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11th Standard Accountancy Model Question Paper

Published on: 28/12/2018

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Questions:

Multiple Choice Question

20 x 1 = 20

Debts which cannot be recovered or irrecoverable are called _________.

(a)

Bad debts

(b)

Depreciation

(c)

Closing stock

(d)

Capital

A trader followed WDV method of depreciation; the book value of assets after 4 years is 24% of original cost. Find rate of depreciation__________.

(a)

24%

(b)

26%

(c)

32%

(d)

30%

In cash book bank charges recorded in the___________.

(a)

Credit side

(b)

Debit side

(c)

Both a & b

(d)

None of these above

The return of goods to a supplier should be credited to______

(a)

Supplier Account

(b)

Goods Account

(c)

Purchase Return Account

(d)

None of the above

Nominal account is classified under__________.

(a)

Personal A/c

(b)

Impersonal A/c

(c)

Neither of the two

Buying of goods with an intention of resale is ________

(a)

purchases

(b)

sales

(c)

income

Amount of Rs.5,000 spent as lawyer's fee to defend a suit claiming that the firm's factory site belonged to the plaintif's land is ____________

(a)

Capital expenditure

(b)

Revenue expenditure

(c)

Prepaid revenue expenditure

(d)

Revenue receipt

TALLY is an example of _______.

(a)

Tailor-made accounting software

(b)

Ready-made accounting software

(c)

In-built accounting software

(d)

Customised accounting software

Which method shall be efficient, if repairs and maintenance cost of an asset increases as it grows older.

(a)

Straight line method

(b)

Reducing balance method

(c)

Sinking fund method

(d)

Annuity method

10.

The total of purchases book was overcast. Which of the following accounts should be debited in the rectifying journal entry?

(a)

Purchases account

(b)

Suspense account

(c)

Creditor account

(d)

None of the above

11.

Drawings appearing in the trial balance is _______.

(a)

Added to the purchases

(b)

Subtracted from the purchases

(c)

Added to the capital

(d)

Subtracted from the capital

12.

A bank reconciliation statement is prepared with the help of ______.

(a)

Bank statement

(b)

Cash book

(c)

Bank statement and bank column of the cash book

(d)

Petty cash book

13.

'Cash withdrawn by the proprietor from the business for his personal use' causes

(a)

Decrease in assets and decrease in owner's capital

(b)

Increase in one asset and decrease in another asset

(c)

Increase in one asset and increase in liabilities

(d)

Increase in asset and decrease in capital

14.

In Triple column cash book, the balance of bank overdraft brought forward will appear in_________

(a)

Cash column debit side

(b)

Cash column credit side

(c)

Bank column debit side

(d)

Bank column credit side

15.

Sales return book is used to record_________

(a)

Returns of goods by the customer for which cash is paid immediately

(b)

Returns of goods by the customer for which cash is not paid immediately

(c)

Returns of assets by the customer for which cash is not paid immediately

(d)

Returns of assets by the customer for which cash is paid immediately

16.

A list which contains balances of accounts to know whether the debit and credit balances are matched is _______

(a)

Journal

(b)

Day book

(c)

Trial balance

(d)

Balance sheet

17.

Transferring entries from Journal to Ledger Accounts is called _____________

(a)

Casting

(b)

Posting

(c)

Journalising

(d)

Balancing

18.

If the total of the debit side of an account exceeds the total of its credit side, it means

(a)

Credit Balance

(b)

Debit Balance

(c)

Nil Balance

(d)

Debit and Credit Balance

19.

The concept which assumes that a business will last indefinitely is

(a)

Business Entity

(b)

Going concern

(c)

Periodicity

(d)

Conservation

20.

Financial position of a business is ascertained on the basis of ______.

(a)

Journal

(b)

Trial balance

(c)

Balance Sheet

(d)

Ledger

Generic 5

15 x 5 = 75

21.

Enter the following transactions in a petty cash book of Mr. Jack with analytical columns. The petty cashier begins with an imprest amount of Rs.1,000.

2012, June	Rs.
4 Postage Stamps	40
5 Travelling expenses	75
6 Lunch expenses	150
8 Labour charges for bringing office tables	50
10 Repair charges to fax machine	250
12 Postage stamps	20
15 Cleaning the office	50
17 Stationery purchased	175
27 Paid to Ravi	150

22.

