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11th Standard Accountancy English Medium All Chapter Book Back and Creative Five Marks Questions 2020

Published on: 14/03/2020

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Questions:

Generic 5

52 x 5 = 260

Journalise the following transactions in the journal of Mr. Jesuraja and Raviraja. 2013, October

Date		Rs.
1	As partners, Jesuraja and Raviraja started their business with Rs.25,000, Rs. 15,000 respectively
5	Opened a current account with bank of India	40,000
10	Paid rent by cheque	2,500
15	Machinery purchased for Rs. 20,000 by cheque
20	Amount withdrawn from bank	3,000
25	Received cheque from Mr. Ramamoorthy	12,000
28	Ramamoorthy cheque deposited into bank for collection	25,000
5	Sold goods for cash
30	Cheque received from Mr. Sundararajan Rs.7000 and immediately banked.

On 31^st December, 2013 the cash book of Ms. Vijayalakshmi showed an overdraft of Rs. 56,700. From the following particulars prepare the bank reconciliation statement and find out the balance as per pass book.
(a) Cheque drawn but not casbed before 31^st December, 2013 amounted to Rs. 39,460.
(b) Cheque paid into bank but not cleared before 31^st December, 2013 amounted to Rs. 48,910.
(c) A bill receivable for Rs. 5,200 previously discounted with bank bad been dishonoured and debited in the pass book.
(d) Debit is also made in the pass book for Rs. 1,200 on account of interest on overdues and Rs. 550 on account of charges for collecting the bills and cheques.
(e) Bank has collected interest on investment and credited Rs. 7,600 on the pass book.

Enter the following transactions in proper subsidiary books.

		Rs.
2013, March1	Purchased goods from Balaraman	2,000
2	Sold goods to Senthil	1,000
3	Goods purchased from Durai	1,000
5	Sold goods to Saravanan	700
8	Sold goods to Senthil	500
10	Purchased goods from Elangovan	600
14	Purchased goods from Parthiban	300
20	Sold goods to Sukumar	600

Enter the following transactions in the Purchase Book of M/s. Subhashree:
2013 March 1 Purchased 100 kg. of coffee seeds from Suresh @ Rs. 40 per kg.
5 Purchased 80 kg. of tea dust from Hari @ Rs. 20 per kg.
12 Bought from Rekha Sugars, Trichy 1,200 kg. of sugar @ Rs. 8 per kg.
18 Bought from Perumal Sweets, Chennai, 40 tins of sweets @ Rs. 200 per tin.
20 Purchased from Govinda Biscuit Company, Chennai 20 tins of biscuits @ Rs. 400 per tin.

Post the following transactions direct into ledger of Thiru. Karthik and balance them.

2013, Oct.	1 Received cash from Ramesh Rs. 1,60,000
20	Withdrew cash for personal use Rs. 18,000
25	Received commission Rs. 20,000
30	Paid rent Rs. 5,000
31	Paid salary Rs. 10,000

Prepare Trial Balance from the following balances of Mrs. Dilshad as on 31.12.2012.

Name of the account	Rs	Name of the account	Rs
Capital	4,20,000	Cash in hand	25,000
Building	1,15,000	Cash at bank	84,700
Machinery	60,000	Salaries	94,000
Furniture	11,000	Rent	48,000
Car	68,000	Commission	1,400
Opening stock	86,000	Rates and Taxes	2,600
Purchases	94,000	Bad debts	3,200
Sales	1,96,000	Insurance	2,400
Sundry debtors	16,200	General Expenses	800
Reserve for doubtful debts	7,300	Sundry Creditors	68,000

From the following balances of Mis. Nillu Sarees as on 31^st March, 2016. Prepare trading and profit and loss account and balance sheet as on date.

Particulars	Rs.	Particulars	Rs.
Opening stock	10,000	Sales	2,28,000
Purchases	78,000	Capital	10,000
Carriage inwards	2,500	Interest	7,000
Salaries	30,000	Commission	8,000
Commission	10,000	Creditors	28,000
Wages	11,000	Bills payable	2,370
Rent and Taxes	2,800	Bank overdraft	21,330
Repair	5,000
Telephone expenses	1,400
Legal charges	1,500
Sundry expenses	2,500
Cash in hand	12,000
Debtors	30,000
Machinery	60,000
Investments	90,000
Drawings	18,000

Closing Stock as on 31^st March, 2016 Rs.22,000.

The following trial balance is extracted from the books of M/s. Ram, on 31^st March, 2016. You are required to prepare trading and profit and loss account and the balance sheet as on date.

Particulars	Rs.	Particulars	Rs.
Debtors	12,000	Premium	5,000
Purchases	50,000	Bills payable	10,000
Coal, Gas and Water	6,000	Bank overdraft	1,000
Factory Wages	11,000	Sales	80,000
Salaries	9,000	Creditors	13,000
Rent	4,000	Capital	20,000
Discount	3,000
Advertisement	500
Drawings	1,000
Loan	6,000
Petty Cash	500
Sales return	1,000
Machinery	5,000
Land and Building	10,000
Income Tax	100
Furniture	9,900

A company purchased machinery on 1.4.2012 for Rs. 50,000. Depreciation is 10%. Accounts are closed on 31^st March every year. Prepare machinery account and depreciation account under straight line method and also under written down value method.

10.

On1^st July 2014, Asoka limited purchased a furniture costing Rs 50,000. On 1^st July 2017 the furniture was sold for Rs 20,000: Prepare furniture account, depreciation account at 10% per annum on original cost method assuming the accounts is closed on 31^st March each year

11.

Discuss the various categories of accounting packages.

12.

Explain briefly the features of computerised accounting system.

13.

State whether the following are capital or revenue.
i) Repairs made on second hand plant purchased.
ii) Wages paid to workmen for setting up a new plant.
iii) Replacement of old furniture.
iv) Salary paid to staff.
v) Amount received as rent during the year for letting out a portion on sub rent.

14.

Kumar gives you the following expenses which were incurred in his business during the year 2003, classify them into capital, revenue or deferred revenue.
i) Rs.12,000 spent on purchasing a patent right.
ii) Freight charges paid on new plant amounts to Rs.700
iii) Repairs of Rs.600 for furniture.
iv) Rs.10,000 spent towards expenses connected with rainwater harvesting as per Government orders.
v) Rs.7,500 spent towards initial advertising expenses.

15.

The following is the Trial balance extracted from the books of Mr. Mohan as on 31-12-2017. Prepare Trading and Profit and loss account and Balance sheet on 31-12-2017.

Debit balances	Amount Rs.	Credit balances	Amount Rs.
Buildings	30,000	Capital	40,000
Machinery	31,400	Purchase return	2,000
Furniture	2,000	Sales	2,80,000
Motor Car	16,000	Sundry creditors	9,600
Purchases	1,88,000	Discount received	1,000
Sales returns	1,000	Provision for bad and
Sundry debtors	30,000'	and doubtful debts	600
General expenses	1,600
Cash at bank	9,400
Rates and Taxes	1,200
Bad debts	400
Insurance premium	800
Discount allowed	1,400
Opening stock	20,000
	3,33,200		3,33,200

Adjustments:
(i) Outstanding rates and taxes Rs.1,600
(ii) Insurance premium prepaid Rs.200
(iii) Maintain provision for bad and doubtful debts at 5% on debtors,
(iv) Depreciate Motor Car by 10%. Furniture by 4% and Buildings by 3%.
(v) Stock on 31-12-2017 Rs.20,000.

16.

The Trial balance shows on 31-03-2012 Sundry debtors 1,25,000.
Adjustments:
(i) Bad debts to.be written off Rs. 5,000
(it) Provide @ 5% provision for bad and doubtful debts and
(iii) Provide @ 2% provision for Discount on debtors.
Pass entries and show how these items will appear in the Final accounts.

17.

An accountant could not tally the trial balance. The Difference of Rs. 520 was temporarily placed to the credit of suspense account arid subsequently found the following errors.
(a) The total of the Discount column on the credit side of the cash book Rs. 230 was not posted in the ledger.
(b) The total of the Discount column on the debit side of the cash book Rs. 150 was omitted to be posted in the ledger.
(c) The total of the Purchases book was short by Rs. 600.
(d) A sale of Rs. 675 to Kannan was entered in the sales book as Rs. 975.
(e) A sale of Rs. 500 to Vimal has been entered in the purchase book.
Rectify the above errors through suspense account. Also give journal entries for rectification.

18.

Following are some accounting errors. Rectify them by making journal entries :
(a) Sales for Rs. 20,000 made to Madhan was not entered in the sales book.
(b) Salary of Rs. 7,500 paid to accountant Raman was debited to his personal account.
(c) Old furniture sold for Rs. 2,800 was entered in the sales book.
(d) Carriage paid Rs. 500 on purchase of a machine was debited to carriage A/c.
(e) Cash Rs. 50,000 paid to the creditor Arya Ghosh was debited to Surya Ghosh's A/c.

19.

