Final Accounts of Sole Proprietors - II Model Question Paper

11th Standard

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Accountancy

Time : 02:00:00 Hrs
Total Marks : 50
    7 x 1 = 7
  1. A prepayment of insurance premium will appear in

    (a)

    The trading account on the debit side

    (b)

    The profit and loss account on the credit side

    (c)

    The balance sheet on the assets side

    (d)

    The balance sheet on the liabilities side

  2. Net profit is

    (a)

    Debited to capital account

    (b)

    Credited to capital account

    (c)

    Debited to drawings account

    (d)

    Credited to drawings account

  3. If there is no existing provision for doubtful debts, provision created for doubtful debts is

    (a)

    Debited to bad debts account

    (b)

    Debited to sundry debtors account

    (c)

    Credited to bad debts account

    (d)

    Debited to profit and loss account

  4. ______ earned during the period must be compared with the expenses incurred during the period.

    (a)

    Incomes

    (b)

    Revenues

    (c)

    Profit

    (d)

    Loss

  5. Depreciation is deducted from concerned ______ in the Balance sheet.

    (a)

    Current asset

    (b)

    Fictitious asset

    (c)

    Fixed asset

    (d)

    None of these

  6. Prepaid insurance is _______

    (a)

    an asset

    (b)

    a liability

    (c)

    an income

    (d)

    an expense

  7. Unexpired expenses are also called as_________.

    (a)

    Outstanding expenses

    (b)

    Prepaid expenses

    (c)

    Accrued income

    (d)

    Income received in advance

  8. 2 x 2 = 4
  9. Assertion (A): The unsold goods in the business at the end of the accounting period are termed as closing stock
    Reason (R): Closing stock is the opening stock for the next accounting period.
    Select the correct answer.
    (a) Both (A) and (R) are true and (R) is the correct explanation of (A)
    (b) Both (A) and (R) are true and (R) is not the correct explanation of (A)
    (c) (A) is true, but (R) is false.
    (d) (A) is false, but (R) is true.

  10. Assertion (A): Expenses which have been incurred in the accounting period but not paid till the end of the accounting period are called outstanding expenses
    Reason (R): Drawings represent the amount or goods withdrawn by the proprietor from the business for his personal use
    Select the correct answer
    (a) Both (A) and (R) are true and (R) is the correct explanation of (A)
    (b) Both (A) and (R) are true and (R) is not the correct explanation of (A)
    (c) (A) is true, but (R) is false.
    (d) (A) is false, but (R) is true

  11. 2 x 2 = 4
  12. (i) Adjustment entries are made so that the financial statements represent a time and fair view of profitability and financial poistion.
    (ii) Opening stock is valued at cost price or net realisable value whichever is lower.
    (iii) Outstanding expense and income received in advance are current liabilities
    (a) (i) is correct
    (b) (ii) is correct
    (c) (i) and (ii) are correct
    (d) (i) and (iii) are correct

  13. (i) Prepaid expense and accrued income are current assets.
    (ii) Provision is created for bad and doubtful debts and discount on debtors in the current accounting period.
    (iii) Cash discount is allowed by the suppliers to customers for prompt payment of amount due either on or before the due date.
    (a) (i) is correct
    (b) (ii) is correct
    (c) (ii) and (iii) are correct
    (d) (i), (ii) and (iii) are correct

  14. 5 x 2 = 10
  15. What are adjusting entries?

  16. What is prepaid expense?

  17. What is provision for discount on debtors?

  18. What is depreciation?

  19. Give adjusting entry for depreciation at 10% p.a. on machinery of Rs.25,000.

  20. 5 x 3 = 15
  21. Show necessary entries to adjust the following on 31st December, 2017.
    (i) Outstanding salaries Rs 1,200
    (ii) Outstanding rent Rs 300
    (iii) Prepaid insurance premium Rs 450
    (iv) Interest on investments accrued Rs 400
    (v) Bad debts written off Rs 200

  22. What is the need for preparing final accounts?

  23. Explain how closing stock is treated in final accounts.

  24. The following are the extracts from the trial balance.

     Particulars   Debit Rs.   Credit Rs. 
      Sundry Creditors      30,000
      Discount received       1,000

    You are required to show how these items will appear in the profit and loss account and balance sheet.

  25. What is Credit balance?

  26. 2 x 5 = 10
  27. From the following particulars, prepare the balance sheet of Madhu, for the year ended 31st March, 2018.

    Particulars Rs Particulars Rs
    Capital 2,00,000 Sundry creditors 40,000
    Drawings 40,000 Bills payable 20,000
    Cash in hand 15,000 Goodwill 60,000
    Loan from bank 40,000 Sundry debtors 80,000
    Bank overdraft 20,000 Land and building 50,000
    Investments 20,000 Vehicles 80,000
    Bills receivable 10,000 Cash at bank 25,000

    The following adjustments were made at the time of preparing final accounts:
    (a) Outstanding liabilities: Salaries Rs 10,000; Wages Rs 20,000; Interest on Bank overdraft Rs3,000 and Interest on bank loan Rs 6,000
    (b) Provide interest on capital @ 10% p.a.
    (c) Bad debts amounted to Rs 10,000 and make a provision for bad debts @ 10% on sundry debtors.
    (d) Closing stock amounted to Rs 1,20,000
    (e) Depreciate vehicles @ 10% p.a.
    Net profit for the year amounted to Rs 96,000 after considering all the above adjustments.

  28. Prepare trading account from the following ledger balances presented by P. Sen as on 31st March 2016.

     Particulars   Rs.   Particulars   Rs. 
      Stock (1-4-2015)       10,000   Sales     3,00,000
      Purchases   1,60,000   Returns inward    16,000
      Wages 30,000   Returns outward    10,000
      Carriage inwards    10,000   Gas and Fuel 8,000
      Freight inwards 8,000    

    Additional information:
    (a) Stock on 31st March, 2016 Rs. 20,000
    (b) Outstanding wages amounted to Rs. 4,000
    (c) Gas and fuel was paid in advance for Rs. 1,000.

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