Classify the following receipts under capital and revenue.
i) Rs.3,00,000 worth of debentures are issued for raising loan.
ii) Rs.5,000 received as dividend from the investment on shares.
iii) Gokul started business with Rs.4,00,000.
iv) A machinery costing Rs.50,000 was sold for Rs.50,000.
v) Creditors allowed discount Rs.30,000.

23.

Enter the following transactions in the purchases returns book of Hari who is dealing in automobiles and post them into the ledger.

2017
Jan 5	Returned to Anand 5 clutch plates @ Rs. 200 each, not in accordance with order.
Jan 14	Returned to Chandran 4 brake shoes @ Rs. 200 each and 10rear view mirrors @ Rs. 350 each, due to inferior quality.

24.

The bank statement of Sudha and Company showed an overdraft of Rs.10,000 on 31^st December 2017, prepare a bank reconciliation statement.
(a) A cheque deposited on 30^th December 2017 for Rs.15,000 was not credited by the bank.
(b) Interest on term loan Rs.500 was debited by bank on 31^st December 2017 but not accounted in the books of Sudha and Company.
(c) A cheque issued for Rs.550 on 24^th December 2017, paid by the bank was recorded as 505 in the bank column of the cash book.
(d) One outgoing cheque on 27^th December 2017 of Rs.200·was recorded twice in the cash book.
(e) Bank recorded a cash deposit of Rs.2,598 as Rs.2,589.
(f) A sum of Rs.2,000 deposited in cash deposit machine by a customer of the business on 31^st December 2017 was not recorded in the books of Sudha and Company.
(g) Interest on overdraft of Rs.600 was not recorded in the books of Sudha and Company,
(h) Two cheques issued on 29^th December 2017 for Rs.500 and Rs 700, but only the first cheque was presented for payment before 31^st December 2017.

25.

Veena is a dealer in textiles. On January 1, 2018, her business showed the following balances: Cash in hand: Rs. 20,000; Bank balance: Rs. 70,000; Stock: Rs. 15,000 following are the transactions made during January 2018. Show the effect of the transactions on accounting equation.
a) Purchased goods (readymade shirts) on credit from Subbu Rs. 20,000
(b) Goods returned to Subbu and no cash is received Rs. 5,000
(c) Goods (shirts) costing Rs. 1,600 was sold to Janani on credit Rs. 2,000
(d) Janani returned 1 shirt of sales value Rs. 500
(e) Janani deposited the money due in cash deposit machine in a bank Rs. 1,500
(f) Insurance on building paid through net banking Rs. 1,000
(g) Insurance on building paid through net banking Rs. 100

26.

Pass journal entries for the following transactions and post them in the ledger accounts.

2017 June 1	Basu started business with cash Rs. 50,000
4	Purchased furniture by paying cash for Rs. 6,000
7	Purchased machinery on credit from Harish Rs. 10,000
10	Bought goods for cash Rs 4,000
18	Paid insurance premium Rs 100

27.

On preparing final accounts of Suresh, bad debt account has a balance of Rs. 800 and sundry debtors account has a balance of Rs. 16,000 of which Rs. 1,200 is to be written off as further bad debts. Pass adjusting entry for bad debts. And also show how it would appear in profit and loss account and balance sheet.

28.

On 1^st January 2015, a second hand machine was purchased for Rs. 58,000 and Rs. 2,000 was spent on its repairs. On 1^stJuly 2017, it was sold for Rs. 28,600. Prepare the machinery account for the years 2011 to 2013 under written down value method by assuming the rate of depreciation as 10% p.a. and the accounts are closed on 31^st December every year.

29.

From the following information, prepare profit and loss account for the year ending 31st December 2016.

Particulars	Rs	Particulars	Rs
Gross loss	60,000	Printing and stationery (office)	2,000
Promotional expenses	5,000	Legal charges	5,000
Distribution expenses	15,000	Bad debts	1,000
Commission paid	7,000	Depreciation	2,000
Interest on loan paid	5,000	Rent received	4,000
Packing charges (on sales)	4,000	Loss by fire not covered by insurance	3,000
Dividend received	3,000

30.

From the data given below
i) Fill the address in B3 using CONCATENATE Function.
ii) Change KAMARAJAR SALAI given in C2 as lower case in C3
iii) Change Chennai given in D2 as upper case in D3

	A	B	C	D	E
1	NAME	HOUSE NO.	STREET	PLACE	PINCODE
2	ANAND	123	KAMARAJAR SALAI	Chennai	600018

31.