Record the following transactions in three column cash book of Gunasekaran

2017	Particulars	Rs
Jan.1	Cash in hand	50,000
1	Cash at bank	90,000
2	Goods sold on credit to Rohini	15,000
5	Cheque received from Rohini in full settlement and deposited into bank	14,500
6	Cash deposited into bank through cash deposited machine	18,000
7	Goods sold to Sridhar for Rs. 12,000. He made the payment of Rs 11,800 by debit card in full settlement by availing' a cash discount of Rs. 200
10	Money withdrawn from bank for office use	2,000
12	Purchased goods from Raja for Rs. 10,000 and paid through credit card in full settlement by availing a cash discount of Rs. 200	9,800
14	Nathiya who owed money made the payment through NEFT	18,000
21	Cheque of Rohini dishonoured

20.

Prepare necessary ledger accounts in the books of Joy from the following opening entry:

In the books of Joy Journal entries
Date	Particulars	Debit Rs	Credit Rs
2017
Jan 1	Cash A/c Dr.	45,000
	Stock A/c Dr.	50,000
	Sohan A/c Dr.	35,000
	Furniture A/c Dr.	50,000
	To Ram A/c		20,000
	To Joy's capital A/c		1,60,000
	(Balances of assets and liabilities brought forward)

21.

Prepare trial balance as on 31st December, 2017 from the following balances of Balaraman.

Particulars	Rs	Particulars	Rs
Capital	2,20,000	Repairs	2,400
Drawings	24,000	Office lighting	2,600
Furniture	63,500	Printing and stationery	2,700
Stock at the beginning	62,050	Bank loan	7,500
Bills receivable	9,500	Computer	25,000
Bills payable	8,750	Debtors	46,500
Purchases	88,100	Cash in hand	15,000
Sales	1,35,450	Cash at bank	27,250
Discount allowed	7,100	General expenses	7,100
Discount received	3,500	Creditors	7,600

22.

Enter the following transactions in Murali's cash book with column for discont, cash & bank.

2002 May	Particulars	Rs
1	Cash Balance	40,00
	Bank Overdraft	10,500
4	Received Rs. 2,000 from Manoj in Cash Allowed him discount of	100
7	Cash Sales	2,000
10	Furniture purchased Rs. 800 by cheque
12	Paid rent by cheque	1,500
15	Paid Rs 2,500 to Karthikeyan half cash and. half by cheque
18	Cash sales	15,000
20	Paid packing charges	500
24	Paid Murugan Rs.4,000. Discount allow by him	50
28	Paid into bank	5,000

23.

Enter the following transactions in the double column cash book of Mr. Srinivasan.

2002 May	Particulras	Rs
1	Cash in hand	50,000
3	Cash Paid to Rajan	6,000
	Discount allowed by him	100
6	Cash Purchases	10,000
10	Received cash from Arun Rs 2,900 and allowed hime discount	100
13	Cash Sales	15,000
15	Electricity charges paid	1,000
18	Paid for miscellaneous expenses	2,000
20	Received cash from Murali	3,450
	Discount allowed	50

24.

From the following information, prepare trading and profit and loss account and balance sheet in the books of Sangeetha for the year ending 31^st March, 2018.

Debit balance	Rs	Credit balance	Rs
Capital	20,000	Salaries	6,600
Bills receivable	8,000	Establishment expenses	4,500
Bills payable	10,500	Advertisement	2,300
Purchases	75,000	Furniture	10,000
Sales	95,000	Cash at bank	3,200
Opening stock	12,000	Miscellaneous receipts	600
Drawings	4,500

Adjustments:
a) Stock on 31^st March, 2018 Rs. 14,200
b) Income tax of Sangeetha paid Rs. 800
c) Charge interest on drawings @ 12% p.a.
d) Provide managerial remuneration @ 10% of net profit before charging such commission.

25.

From the trial balance of Ajith and the adjustments given below, prepare trading and profit and loss A/c for the year ended 31st March, 2016 and the balance sheet as on that date.

Particulars	Debit Rs.	Particulars	Credit Rs.
Opening stock	15,000	Capital	25,000
Furniture and fixtures	30,000	Returns outward	1,000
Purchases	40,000	Bills payable	10,000
Sales returns	2,000	Sales	1,24,000
Carriage inwards	10,000	Provision for doubtful debts	500
Office rent	23,000	Provision for discount on debtors	100
Sundry debtors	20,100
Bank balance	19,600
Bad debts	900
	1,60,600		1,60,600

Adjustments:
(a) Stock at the end of the year was Rs. 8,000
(b) Further bad debts amounted to Rs. 100
(c) Create 2% provision for doubtful debts on sundry debtors
(d) Create 1% provision for discount on sundry debtors.

26.

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.

27.

Prepare trading and profit and loss account in the books of Ramasundari for the year ended 31st December 2017 and balance sheet as on that date from the following information:

Particulars	Rs	Particulars	Rs
Opening stock	2,500	Sales	7,000
Wages	2,700	Purchases	3,300
Closing Stock	4,000	Salary	2,600
Discount received	2,500	Capital	52,000
Machinery	52,000	Cash at Bank	6,400
Creditors	8,000

28.

The book-keeper of a firm found that the trial balance was out by Rs.922 (excess credit). He placed the amount in the suspense account and subsequently found the following errors:
(a) The total of discount column on the credit side of the cash book Rs.78 was not posted in the ledger.
(b) The total of purchases book was short by Rs.1,000.
(c) A credit sale of goods to Natarajan for Rs.375 was entered in the sales book as Rs.735.
(d) A credit sale of goods to Mekala for Rs.700 was entered in the purchases book.
You are required to give rectification entries and prepare suspense account.

29.

Calculate depreciation under Straight Line Method using Spreadsheet based on the details given below.

A	B	C	D	E	F
Asset	Cost of purchase Rs	Installation charge Rs	Transportation charge Rs	Salvage value Rs	Life in years
1. Machinery	200000	20000	5000	25000	10
2. Furniture	50000	4000	2000	5000	8

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.

From the following particulars, give journal entries for 2 years and prepare machinery account under straight line method of providing depreciation:
Machinery was purchased on 1.1.2016
Price of the machine Rs. 36,000
Freight charges Rs. 2,500
Installation charges Rs. 1,500
Life of the machine 5 years

32.

A book-keeper finds that the debit column of the trial balance is short by Rs.308 and the difference is put to a suspense account. Subsequently, the following errors were located.
(a) An entry for sale of goods on credit for Rs.102 to Mekala was posted to her account as Rs.120.
(b) Rs.100 being the monthly total of discount allowed to customers was credited to discount received account in the ledger.
(c) Rs.275 paid by Mannan was credited to Kannan account.
(d) Rs. 26 appearing in the cash book as paid for the purchase of stationery for office use has not been posted to ledger.
(e) The purchases book was undercast by Rs.100.
Rectify the errors and prepare suspense account.

33.

From the following information, prepare trading and profit and loss account of Abdul Rahuman for the year ending 31st December 2016 and balance sheet as on that date. The closing stock on 31st December 2016 was valued at Rs. 2,000.

Particulars	Rs	Particulars	Rs
Opening stock	500	Purchases	1,300
Sales	5,000	Wages	700
Discount received	500	Salary	500
Building	50,000	Capital	50,000
Cash in hand	4,500

34.

State whether they are capital and revenue.
i) Construction of building Rs.10,00,000.
ii) Repairs to furniture Rs.50,000.
iii) White-washing the building Rs.80,000
iv) Pulling down the old building and rebuilding Rs.4,00,000

35.

State whether the following expenditures are capital, revenue or deferred revenue.
i) Advertising expenditure, the benefits of which will last for three years.
ii) Registration fees paid at the time of registration of a building.
iii) Expenditure incurred on repairs and whitewashing at the time of purchase of an old building in order to make it usable.

36.

From the following particulars ascertain Bank Balance as per pass book of Ms.Padma as on December 31, 2008.
a) The balance as per Cashbook on that date was Rs. 12,500.
b) Cheques issued but not cashed before that date amounted to Rs. 1,750.
c) Cheques paid into bank, but not cleared before December 31,2008 amounted to Rs. 2,150.
d) Interest on investments collected by the bank but not entered in the cash book amounted to Rs. 275.
e) Dividend collected by bank Rs. 300.
f) Bank charges debited in the passbook Rs. 25.
g) Subscription paid as per standing instructions Rs. 125.

37.

Show the effects of the following business transactions on the accounting equation.

		Rs
i)	Anitha started business with cash Rs.20,000; goods Rs.12,000 and machine	8,000
ii)	Bought goods for cash	6,000
iii)	Sold goods costing Rs.2,000 for	2,500
iv)	Purchased goods from Ramani on credit	7,000
v)	Payment made to Ramani in full settlement	6,900
vi)	Sold goods to Rajan on credit costing Rs.5,400 for	20,000
vii)	Received from Rajan 5,800 in full settlement of his account	6,000
viii)	Salaries paid	4,000
ix)	Wages Outstanding	400
x)	Prepaid Insurance	100

38.

From the following particulars of Simon traders, prepare a bank reconciliation statement as on 31^st March, 2018.
(a) Debit balance as per bank statement Rs. 2,500
(b) Cheques deposited amounting to Rs. 10,000, not yet credited by bank.
(c) Payment through net banking for Rs. 2,000, omitted in the cash book.

39.

Write out a cash book with discount, cash and bank columns in the books of Mahendran.

