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11th Standard Accountancy Second Revision Test 2019 Important Questions and Answers 2018-19 | QB365

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11th Standard Accountancy Second Revision Test 2019 Important Questions and Answers 2018-19

Published on: 19/02/2019

11th Second Revision Test 2019 Important Question

Download Tamil Nadu 11th Standard Accountancy question papers, model tests, one-mark questions, important questions, and public exam papers in PDF format. Free study materials and answer keys for TN State Board students.

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Questions:

Multiple Choice Question

20 x 1 = 20

An asset worth Rs. 1,00,000 is sold for Rs. 75,000 the capital loss amounts to __________

(a)

Rs.1,75,000

(b)

Rs.1,00,000

(c)

Rs.75,000

(d)

Rs.25,000

Under which method of depreciation, interest is also taken into consideration?

(a)

Revaluation method

(b)

Depletion method

(c)

Annuity method

(d)

None of the above

When goods meant for resale are sold it is called as ______

(a)

Purchases

(b)

Sales

(c)

Income

The Trial Balance as on 31-03-2016 shows capital Rs.5,00,000. Interest on capital at 6% p.a. is ______

(a)

Rs.5,00,000

(b)

Rs.30,000

(c)

Rs.5,30,000

(d)

Rs.2,50,000

________ accounts give the net amount due to creditor and the net amount due from debtors.

(a)

Real

(b)

Personal

(c)

Nominal

(d)

Ledger

Customised accounting software is suitable for _______.

(a)

Small, conventional business

(b)

Large, medium business

(c)

Large, typical business

(d)

None of the above

Depreciation is provided on ____________

(a)

Fixed assets

(b)

Current assets

(c)

Outstanding charges

(d)

All assets

The difference in trial balance is taken to _______.

(a)

The capital account

(b)

The trading account

(c)

The suspense account

(d)

The profit and loss account

Goodwill is classified as _______.

(a)

A current asset

(b)

A liquid asset

(c)

A tangible asset

(d)

An intangible asset

10.

A time gap between the depositing of the ________________ and the collection by the bank.

(a)

cash

(b)

cheques

(c)

petty Cash

(d)

none of these

11.

When money is withdrawn from bank, the bank _______.

(a)

Credits customer's account

(b)

Debits customer's account

(c)

Debits and credits customer's account

(d)

None of these

12.

Madhan spent Rs.2,000 as repair on purchases of machine from scrap dealer. The transaction will ____

(a)

Increase and decrease Asset

(b)

Decrease Assets and Capital

(c)

Increase and decrease Asset

(d)

Increase and Decrease Liability

13.

A Bill is drawn on 1.4.2004 for 2 months, its due date is _____

(a)

1.6.2004

(b)

3.6.2004

(c)

4.6.2004

(d)

4.4.2005

14.

The incorrect accounting equation

(a)

Assets = Liabilities + Capital

(b)

Assets = Capital + Liabilities

(c)

Liabilities = Assets + Capital

(d)

Capital = Assets - Liabilities

15.

If the debit and credit aspects of a transaction are recorded in the cash book, it is ______.

(a)

Contra entry

(b)

Compound entry

(c)

Single entry

(d)

Simple entry

16.

Sales book is used to record _____

(a)

all sales of goods

(b)

all credit sales of assets

(c)

all credit sales of goods

(d)

all sales of assets and goods

17.

The account which has a debit balance and is shown in the debit column of the trial balance is _______

(a)

Sundry creditors account

(b)

Bills payable account

(c)

Drawings account

(d)

Capital account

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 proponent of double entry system of book-keeping is ___________

(a)

J. R. Batlibai

(b)

Luca Pacioli

(c)

Old Kesal

(d)

Menhar

20.

Which one of the following is not a branch of accounting?

(a)

Financial accounting

(b)

Management accounting

(c)

Human resources accounting

(d)

None of the above

Generic 5

15 x 5 = 75

21.

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.

22.

Deepak is a dealer in stationery items. From the following transactions, pass journal entries for the month of January and February, 2018

Jan		Rs
1	Commenced bussiness with cash	2,00,000
2	Opened a bank account by deposited cash	1,00,000
3	'A 4 paper' sold on credit to Padmini and Co	60,000
4	Bills received from Padmini and Co. for the amount due
5	Bills received from Padmini and Co. discounted with the bank	58,000
Feb
15	Bills of Pad mini and Co. dishonoured

23.

