the books of Kapil :

2007 Rs.

June 1 Started business with cash 45,000

1 Paid into bank 25,000

2 Goods purchased for cash 15,000

3 Purchase of furniture and payment by cheque 5,000

5 Sold goods for cash 8,500

8 Sold goods to Arvind Walia 4,000

10 Goods purchased from Amrit Lal 7,000

12 Goods returned to Amrit Lal 1,000

15 Goods returned by Arvind Walia 200

18 Cash received from Arvind Walia Rs. 3,760 and

discount allowed to him 40

21 Withdrew from bank for private use 1,000

Withdrew from bank for use in the business 5,000

25 Paid telephone rent for one year 400

28 Cash paid to Amrit lal in full settlement of his account 5,940

30 aid for : Stationary 200

rent 1,000

Salaries to staff 2,500


UNIT 2

PART A

1. What is closing stock?

2. What do you understand by donation? Nov18

3. What do you mean by income and expenditure account?

4. What is receipts and payments account?

5. What is profit and loss account? Ap17

6. Write a short note on Life membership fees.

7. Define Profit & Loss account.

8. Give a formula for computing the GP ratio.

9. Calculate purchases: Cost of goods sold Rs. 4,00,000; Opening stock Rs. 50,000; Closing

stock Rs. 60,000

10. How the following will appear in Income and expenditure account of sports club for the year

31-12-1999 and in the balance sheet on that date?

Stock of sports materials 1-1-99 Rs. 800

Stock of sports materials 31-12-99 Rs. 1,200

Purchases of sports materials during the year 1999 Rs. 5,000

Sale of old sports material during the year 1999 Rs. 300. AP 16

11. Why do you prepare trading account? N15

12. What is a receipts and payments account?

13. What is trading account?

14. . Calculate Total sales ; Debtors Rs. 51,000, Cash sales Rs. 1,42,000, Return inwards Rs.

13,500, Credit sales Rs. 1,89,500. AP15

15. What do you understand by deferred revenue expenditure?

16. What is Balance sheet?

17. Calculate Total purchases : Cash purchases Rs.85,000, Creditors Rs.40,000, Purchase

returns Rs.5,000, Credit purchases Rs.1,87,000.

18. What is the purpose of preparing receipts and payments account? N14

PART B

1. Prepare profit and loss account for the year ending on 31.3.1994

Rs

Gross profit 25000

Salaries 5600

Insurance 200

Dis allowed 400

Dis received 300

Com earned 100

Advertisement 450

Taxes 150

Travelling exp 500

Stationary 75

Rent 650

Interest on loan 225

Repairs 125

Office exp 55

General exp 875

Postage 175

Printing charges 375


2. Prepare income and expenditure account and balance sheet of Trichy sports club

Rs

Stock of sports materials on 1.1.1999 3000

Sports material purchased during 1999 8500

Sale of old sports materials during 1999 100

Stock of sports materials on 31.12.1999 600

3. From the following information, find out the credit sales

Rs

Balance of debtors as on 1.1.98 12000

Return inwards 5000

Cash received from customers 45000

Discount allowed to them 3000

Bills receivable received from customers 17000

Bad debts 1500

Bus receivable honored 3500

Debtors as on 31.12.1998 10000 N18

4. From the following information calculate the amount to be shown in an income

expenditure account for the year ended 31.12.2015.

a. Stock of stationery on 1.1.2015 Rs 400

b. Creditors for stationary on 1.1.2015 Rs250

c. Advance paid for stationary carried from 2014 Rs60

d. Stock of stationary on 31.12.2015 Rs75

e. Creditors for the stationary on 31.12.2015 Rs150

f. Advance paid for stationary on 31.12.2015 Rs45

g. Amount paid for stationary during the year 2015 Rs1200. Ap17

5. From the following particulars, prepare Income and expenditure

account.

a. Rs. Rs.

Fee collected, including Meeting expenses 18,000

Rs. 80,000 on account Travelling expenses 6,000

of previous year 3,80,000 Purchase of Books and

Fee for the year Periodicals (including

outstanding 10,000 Rs.19,000 for purchase of

Salary paid, including books) 29,000

Rs. 3,000 on account of Rent 10,000

the previous year 28,000 Postage 15,000

Salary outstanding at the Printing and Stationery 4,000

end of the year 1,000 Donations received 20,000

Entertainment expenses 3,000

Tournament expenses 12,000


6. Find out purchases and sales from the following details by

making necessary accounts:

Rs. Rs.