2017 Oct		Rs
1	Cash balance	12,000
2	Bank balance	48,500
3	Received a cheque from Kesavan	150
4	Paid Shanmuganathan cheque for Rs 7950 and discount allowed by him	50
6	Cash Sales	17,800
7	Paid Sivasamy in cash	10,000
15	Withdrew cash from bank	6,000
17	Purchased goods and payment made through credit card	14,500
20	Received cash from Janarthanam Rs.10,000 and discount allowed to him	100
21	Cash remitted into bank through CDM	12,000
24	Bought furniture for office use by cash	15,000
28	Deepavali advance paid to staff through bank	10,000
30	Salary for staff paid by cash	4,500
	Salary of Manager paid by through net banking	12,500

40.

From the following particulars of Siva and Company, prepare a bank reconciliation statement as on 31^st December, 2017.
(a) Credit balance as per cash book Rs. 12,000.
(b) A cheque of Rs. 1,200 issued and presented for payment to the bank, wrongly credited in the cash book as Rs. 2,100.
(c) Debit side of bank statement was undercast by Rs.100.

41.

Mary runs a textile store. She has prepared the following trial balance from her ledger balances. Her trial balance does not tally. She needs your help to check whether what she has done is correct.

S.No.	Name of the account	Debit Balance Rs	Credit Balance Rs
1.	Capital	50,000
2.	Discount received		3,000
3.	Rent paid		15,000
4.	Salaries Paid	1,000
5.	Purchases of textiles		20,000
6.	Sale of textiles		30,000
7.	Salesmen commission paid		9,000
8.	Transport charges paid	6,000
9.	Cash balance	32,000
		89,000	77,000

42.

Record the following transactions in the sales book and sales returns book of M/s. Ponni & Co., and post them to ledger.

2017 Aug 1	Sold goods to Senthil as per Invoice No. 68 for Rs. 20,500 on credit
Aug 4	Sold goods to Madhavan as per Invoice No. 74 for Rs. 12,800 on credit
Aug 7	Sold goods to Kanagasabai as per Invoice No. 78 for Rs. 7,500 on credit
Aug 15	Returns inward by Senthil as per Credit Note no. 7 for Rs. 1,500 for which cash is not paid
Aug 20	Sold goods to Selvam for Rs. 13,300 for cash
Aug 25	Sales returns of Rs. 1,800 by Madhavan as per Credit Note No. 11 for which cash is not paid

43.

Journalise the following transactions in the books of Ramesh who is dealing in computers:

2017 March
1	Ramesh started business with cash Rs.3,00,000, Goods Rs.80,000 and Furniture Rs.27,000.
2	Money deposited into bank Rs.2,00,000
3	Bought furniture from M/s Jayalakshmi Furniture for Rs.28,000 on credit.
4	Purchased goods from Ashokan for Rs.5,000 by paying through debit card.
5	Purchased goods from Guna and paid through net banking for cash Rs.10,000
6	Purchased goods from Kannan and paid through credit card Rs.20,000
7	Purchased goods from Shyam on credit for Rs.50,000
8	Bill drawn by Shyam was accepted for Rs.50,000
9	Paid half the amount owed to M/s Jayalakshmi Furniture by cheque
10	Shyam's bill was paid

44.

Karthick opened a provisions store on 1st April, 2017. Journalise the following transactions in his books:

2017 April		Rs
1	Paid into bank for opening a current account	2,00,000
3	Goods purchased by cheque	40,000
5	Investments made in securities	40,000
6	Goods sold to Radha for Rs.20,000 and cheque received and deposited into bank
7	Amount withdrawn from bank for office use	15,000
10	Purchased goods from Kamala and cash deposited in CDM	10,000
12	Sold goods to Vanitha who paid through debit card	10,000
15	Interest on securities directly received by the bank	1,000
20	Insurance paid by the bank as per standing instructions	2,000
25	Sales made to Kunal who made payment through CDM	6,000

45.

The following balances appeared in the books of Vinoth on Jan 1,2018
Assets: Cash Rs. 40,000; Stock Rs. 50,000; Amount due from Ram Rs. 20,000;
Machinery Rs. 40,000 Liabilities: Amount due to Vijay Rs. 10,000
Pass the opening journal entry and "post them to Vinoth's Capital account.

46.

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

2017 Aug		Rs.
1	Dharma started business with cash	70,000
6	Cash received from Ganesan	10,000
10	Rent paid	3000
20	Received commission from Anand	5000

47.

Enter the following credit transactions in the purchases book of Manoharan, a Provisions Merchant.

2017 May 2	Bought from Vasu 100 bags of rice @ Rs. 800 per bag
May 8	Bought from Cheyyar Sugar Mills Ltd., 20 bags of sugar @ Rs. 2,600 Per bag
May 10	Bought from Ram Flour Mill, Coimbatore, 10 bags of wheat flour @ Rs. 750 per bag
May 15	Bought from Nilgiri Tea Co., Nilgiris, 15 cases of tea @ Rs. 900 per case
May 25	Bought from Sairam Coffee Works Ltd., 100 kgs of Coffee @ Rs. 190 per kg
May 29	Bought from X & Co. furniture worth Rs. 2,000

48.

Prepare a trial balance with the following information:

Name of the Account	Rs	Name of the Account	Rs
Purchases	1,00,000	Sales	1,50,000
Bank Loan	75,000	Creditors	50,000
Debtors	1,50,000	Cash	90,000
Stock	35,000	Capital	1,00,000

49.

What are the differences between Book keeping and Accounting?

50.

Explain the advantages of Book-keeping.

51.

Briefly explain the functions of accounting

52.

Explain the Accounting cycle

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Answers Key:

Generic 5

52 x 5 = 260

Journal Entries of Mr. Jesuraja and Mr. Raviraja
Date	Particulars		Debit Rs.	Credit Rs.
1.10.13	Cash A/c	Dr.	40,000
	To Jesuraja's Capital A/c			25,000
	To Raviraja's Capital A/c			15,000
	(Amount invested by Jesuraia and Raviraia)
5.10.13	Bank of India A/c	Dr.	40,000
	To cash A/c			40,000
	(Amount paid into bank)
10.10.13	Rent A/c	Dr	2,500
	To Bank A/c			2,500
	(Rent paid by cheque)
15.10.13	Machinery A/c	Dr.	20,000
	To Bank A/c			20,000
	(Machinery purchased by cheque) .
20.8.13	Cash A/c	Dr.	3,000
	To Bank A/c			3,000
	(Amount withdrawn from bank)
25.10.13	Cash A/c	Dr.	12,000
	To Ramamoorthy A/c			12,000
	(Cheque received)
28.10.13	Bank A/c	Dr.	12,000
	To Cash A/c			12,000
	(Cheque paid into bank)
30.8.13	Bank A/c	Dr.	7,000
	To Sundarajan A/c			7,000
	(Cheque received and immediately banked) .

Bank Reconciliation Statement of Ms. Vijayalakshmi as on 31.12.2013
Particulars	Amount (Rs)	Amount (Rs)
Overdraft balance as per cash book		56,700
Add: (All credit items)
Cheques paid into bank but not cleared	48,910
Bills receivable dishonoured	5,200
Interest on overdraft	1,200
Bank charges	550	55,680
		1,12,560
Less: (All debit items)
(a) Cheques issued but not presented	39,460
(b) Interest on investment	7,600	47,060
Overdraft balance as per pass book		65,500

In the books of .................. Purchases Book
Date	Particulars	Invoice No.	L.F.	Amount Rs
Date	Particulars	Invoice No.	L.F.	Details	Total
1.3.13	Balaraman				2,000
3.3.13	Durai				1,000
10.3.13	Elangovan				600
14.3.13	Parthiban				300
31.3.13	Purchases A/c Dr.				3,900

Sales Book
Date	Particulars	Invoice No.	L.F.	Amount Rs
Date	Particulars	Invoice No.	L.F.	Details	Total
2.3.13	Senthil				1,000
5.3.13	Saravanan				700
8.3.13	Senthil				500
20.3.13	Sukumar				600
31.3.13	Sales A/c Cr.				2,800

In the books of M/s. Subhashree Purchases Book
Date	Particulars	Invoice No.	L.F.	Amount Rs
Date	Particulars	Invoice No.	L.F.	Details	Total
1.3.13	Suresh 100 kg. coffee seeds @ Rs. 40 per kg				4,000
5.3.13	Hari 80 kg. tea dust @ Rs. 20 per kg				1,600
12.3.13	Rekha Sugars, Trichy 1,200 kg. sugar @ Rs. 8 per kg				9,600
18.3.13	Perumal Sweets, Chennai 40 tins sweets @ Rs.200 per tin				8,000
20.3.13	Govinda Biscuit Company, Chennai 20 tins biscuits @ Rs. 400 per tin				8,000
31.3.13	Purchases A/c Dr.				31,200

Dr. Ledger of Thiru. Karthik Cash A/c Cr.
Date	Particulars	Amount Rs.	Date	Particulars	Amount Rs.
1.10.13	To Ramesh A/c	1,60,000	20.10.13	By Drawings A/c	18,000
25.10.13	To Commission A/c	20,000	30.10.13	By Rent A/c	5,000
			31.10.13	By Salary A/c	10,000
			31.10.13	By balance c/d	1,47,000
		1,80,000			1,80,000
1.11.13	To Balance b/d	1,47,000