Rectify the following errors which were located before preparing the trial balance.
(a) Wages paid Rs. 2,000 for the erection of machinery was debited to wages account.
(b) Sales returns book was short totalled by Rs.1,000.
(c) Goods purchased for Rs. 200 was posted as Rs. 2,000 to purchases account.
(d) The sales book was overcast by Rs.1,500.
(e) Cash paid to Mukil Rs. 2,800 which was debited to Akhil’s account as Rs. 2,000

32.

Record the following transactions in an analytical petty cash book and balance the same. On 1^st November, 2017, the petty cashier started with imprest cash Rs.2,000.

2017 Nov	1	Postage stamps purchased	155
	2	Paid to sweeper and scavenger	170
	3	Conveyance to Manager	125
	6	Lorry hire for goods rent	260
	7	Greeting card purchased	110
	10	Carriage paid	70
	11	Repairs to furniture	100
	13	Ink and gum purchased	50
	17	Computer servicing charges paid	250
	20	Cleaning charges paid	120
	22	Gave charity to beggars	40
	23	Paid to Rammohan	80
	25	Paid railway fare	150
	30	Subscription paid to the Times of India	120

33.

Prepare the trial balance from the following balances of Rajesh as on 31^st March, 2017.

Particulars	Rs	Particulars	Rs
Bills receivable	13,000	Drawings	7,000
Bank charges	750	Sundry debtors	17,100
Conveyance charges	350	Bills payable	12,000
Discount received	1,300	Capital	25,900
Cash in hand	1,000

34.

Briefly explain the functions of accounting

35.

Discuss briefly the branches of accounting.

Generic 3

9 x 3 = 27

36.

Enter the following transactions in a single column cash cash book of Pradeep for April, 2017

April	Particulars	Rs
1	Commenced Bussiness with cash	27,000
5	Bought goods for cash	6,000
10	Goods sold for cash	11,000
13	Paid into bank	5,000
14	Goods sold to Sangeetha for cash	9,000
17	Goods purchased from Preethi on credit	13,000
21	Purchased stationery by cash	200
25	Paid Murugan by cash	14,000
26	Commission paid by cash	700
29	Drew from bank for office use	4,000
30	Rent paid by cheque	3,000

37.

Give the adjusting entries for interest on capital and interest on drawings.

38.

Rectify the following errors assuming that the trial balance is already prepared and the difference was placed to suspense account:
(a) Sales book was undercast by Rs.250
(b) Purchases book was undercast by Rs.120
(c) Sales book was overcast by Rs.130
(d) Bills receivable book was undercast by Rs.75
(e) Purchases book was overcast by Rs.35.

39.

Consider the following information:
Loan amount Rs.3,00,000
Number of payment periods 48 months
Annual rate of interest 10%
Calculate periodic payment using PMT function.

40.

“Balance sheet is not an account”- Explain.

41.

Write the following transactions in proper subsidiary books of Mr. Rajasekaran.

2014 May 10	Purchased goods from Raman Rs. 15,000.
May 14	Returned goods to Raman Rs. 500.
May 18	Purchased goods from Sekaran Rs. 10,000.
May 20	Pradeep sold goods to us Rs. 20,000.
May 24	Sent a Debit note to Sekaran for goods damaged in transit Rs. 1,000.

42.

Indicate the nature of normal balance in the following accounts.
(a) Cash (b) Creditors (c) Sales (d) Furniture (e) Commission received (f) Debtors (g) purchases (h) Capital (i) Salaries and (j) Computer

43.

State the principles of double entry system of book keeping.

44.

Explain the Process of Accounting cycle.

Generic 2

10 x 2 = 20

45.

When can a bank reconciliation be prepared?

46.

If depreciation reduces profits, reduces value of assets and also reduces capital of the proprietor, then why do enterprises provide for depreciation?

47.

'Accounting is useful only to the owner of the business' - Do you agree?

48.

Give any two examples of readymade software.

49.

A furniture costing Rs 5,000 was purchased on 1.1.2016, the installation charges being Rs 1,000. The furniture is to be depreciated @10% p.a. on the diminishing balance method. Pass journal entries for the first two years.

50.

Rectify the following errors discovered after the preparation of the trial balance:
(a) Rent paid was carried forward to the next page Rs.500 short.
(b) Wages paid was carried forward Rs.250 excess.

51.