Opening balance of debtors 30,000 Return inwards 2,000

Opening balance of creditors 10,000 Return outwards 3,000

Collections from debtors 1,60,000 Cash purchases 6,000

Discount received 2,500 Cash sales 10,000

Bad debts 1,000 Closing balance of debtors 35,000

Payment to creditors 14,000 Closing balance of creditors 15,000

Discount allowed 1,500

7. From the following information ascertain opening stock on 1-1-2006.

Purchases during the year 2006 Rs. 2,50,000

Sales during the year 2006 Rs. 3,25,000

Stock on 31-12-2006 Rs. 60,000

Wages Rs. 3,000

Rate of gross profit on cost 25% Ap16

8. From the following balances taken from the books of Ved & Co., prepare Trading and

Profit and Loss account for the year ending 30th June, 2002 and Balance Sheet as on that

date.

Rs. Rs.

Capital 35,000 Return outward 110

Building 18,750 Salaries 1,110

Machinery 9,250 Discount allowed 200

Debtors 7,000 Stock (1-7-2001) 16,500

Generalexpenses 800 Bills payable 5,000

Rent paid 3,710 Sales 63,500

Drawings 650 Purchases 46,850

Electric Charges 190 Wages 2,500

Carriage inward 850 Cash in hand 1,800

Cash at bank 3,000 Sundry Creditors 10,000

Return inward 450

Closing Stock is valued Rs. 18,210

9. From the following details find out the credit purchases and total purchases:

Rs. Rs.

Cash purchases 29,000 Bills payable paid during the year 10,500

Bills payable (Opening) 7,500 Purchase returns 1,500

Bills payable (Closing) 2,500 Allowances from creditors 800

Creditors (Opening) 20,000 Bills payable dishonored 300

Creditors (Closing) 18,000

Cash paid to creditors 25,000

N15


10. From the following balances extracted at the close of the year ended 31st Mar 2002.

Prepare profit and loss account of M/s Ashok and Sons as at that date.

Rs. Rs.

Gross profit 1,01,000 Discount 500

Carriage outward 2,500 Apprentice premium 1,500

Salaries 5,500 Printing and stationery 250

Rent 4,100 Rent and rates 350

Fire insurance premium 900 Travelling expenses 200

Bad debts 2,100 Sundry trade expenses 300

Income tax paid 3,500 Rent received on subletting 1,000

Life insurance premium 3,000

11. From the following details prepare receipts and payments account.

Rs. Rs.

Opening cash in hand 500 Furniture purchased 2,000

Opening bank balance 4,800 Tournament expenses 3,000

Subscription collected 11,000 Entertainment expenses 1,500

Entrance fees received 1,000 Periodicals 1,200

Salary paid 3,000 Miscellaneous expenses 300

Rent paid 1,200 Cash in hand at close 800 AP15

12. From the following ledger balances extracted at the close of a trading year ended 31st

December 2013, prepare Trading account as at that date.

Rs. Rs.

Opening stock 40,000 Purchases 1,00,000

Sales 4,00,000 Returns inwards 7,500

Returns outwards 2,000 Carriage inwards 6,000

Wages 16,500 Freight and dock charges 12,000

Stock on 31.12.2013 35,000

13. Prepare a Trading account of Rajesh Kumar for the year ending 31st march, 2012 from

the following particulars :

Rs. Rs.

Stock of goods on 1.4.2011 2,50,000 Returns to suppliers 25,000

Stock of goods on 31.3.2012 4,75,000 Returns by customers 20,000

Purchases – Cash 3,70,000Goods withdrawn by Rajesh

Kumar for personal use 21,000

Credit 8,25,000 Goods distributed as free

samples during the year 4,000

Sales – Cash 5,10,000 Duty and clearing charges 55,000

Credit 11,50,000

Cost of goods – rent on

Consignment 10,000


14. From the following particulars prepare Income and Expenditure

account :

Rs. Rs.

Fees collected (including 28,000 Meeting expenses 2,000

Rs.3,000 on account of last year)

Fees for the year outstanding 5,000 Travelling and conveyance 800

Salary paid (including Rs.300 2,400 Purchase of books and

on account of last year) periodicals (includes Rs.2,000

of books) 3000

Salary outstanding 400 Rent 1,200

Entertainment expenses 500 Postage, telephone and

Telegram

Tournament expenses 1,000 Printing and stationary 500

Donations received 800 Nov14

PART C

1) From the following trial balance of Mr.Rajan as on 31.12.2000, prepare final accounts.