Dr. Ramesh A/c Cr.
Date	Particulars	Amount Rs.	Date	Particulars	Amount Rs.
31.10.13	To Balance c/d	1,60,000	1.10.13	By Cash A/c	1,60,000
		1,60,00			1,60,00
			1.11.13	By Balance b/d	1,60,000

Dr. Drawings A/c Cr.
Date	Particulars	Amount Rs.	Date	Particulars	Amount Rs.
20.10.13	To Cash A/c	18,000	31.10.13	By Balance c/d	18,000
		18,000			18,000
1.11.13	To Balance b/d	18,000

Dr. Commission received A/c Cr.
Date	Particulars	Amount Rs.	Date	Particulars	Amount Rs.
31.10.13	To Balance c/d	20,000	25.10.13	By Cash A/c	20,000
		20,000			20,000
			1.11.13	By Balance b/d	20,000

Dr. Rent A/c Cr.
Date	Particulars	Amount Rs.	Date	Particulars	Amount Rs.
30.10.13	To Cash A/c	5,000	31.10.13	By Balance c/d	10,000
		5,000			10,000
1.11.13	To Balance b/d	5,000

Dr. Salary A/c Cr.
Date	Particulars	Amount Rs.	Date	Particulars	Amount Rs.
31.10.13	To Cash A/c	10,000	31.10.13	By Balance c/d	10,000
		10,000			10,000
1.11.13	To Balance c/d	10,000

Trial Balance of Mrs. Dilshad as on 31.12.2012
S.No	Name of Account / Particulars	Debit balance Rs	Credit balance Rs
1	Capital		4,20,000
2	Building	1,15,000
3	Machinery	60,000
4	Furniture	11,000
5	Car	68,000
6	Opening stock	86,000
7	Purchases	94,000
8	Sales		1,96,000
9	Sundry debtors	16,200
10	Reserve for doubtful debts		7,300
11	Cash in hand	25,000
12	Cash at bank	84,7000
13	Salaries	94,000
14	Rent	48,000
15	Commission	1,400
16	Rates and Taxes	2,600
17	Bad debts	3,200
18	Insurance	2,400
19	General expenses	800
20	Sundry creditors		68,000
21	Suspense Account		21,000
		7;12,300	7;12,300

Dr. Trading and profit and loss account for the year ended 31^stMarch 1016 Cr.
Particulars	Rs.	Particulars	Rs.
To Opening stock	10,000	By Sales	2,28,000
To Purchases	78,000	By Closing stock	22,000
To Carriage inwards	2,500
To Wages	11,000
To Gross profit c/d	1,48,500
	2,50,000		2,50,000
To Salaries	30,000	By Gross profit c/d	1,48,500
To Commission	10,000	(Transferred from trading Alc)
To Rent and Taxes	2,000	By Interest	7,000
To Repair	5,000	By Commission	8,000
To Telephone expenses	1,400
To Legal charges	1,500
To Sundry expenses	2,500
To Net profit	1,10,300
(Transferred to Capital A/c)
	1,63,500		1,63,500

Balance sheet as at 31^stMarch 2016
Liabilities	Rs.	Rs.	Assets	Rs.
Capital	70,000		Machinery	60,000
Add: Net profit	1,10,300		Investment	90,000
	1,80,300		Debtors	30,000
Less: Drawings	18,000	1,62,300	Cash in hand	12,000
Creditors		28,000	Closing stock	22,000
Bills payable		2,370
Bank overdraft		21,330
		2,14,000		2,14,000

Dr. Trading and profit and loss account for the year ended 31^st March 2016 Cr
Particulars	Rs.	Particulars	Rs.	Rs.
To Purchases	50,000	By Sales	80,000
To Coal, Gas and Water	6,000	Less: Sales returns	1,000	79,000
To Factory Wages	11,000
To Gross profit c/d	12,000
	79,000			79,000
To Salaries	9,000	By Gross profit c/d		12,000
To Rent	4,000	By Premium		5,000
To Discount	3,000
To Advertisement	500
To Net profit	500
(Transferred to capital A/c)
	17,000			17,000

Balance sheet as at 3st March 2016
Liabilities	Rs.	Rs.	Assets	Rs.
Capital	20,000		Machinery	5,000
Add: Net profit	500		Land and Buildings	10,000
	20,500		Furniture	9,900
Less: Drawings	1,000		Loan and Advances	6,000
	19,500		Debtors	12,000
Less : Income Tax	100	19,400	Petty cash	500
Creditors		13,000
Bills payable		10,000
Bank overdraft		1,000
		43,400		43,400

(a) Straight Line Method:

Machinery Account
Date	Particulars	Amount Rs	Date	Particulars	Amount Rs
2012 Apr 01	To Bank A/c	50,000	2013 Mar 31	By Depreciation A/c	5,000
			''	By Balance c/d	45,000
		50,000			50,000
2013 Apr 01	To Balance b/d	45,000	2014 Mar 31	By Depreciation A/c	5,000
			''	By Balance	40,000
		45,000			45,000
2013 Apr 01	To Balance b/d	40,000	2014 Mar 31	By Depreciation A/c	5,000
			''	By Bank A/c	35,000
		40,000			40,000

Depreciation Account
Date	Particulars	Amount Rs.	Amount Rs.	Particulars	Amount Rs.
2013 Mar 31	To Machinery A/c	5,000	2013 Mar 31	By Profit & Loss A/c	5,000
		5,000			5,000
2014 Mar 31	To Machinery A/c	5,000	2014 Mar 31	By Profit & Loss A/c	5,000
		5,000			5,000
2015 Mar 31	To Machinery A/c	5,000	2015 Mar 31	By Profit & Loss A/c	5,000
		5,000			5,000

(b) Written Down Value Mathod:

Date	Particulars	Amount Rs.	Date	Particulars	Amount Rs.
2012 Apr 01	To Bank A/c	50,000	2013 Mar 31	By Depreciation A/c	5,000
			''	By Balance c/d	45,000
		50,000			50,000
2013 Apr 01	To Balance b/d	45,000	2014 Mar 31	By Depreciation A/c	4,500
			''	By Balance	40,500
		45,000			45,000
2014 Apr 01	To Balance b/d	40,500	2015 Mar 31	By Depreciation A/c	4,050
			''	By Bank A/c	36,450
		40,500			40,500
2015 Apr 01	To Balance b/d	36,450

Depreciation Account
Date	Particulars	Amount Rs.	Amount Rs.	Particulars	Amount Rs.
2013 Mar 31	To Machinery A/c	5,000	2013 Mar 31	By Profit & Loss A/c	5,000
		5,000			5,000
2014 Mar 31	To Machinery A/c	4,500	2014 Mar 31	By Profit & Loss A/c	4,500
		4,500			4,500
2015 Mar 31	To Machinery A/c	4050	2015 Mar 31	By Profit & Loss A/c	4050
		4,050			4,050

10.

**Calculation of Pofit or loss on sale of furniture**
Date	Particulars	Amount Rs
2014 July 01	Cost of furniture	50,000
2015 Mar 31	Less : 1^st Year depreciation \(\left( 50,000\times \frac { 10 }{ 100 } \times \frac { 9 }{ 12 } \right) \)	3,750
		46,250
2016 Mar 31	Less : II^nd Year Depreciation \(\left( 46,250\times \frac { 10 }{ 100 } \right) \)	4,625
		41,625
2017 Mar 31	Less: III^rd Year depreciation \(\left( 46,250\times \frac { 10 }{ 100 } \times \frac { 3 }{ 12 } \right) \)	1,156
	Book Value	40,469
	Sale Value	20,000
	Loss	20,469

Furniture Account
Date	Particulars	Amount Rs	Date	Particulars	Amount Rs
2014 July 01	To Bank A/c	50,000	2015 Mar 31	By Depreciation A/c	3,750
			''	By Balance c/d	46,250
		50,000			50,000
2015 Mar 31	To Balance b/d	46,250	2016 Mar 31	By Depreciation A/c	4,625
				By Balance c/d	41,625
		46,250			46,250
2016 Mar 31	To Balance B/d	41,625	2017 Mar 31	By Depreciation A/c	1,156
			''	By Bank A/c	20,000
			''	By Profit & Loss A/c	20,649
		41,625			41,625

Depreciation Account
Date	Particulars	Amount Rs	Date	Particulars	Amount Rs
2015 Mar 31	To Furniture A/c	3,750	2015 Mar 31	By Profit & Loss A/c	3,750
		3,750			3,750
2016 Mar 31	To Furniture A/c	4,625	2016 Mar 31	By Profit & Loss A/c	4,625
		4,625			4,625
2017 July 31	To Furniture A/c	1,156	2017 July 31	By Profit & Loss A/c	1,156
		1,156			1,156

11.