State with reasons whether the following are capital or revenue expenditure:
i. Expenses incurred in connection with obtaining a licence for starting the factory for Rs.25,000.
ii. A factory shed was constructed at a cost of Rs.2,00,000. A sum of Rs.10,000 had been incurred in the construction of temporary huts for storing building material.
iii. Overhaul expenses of second-hand machinery purchased amounted to Rs.5,000.

52.

Mr. Ganesh an accountant of XYZ co. in order to match the trial balance passed a dummy entry without any proof of the transaction and did not even inform the senior about it. Identify the value being violated by the accountant.

53.

What is accounting equation?

54.

What is journal proper ?

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Answers Key:

Multiple Choice Question

20 x 1 = 20

(a)
Bad debts

(d)
30%

(a)
Credit side

(b)
Impersonal A/c

(a)
purchases

(b)
Revenue expenditure

(b)
Ready-made accounting software

(b)
Reducing balance method

10.

(b)
Suspense account

11.

(d)
Subtracted from the capital

12.

13.

(a)
Decrease in assets and decrease in owner's capital

14.

(d)
Bank column credit side

15.

(b)
Returns of goods by the customer for which cash is not paid immediately

16.

17.

(b)
Posting

18.

(b)
Debit Balance

19.

(b)
Going concern

20.

Generic 5

15 x 5 = 75

21.

Analytical Petty Cash book of Mr. Jack Analysis of payments
Dr. Cr.
Receipts	Date	Particulars	Total Payments Rs.	Postage & Telegrams Rs.	Printing & Stationery Rs.	Carriage& Travelling Rs.	Sundries Rs.	Personal A/c Rs.	Repairs & Services Rs.
1,000	1.6.12	To Cash A/c
	4.6.12	By Postage Stamps	40	40
	5.6.12	To Travelling expenses A/c	75			75
	6.6.12	By Lunch expenses	150				150
	8.6.12	By Labour charges	50			50
	10.6.12	By Repairs	250						250
	12.6.12	By Postage Stamps	20	20
	15.6.12	By Cleaning	50				50
	17.6.12	By Stationery	175		175
	27.6.12	By Ravi	150					150
	30.6.12	Total Expenses	960	60	175	125	200	150	250
	30.6.12	By Balance c/d	40
1,000			1,000
40	1.7.12	To Balance b/d
960	1.7.12	To Cash A/c

22.

S.No.	Transactions	Classification
i)	Rs.3,00,000 worth of debentures are issued for raising loan.	Capital receipt
ii)	Rs.5,000 received as dividend from the investment on shares.	Revenue receipt
iii)	Gokul started business with Rs.4,00,000.	Capital receipt
iv)	A machinery costing Rs.50,000 was sold for Rs.50,000.	Capital receipt
v)	Creditors allowed discount Rs.30,000.	Revenue receipt

23.

In the books of Hari Purchase return book
Date	Particulars	Debit Note No.	L.F.	Amount Rs.		Remarks
Date	Particulars	Debit Note No.	L.F.	Details	Total	Remarks
2017
Jan 5	Anand					Not in accordance with order
	5 clutch plates @ Rs. 200				1,000
Jan 14	Chandran
	4 brake shoes @ Rs. 200 each			800		Due to inferior quality
	10 rear view mirrors @ Rs. 350 each			3,500	4,300
	Purchase A/c Cr.				5,300

Dr. Purchases returns A/c Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
				2017
				Jan 31	By Sundry Creditors A/c		5,300

Dr. Anand accounts A/c Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017
Jan 5	To Purchases return A/c		1,000

Dr. Chandran returns A/c Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017
Jan 14	To Purchases return A/c		4,300

24.

Particulars	Amount Rs	Amount Rs
Overdraft as per bank statement (debit balance)		10,000
Add: Cheque issued recorded twice in cash book	200
Direct cash deposit not entered in cash book	2,000
Unpresented cheque	700	2,900
		12,900
Less: Cheque deposited but not credited by bank	15,000
Interest on term loan not entered in cash book	500
Cheque issued amount entered lesser in cash book (550-505)	45
Cash deposit recorded lesser in bank statement (2,598-2,589)	9
Interest on overdraft not entered in cash book	600
Favourable balance as per cash book*		-3,254

25.