Rs

Credit balances

Capital 36000

Creditors 8720

Bills payable 2528

Sales 78182

Loan 12000

Debit balances

Debtors 3885

Salaries 4000

Discount 1000

Postage 273

Bad debts 287

Interest 1295

Insurance 417

Machinery 10000

Stock(1.1.2000) 9945

Purchases 62092

Wages 4300

Buildings 23780

Fixtures 16156

a. Charge depreciation on machinery 25% and building 5%.

b. Allow 5% interest on capital.

c. Stock on 31.12.2000 Rs.14300.


2) From the following particulars, prepare (a) total debtors A/C (b) Total creditors A/c (c) Bills

receivable A/c (d) Bill Payable A/c

On 1.1.92 Rs

Total debtors 40000

Total creditors 15000

Total bills receivable 16000

Total bills payable 6000

Transactions during the year:

Cash received from debtors 30000

Discount allowed to debtors 6000

Bad debts written off 3000

Return inwards 5000

Cash sales 16000

Cash purchases 7000

Cash received against B/R 10000

Cash paid to suppliers 10000

(including a payment of Rs.1,000 for purchasing machine)

Cash paid against B/P 3000

Discount received from suppliers 600

Return outwards 1500

Bills payable dishonored 600

On 31.12.92 Rs

Total debtors 70000

Total creditors 15000

Total bills receivable 16000

Total bills payable 8000

3) The following is the receipt and payment account of madras sports club for the first year

ending 31st Dec.2015

Receipts Rs Payments Rs

To donations 50000 By buildings 40000

To life member fees By expenses towards matches 900

(kept in reserve fund ) 4000 By furniture 2100

To receipt from football By investments 16,000

Matches (kept in match fund) 8000 By salaries 1800

To subscriptions 5200 By wages 600

To interest on securities 240 By insurance premium 350

To Locker rent 50 By telephone 250

To miscellaneous receipts 350 By electricity 110

By sundry expenses 210

By balance on hand 5520

67,840

67,840

Additional information:

a. Subscription outstanding Rs 250, salaries unpaid Rs170 , wages Rs90, outstanding bills

for sundry expenses Rs 40.

b. Insurance premium paid Rs 50. Donations received in full are to be capitalized. Prepare

income and expenditure a/c and the balance sheet as on 31.12.2015. ap17


4) From the trial balance given below, prepare final accounts for the year ending on 31-3-99.

Rs. Rs.

Opening stock 9,300 Bank interest 200

Repairs 310 Purchase returns 440

Machinery 12,670 Creditors 12,370

Furniture 1,330 Sales 20,560

Office expenses 750 Capital 24,500

Trade expenses 310 Loan 5,000

Land & Building 15,400

Bank charges 50

Purchases 15,450

Sales returns 120

Advertisement 500

Cash in hand 160

Cash at bank 5,870

Sundry expenses 150

Insurance 500

Travelling expenses 200

63,070 63,070

Adjustments:

(a) Closing stock on 31-3-99 Rs. 7,585

(b) Prepaid insurance Rs. 250

(c) Depreciation on buildings at 5% and Machinery at 10%

5) Prepare a Trading and Profit and Loss account for the year ending 31stMarch 2001 and a

balance Sheet as on that date from the following balances:

Particulars Rs. Particulars Rs.

Capital 52,000 Sundry debtors 31,000

Sales 1,01,000 Purchases 72,000

Purchase returns 1,900 Rent 560

Opening stock 22,000 Carriage inwards 390

Furniture and fittings 5,500 Bad debts 160

Sundry creditors 6,200 Postage and telegrams 210

Particulars Rs. Particulars Rs.

Investments 16,700 Travelling expenses 550

Salaries 1,800 Cash at bank 3,270

Sales returns 5,200 Wages 1,300

Printing and stationery 240 Insurance 220

Adjustments:

(a) Salaries outstanding Rs. 150

(b) The closing stock Rs. 18,500

(c) Insurance was prepaid Rs. 30

(d) Charge 10% depreciation on furniture550.


6) Rathinam keeps his books under single entry system. From the following information

prepare trading and P & L account and Balance sheet as on 31-12-91.