Depending upon the suitability of business requirements there are three types of softwares namely,
(i) Ready-made software
(ii) Customised software and
(iii) Tailor-made software.
(i) Readymade software:
(a) These packages are standardised or readymade packages which can be used by the business enterprises immediately on procurement.
(b) These packages are used by, small and conventional business enterprises. Cost of installation and maintenance is very low.
(c) Few Examples: of such type of software are TALLY, TATAEx, SAGE, MS-EXCEL.
(ii) Customised software:
(a) Customised packages can be modified according to the need of the enterprise.
(b) Few Examples: software can record attendance of the employees and on the requirement of the customer it can also count the absence of employees in a month etc.
(c) these packages are used by medium or large business enterprises. Cost of installation, maintenance and training is relatively higher than that of ready-to-use packages.
(iii) Tailormade Software:
(a) Large enterprises have their own way of functioning and for effective management information system, varied and specific information is frequently required by many users which may not
be applicable in case of small or medium scale enterprises.
(b) The cost of these packages is very high and specific training for using these packages is also required.

12.

The CAS possesses the following features:
(i) Simple and integrated:
Computerised Accounting System is designed to automate and integrate all the business operations, such as sales, finance, purchase, inventory and manufacturing.
(ii) Speed:
It can perform functions at much higher speed than doing the same manually.
(iii) Accuracy:
(a) Computers perform functions with high degree of accuracy.
(b) If hardware, software and input by people are proper, the computerised accounting system can assure of accurate outcome.
(iv) Reliability: Computers are used to process large volumes of data and hence, data provided by it are reliable.
(v) Versatility: Computer and accounting software have ability to perform diverse tasks.
(vi) Transparency: With computerised accounting, the organisation will have greater transparency for day-to-day business operations and access to the vital information.
(vii) Scalability: CAS enables processing of any volume of data in tune with the change in the size of the business.

13.

S.No.	Transactions	Classification
i)	Repairs made on second hand plant purchased.	Capital expenditure
ii)	Wages paid to workmen for setting up a new plant.	Capital expenditure
iii)	Replacement of old furniture.	Capital expenditure
iv)	Salary paid to staff.	Revenue expenditure
v)	Amount received as rent during the year for letting out a portion on sub rent.	Revenue receipt

14.

S.No.	Transactions	Classification
i)	Rs.12,000 spent on purchasing a patent right.	Capital expenditure
ii)	Freight charges paid on new plant amounts to Rs.700	Capital expenditure
iii)	Repairs of Rs.600 for furniture.	Revenue expenditure
iv)	Rs.10,000 spent towards expenses connected with rainwater harvesting as per Government orders.	Capital expenditure
v)	Rs.7,500 spent towards initial advertising expenses.	Deferred revenue expenditure

15.

Dr. Trading and profit ad loss account for the year ended 31^st December 2017 Cr.
Particulars	Amount Rs.	Amount Rs.	Particulars	Amount Rs.	Amount Rs.
To Opening stock		20,000	By Sales	2,80,000
To Purchases	1,88,000		Less: Sales returns	1,000	2,79,000
Less: Purchase returns	2,000	1,86,000	By Closing stock		20,000
To Gross profit c/d (Transferred to profit and loss account)		93,000
		2,99,000			2,99,000
To General expenses		1,600	By Gross profit b/d		93,000
To Rates and taxes	1,200		(Transferred from trading
Add: Outstanding	1,600	2,800	account A/c
To Bad debts	400		By Discount received		1,000
Add: New provision for bad and doubtful debt \(\left[ 30,000\times \frac { 5 }{ 100 } \right] \)	1,500
	1,900
Less: Old provision for bad and doubtful debts	600	1,300
To Insurance premium	800
Less: prepaid	200	600
To Discount allowed		1,400
To Depreciation on Motor Carby 10%	1,600
Furniture by 4%	80
Buildings by 3%	900	2,580
To Net profit (To be transferred to capital account)		83,720
		94,000			94,000

Balance Sheet as on 31^st December 2017
Liabilities	Amount	Amoun	Assets	Amount Rs.	Amount Rs.
Capital	40,000		Buildings	30,000
Add: Net profit	83,720	1,23,720	Less: Depreciation on @ 3%	900	29,100
Sundry creditors		9,600	Machinery		31,400
Outstanding			Furniture	2,000
rates and taxes		1,600	Less: Depreciation 4%	80	1,920
			Motor Car	16,000
			Less: Depreciation	1,600	14,400
			Cash at bank		9,400
			Sundry debtors	30,000
			Less: 5% new provision for doubtful debtors	1,500	28,500
			Prepaid Insurance		200
			Closing stock		20,000
		1,34,920			1,34,920

16.

Adjusting and Transfer Entries
Date	Particulars		Debit Rs.	Credit Rs.
2012 Mar 31	Bad debts A/c	Dr.	5,000
	To Sundry debtors A/c (Adjusting entry made)			5,000
,,	Profit and loss A/c	Dr	5,000
	To Bad debts A/c (Bad debts transferred o profit and loss A/c)			5,000
,,	Profit and Loss A/c	Dr	6,000
	To Provision for bad and doubtful debts A/c (Provision for bad and doubtful debts-1,20,000 x \(\frac{5}{100}\))			6,000
,,	Profit and Loss A/c	Dr.	2,280
	To Provision for discount on debtors A/c (Provision for discount on debtors -1,14,000 x \(\frac{2}{100}\)			2,280

Dr Profit ad Loss Account for the year ended 31^st March 2012 Cr.
Particulars	Amount Rs.	Amount Rs.	Particulars	Amount Rs.	Amount Rs.
To Bad debts A/c		5,000
To provision for bad and doubtful debts A/c		6,000
To provision for discount on debtors A/c		2;280

Balance Sheet as on 31st March 2012
Assets	Amount Rs.	Amount Rs.
Sundry debtors	50,000
Less: Bad debts written off	5,000
	1,20,000
Less: Provision for bad and doubtful debts	6,000
	1,14,000
Less: Provision for discount on debtors	2,280
		1,11,720

17.

Rectification of errors
S. No.	Particulars		Debit Rs	Credit Rs
(a)	Suspense A/c	Dr.	230
	To Discount received A/c			230
	(Partial omission in discount received A/c is now rectified)
(b)	Discount allowed A/c	Dr.	150
	To Suspense A/c			150
	(Partial Omission in discount allowed A/c is now rectified)
(c)	Purchases A/c	Dr.	600
	To Suspense A/c			600
	(undercast in purchase book, now rectified)
(d)	Sales A/c	Dr.	300
	To Kannan A/c			300
	(Excess debit in Kalpana's A/c and excess credit in sales A/c now rectified)
(e)	Vimal's A/c	Dr.	1,000
	To Sales A/c			500
	To Purchases A/c			500
	(Correction of wrong entry in Purchases book for a credit sales to Vimal)

Dr. Suspense. account Cr.
Particulars	Amount Rs	Particulars	Amount Rs
To Discount Received A/c	230	By Discount allowed A/c	150
To Difference in trial balance	520	By Purchases A/c	600
	750		750

18.

Rectification of Errors
S.No.	Particulars		Debit Rs	Credit Rs
(a)	Madhan A/c	Dr.	20,000
	To Sales A/c			20,000
	(Sale to Madhan omitted to be entered in sales book is corrected)
(b)	Salary A/c	Dr.	7,500
	To Raman A/c			7,500
	(Salary paid to Raman was debited to his personal account is now corrected)
(c)	Sales A/c	Dr.	2,800
	To Furniture A/c			2,800
	(Qld furniture sold was entered in the sales book is now corrected)
(d)	Machine A/c	Dr.	500
	To Carriage A/c			500
	(Amount paid for carriage on Purchase of machine is debited to carriage A/c is now corrected)
(e)	Atya Ghosh A/c	Dr.	50,000
	To Surya Ghosh A/c			50,000
	(Amount paid to Arya Ghosh was debited to Surya Ghosh is corrected)

19.

In the books of Gunasekaran Three column cash book
				Amount Rs							Amount Rs
Date	Particluars	R.N	L.F	Discount Allowed	Cash	Bank	Date	Particluars	V.N	L.F	Discount Received	Cash	Bank
2017							2017
Jan. 1	To Balance b/d				50,000	90,000	Jan.6	By Bank A/c		C		18,000
5	To Rohini A/c			500		14,500	10	By Cash A/c					2,000
6	To Cash A/c		C			18,000	12	By Purchases A/c			200		9,800
7	To Sales A/c			200		11,800	27	By Rohini A/c					14,500
10	To Bank A/c				2000		31	By Balance c/d				34,000	1,26,500
14	To Nathiya A/c					18,000
				700	52,000	1,52,300					200	52,000	1,52,300
Feb.1	To Balance b/d				34,000	1,26,500

20.

Dr. Ledger accounts Cash account Cr.
Date	Particulars	J.F	Rs	Date	Particulars	J.F.	Rs
2017 Jan 1	To Balance b/d		45,000

Dr. Stock account Cr.
Date	Particulars	J.F	Rs	Date	Particulars	J.F.	Rs
2017 Jan 1	To Balance b/d		50,000

Dr. Sohan account Cr.
Date	Particulars	J.F	Rs	Date	Particulars	J.F.	Rs
2017 Jan 1	To Balance b/d		35,000

Dr. Furniture Cr.
Date	Particulars	J.F	Rs	Date	Particulars	J.F.	Rs
2017 Jan 1	To Balance b/d		50,000

Dr. Ram account Cr.
Date	Particulars	J.F	Rs	Date	Particulars	J.F.	Rs
				2017 Jan 1	By Balance b/d		20,000

Dr. Joy's capital account Cr.
Date	Particulars	J.F	Rs	Date	Particulars	J.F.	Rs
				2017 Jan 1	By Balance b/d		1,60,000

21.