Prepare a analytical petty cash book from the following information on the imprest system:

2017		Rs
Jan 1	Received for petty cash	500
Jan 2	Paid rickshaw charges	5
	Paid cartage	12
Jan 3	Paid for postage	15
	Paid wages to casual labourer	66
Jan 4	Paid for stationery	134
	Paid for auto charges	18
Jan 5	Paid for repairs	65
	Paid for bus fare	11
	Paid for cartage	24

24.

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

25.

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

26.

Given below are the balances of Pandian as on 31st March, 2016.

Particulars	Debit Rs.	Credit Rs.
Capital		1,20,000
Sundry debtors and creditors	22,000	22,500
Sales		59,700
Drawings	2,000
Cash in hand	8,200
Cash at bank	30,000
Wages	2,500
Purchases	10,000
Opening stock	30,000
Business premises	60,000
Bills receivable	14,500
Office telephone expenses	3,500
General expenses	9,000
Goodwill	10,500
	2,02,200	2,02,200

Adjustments:
(a) The stock value at the end of the accounting period was Rs. 5,000
(b) Interest on capital at 6% is to be provided
(c) Interest on drawing at 5% is to be provided
(d) Write off bad debts amounting to Rs. 2,000
(e) Create provision for bad and doubtful debts on sundry debtors @ 10%
Prepare final accounts for the year ended 31st March, 2016.

27.

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

28.

A manufacturing company purchased on 1 April, 2010, a plant and machinery for Rs. 4,50,000 and spent Rs. 50,000 on its installation. After having used it for three years, it was sold for Rs. 3,85,000. Depreciation is to be provided every year at the rate of 15% per annum on the fixed instalment method. Accounts are closed on 31^st March every year. Calculate profit or loss on sale of machinery.

29.

Pass journal entries to rectify the following errors located after the preparation of the trial balance. Assume that there exists a suspense account.
(a) The total of sales book was undercast by Rs. 2,000.
(b) The purchase of machinery for Rs. 3,000 was entered in the purchases book.
(c) A credit sale of goods for Rs. 450 to Mathi was posted in his account as Rs. 540.
(d) The purchases returns book was overcast by Rs. 200.
(e) The total of sales book Rs. 1,122 were wrongly posted in the ledger as Rs. 1,222.

30.

From the following information, prepare trading account for the year ending 31st December 2017.

Particulars	Rs	Particulars	Rs
Opening stock	50,000	Dock charges on purchases	4,000
Cost of goods manufactured	12,000	Import duty on purchases	3,500
Cash purchases	60,000	Wages	11,000
Cash sales	85,000	Sales returns	3,000
Purchases returns	2,000	Credit purchases	35,000
Carriage inwards	4,000	Credit sales	60,000
Freight outwards	3,000	Other direct expenses	7,000
Coal and fuel	2,500

31.

From the following information, prepare the necessary subsidiary books for Nalanda Book Stores.

2017 Dec. 1	Bought from M/s. Umadevi on credit
	100 copies Business Statistics Book @ Rs. 80 each
	100 copies Accountancy Book @ Rs. 150 each
Dec. 7	Sold to Sridevi & Co., on credit
	240 copies Business Statistics @ Rs. 90 each
	250 copies Accountancy books @ Rs. 170 each
Dec. 10	Bought from Subha & Co.,
	40 Copies Economics books @ Rs. 80 each
	Less: 15% Trade Discount
Dec. 15	Returned to Mis. Vma Devi 10 copies of damaged Accountancy book for which cash is not received
Dec. 18	Sold to Gupta Bros., on credit
	200 copies of Economics book @ Rs. 95 each
Dec. 26	Returned 6 copies of Economics books to Subha & Co.,

32.

From the following information, prepare bank reconciliation statement as on 31^st December, 2017 to find out the balance as per bank statement.

Particulars	Rs
(i) Bank overdraft as per cash book	20,000
(ii) Cheques deposited but not yet credited	4,000
(iii) Cheque issued but not yet presented for payment	1,000
(iv) Rent collected by the bank as per standing instruction	500
(v) Interest on overdraft debited by bank	2,000
(vi) Amount wrongly debited by bank	300
(vii) Cheque issued on 30^th December 2017 dishonoured by the bank	5,000
(viii) A customer's cheque deposited in the bank dishonoured by bank not recorded in the book	2,000

33.

