Choose the correct chronological order of ascertainment of the following profits from the profit and loss account:

1

(a)

Operating Profit, Net Profit, Gross Profit

(b)

Operating Profit, Gross Profit, Net Profit

(c)

Gross Profit, Operating Profit, Net Profit

(d)

Gross Profit, Net Profit, Operating Profit

While calculating operating profit, the following are not taken into account.

1

(a)

Normal transactions

(b)

Abnormal items

(c)

Expenses of a purely financial nature

(d)

(ii)& (iii)

(e)

(i)& (ill)

Which of the following is correct

1

(a)

Operating profit = Operating profit - Nonoperating expenses - Non-operating incomes

(b)

Operating profit = Net profit + Non-operating Expenses + Non-operating incomes

(c)

Operating profit = Net profit + Non-operating expenses - Non-operating incomes

(d)

Operating profit = Net profit - Non-operating expenses + Non-operating incomes

Gross profit is total revenue.

1

(a) True

(b) False

In trading and profit and loss account, opening stock appears on the debit side because it forms the part of the cost of sales for the current accounting year.

1

(a) False

(b) True

Rent, rates and taxes is an example of direct expenses

1

(a) False

(b) True

Define financial statements.

1

(a)

Financial statements may be defined as the reports prepared to present a periodical review of financial performance and the financial position of a business enterprise.

What is the use of financial statements for Potential Investors?

1

(a)

Potential investors use the financial statements to ascertain future prospects of the firm on the basis of past and current performance of the firm.

Give formula to calculate net profit from gross profit.

1

(a)

Net Profit = Gross Profit + Non-operating incomes - (Indirect Expenses + Non-operating Expenses)

Define Balance Sheet.

1

(a)

Balance Sheet may be defined as a statement depicting the exact financial position of business on any date.

What is meant by grouping of assets and liabilities?

3

(a)

Grouping means putting together items of a similar nature under a common heading.

What do you mean by Deferred Revenue Expenditure?

3

(a)

What is meant by Direct Expenses? Give two examples.

3

(a)

What are Non-operating Expenses? Give examples.

3

(a)

State the examples of Contingent Liabilities.

3

(a)

Explain the concept of cost of goods sold?

5

(a)

Operating profit earned by M/s Arora and Sachdeva in 2013-14 was Rs.17,00,000. Its non-operating incomes were Rs.1,50,000 and non-operating expenses were Rs.3,75,000. Calculate the amount of net profit earned by the firm.

5

(a)

Prepare a Trading Account from the following particulars for the year ended March 31, 2012:

(Rs.)
Opening stock	37,500
stock	1,05,000
Sales	2,70,000
Wages	30,000

5

(a)

From the following balances prepare a Trading and Profit & Loss account and Balance Sheet for the year ended March 31, 2014

Particulars	Amount Rs	Particulars	Amount Rs
Carriage on goods Purchased	8,000	Cash-in-hand	2,500
Carriage on goods sold	3,500	Bank overdraft	30,000
Manufacturing expenses	42,000	Motor car	60,000
Advertisement	7,000	Drawings	8,000
Excise duty	6,000	Audit fees	2,700
Factory lighting	4,400	Plant	1,53,900
Debtors	80,000	Repairs to plant	2,200
Creditors	61,000	Closing Stock	76,000
Dock and Clearing charges	5,200	Purchases less returns	1,60,000
Postage and Telegram	800	Commission on purchases	2,000
Fire Insurance Premium	3,600	Incidental trade expenses	3,200
Patents	12,000	Investment	30,000
Income tax	24,000	Interest on investment	4,500
Office expenses	7,200	Capital	1,00,000
Sales tax paid	12,000	Sales less return	5,20,000
Discount allowed	2,700
Discount on purchases	3,400

5

(a)

From the following information, complete the missing figures of Trading Account of Anadiram for the financial year ended on 31st March, 2017

Particulars	Amount Rs	Particulars	Amount Rs
Wages	8,514	Opening Stock	19,380
Purchases	28,380	Rent, Rates and Taxes of Office	5,400
Carriage and Freight on Goods Purchased	3,510	Sales	78,600
Sales Return	8,600	Purchase Return	6,000
Closing Stock	18,000	Octroi Charges	300
Fuel and Power	2,600	Trade Expenses	4,200

Trading and Profit & Loss Account for the year ended 31st March, 2017

Particulars		Amount Rs	Particulars		Amount Rs
To ....(1)...		...(2)...	By Sales	78,600
To Purchase	28,380		Less : Returns	...(3)..	...(4)..
Less : Returns	...(5)..	...(6)...	By ...(7)...		...(8)...
To Wages		8,514
To Carriage and Freight		3,510
To Octroi Charges		300
To ...(9)...		...(10)...
To Gross Profit		...(11)...
		...(12)...			...(13)...

5

(a)