Assets and Liabilities

31.12.1990 (Rs.) 31.12.1991 (Rs.)

Debtors 16,300 21,250

Stock 8,330 11,220

Furniture 850 850

Creditors 5,100 3,780

Other transactions:

Rs. Rs.

Cash received from debtors 52,680 Cash sales 1,275

Cash paid to creditors 37,400 Cash purchases 4,250

Salaries 10,200 Discount received 595

Rent and taxes 1,275 Discount allowed 255

Other expenses 1,530 Returns inwards 850

Drawings 2,550 Return outwards 680

Additional 1,700 Bad debts 170

Capital

Adjustments:

Write off depreciation of 5% on furniture. Create a reserve of

1% on debtors for doubtful debts N15

7) On 31st March 1992, the following was extracted from the books

of Saravanan.

Particulars Debit Credit

Capital 50,000

Plant and machinery 80,000

Sales 1,77,000

Purchases 60,000

Returns 1,000 750

Opening stock 30,000

Discount 350 800

Bank charges 75

Debtors 45,000

Creditors 25,000

Particulars Debit Credit

Salaries 6,800

Manufacturing wages 10,000

Carriage (in) 750

Carriage (out) 1,200

Bad debts provision 525

Rent and rates 10,000

Advertisements 2,000

Cash in hand 900

Cash at bank 6,000

2,54,075 2,54,075

From the above information prepare final accounts as on 31st

March 1992. The following adjustments are required.

(a) Closing stock Rs. 35,000.

(b) Depreciate on plant at 6%.


(c) Interest on capital 5% p.a.

(d) Bad debts provision to be adjusted to Rs. 500.

8) Mr. Mathivanan carries on a small business but he does not maintain a complete set of

account books. He banks all receipts and makes all payments only be means of cheques. He

maintains properly a cash book, a sales ledger and a purchase ledger. He

also makes a proper record of the assets and liabilities as at the close of every accounting

year. From such records you are able to gather the following facts.

Cash book

Receipts Rs. Payments Rs.

From sundry debtors 35,250 New plant purchased 1,250

Cash sales 8,250 Drawings 3,000

Paid in by the proprietor 5,000 Wages 13,450

Salaries 2,250

Interest paid 150

Receipts Rs. Payments Rs.

Telephone 250

Rent 2,400

Light and power 950

Sundry expenses 4,250

Sundry creditors 15,250

Assets and Liabilities Act at 31st Dec. 1997 Act at 31st Dec. 1998

Rs. Rs.

Sundry creditors 5,050 4,800

Sundry debtors 7,500 12,250

Bank 1,250 Nil

Stock 12,500 6,250

Plant 15,000 14,630

From the above data, prepare trading and profit and loss account for the year ended 31st

December 1998 and the balance sheet as on that date. Ap 15

9) The following balances are extracted from the books of M/s. Chaitanya & co. on 31st

December, 2008. You are required to give the necessary closing entries and prepare Trading

andProfit and Loss a/c for the year ended and a Balance sheet as at that date.

Rs. Rs.

Capital 7,160 Rent and taxes 440

Creditors 7,860 Commission (cr.) 160

Bills payable 1,200 Returns inwards 520

Sales 20,000 Stationery 180

Carriage outward 580 Interest on capital 280

Commission (Dr.) 320 Stock on Jan 1.2008 400

Carriage inward 320 Bills receivable 1,800

Wages 1,120 Sundry debtors 12,000

Purchases 15,600 Trade expenses 80

Insurance 440 Office furniture 400

Return outwards 200 Cash in hand 200

Cash at bank 1,900

The closing stock was valued at Rs.10,000.


10) From the following particulars extracted from the books of a trader kept under the single

entry system, you are required to find out the figures for credit sales and credit purchases by

showing the total debtors account and total creditors account. Show also the bills receivable

account and bills payable account.

Rs.