Transaction	Assests						Capital Rs	Creditors Rs
Transaction	Cash Rs	Bank Rs	Stock Rs	Debtors Rs	Prepaid insurance Rs		Capital Rs	Creditors Rs
To Balance b/d	+20,000	+70,000	+15,000				+1,05,000
Equation	+20,000	+70,000	+15,000			=	+1,05,000
(a) Purchased goods on credit			20,000					+20,000
Equation	+20,000	+70,000	+35,000			=	+1,05,000	+20,000
(b) Goods returned and no cash received			-5,000					-5,000
Equation	+20,000	+70,000	+30,000			=	+1,05,000	+15,000
(c) Goods sold on credit			-1,600	2,000			+400
Equation	+20,000	+70,000	+28,400	+2,000		=	+1,05,400	+15,000
(d) Sales return the cost of which is Rs 400 and no cash paid			+400	-500			-100
Equation	+20,000	+70,000	+28,800	+1,500		=	+1,05,300	+15,000
(e) Customer deposited the money in CDM		+1,500		-1,500
Equation	+20,000	+71,500	+28,800			=	+1,05,300	+15,000
(f) Insurance premium paid through net banking		-1,000					-1,000
Equation	+20,000	+70,500	+28,800			=	+1,04,00	+15,000
(g) Prepaid Insurance					+100		+100
Equation	+20,000	+70,500	+28,800		+100	=	+1,04,400	+15,000

26.

In the books of Basu Journal entries
Date	Particulars		Debit Rs	Cresit Rs
2017 June 1	Cash A/c To Basu's capital A/c (Started business with cash)	Dr.	50,000	50,000
June 4	Furniture s A/c To Cash A/c (Furniture bought for cash)	Dr.	6,000	6,000
June 7	Machinery A/c To Harish A/c (Machinery bought on credit from Harish)	Dr.	10,000	10,000
June 10	Purchase A/c To Cash A/c (Goods bought for cash)	Dr.	4,000	4,000
June 18	Insurance premium A/c To Cash A/c (Insurance premium paid)	Dr.	100	100

Ledger accounts

Dr. Cash account Cr.
Date	Particulars	J.F.	Rs	Date	Particulars	J.F.	Rs
2017 June 1	To Basu's capital A/c		50,000	2017 June 4 10 18	By Furniture A/c By Purchases A/c By Insurance premium A/c.		6,000 4,000 100

Dr. Basu's Capital account Cr.
Date	Particulars	J.F.	Rs	Date	Particulars	J.F.	Rs
				2017 June 1	By Cash A/c		50,000

Dr. Furniture account Cr.
Date	Particulars	J.F.	Rs	Date	Particulars	J.F.	Rs
2017 June 4	To Cash A/c		6,000

Dr. Machinery account Cr.
Date	Particulars	J.F.	Rs	Date	Particulars	J.F.	Rs
2017 June 7	To Harish A/c		10,000

Dr. Harish account Cr.
Date	Particulars	J.F.	Rs	Date	Particulars	J.F.	Rs
				2017 June 7	By Machinery A/c		10,000

Dr. Purchases account Cr.
Date	Particulars	J.F.	Rs	Date	Particulars	J.F.	Rs
2017 June 10	To Cash A/c		4,000

Dr. Insurance premium account Cr.
Date	Particulars	J.F.	Rs	Date	Particulars	J.F.	Rs
2017 June 18	To Cash A/c		100

27.

**Adjusting Entry**
Particulars		Debit Rs	Credit Rs
Bad debts A/c	Dr	1,200
To Sundry debtors A/c			1,200
(Bad debts written off)

**Dr Profit ad loss account for the year ended Cr.**
Particulars	Amount Rs	Amount Rs
To Bad debts	800
Add : Additional Bad debts	1,200
		2,000

**Balance Sheet**
Assets	Amount Rs	Amount Rs
Sundry Debtors	16,000
Less: Additional Bad debts	1,200
		14,500

28.