Prepare the trial balance from the following information:

Name of the account	Rs	Name of the account	Rs
Bank Loan	2,00,000	Purchases	1,80,000
Bills Payable	1,00,000	Sales	3,00,000
Stock	70,000	Debtors	4,00,000
Capital	2,50,000	Bank	2,00,000

34.

Explain the Accounting cycle

35.

Discuss the role of an accountant in the modern business world.

Generic 3

9 x 3 = 27

36.

What are the various types of subsidiary books?

37.

Opening stock Rs. 30,000, Purchases Rs. 54,600, Expenses Rs. 6,000, Sales Rs.90,000, Expenses on sales Rs. 3,000, Closing stock Rs. 36,000. Calculate Cost of goods sold and Gross profit.

38.

Enter the following transactions in a simple cash book of Kuna

2017
Jan		Rs
1	Cash in hand	11,200
5	Received from ramesh	300
7	Pain Rent	30
8	Sold goods for cash	300
10	Paid mohan	700
27	Purchased furniture for cash	200
31	Paid salaries	100

39.

State the input and output devices of a computer system.

40.

Sundry debtors as per trial balance as on 31^st March, 2016 is Rs. 10,000.
Adjustment: Write off bad debts amounting to Rs. 300.
Give adjusting entry and show how these appear in the final accounts as on 31^st March, 2016.

41.

The following errors were located after the preparation of the trial balance. Assume that there exists a suspense account. Rectify them.
(a) Sale of goods on credit to Arun for Rs. 152 posted to his account as Rs. 125.
(b) Bought goods from Lakshmi on credit for Rs. 550, credited to her account as Rs. 505.
(c) Purchase of furniture from Abirupa for Rs. 404 on credit was debited to furniture account as Rs. 440.
(d) Purchased machinery for cash Rs. 200 was not posted to machinery account.
(e) The total of purchases book Rs. 89 was carried forward as Rs. 98.

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.

What is the accounting treatment for insurance premium paid on the life of the proprietor?

44.

What are the basic concepts of accounting?

Generic 2

10 x 2 = 20

45.

Explain the principle on which the agreement of trial balance is based.

46.

What is solvency?

47.

How will the following adjustment appear in the balance sheet as on 31-12-2010?
Sundry Debtors Rs.21,000
Bad debts to be written off Rs.1,000
Provide 5% provision for bad and doubtful debts and 2% provision for discount on debtors.

48.

What is a computer?

49.

What is annuity method?

50.

State the account/s affected in each of the following errors:
(a) Goods sold to Vasu on credit for Rs.1,000 was not recorded in the sales book.
(b) The total of sales book Rs.2,500 was posted twice.

51.

What is meant by revenue expenditure?

52.

Who prepares a bank statement?

53.

How are personal accounts classified?

54.

What is credit note?

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Answers Key:

Multiple Choice Question

20 x 1 = 20

(b)
Sales

(b)
Rs.30,000

(b)
Personal

(b)
Large, medium business

(a)
Fixed assets

(d)
An intangible asset

10.

(b)
cheques

11.

(b)
Debits customer's account

12.

(a)
Increase and decrease Asset

13.

14.

15.

(a)
Contra entry

16.

17.

18.

(b)
Debit Balance

19.

(b)
Luca Pacioli

20.

(d)
None of the above

Generic 5

15 x 5 = 75

21.

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

22.

Date	Particulars	Debit Rs	Credit Rs
2018
Jan 1	Cash A/c Dr	2,00,000
	To Deepak's Capital A/c		2,00,000
	(Capital contributed by Deepak)
2	Bank A/c Dr	1,00,000
	To Cash A/c		1,00,000
	(Cash deposited with the bank)
3	Padmini and Co. A/c Dr	60,000
	To Sales A/c		60,000
	(Credit sales to Padmini and Co.)
4	Bills receivable A/c Dr	60,000
	To Padmini and Co. Alc		60,000
	(Bills received for the amount due)
5	Bank A/c Dr	58,000
	Discount A/c	2,000
	To Bills receivable A/c		60,000
	(Bills receivable discounted with the bank)
Feb 15	Padmini and Co. A/c Dr	60,000
	To Bank A/c		60,000
	(Bill discounted with the bank dishonoured)

23.