Balance, 1st January 2008

Total debtors 57,200

Bills receivable 4,000

Total creditors 26,400

Bills payable 2,500

Cash paid to creditors 70,250

Discount allowed by suppliers 2,650

Cash received from customers 1,35,400

Discount allowed to customers 4,200

Returns from customers 1,625

Returns to suppliers 1,330

Bad debts written off 3,540

Cash received against bills receivable 14,200

Payments made against bills payable 7,000

Bills receivable dishonoured 1,100

Bad debts previously written off, now recovered 1,000

Cash sales during the year 15,800

Cash purchases during the year 12,300

Total debtors on 31.12.2008 55,600

Total creditors on 31.12.2008 28,400

Bills receivable on 31.12.2008 1,000

Bills payable on 31.12.2008 3,000 nov14


UNIT 3

PART A

1. What is rectification of error?

2. What is a bank charge? Nov18

3. What is error of omission?

4. What are errors? Ap17

5. What do you understand by bank reconciliation statement?

6. What is compensating errors? AP 16

7. What is suspense account?

8. What is pass book? N15

9. State the types of errors.

10. What do you mean by unpresented cheques? AP15

11. What is Error of Omission?

12. What is Suspense a/c? N14

PART B

1. Rectify the following errors:

a. Purchase book is carried forward Rs.300 less

b. Sales book total is carried forward Rs.500 more

c. A total of Rs758 in the purchase book has been carried forward Rs.875

d. The total of sales book rs.755on Page 20 was carried forward to page 21 as Rs.557

e. Purchase return book was carried forward as Rs. 5125 instead of Rs. 1520.

N18

2. Prepare a bank reconciliation statement on 32.3.2016 from the following information:

a. Balance as per cash book Rs. 9500

b. Cheque deposited but not credited by the banker Rs4500

c. Cheque issued but not presented for payment Rs5000

d. Cash directly paid in to bank by a customer Rs3500

e. Bank charges recorded in the passbook Rs50

f. Dividend collected by the banker and recorded in the passbook Rs250. Ap17

3. Rectify the following errors:

(a) Purchase book is over cast by Rs. 300 (for the month of March)

(b) Sales book has been under cast Rs. 200

(c) Purchase returns book has been over cast by Rs. 75

(d) Sales return book has been under cast by Rs. 50. Ap16

4. The bank over draft of Kavi on 31-03-06 as per cash book is Rs. 9,000. From the following

particulars, prepare bank reconciliation statement:

(a) Un presented cheque Rs. 3,000

(b) Uncleared cheque Rs. 1,700

(c) Bank interest debited in the pass book only Rs. 500

(d) Bill collected and credited in the pass book only Rs. 800

(e) Cheque of Renu dishonoured Rs. 500

(f) Cheque issued to Sekar entered in the cash column of cash book Rs. 300. N15


5. Rectify the following errors :

(a) Rs. 700 paid for purchase of office furniture charged to

office expenses account.

(b) Goods worth Rs. 450 were purchased from Durga stores

and their account was debited with Rs. 540.

(c) Goods worth Rs. 960 were sold to Suresh and invoice was

sent to him. The invoice amount was debited to his account

and entered in the sales book. Latter on it was found that

the invoice was made only for Rs. 690.

(d) The total of the discount column on the credit side of the

cash book was short by Rs. 100.

(e) An amount of Rs. 500 withdrawn by the proprietor for his

personal use was debited to trade expenses account.

(f) Rs. 190 received on account of interest was credited to

commission account. AP15

6. The following errors were deducted in the accounts of Asa Ram & sons for the year ended

30th June 2007.

(a) A builder's bill for Rs.2,700 for the erection of a small shed was debited to repairs

account.

(b) A cheque for Rs.300 received from Rahim Bux & Co. was dishonoured and debited

to allowances account.

(c) Goods to the value of Rs.150 returned by Chandmal Bros. were included in Stock,

but no entry was made in the books.

(d) Repairs to plant amounting to Rs.567 had been charged to plant and machinery

account.

(e) Wages paid to the firm's own workmen for making certain additions to machinery

amounting to Rs.550 were posted to wages account.

Give Journal entries to correct these errors. Nov14

PART C

1) From the following particulars ascertain the bank balances as per bank pass book of ramnath

as on 31.12.1996.

a. Bank overdraft as per cash book on 31.12..1996, Rs. 6000

b. Interest on overdraft for six months ending 31.12.96, Rs200 is debited in the pass book

c. Cheques issued but not cashed before 31.12.96 amounted to Rs.1500.

d. Cheques deposited into bank but not cleared and credited before 31.12.96 amounted to

Rs2500.

e. Interest on investment collected by bank and credits in bank passbook amounted to

Rs1800.

f. Bills received which was dishonored with the bank in November 1996, was debited by

Rs1050 including Rs 50 for bank charges

g. The bank column of cash book receipts side was overcast by Rs 100 in December 1996.

h. Bank had wrongly debited Mr. ramnath for Rs500 on 10.12.1996 on account of

dishonor of cheque pertaining to Mr. ramgopal but rectified the said mistake on

30.12.96.