In the books of Balaraman Trial balance as on 31st March, 2017

S.No.	Name of the account	Debit balance Rs.	Credit Balance Rs.
1.	Capital		2,20,000
2.	Drawings	24,000
3.	Furniture	63,500
4.	Stock at the beginning	62,050
5.	Bills receivable	9,500
6.	Bills payable		8,750
7.	Purchases	88,100
8.	Sales		1,35,450
9.	Discount allowed	7,100
10.	Discount received		3,500
11.	Repairs	2,400
12.	Office lighting	2,600
13.	Printing and stationery	2,700
14.	Bank loan·		7,500
15.	Computer	25,000
16.	Debtors	46,500
17.	Cash in hand	15,000
18.	Cash at bank	27,250
19.	General expenses	7,100
20.	Creditors		7,600
	Total	3.82,800	3,82,800

22.

Date	Receipts	RN	LF	Amount Rs			Date	Payments	VN	LF	Amount Rs
Date	Receipts	RN	LF	Discount Allowed	Cash	Bank	Date	Payments	VN	LF	Discount Received	Cash	Bank
2002 May							2002 Apr
1	To Balance b/d				4000		1	By Balance b/d					10500
4	To Manoj A/c			100	2000		10	By Furniture Alc					800
7	To Sales Alc				2000		12	By Rent A/c					1500
18	To Sales A/c				15000		15	By Karthikeyan A/c					1250
26	To Cash Alc					5000	20	By Packing Charges A/c				500
30	To Balance c/d					9050	24	By Murugan A/c			50	4000
							28	By Bank Alc				5000
							28	By Balance c/d				12250
				100	23000	14050					50	23000	14050
2002 May 1	To Balance b/d				12250		1	By Balance b/d					9050

23.

**Dr In the books of Mr Srinivasan Double Column Cash Book Cr**
Date	Receipts	RN	LF	Amount Rs		Date	Payments	VN	LF	Amount Rs
Date	Receipts	RN	LF	Discount Allowed	Cash	Date	Payments	VN	LF	Discount Received	Cash
2002 May 1	To Balance b/d				50000	2002 May 3	By Rajan A/c			100	6000
10	To Arun A/c			100	2900	6	By Purchases A/c				10000
13	To Sales A/c				15000	15	By Electricity Charges A/c				1000
20	To Murali A/c			50	3450	18	By Miscellaneous Expenses A/c				2000
						31	By Balance c/d				52350
				150	71350					100	71350
June 1	To Balance b/d				52350

24.

**Dr Trading and profit and loss account of Sangeetha for the year ended 31^st March 2018 Cr**
Particulars	Amount Rs.	Particulars	Amount Rs.
To Opening stock	12,000	By Sales	95,000
To Purchases	75,000	By Closing stock	14,200
To.Gross profit c/d	22,200
(Transferred to profit and loss account)
	1,09,200		1,09,200
To Salaries	6,600	By Gross profit b/d	22,200
To Establishment expenses	4,500	(Transferred from trading account)
To Advertisement	2,300	By Interest on drawings	540
To Income tax	800	By Miscellaneous receipts	600
To Managerial remuneration	914
To Net profit c/d	8,226
(Transferred to capital account)
	23,340		23,340

**Balance sheet for the year ended 31^st March 2018**
Liabilities	Amount Rs.	Amount Rs.	Assets	Amount Rs.	Amount Rs.
Capital	20,000		Bills receivable		8,000
Add: Net profit	8,226		Furniture		10,000
	28,226
Less : Drawings	4,500		Cash at bank	3,200
	23,726		Less : Income tax payable	800
Less: Interest on drawings	540				2,400
		23,186	Closing stock		4,200
Bills payable		10,500
Manager's remuneration		914
		34,600			34,600

25.

In the books of Ajith
Dr. Trading and Profit and Loss Account for the year ended 31st March, 2016 Cr.
Particulars	Rs.	Rs.	Particulars	Rs.	Rs.
To Opening Stock		15,000	By Sales	1,24,000
To Purchases	40,000		Less: Sales returns	2,000	1,22,000
Less: Returns outward	1,000	39,000	By Closing stock		8,000
To Carriage inwards		10,000
To Gross profit c/d		66,000
		1,30,000			1,30,000
To Office rent		23,000	By Gross profit b/d		66,000
To Provision for bad and doubtful debts (closing)	400
Add: Bad debts	900
Add: Further bad debts	100
	1,400
Less: Provision for bad and doubtful debts (opening)	500	900
To Provision for discount on debtors (closing)	196
Less: Provision for discount on debtors (opening)	100	96
To Net profit (transferred to capital A/c)		42,004
		66,000			66,000

**Balance Sheet as on 31st March 2016**
Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Capital	25,000		Furniture and fixtures		30,000
Add: Net profit	42,004	67,004	Sundry debtors	20,100
Bills payable		10,000	Less: Further bad debts	100
				20,000
			Less: Provision for bad and doubtful debts (20,000 × 2%)	400
				19,600
			Less: Provision for discount (19,600 × 1%)	196	19,404
			Stock-in-trade		8,000
			Cash at bank		19,600
		77,004			77,004

26.

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

27.

Dr. In the Books of Ramasundari Trading and Profit and Loss account for the year ended 31.12.2017 Cr.
Particulars	Rs.	Particulars	Rs.
To Opening stock	2,500	By Sales	7,000
To Wages	2,700	By Closing stock	4,000
To Purchases	3,300
To Gross profit c/d	2,500
	11,000		11,000
To Salary	2,600	By Gross-profit b/d	2,500
To Net profit c/d	2,400	By Dividend received	2,500
(Transferred to Capital accounts)
	5,000		5,000

Balance as on 31st December 2017
Liabilities	Rs.	Rs.	Assets	Rs.
Capital	52,000		Machinery	52,000
Add: Net profit	2,400	54,400	Cash at bank	6,400
Creditors		8,000	Closing stock	4,000
		62,400		62,400

28.

Rectification of Errors
S.No.	Particulars		Debit Rs	Credit Rs
(a)	Suspense A/c	Dr.	78
	To Discount Received A/c			78
	(Partial omission in Discount received A/c is now rectified)
(b)	Purchase Book A/c	Dr.	1,000
	To Suspense A/c			1,000
	(Undercast in Purchase book, now rectified)
(c)	Sales A/c	Dr.	360
	To Natarajan A/c			360
	(Excess Debit in Natarajan A/c and excess Credit in Sales A/c now rectified)
(d)	Mekala A/c	Dr.	1,400
	To Sales A/c			700
	To Purchases A/c			700
	(Being the rectification for a Credit sale wrongly passed through the Purchases book)

Dr. Suspense Account Cr.
Particulars	Amount Rs	Particulars	Amount Rs
To Discount received A/c	78	By Purchase book	1,000
To Difference in Books	922
	1,000		1,000

29.

Procedure and answer
(i) Open a new spreadsheet in MS-EXCEL
(ii) Enter labels and values in the cells as given above
(iii) Write total cost in G1 and annual depreciation in H1
(iv) Calculate total cost in the cell G2 by the formula
= Sum(B2:D2) and copy formula to cell G3
(v) Calculate annual depreciation in the cell H2 by the formula
= SLN(G2,E2,F2) and copy formula to cell H3
Output

A	B	C	D	E	F	G	H
Asset	Cost of purchase Rs	Installation charge Rs	Transportation charge Rs	Salvage value Rs	Life in years	Total cost Rs	Annual depreciation Rs
1. Machinery	200000	20000	5000	25000	10	225000	20,000
2. Furniture	50000	4000	2000	5000	8	56000	6,375

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.

Amount of depreciation per year \(=\frac{\text { Original cost }}{\text { Estimates useful life }}\)
\(={40,000\over 5} =Rs.8,000\)
Rate of Depreciation per year = \({Amount\ of\ depreciation\over Original\ Cost}\times100\)
\(={8,000\over 40,000}\times 100=20\%\)
(Note : Cost of the asset = Purchase price +Transportation cost + Installation cost,
= 36,000 + 2,500 + 1,500 = Rs.40,000)
Amount of depreciation: Rs. 8,000; Balance in machinery A/c: Rs. 24,000)

Journal entries
Date	Particulars		Debit Rs.	Credit Rs.
2016 January 1	Machinery A/c	Dr	36,000	36,000
	To Bank A/c			36,000
	(Machinery bought)
January 1	Machinery A/c	Dr	4,000
	To Bank A/c			4,000
	(Transportation and installation cost incurred on purchase of machinery)
December 31	Depreciation A/c	Dr	8,000
	To Machinery a/C			8,000
	(Depreciation provided)
December 31	Profit and loss A/c	Dr	8,000
	To Depreciation A/c			8,000
	(Depreciation transferred to profit and loss amount)
2017 December 31	Depreciation A/c	Dr	8,000
	To-Machinery A/c			8,000
	(Depreciation provided)
December 31	Profit and loss A/c	Dr	8,000
	To Depreciation A/c			8,000
	(Depreciation transferred to profit and loss account)

Dr Ledger Account Machinery Account Cr
Date	Particulars	Amount Rs.	Date	Particulars	Amount Rs.
2016 Jan 1	To Bank A/c	36,000	2016 Dee 31	By Depreciation A/c	8,000
Jan I	To Bank A/c	4,000	Dec 31	By Balance c/d	32,000
		40,000			40,000
2017 Jan 1	To Balance b/d	32,000	2017 Dec 31	By Depreciation A/c	8,000
			Dec 31	By Balance c/d	24,000
		32,000			32,000
2018 Jan 1	To Balance b/d	24,000

32.