Dr. Analytical petty cash book (in Rs) Cr.
Receipts	Date	Particulars	Total Payments	Coveyance	Cartage	Stationery	Postage	Wages	Sundries
	2017
500	Jan. 1	To Cash
	Jan. 2	By Conveyance	5	5
		By Cartage	12		12
	Jan. 3	By Postage	15				15
		By Wages	66					66
	Jan. 4	By Stationery	134			134
		By Conveyance	18	18
	Jan. 5	By Repairs	65						65
		By Conveyance	11	11
		By Cartage	24		24
		Total expenses	350	34	36	134	15	66	65
	Jan. 6	By Balance c/d	150
500			500
150	Jan. 6	To Balance b/d
350	Jan. 6	To Cash

24.

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

25.

**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

26.

In the books of Pandian
Dr. Trading and Profit and Loss Account for the year ended 31st March, 2016 Cr.
Particulars	Rs.	Particulars	Rs.
To Opening stock	30,000	By Sales	59,700
To Purchases	10,000	By Closing Stock	5,000
To Wages	2,500
To Gross Profit c/d	22,200
	64,700		64,700
To Office telephone expenses	3,500	By Gross profit b/d	22,200
To General expenses	9,000	By Interest on drawings (2000 x 5/100)	100
To Interest on capital (1,20,000 x 6/100)	7,200	By Net loss (transferred to capital account)	1,400
To Bad debts	2,000
To Provision for bad and doubtful debts	2,000
	23,700		23,700

**Balance Sheet as on 31st March 2016**
Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Capital	1,20,000		Goodwill		10,500
Less: Net loss	1,400		Business premises		60,000
	1,18,600		Stock in trade		5,000
Add: Interest on capital	7,200		Sundry debtors	22,000
	1,25,800		Less: Bad debts	2,000
Less: Drawings and Interest on drawings (2000+100)	2,100	1,23,700		20,000
Sundry creditors		22,500	Less: Provision for bad and doubtful debts (20,000 x 10/100)	2,000	18,000
			Bills receivable		14,500
			Cash at bank		30,000
			Cash in hand		8,200
		1,46,200			1,46,200

27.

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

28.

Calculation of profit or loss on sale of machinery
Particulars	Amount Rs.
Cost price	4,50,000
Add : Installation charges	50,000
	5,00,000
Less : Depreciation for 2010 - 11	75,000
\(\left(5,00,000\times{15\over 100}\right)\)
	4,25,000
Less: Depreciation for 2011 - 12	75,000
\(\left(5,00,000\times{15\over 100}\right)\)
	3,50,000
Less: Depreciation for. 2012 - 13	75,000
\(\left(5,00,000\times{15\over 100}\right)\)
Book value on the date of sale	2,75,000
Less: Selling price	3,85,000
Profit on sale	1,10,000

The selling price is more than the book value on the date of sale of machinery. Hence, the difference 1,10,000 is profit on sale of machinery.

29.

	Particulars		Dr.	Cr.
a	Suspense A/c	Dr	2,000
	To Sales A/c			2,000
	(Under casting in the sales book rectified)
b	Machinery A/c	Dr	3,000
	To Purchases A/c			3,000
	(Purchase of machinery wrongly entered in the purchases book rectified)
c	Suspsense A/c	Dr	9
	To Mathi A/c			9
	(Excess amount posted to the debit of Mathi rectified)
d	Purchase returns A/c	Dr	200
	To Suspense A/c			200
	(Overcasting in the purchase returns book rectified)
e	Sales A/c	Dr	100
	To Suspense A/c			100
	(Excess amount carried forward in the sales book rectified)

30.

Dr. Trading account for the year ended 31st December, 2017 Cr.
Particulars	Rs	Rs	Particulars	Rs	Rs
To Opening stock		50,000	By Sales:
To Cost of goods manufactured		12,000	Cash	85,000
			Credit	60,000
To Purchases:				1,45,000
Cash	60,000		Less: Sales returns	3,000	1,42,000
Credit	35,000		By Gross loss c/d		45,000
	95,000
Less: Purchases returns	2,000	93,000
To Carriage inwards		4,000
To Coal and fuel		2,500
To Dock charges on Purchases		4,000
To Import duty on Purchases		3,500
To Wages		11,000
To Other direct expenses		7,000
		1,87,000			1,87,000

Note: Freight outwards will not appear in trading account as it is not a direct expense.

31.