2) Prepare a bank reconciliation statement from the following data as on 31-12-1995.

(a) Balance as per cash book Rs. 12,500

(b) Cheques issued but not presented for payment Rs. 900

(c) Cheques deposited in bank but not collected Rs. 1,200

(d) Bank paid insurance premium Rs. 500

(e) Direct deposit by a customer Rs. 800

(f) Interest on investment collected by bank Rs. 200

(g) Bank charges Rs. 100.

3) The following errors were found in the books of Prabhakar & Sons. Give the

necessary entries to correct them:

(a) Salary of Rs. 1,000 paid to a Mohan due to him has been

debited to his personal account.

(b) Rs. 1,500 paid in cash for a typewriter was charged to office

expenses account.

(c) Rs. 5,000 paid for furniture purchased has been charged to

purchases account.

(d) Repairs made were debited to Building account for Rs. 250.

(e) An amount of Rs. 500 withdrawn by the proprietor for his

personal use has been debited to trade expenses account.

(f) Rs. 200 received from Shanthy & Co., has been wrongly

entered as from Shajahan & Co.,

4) On 31st March, 2007 the cash book of a firm showed a bank balance of Rs. 3,000. From the

following information, prepare a Bank Reconciliation Statement, Showing the balance as

per pass book.

(a) Cheques have been issued for Rs. 2,500 out of which cheques worth Rs.

2,000 only were presented for payment.

(b) Cheques worth Rs. 700 were deposited on 28th March but had not been

credited by the bank. One cheque for Rs. 250 was entered in the cash book on

30th March but was banked on 3rd April, 2007.

(c) A cheque from Mohan for Rs. 200 was paid in on 26th March but was

dishonoured and the advice was received on 2nd April, 2007.

(d) Pass Book showed bank charges Rs. 10 debited by the bank. Its also showed

Rs. 400 collected by the bank as interest.

(e) One of the debtors deposited a sum of Rs. 250 in the account of the firm on

20th March Intimation in this respect was received from the bank on 2nd

April 2007.


5) On 31st Jan. 2007, the passbook of Prabhu showed a debit balance of Rs.41,000. Prepare a

bank reconciliation statement with the following information :

(a) Cheques amounting to Rs. 15,600 were drawn on 27th Jan.2007, out of which

cheques for Rs.11,000 were cashed upto 31st Jan. 2007.

(b) A wrong debit of Rs.800 has been given by the bank in pass

book.

(c) A cheque for Rs.200 was credited in passbook but was not

recorded in cash book.

(d) A cheque for Rs.1,000 returned dishonoured and were

debited in passbook only.

(e) Cheques amounting to Rs.21,000 were deposited for

collection. But cheques for Rs.7,400 have been credited in

pass book at 5th Feb. 2007.

(f) Interest and bank charges amounted to Rs.100 and were

not accounted for in cash book.

(g) A cheque of Rs.500 debited in the cash book omitted to be

banked.

(h) A wrong credit has been given by the banker for Rs.500 in the passbook.


UNIT 4

PART A

1. What is straight line method of depreciation?

2. What is salvage?

3 What is insured standing charge? Nov18

4 What is revaluation method of depreciation?

5 Define depreciation.

6 Write any two advantages of fire insurance.

7 What is annuity method? Ap17

8 Mention any two causes of depreciation. AP 16

9 Give a formula for computing the rate of depreciation.

10 What is memorandum trading account?

11 A machine was purchased for Rs. 30,000 on 1-1-86. It is expected to last for 5 years.

Estimated scrap at the end of five years is Rs. 5,000. Find out the rate of depreciation.

N15

13. What is meant by Tangible fixed assets?

14. State the formula for calculating depreciation under diminishing balance method.

15. The value of insurance policy for the loss of stock is Rs. 1,50,000 and stock in hand on the

date of fire is Rs. 2,10,000 out of which stock destroyed is estimated to be 1,05,000.

Ascertain the claim admitted by the insurance company. AP15

16. Define 'Depreciation'.

17. Give the formula for depreciation under straight line method. N14

PART B

1. An asset purchased for Rs.25000. depreciation is to be provided annually according to

straight line method. The useful life of the asset is 10yrs and its residual value is Rs5000.