Calculation of Profit or Loss on Sale of Machinery
Date	Particulars	Amount Rs.
2015 Jan 01	Cost Price (58,000 + 2,000)	60,000
2015 Dec 31	Less: Depreciation\([60,000\times\frac{10}{100}]\)	6,000
		54,000
2016 Dec 31	Less: .Depreciation\([54,000\times\frac{10}{100}]\)	5,400
		48,600
2017 July 01	Less: Depreciation\([48,600\times\frac{10}{100}\times\frac{6}{12}]\)	2,430
	Book Value of the Machinery	46,170
	Sales	28,600
	Loss on sale	17,570

Dr. Machinery Account Cr.
Date	Particulars	Amount Rs.	Date	Particulars	Amount Rs.
2015 Jan 01	To Bank A/c	60,000	2015 Dec 31	By Depreciation A/c	6,000
			2015 Dec 31	By Balance c/d	54,000
		60,000			60,000
2016 Jan 01	To Balance b/d	54,000	2016 Dec 31	By Depreciation A/c	5,400
			2016 Dec 31	By Balance c/d	48,600
		54,000			54,000
2016 Jan 01	To Balance b/d	48,600	2017 Dec 31	By Depreciation A/c	2,430
			2017 Dec 31	By Bank A/c	28,600
			2017 Dec 31	By Profit & LossA/c	17,570
		48,600			48,600

29.

Dr. Profit and Loss A/c for the year ending 31.12.2016 Cr.
Particulars	Rs.	Particulars	Rs.
To Gross loss	60,000	By Dividend received	3,000
To Promotional expenses	5,000	By Rent received	4,000
To Distribution expenses	15,000	By Net Loss	1,02,000
To Commission paid	7,000	(Transferred to capital account)
To Interest on loan paid	5,000
To Packing charges	4,000
To Printing and Stationery	2,000
To Legal charges	5,000
To Bad debts	1,000
To Loss by fire	3,000
To Depreciation	2,000
	1,09,000		1,09,000

30.

Procedure
i) To fill the address
a. Open a new spreadsheet in MS-Excel
b. Enter all given values as given in the question
c. Enter the formula in the cell B3 as
=CONCATENATE(A2,” “,B2,” “,C2,” “,D2,” “,E2)
ANAND 123 KAMARAJAR SALAI Chennai 600018
ii) To change KAMARAJAR SALAI given in C2 as lower case in C3
Enter the formula in the cell C3 as
=LOWER(C2)
kamarajar salai
iii) To change Chennai given in D2 as upper case in D3
Enter the formula in the cell D3 as
=UPPER(D2)
CHENNAI

31.

Rectification of Errors
S.No.	Particulars		Debit Rs	Credit Rs
(a)	Machinery A/c	Dr.	2,000
	To WagesA/c			2,000
	(Wages paid Rs. 2,000 for the erection of machinery was debited to wages account now rectified)
(b)	Sales return A/c	Dr.	1,000
	To Suspense A/c			1,000
	(Being the mistake in totalling of sales return accounts now rectified)
(c)	Suspense A/c	Dr.	1,800
	To Purchases A/c			1,800
	(Being the purchases book overcast; now rectified)
(d)	Sales A/c	Dr.	1,500
	To Suspense A/c			1,500
	(Being sales book overast by Rs. 1,500 now rectified)
(e)	Mukil A/c	Dr.	2,800
	To Akhil's A/c			2,000
	To Suspense A/c			800
	(Cash paid to Mukil 2,800 was debited to Akhil's account now rectified)

32.

Dr. Analytical Petty Cash book Analysis of Payments Cr.
Receipts	C. B. F. N.	Date	Particulars	V. N.	Total Payment	Postage and telegrams	Printing & Stationary	Carriage	Conveyance	Repairs	Sundries	L. F.	Personal Accounts
(Rs.)	C. B. F. N.	Date	Particulars	V. N.	(Rs.)	(Rs.)	(Rs.)	(Rs.)	(Rs.)	(Rs.)	(Rs.)	L. F.	(Rs.)
		2017 Nov
		1	To Cash A/c
		1	By Postage Stamps		155	155
		2	By Sweeper		170						170
		3	By Conveyance		125				125
		6	By Lorry hire		260			260
		7	By Greetings card		110						110
		10	By Carriage & Cooly		70			70
		11	By Repairs		100					100
		13	By Ink & Gums		50		50
		17	By Service Charges		250					250
		20	By Cleaning Charges		120						120
		22	By Charity		40						40
		23	By Ram Mohan		80								80
		25	By Railway Fare		150				150
		30	By Subscriptions		120						120
					1,800	155	50	330	275	350	560		80
		30	By Balance c/d		200
2,000					2,000
		Dec
200		1	To Balance b/d
1,800		1	To Cash

33.