In the Books of Nalanda Book store I. Purchases Book
Date	Particulars	Inward Invoice No.	L.F	Amount
Date	Particulars	Inward Invoice No.	L.F	Details (Rs)	Total (Rs)
2017 Dec 1	M/s. Umadevi 100 copies Business statistics Book @ Rs. 80 each 100 copies Accountancy Book @ 150 each			8,000 15,000	23,000
Dec 10	Subha & Co., 40 copies Economics book @ 80 each Less : Trade Discount @ 15%			3,200 480	2,720
	Purchases A/c Dr.				25,720

II. Purchase Returns Book
Date	Particulars	Inward Invoice No.	L.F	Amount		Remarks
Date	Particulars	Inward Invoice No.	L.F	Details (Rs)	Total (Rs)
2017 Dec 15	M/s. Umadevi 10 copies of Accountancy book @ Rs. 150 each				1,500	Damaged
Dec 26	Subha & Co., 6 Copies of Economis @ Rs. 80 each Less; 15% Trade Discount			480 72	408
	Purchases return A/c Cr.				1,908

III. Sales Book
Date	Particulars	Id Invoice No.	L.F	Amount
Date	Particulars	Id Invoice No.	L.F	Details (Rs)	Total (Rs)
2017 Dec 7	Sridevi & Co. 240 copies Business Statistics @ Rs. 90 each 250 copies Accountancy books @ Rs. 170 each			21,600 42,500	64,100
Dec 18	Gupta Bros., 200 copies Economics books @ Rs. 95 each				19,000
	Sales A/c Cr.				83,100

32.

Particulars	Amount Rs	Amount Rs
Bank overdraft as per cash book		20,000
Add: Cheque deposited but not yet credited	4,000
Interest on overdraft	2,000
Amount wrongly debited by bank	300
Cheque deposited but dishonoured	2,000	8,300
		28,300
Less: Cheques issued but not yet credited	1,000
Rent collected by bank	500
Cheque issued but dishonoured	5,000	6,500
Overdraft as per bank statement		21,800

33.

Trial Balance

S.No	Name of account	Debit Balance	Credit Balance
1	Bank Loan		2,00,000
2	Bills Payable		1,00,000
3	Stock	70,000
4	Capital		2,50,000
5	Purchases	1,80,000
6	Sales		3,00,000
7	Debtors	4,00,000
8	Bank	2,00,000
	Total	8,50,000	8,50,000

34.

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.

35.

An accountant designs the accounting procedures for an enterprise. He plays several roles in an organisation as follows:
(i) Record keeper :
1. The accountant maintains a systematic record of financial transactions.
2. He also prepares the financial statements and other financial reports.
(ii) Provider of information to the management :
The accountant assists the management by providing financial information required for decision making and for exercising control.
(iii) Protector of business assets :
The accountant maintains records of assets owned by the business which enables the management to protect and exercise control over these assets.
(iv) Financial advisor :
The accountant analyses financial information and advises the business managers regarding investment opportunities, strategies for cost savings, capital budgeting, provision for future growth and development, expansion of enterprise, etc.
(v) Tax Manager :
1. The accountant ensures that tax returns are prepared and filed correctly on time and payment of tax is made on time.
2. The accountant can advise the managers regarding tax management, reducing tax burden, availing tax exemptions, etc.
(vi) Public relations officer :
The accountant provides accounting information to various interested users for analysis as per their requirements.

Generic 3

9 x 3 = 27

36.

The number of subsidiary books may vary according to the requirements of each business. Based on the nature of business and the volume of transactions, the following subsidiary books are maintained:

37.

Cost of Goods sold Opening stock + Purchases + Expenses on purchases - Closing stock
= Rs.30,000 + Rs. 54,600 + Rs. 6,000 -Rs. 36,600
= Rs. 54,000
Gross profit Net Sales - Cost of Goods sold
= Rs. 90,000 - Rs. 54,000
= Rs. 36,000

38.

**In the books of Kuna Cash Book (Single column)**
Date	Particulars	Amount Rs	Date	Payments	Amount Rs
2017			2017
Jan.1	To Balance b/d	11,200	Jan.7	By rent A/c	30
Jan.5	To Ramesh A/c	300	Jan.10	By Mohan A/c	700
Jan.8	To Sales A/c	300	Jan.27	by Furniture	200
			Jan.31	By Salaries A/c	100
			Jan.31	By Balance C/d	10,770
		11,800			11,800
Feb.1	To Balance B/d	10,770

39.