You are required to find out the rate of depreciation and prepare the asset accounts for

the first three years.

2. State the significance of average clause. N18

3. Briefly explain the method of depreciation

4. A fire occurred at the premises of a sole trader on 31.5.2015 destroying a great part of

his goods. His stock on 1.1.2015 was Rs60000. The value of stock salvaged was

Rs13500. The gross profit on sale was 30% and sales amounted to Rs1,53,000 from

January to date of fire, while for same period the purchases amounted to Rs1,03,500.

Prepare a statement of claim.

5. Briefly explain the method of depreciation

6. Fire occurred in the premises of K on 10th may 2016. In order to make claim on their fire

policies in respect of the stock they ask your advice and you are able to obtain the

following information :

2013 2014 2015 2016

Opening stock 16,000 15,000 16,000 18,000

Purchases 41,000 47,200 56,600 78,000

Sales 60,000 66,000 78,000 99,000

Closing stock 15,000 16,000 18,000 ?

The stock salvaged Rs 3800. Compute the amount of claim. Ap17


7. A company acquired a machine on 1.1.88 at a cost of Rs. 40,000 and spent Rs1,000 on

its installation. The firm writes of depreciation at 10% on the diminishing balance. The

books are closed on 31st December of each year. Show the Machinery account for 3

years. Ap16

8. A fire occurred in the premises of X Ltd., on 10-10-91. All stocks were destroyed except

to the extent of Rs. 6,200. From the following figures, ascertain the loss of stock

suffered by the company:

Rs.

Stock on 1-1-90 40,000

Purchases during 1990 1,45,000

Sales during 1990 2,00,000

Stock on 31-12-90 25,000

Purchases during 1991upto the date of fire 1,52,200

Sales during 1991 upto date of fire 1,89,000 N15

9. Vijay and Co. purchased a Grinding machine on 1st January 1995 for Rs. 9,250 and

immediately spend Rs. 750 on its erection. On 1st July, 1996, it purchased another

machine for Rs. 2,500 and on 1st July 1997, it sold off the first machine purchased in

1995 for Rs. 7,000 and on the same date it purchased another machine for Rs. 6,250. On

1st July, 1998, the second machine purchased for Rs. 2,500 was also sold off for Rs.

500. Depreciation was provided on the machinery on written down value basis at 10%

p.a. Give the machinery account for four years commencing from Jan1 1995.

Calculations are to be made to the nearest rupee. AP15

10. A company, whose accounting year is the calendar year, purchased on 1st April 2000,

machinery costing Rs.30,000. It purchased further machinery on 1st October, 2000

costing Rs.20,000 and on 1st July, 2001 costing Rs.10,000.

On 1st January, 2002 one third of the machinery installed on 1st April, 2000 became

obsolete and was sold for Rs.3,000.

Show how machinery account would appear in the books of thecompany, it being given

that machinery was depreciated by fixed instalment method. Nov14

PART C

1) A fire occurred in the premises of Mr. Dhenna on 15th august 2015. A large part of the stock

was destroyed and Rs7500 was realized for the salvage. For the period from 1.1.2015 to

15.8.2015, the following is available.

a. Purchase amounted to Rs.42500

b. Sales amounted to Rs45000

c. Stock on hand on 1.1.2015 was Rs.20,000 at cost price

d. Goods costing Rs.2,500 was taken by Dheena for his personal use

The previous accounts revealed that the rate of gross profit was 33 ½% on sale. The

insurance policy was for Rs. 25,000 and included an average clause. Prepare the

statement of claim to be made on the insurance company.


2) A machinery was purchased on 1.1.2012 for Rs40,000. After 5 years depreciating it by 16%

under straight line method, it was sold for Rs 5000 in 31.12.16. show machine account for

the 5 years period

3) How will you prepare statement of fire claims?

4) Calculate the insurance claim from the following particulars assuming that the insurers met

their liability under the policy on average clause. Stock of a trading concern worth Rs

40,000 was totally destroyed. The stock was insured for Rs 30000 subject to average clause.

The value of stock salvaged was Rs 24000.

5) Details for year 2008 are as follows:

Rs.

Stock on 1-1-2008 50,000

Purchases plus expenses 1,20,000

Sales 1,80,000

Stock on 31-12-2008 26,000

Purchases till the date of fire i.e., 4-4-2009 74,000

Direct expenses 12,000

Sales 60,000

Stock salvaged 4,000

Policy was taken for only Rs, 75,000. Prepare the fire claim.