In the books of Rajesh Trial Balance as on 31.03.2017
S.No	Name of account	Debit balance Rs	Credit balance Rs
1.	Bills receivable	13,000
2.	Bank Charges	750
3.	Conveyance Charges	350
4.	Discount received		1,300
5.	Cash in hand	1,000
6.	Drawings	7,000	1,675
7.	Sundry Debtors	17,100
8.	Bills payable		12,000
9.	Capital		25,900
	Total	39,200	39,200

34.

The main functions of accounting are as follows:
(i) Measurement:
1. The main function of accounting is to keep systematic record of business transactions, post them to the ledger and ultimately to prepare the final accounts.
2. Accounting works as a tool for measuring past performance of the business enterprises.
(ii) Forecasting:
With the help of the various tools of accounting, future performance and financial position of the business enterprises can be forecasted.
(iii) Comparison:
1. Accounting helps to assess the actual performance with the targets.
2. It also discloses the accounting policies.
(iv) Decision making:
1. Accounting assists the management in planning, evaluation of performance, control and decision making by providing required information to various users of accounts.
2. This will help them to take various decisions on cost, price, sales, volume, etc.
(v) Control:
1. As accounting works as a tool of control, the strengths and weaknesses are identified to provide feedback on various measures adopted.
2. It serves as a tool for evaluating compliance of business policies and programmes.
(vi) Assistance to Government regulations:
Government needs full information on the financial aspects of the business, so that proper tax can be levied on the income earned by the enterprises.

35.

The various branches of accounting are

(i) Financial Accounting :
1. It involves recording of financial transactions and events.
2. It provides financial information to the users for taking decisions.
3. It ends up with the preparation of trading and profit and loss account and balance sheet,
(ii) Cost Accounting :
It involves the collection, recording, classification and appropriate allocation of expenditure for the determination of the costs of products or services and for the presentation of data for the purposes of cost control and managerial decision making.
(iii) Management Accounting :
It is concerned with the presentation of accounting information in such a way as to assist management in decision making and in the day - to - day operations of an enterprise.
(iv) Social Responsibility Accounting :
It is concerned with presentation of accounting information from the view point of the society by showing the social costs and social benefits.
(v) Human Resource Accounting :
It is concerned with identification, quantification, and reporting of investments made in human resources of an enterprise.

Generic 3

9 x 3 = 27

36.

In the books of Kunal Cash Book (Single column)
Date	Receipts	L.F	Amount Rs.	Date	Payments	L.F	Amount Rs.
2017				2017
Apr.1	To Pradeep's capital Alc		27,000	Apr.5	By Purchases Alc		6,000
10	To Sales Alc		11,000	13	By BankA/c		5,000
14	To Sales Alc		9,000	21	By Stationery Alc		200
29	To Bank Alc		4,000	25	By Murugan Alc		14,000
				26	By Commission A/c		700
				30	By Balance c/d		25,100
			51,000				51,000
May 1	To Balance B/d		25,100

37.

**Interest on capital**
Particulars		Debit Rs	Credit Rs
Iriterest on capital A/c	Dr	xxxxxx
To Capital A/c			xxxxxx
(Interest on capital due)

**Interest on drawings**
Particulars		Debit Rs	Credit Rs
capital A/c	Dr	xxxxxx
To Interest on drawings A/c			xxxxxx
(Interest on drawings)

38.

Rectification of Errors
S.No.	Particulars		Debit Rs	Credit Rs.
(a)	Suspense A/c	Dr.	250
	To Sales A/c			250
	(Being the uridercasting of sales book now rectified)
(b)	Purchases A/c	Dr.	120
	To Suspense A/c			120
	(Being the undercasting of Purchase book now rectified)
(c)	Sales A/c	Dr.	130
	To Suspense A/c			130
	(Being the overcasting the sales book now rectified)
(d)	Bills receivable A/c	Dr.	75
	To Suspense A/c			75
	(Being bills receivable book undercast, now rectified)
(e)	Suspense A/c	Dr.	35
	To Purchases A/c			35
	(Being Purchase book was overcast by Rs 35, now rectified)

39.

Procedure
i) Open a new spreadsheet in MS-Excel
ii) Enter values in the cells as given below

	A	B
1	Rate of interest (p.a.)	10%
2	Number of instalments (nper)	48
3	Loan amount (pv)	-300000
4	FV	0
5	Type	0

iii) Compute PMT in the cell B6 by the formula
= PMT(B1/12,B2,B3,B4,B5)
= Rs.7,608.78

40.