	Particulars		Dr. Rs	Cr. Rs
a	Suspense A/c	Dr	18
	To Mekala A/c			18
	(Excess amount posted to Mekala account rectified)
b	Discount allowed A/c	Dr	100
	Discount received A/c	Dr	100
	To Suspense A/c			200
	(Discount allowed wrongly posted to discount received account rectified)
c	Kannan A/c	Dr	275
	To Mannan A/c			275
	(Wrong credit to Kannan account instead of Mannan account rectified)
d	Stationery A/c	Dr	26
	To Suspense A/c			26
	(Purchase of stationery not posted to stationery account rectified)
e	Purchases A/c	Dr	100
	To Suspense A/c			100
	(Undercasting in the purchases book rectified)

Dr Suspense Account Cr
Particulars	Rs	Particulars	Rs
To Balance b/d	308	By Discount allowed A/c	100
To Mekala A/c	18	By Discount received A/c	100
		By Stationery A/c	26
		By Purchases A/c	100
	326		326

33.

In the books of Abdul Rahuman Trading Profit and Loss Account
Particulars	Rs	Particulars	Rs
To Opening stock	500	By Sales	5,000
To Purchases	1,300	By Closing stock	2,000
To Wages	700
To Gross profit c/d	4,500
	7,000		7,000
To Salary	500	By Gross profit b/d	4,500
To Net profit (transferred to capital account)	4,500	By Discount received	500
	5,000		5,000

Balance Sheet as on 31st December, 2016
Liabilities	Rs	Rs	Assets	Rs
Capital	50,000		Building	50,000
Add: Net profit	4,500	54,500	Cash in hand	4,500
		54,500		54,500

34.

S.No.	Transactions	Classification
i)	Construction of building Rs.10,00,000	Capital expenditure
ii)	Repairs to furnitures Rs.50,000	Revenue expenditure
iii)	White-washing the building Rs.80,000	Revenue expenditure
iv)	Pulling down the old building and rebuilding Rs.4,00,000.	Capital expenditure

35.

S.No	Transactions	Classification
i)	Advertising Expenditure, the benefits of which will last for three years.	Deferred Revenue Expenditure
ii)	Registration fees paid.at the time of registration of a building.	Capital Expenditure
iii)	Expenditure incurred on repairs and whitewashing of an old building.	Capital Expenditure

36.

Particulars	Amount Rs	Amount Rs
Balance as per Cashbook		12,500
Add: Cheques issued but not presented	1,750
Interest on Investment collected by bank	275
Dividend collected by bank	300	2,325
		14,825
Less: Cheques paid into bank, but not cleared	2,150
Bank charges	25
Subscription paid as per standing instructions	125	2,300
Balance as per pass book		12,525

37.

S.No.	Transaction	Cash	Stock	Machine	Debtors	Prepaid Insurance	Total Assets		Total Liabilities	Capital	Liabilities
i)	Started Business with Cash, Stock and Maintenance	+ 20,000	+12,000	+8,000						+40,000
	Balance	+ 20,000	+12,000	+8,000						+40,000
	Equation						+40,000	=	+40,000
ii)	Cash purchases	- 6,000	+6,000
	Balance	+ 14,000	+ 18,000	+8,000						+40,000
	Equation						+40,000	=	+40,000
iii)	Cash Sales	+ 2,500	- 2,000							+500
	Balance	+ 16,500	+16,000	+8,000						+40,000
	Equation						+40,500	=	+40,500
iv)	Credit Purchases		+ 7,000								+ 7,000
	Balance	+ 16,500	+23,000	+8,000						+40,500	+ 7,000
	Equation						+47,500	=	+47,500
v)	Payment Made	- 6,900								+100	-7,000
	Balance	+ 9,600	+23,000	+ 8,000						+40,600	0
	Equation						+40,000	=	+40,600
vi)	Credit Sales		-5,400		+6,000					+600
	Balance	+9,600	+17,600	+8,000	+6,000					+41,200
	Equation						+41,200	=	+41,200
vii)	Cash Receipt	+ 5,800			-6,000					-200
	Balance	+ 15,400	+17,600	+8,000	0					+41,000
	Equation						+41,000	=	+41,000
viii)	Salaries Paid	- 4,000								-4,000
	Balance	+ 11,400	+17,600	+8,000	0					+37,000
	Equation						+37,000	=	+37,000
ix)	Wages outstanding									-400	+400
	Balance	+ 11,400	+17,600	+8,000	0					+36,600	+400
	Equation						+37,000	=	+37,000
x)	Prepaid Insurance					+100				+ 100
	Balance	+ 11,400	+17,600	+8,000	0	+100				+36,700	+400
	Equation						+37,100	=	+37,100

38.

Bank Reconciliation Statement as on 31^st March 2018
Particulars	Amount Rs	Amount Rs
Credit balance as per bank statement		2,500
Less: Cheques deposited but not credited	10,000
Overcasting payment	2,000	12,000
Balance as per cash book		9,500

39.

Dr. In the Books of Mr. Mahendran Cash Book (Three columns) Cr.
Date	Receipts	R.N.	L.F.	Amount			Date	Payments	V.N.	L.F.	Amount
Date	Receipts	R.N.	L.F.	Discount allowed (Rs)	Cash (Rs)	Bank (Rs)	Date	Payments	V.N.	L.F.	Discount Received (Rs)	Cash (Rs)	Bank (Rs)
2017 Oct							2017 Oct
1	To Balance b/d				12,000	48,500	4	By Shanmuganathan A/c			50		7,950
3	To Kesavan A/c			150	15,850		7	By Sivasamy A/c				10,000
6	To Sales A/c				17,800		15	By Cash A/c		'C'			6,000
15	To Bank A/c		'C'		6,000		17	By Purchases A/c					14,500
20	To Janarthanam A/c			100	10,000		21	By Bank A/c		'C'		12,000
21	To Cash A/c		'C'			12,000	24	By Furniture A/c				15,000
							28	By Advance paid					10,000
							30	By Salary staff				4,500
							30	By Salary Manager					12,500
							31	By Balance c/d				20,150	9,550
				250	61,650	60,500					50	61,650	60,500
Nov 1	To Balance b/d				20,150	9,550

40.

Bank Reconciliation Statement as on 31st December 2017
Particulars	Amount Rs	Amount Rs
Credit balance as per Cash book		12,000
Add: Cheques issued but not presented		1,200
		13,200
Less: Wrong credited in the cash book	2,100
Debits in bank statement	100
Overdraft as per bank statement		11,000

41.

Correct Trial Balance
S.No.	Name of account	Debit Balance Rs	Credit Balance Rs
1.	Capital		50,000
2.	Discount received		3,000
3.	Rent paid	15,000
4.	Salaries paid	1,000
5.	Purchases of textiles	20,000
6.	Sale of textiles		30,000
7.	Salesmen commission paid	9,000
8.	Transport charges paid	6,000
9.	Cash balance	32,000
	Total	83,000	83,000

42.

In the Books of M/s. Ponni & Co., Sales Book
Date	Particulars	Outward Invoice No.	L.F.	Amount
Date	Particulars	Outward Invoice No.	L.F.	Details (Rs)	Total (Rs)
2017 Aug 1	Senthil	68			20,500
Aug 4	Madhavan	74			12,800
Aug 7	Kanagasabai	78			7,500
	Sales A/cCr.				40,800

Dr. Ledger Account Sales Account Cr.
Date	Particulars	J.F	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
				2017 Aug 31	By Sundries as per Sales Book		40,800

Dr. Senthil Account Cr.
Date	Particulars	J.F	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017 Aug 1	To Sales A/c		20,500

Dr. Madhavan Account Cr.
Date	Particulars	J.F	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017 Aug 4	To Sales A/c		12,800

Dr. Kanagasabai Account Cr.
Date	Particulars	J.F	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017 Aug 7	To Sales A/c		7,500

Sales Return Book
Date	Particulars	Credit Note No.	L.F.	Amount		Remarks
Date	Particulars	Credit Note No.	L.F.	Details (Rs)	Total (Rs)	Remarks
2017 Aug 15 Aug 25	Senthil Madhavan	7 11			1,500 1,800
	Sales return A/c Dr.				3,300

Dr. Ledger Account Sales return account Cr.
Date	Particulars	J.F	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017 Aug 31	To Sundries as per Sales return Book		3,300

Dr. Senthil Account Cr.
Date	Particulars	J.F	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
				2017 Aug 31	By Sales Return A/c		1,500

Dr. Madhavan Account Cr.
Date	Particulars	J.F	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
				2017 Aug 25	By Sales return A/c		1,800

43.