6) Abi & Co. purchased a machine on 1.1.1995 for Rs. 9,250 and immediately spent Rs. 750 on

its erection. On 1.7.1996, it purchased another machine for Rs. 2,500 and 1.7.1997, it sold

off the first machine purchased in 1995 for Rs. 7,000 and on the same date it purchased

another machine for Rs. 6,250. On 1.7.1998 the second machine purchased for Rs. 2,500

was also sold off for Rs. 500. Depreciation was provided on the machinery on written down

value basis at 10% p.a. Give machinery account for four years commencing from January 1,

1995.

7) On 25th April 1998, a fire occured in the premises of a company. From the various books

are saved from the fire, the following were ascertained.

Rs.

Stock on 1.1.98 93,750

Purchases from 1.1.98 to the date of fire 3,75,000

Wages 75,000

Manufacturing expenses 37,500

Sales from 1.1.98 to the date of fire 5,62,500

The Gross profit ratio for the past five years had average at 15% on sales. The stock

salvaged was estimated at Rs. 28,125.

Ascertain the amount of claim to be lodged in case of the loss of

stock insured.


8) Goodluck traders have taken out a fire policy of Rs.2,40,000 covering its stock-in-trade. A

fire occurs on 31st March 2008 and stock was destroyed with the exception of the value of

Rs.62,040. Following particulars are available from the books of account of the firm :

Rs.

Stock on 31st December 2007 90,000

Purchases to the date of fire 3,90,000

Sales to the date of fire 2,70,000

Commission paid to the purchase 2%

Carriage paid on purchase 2,400

Average gross profit on cost 50%

The policy was subject to average clause. You are required to arrive at the

(a) Total loss of stock and

(b) Amount of claim to be made against the insurance company.


UNIT 5

PART A

1. Give any two advantages of single entry system.

2. What do you understand by conversion method? Nov18

3. What is single entry system? Ap17

4. Define Single entry system.

5. Point out any two differences between single entry system and double entry system. AP 16

6. Point out the methods to ascertainment of profit under single entry system. N15

7. State any two defects of single entry. AP15

8. What is meant by Double entry system?

9. What is Single entry system? N14

PART B

1. Amitabh keeps his books under single entry system. Assets and

liabilities on 31-12-93 and 31-12-94 stood as follows:

31-12-93 (Rs.) 31-12-94 (Rs.)

Cash 10 2,000

Bank balance 990 10,000

Stock 7,000 10,000

Sundry debtors 15,000 20,000

Furniture 3,000 3,000

Sundry creditors 3,000 6,000

He introduced an additional capital of Rs. 3,000 during 1994. He withdrew Rs7,000 for

his domestic purpose. Find out the profit for 1994. N15

2. Vishnu maintains books on single entry system. He gives you the following information

:

Capital on March 31, 2008 Rs. 11,400

Capital on March 31, 2009 Rs. 12,675

Drawings made during the period :

April 2008 to March 2009 Rs. 3,600

Capital introduced on October 31, 2008 Rs.1,500

You are required to calculate the profit made by Vishnu. Nov14

PART C

1) P keeps his book by single entry system. His position on 1.4.2014 and 31.3.2015 was as

follows :

1.4.2014 31.3.2015

Cash 500 6000

Bank balance 10000 15000

Stock 7000 10000

Sundry debtors 30000 40000

Furniture 6000 6000

Sundry creditors 6000 12000

He introduced an additional capital of Rs 8,000 during the financial year. He withdraw Rs

14,000 for domestic purpose. Find out the profit for the year ended 31.3.2015.


2) Mr. Mano keeps his books of accounts under single entry system.

His financial position on 31-12-2009 and 31-12-2010 was as

follows:

2009 (Rs.) 2010 (Rs.)

Cash 9,860 800

Stock in trade 38,520 57,020

Plant & Machinery 54,420 61,000

Bills receivable – 16,480

Sundry Debtors 24,840 43,940

Sundry Creditors 72,040 80,000

Furniture 4,960 5,220

Drawings – 5,000

Ap 16

Documents

ST. ANNE’S ARTS AND SCIENCE COLLEGE DEPARTMENT OF ......15 Received cash from Kumar on account 8,000 18 Paid Maran on account 4,000 ... Purchases of sports materials during the year