(i) The balance sheet is a statement prepared for showing the financial position of the business summarising its assets and liabilities at a given date.
(ii) It is prepared at the end of the accounting period after the trading and profit and loss account have been prepared.
(iii) It is called a balance sheet because it is a statement of balances of ledger accounts which have not been closed even after the preparation of the trading and profit and loss account.

41.

**In the Books of Mr Rajasekaran Purchases Book**
Date	Particulars	Inward Invoice No.	L.F.	Amount
Date	Particulars	Inward Invoice No.	L.F.	Details (Rs)	Total (Rs)
2017 May 10	Raman				15,000
May 18	Sekaran				10,000
May 20	Pradeep				20,000
	Purchases A/c Dr.				45,000

**Purchases Return Book**
Date	Particulars	Debit Note No.	L.F.	Amount		Remarks
Date	Particulars	Debit Note No.	L.F.	Details (Rs)	Total (Rs)	Remarks
2014 May 14	Raman				500	Damaged in transit
May 24	Sekaran				1,000
	Purchases return A/c Cr.				1,500

42.

Debit balance : Cash, Furniture, Debtors, Purchases, Salaries paid, Computer
Credit balance : Creditors, Sales, Commission received, Capital

43.

Following are the principles of double entry system:
(i) In every business transaction, there are two aspects
(ii) The two aspects involved are the benefit or value receiving aspect and benefit or value giving aspect.
(iii) These two aspects involve minimum two accounts; at least one debit and at least one credit.
(iv) For every debit, there is a corresponding and equivalent credit. If one account is debited the other account must be credited.

44.

Process of Accounting cycle

(i) When a businessman starts his business activities, he records the day-to-day transactions in the journal.
(ii) From the journal the transactions move further to the ledger where accounts are written up.
(iii) Preparation of trading and profit and loss account is the next step.
(iv) The balancing of profit and loss account gives the net result of the business transactions.
(v) Thus this cyclic movement of the transactions through the books of accounts (accounting cycle) is a continuous process.

Generic 2

10 x 2 = 20

45.

Normally entries in the cashbook should tally (agree) with those in the pass book and the balances shown by both the books should be the same. But in practice the balances may generally differ. In case of disagreement in the balance of the cash book and the pass book, on a particular date the need for preparing 'Bank Reconciliation Statement' arises. After tracing the various items of difference, the statement is prepared.

46.

Financial statements must show a true and fair view of the financial performance and position of the business. If depreciation is not provided, both fixed asset and profit, will be shown at inflated amounts .

47.

No, because there are several persons using of accounting systems:
1. Internal users \(\longrightarrow\) Owners, management
2. External users \(\longrightarrow\) Creditors, bankers

48.

Examples of Readymade software:
(i) TALLY
(ii) MS-EXCEL

49.

Journal entries
Date	Particulars		Debit Rs.	Credit Rs.
1.1.2016	furniture A/c	Dr.	6,000
	To Bank A/c			6,000
	(Furniture purchased)
31.12.2016	Depreciation A/c	Dr.	600
	To Furniture A/c			600
	(Annual depreciation)
31.12.2016	Profit and loss A/c	Dr.	600
	To Depreciation A/c			600
	(Depreciation transferred te profit and loss A/c)
31.12.2017	Depreciation A/c	Dr.	540
	To Furniture A/c			540
	(Annual depreciation)
31.12.2017	Profit and loss A/c	Dr.	540
	To Depreciation A/c			540
	(Depreciation transferred to profit and loss A/c)

50.

(a) Rent was should be debited with Rs. 500.
(b) Wages paid should be credited with Rs. 250.

51.

i) It is a capital expenditure since it is incurred to acquire the right to carry on business.
ii) Cost of construction of building including cost of temporary huts is capital expenditure.
iii) It is a capital expenditure because overhaul expenses are incurred to put second-hand machinery in working condition to get long-term advantage.

52.

Value of trust is being violated by the accountant by passing a dummy entry and not even informing the seniors about it.

53.

(i) Accounting equation is a mathematical expression which shows that the total of assets is equal to the total of liabilities and capital.
(ii) This is based on the dual aspect concept of accounting.
(iii) This means that total claims of outsiders and the proprietor will always be equal to the total of assets of business enterprise.
Assets = Liabilities + Capital + Revenues - Expenses

54.

Journal Proper is a residuary book which contains record of transactions which do not find a place in the subsidiary books such as cash book, purchases book, sales book, purchases returns book, sales returns book, bills receivable book and bills payable book.