In the books of Ramesh Journal Entries
Date	Particulars		Debit Rs	Credit Rs
2017 March 1	Cash A/c	Dr	3,00,000
	Goods A/c	Dr	80,000
	Furniture A/c	Dr	27,000
	To Ramesh capital A/c			4,07,000
	(Ramesh started in the business)
2	Bank A/c	Dr	2,00,000
	To Cash A/c			2,00,000
	(Cash deposited with the bank)			40,000
3	Furniture A/c	Dr	28,000
	To Mis Jayalakshmi Furniture Alc			28,000
	(Furniture purchased)
4	Purchases A/c	Dr	5,000
	To Bank A/c			5,000
	(Goods purchased and payment made through debit card)
5	Purchases A/c	Dr	10,000
	To Bank A/c
	(Goods purchased and payment made through net banking)			10,000
6	Purchases A/c	Dr	20,000
	To Bank A/c			20,000
	(Goods purchased through credit card)
7	Purchases A/c	Dr	50,000
	To Shyam A/c			50,000
	(Credit purchases made)
8	Shyam A/c	Dr	50,000
	To Bills payable A/c			50,000
	(Bill drawn by Shyam and accepted)
9	Bank A/c	Dr	14,000
	To M/s Jayalakshmi furnture A/c			14,000
	(Paid half of the amount)
10	Bills payable A/c	Dr	50,000
	To Cash A/c
	(Bills payable paid)			50,000

44.

Date	Particulars		Debit Rs	Credit Rs
2017 April 1	BankA/c	Dr	2,00,000
	To Cash A/c			2,00,000
	(Opening a current account)
3	Purchases A/c	Dr	40,000
	To Bank A/c			40,000
	(Goods purchased by cheque)
5	Investments A/c	Dr	40,000
	To Karthick capital A/c			40,000
	(Being investments made)
6	Cash A/c	Dr	20,000
	To Sales A/c			20,000
	(Sales made and cheque received).
	Bank A/c	Dr	20,000
	To Cash A/c			20,000
	(Cheque received from Radha and deposited in the CDM)
7	Cash A/c	Dr	15,000
	To Bank A/c			15,000
	(Amount withdrawn from bank for office use)
10	Purchases A/c	Dr	10,000
	To Bank A/c			10,000
	(Cash deposited in CDM)
12	Bank A/c	Dr	10,000
	To Sales A/c			10,000
	(Sales made and money credited through debit card)
15	Bank A/c	Dr	1,000
	To Interest on securities A/c			1,000
	(Interest on securities received by the bank)
20	Insurance A/c	Dr	2,000
	To Bank A/c			2,000
	(Insurance paid by the bank)
25	Bank A/c	Dr	6,000
	To Sales A/c			6,000
	(Sales made and money received through CDM)

45.

In the books of Mr. Vinoth Opening Entry
Date	Particulars	Debit Rs	Credit Rs.
2018Jan. 1	Cash A/c Dr.	40,000
	Stock A/c Dr.	50,000
	Ram A/c Dr.	20,000
	Machinery A/c Dr.	40,000
	To Vijay A/c		10,000
	To Vinoth's capital A/c		1,40,000
	(Being balance brought forward)

Dr. Ledger Account Vinoth's Capital Account Cr
Date	Particulars	Amount Rs.	Date	Particulars	Amount Rs.
2018 Jan 31	To Balance c/d	1,40,000	2018 Jan 1	By Sundry Assets A/c	1,40,000
		1,40,000			1,40,000
			2018 Feb 1	By Balance b/d	1,40,000

46.

Journal Entries
Date	Particulars	Debit Rs.	Credit Rs.
2017 Aug. 1	Cash A/c Dr. To Dharma's Capital A/c (Amount invested in business)	70,000	70,000
6	Cash A/c Dr. To Ganesan's A/c (Cash received)	10,000	10,000
10	Rent A/c Dr. To Cash A/c Dr. (Rent paid)	3,000	3,000
20	Cash A/c Dr. To Commission received A/c (Commission received)	5,000	5,000

Dr. Ledger Account Cash Account Cr.
Date	Particulars	Amount Rs.	Date	particulars	Amount Rs.
2017 Aug 1	To Dharma's Capital A/c	70,000	2017 Aug 10	By Rent A/c	3,000
6	To Ganesan's A/c	10,000	31	By Balance c/d	82,000
20	To Commission received A/c	5,000
		85,000			85,000
2017 Sep 01	To Balance B/d	82,000

Dr. Dharma's Capital Account Cr.
Date	Particulars	Amount Rs.	Date	Particulars	Amount Rs.
2017 Aug 31	To Balance c/d	70,000	2017 Aug 1	By Cash A/c	70,000
		70,000			70,000
			2017 Sep 1	By Balance b/d	70,000

Dr. Ganesan's Account Cr.
Date	Particulars	Amount Rs.	Date	Particulars	Amount Rs.
2017 Aug 31	To Balance c/d	10,000	2017 Aug 6	By Cash A/c	10,000
		10,000			10,000
			2017 Sep 1	By Balance b/d	10,000

Dr. Rent Account Cr.
Date	Particulars	Amount Rs.	Date	Particulars	Amount Rs.
2017 Aug 10	To Cash A/c	3,000	2017 Aug 31	By Balance c/d	3,000
		3,000			3,000
	To Balance b/d	3,000		By Balance b/d

Dr. Commission received Account Cr.
Date	Particulars	Amount Rs.	Date	Particulars	Amount Rs.
2017 Aug 31	To Balance c/d	5,000	2017 Aug 20	By Cash A/c	5,000
		5,000			5,000
			2017 Sep 1	By Balance b/d	5,000

47.

**In the Books of Manoharan Purchases Book**
Date	Particulars	Inward Invoice No.	L.F.	Amount
Date	Particulars	Inward Invoice No.	L.F.	Details	Total
2017 May 2	Vasu
	100 bags of Rice @ Rs. 800				80,000
	Goods purchased vide
May 8	Cheyyar Sugar Mills Ltd.,
	20 bags of Sugar @ Rs.2,600				52,000
May 10	Ram Flour Mill
	10 bags of wheat flour @ Rs. 750
May 15	Nilgiri Tea Co.,
	15 cases of tea @ Rs. 900				13,500
May 25	Sairam Coffee Works Ltd.,
	100 kgs. of Coffee @ Rs. 190				19,000
	Purchases A/c Dr.				1,72,000

29^th may 2017 transaction is purchase of an asset. Hence the transaction will not be recorded in the purchases book.

48.

Trial Balance

S.No	Name of account	Debit balance Rs	Credit balance Rs
1.	Purchases	1,00,000
2	Bank Loan		75,000
3	Debtors	1,50,000
4	Stock	35,000
5	Sales		1,50,000
6	Creditors		50,000
7	Cash	90,000
8	Capital		1,00,000
	Total	3,75,000	3,75,000

49.

S.No	Basis of distinction	Book-keeping	Accounting
1	Scope	It is concerned with recording and classification the business transaction	It is concerned with recording, classification, summarising, analysing and interpreting the financial data
2	Stage	Book-keeping is the primary stage in accounting. It is the base for Accounting.	Apart from the primary stage, it includes secondary stage of analysis and interpretation.
3	Nature of job	It is routine and clerical in nature.	It is analytical in nature
4	Knowledge required	It requires basic knowledge of the principles of journalising and posting	It requires thorough knowledge of accounting principles, procedures, and practices.
5	Skill required	Analytical skill is not required for book-keeping.	It requires analytical skill

50.

Book-keeping has the following advantages:
(i) Transactions are recorded systematically in chronological order in the book of accounts. Thus, book-keeping provides a permanent and reliable record for all business transactions.
(ii) Book-keeping is useful to get the financial information.
(iii) It helps to have control over various business activities.
(iv) Records provided by business serve as a legal evidence in case of any dispute.
(v) Comparison of financial information over the years is possible. Also comparison of financial information of different business units is facilitated.
(vi) Book-keeping is useful to find out the tax liability.

51.

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.

52.

Accounting cycle is the sequence of steps involved in the accounting process. Accounting cycle starts with the identification and recording of financial transactions of an organisation and ends with the preparation of final accounts for the accounting year. The steps involved are:
(i) Identifying the transactions and journalising :
(1) The first step in the accounting process is identifying the financial transactions of a business.
(2) All the monetary transactions are recorded in the books of original entry called journals.
(ii) Posting and balancing:
(1) Transferring the entries from the journal. to the ledger is called posting.
(2) In the ledger, entries are made in each account after classifying them under common heads. Finding the difference between the total of the debit column and credit column of all the ledger accounts is called balancing.
(iii) Preparation of trial balance:
(1) The list of ledger balances namely trial balance is prepared as the next step.
(2) On the basis of ledger balances the financial statements are prepared.
(iv) Preparation of trading account:
(1) Next step is preparation of trading account for a particular accounting period.
(2) All the direct revenues and direct expenses are transferred to trading account.
(3) The balance in the trading account is the gross profit or gross loss.
(v) Preparation of profit and loss account:
(1) Profit and loss account is prepared next for a particular accounting period.
(2) All the indirect revenues and indirect expenses along with gross profit or gross loss are transferred to profit and loss account.
(3) The balance in the profit and loss account is the net profit or net loss.
(vi) Preparation of balance sheet:
(1) A statement showing the balances of assets and liabilities namely balance sheet is prepared as the final step in the accounting process.
(2) It is prepared on a particular date, normally, on the last day of the accounting period.