(i) Input Devices:
(a) Keyboard
(b) Optical scanner
(c) Mouse
(d) Joystick
(ii) Output Devices:
(a) Monitor
(b) Printer

40.

Adjusting entry
Date	Particulars	Debit Rs	Credit Rs
2016	Bad debts A/c Dr.	300
March 31	To Sundry debtors A/c		300
	(Bad debts written off)

Dr. Profit and loss account for the year ended 31^st March, 2016 Cr.

Particulars	Rs	Rs	Particulars	Rs	Rs
To Bad debts		300

Balance Sheet as on 31^st March, 2016
Liabilities	Rs	Rs	Liabilities	Rs	Rs
			Sundry debtors	10,000
			Less: Bad debts	300	9,700

41.

	Particulars		Dr.	Cr.
a	Arun A/c	Dr.	27	27
	To Suspense A/c
	(Wrong amount posted to Arun account rectified)
b	Suspense A/c	Dr.	45
	To Lakshmi A/c			45
	(Short credit to Lakshmi account rectified)
c	Suspense A/c	Dr.	36
	To Furniture A/c			36
	(Excess debit to furniture account rectified)
d	Machinery A/c	Dr	200
	To Suspense A/c			200
	(Omission to debit machinery account rectified)
e	Suspense A/c	Dr	9
	To Purchases A/c			9
	(Excess amount carried forward to purchases account rectified)

42.

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

43.

(i) Insurance premium paid on the life of the proprietor is a personal account.
(ii) It is spent for the personal use of the proprietor not for the business purpose. Hence Drawings A/c should be debited.
The entry is

Drawings A/c Dr	xxxx
To Cash A/c		xxx

44.

The following are the basic concepts of accounting:
(i) Business entity concept
(ii) Money measurement concept
(iii) Going concern concept
(iv) Cost concept
(v) Dual aspect concept
(vi) Accounting period concept
(vii) Matching concept
(viii) Realisation concept
(ix) Verifiable and objective evidence concept
(x) Accrual concept.

Generic 2

10 x 2 = 20

45.

Basis for the trial balance agreement: The fundamental principle of the double entry system is that every debit has a corresponding credit of equal amount and vice-versa.
Therefore, the total of all debit balances in different accounts must be equal to the total of all credit balances in different accounts, (Le.,) the total of the two columns should tally (agree).

46.

Solvency is the capability of a person or an enterprise to pay the debts.

47.

Balance Sheet as on 3pt December 2010
Assets	Amount Rs	Amount Rs
Sundry debtors	21,000
Less: Bad debts written off	1,000
	20,000

Less: Provision for bad and doubtful debts	1,000

[20,000 x 5 / 100]	19,000
Less: Provision for Discount on debtors	380

[19,000 x 2/100]		18,620

48.

A computer can be described as an electronic device designed to accept raw data as input, processes them and produce meaningful information as output. It has the abitity to perform arithmetic and logical operations as per given set of instructions called program.

49.

(i) Under this method, the amount spent on the purchase of an asset is regarded as an investment. As such, the interest at a certain rate is calculated on the opening balance of the asset account each year and debited to the asset account.
(ii) The amount of depreciation written off is ascertained by- referring to the annuity table. Annual depreciation is uniform throughout the working life of the asset.

50.

Journal Entries
S.No.	Particulars		Debit Rs	Credit Rs
(a)	Vasu A/c	Dr.	1,000
	To Sales A/c			1,000
	(Being the sale of goods to Vasu was recorded in the Sales Book)
(b)	Sales A/c	Dr.	2,500
	To Suspense A/c			2,500
	(Being the sale of goods to Vasu was recorded in the Sales Book)

51.

The expenditure incurred for day to day running of the business or for maintaining the earning capacity of the business is known as revenue expenditure. It is recurring in nature.

52.

The bank passbook or the bank statement of accounts is prepared by the bank

53.

Personal accounts can be classified into natural, artificial and representative personal accounts

54.

(i) A credit note is prepared by the seller and sent to the buyer when goods are returned indicating that the buyer's account is credited in respect of goods returned.
(ii) Credit note is a statement prepared by a trader who receives back from his customer the goods sold.
(iii) It contains details such as the description of goods returned by the buyer, quantity returned and also their value.