ACCOUNTS QUESTION PAPER WITH SOLUTIONS

8/8/2019 ACCOUNTS QUESTION PAPER WITH SOLUTIONS

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OMTEX CLASSESTHE HOME OF SUCCESS

OMTEX

CLASSES

I ST PRELIMINARY

EXAMINATION

BOOK KEEPING &

ACCOUNTANCYGROUP: A

TIME: - 3 HRS DATE: - 16.11.2010 DAY - TUESDAY MARKS: -

100

Q1. Answer Any four of the following. (20 marks)

A. Answer the following. (5)

1. What is Balance Sheet?Ans. A balance sheet is a statement showing the financial position of the business in the

form of its assets and liabilities on a particular date.

2. Who is co venture?Ans. A co venture is a temporary partner of joint venture business only.

3. What is Super Profit?Ans. Super profit is the profit earned over and above the normal return on the capital

employed by the business firm.

4. What is Endorsement of Bill?Ans. Endorsement of a bill is the holders signing on its back with the intention of

transferring its title or ownership to another.

5. What is Good will of the firm?Ans. Goodwill is the monetary value of the reputation of a firm as measured in terms of

its expected future profits.

B. Write word/term/phrase which can substitute each of the followings: (5)

1. Reputation of a firm expressed in terms of money.Ans. Goodwill.

2. Payment of expenses before they have become due.Ans. Prepaid Expenses.

3. Payment of bill of exchange before its due date at rebate.Ans. Retirement of Bill of Exchange.


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4. The person on whom the bill of exchange is drawn.Ans. Drawee.

5. The account that is credited when depreciation is charged.Ans. Respective Assets Account.

C. Match the pairs. (5)

A B (Answers)

1.

2.

3.

4.

5.

Depreciation

Dishonour of bill

Joint Venture

Goodwill

Co Ventures

1.

2.

3.

4.

5.

Wear and tear

Notary Public

Temporary partnership

Intangible Asset

Temporary Partners

D. Select the most appropriate alternative from those given below: (5)

1. Debit Balance in Profit and Loss Account shows _______________a. Net profitb. Gross profitc.Net lossd. Gross loss

2. A bill of exchange must be accepted by ___________________a. A drawerb. A payeec. An endorseed.A drawee


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3. At the end of the financial year balance of Depreciation account is transferred to_______________

a. Depreciation accountb. Asset accountc. Trading accountd.Profit and loss account.

4. In the absence of partnership deed the partners share the profit and loss of the firm_____________

a. In the ratio of capitalb.Equallyc. As per rights in managementd. On the basis of experience.

5. ____________ has to ultimately bear the noting charges.a.

Drawer

b.Draweec. Endorserd. Bank

E. State True / False with reasons. (Any Two) (5)

1. Under fixed capital method for each partner two accounts are maintained.Ans. The given statement is true because of the following reasons.

i. Under fixed capital method each and every transactions of partners aretransferred to their current account and not in their capital account.


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ii. It becomes compulsory for the partners to maintain two accounts fortheir transactions. Once is capital account to record additional capital

introduced and current account as well.

2. Under fixed instalment method depreciation is charged on the diminishing value of theasset.

Ans. The above statement is false because of the following reasons.

i. Under fixed instalment method depreciation is charged on the originalvalue of the assets and the amount of depreciation will remain constant

for each year.

ii. Under Diminishing balance method only the depreciation on fixed asset ischarged on the written down value of fixed asset every year.

3. Interest on partners drawings is debited to Profit and loss appropriation account.Ans. The above statement is false because of the following reasons.

i. Profit and loss appropriation account is another profit and loss accountprepared especially to record the transactions pertaining to the partners.

ii. Thus Interest on Partners drawings is credited to the profit and lossaccount (or) profit and loss appropriation account and it will be debited

to Partners capital account in the case of fluctuating capital method and

to Partners current account in the case of fixed capital method.

F. Prepare a bill of exchange from the following information:

Drawer: Vilas Patil, 21. M.G. Road, Pune

Drawee: Vikas Pawar, 31. S.V. Road, Nasik.

Payee: Viraj Potade, 41, A.B. Road, Sholapur,

Period: 2 months

Amount: Rs. 7,500/-

Date of Bill: 1st

January, 2007.

Date of acceptance: 3rd January, 2007.


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Ans.


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Q2. Ravindra Trading company. Ambajogai Purchased machinery for Rs. 55,000/- on 1st

April,

1996 and spent Rs. 5,000/- on its fixation and erection. In the same year on 1st

October,

additional machinery costing Rs. 40,000/- was purchased. On 1st

October, 1998 the machinery

purchased on 1st

April, 1996 became obsolete and was sold for Rs. 43,000/- On 1st

January,

1999, a new machinery was also purchased for Rs. 20,000.Depreciation was provided annually on 31

stMarch at the rate of 10% per annum on Fixed

Instalment Method. Prepare Machinery A/c and Depreciation A/c for the years 1996 97, 1997-

98, 1998-99. (March 2005 Board exam Question).

Ans.

M/s Ravindra Trading Co.

Machinery Account.

Date Particulars J

F

Amount Date Particulars J

F

Amount

1.4.1996 To cash / bank a/c

[machinery purchased]

55000 31.3.1997 By Depreciation a/c 8000


[fixation and erection]

5000


[marhinery purchased]

40000 31.3.1997 By Balance c/d 92000

100000 100000

1.4.1997 To balance b/d 92000 31.3.1998 By depreciation a/c 10000

31.3.1998 By balance c/d 82000

92000 92000

1.4.1998 To balance b/d 82000 1.10.1998 By depreciation a/c 3000

1.10.1998 By cash/ bank a/c

[Machinery sold]

43000

1.10.1998 By profit / loss a/c

[ loss on machinery sold]

2000

31.3.1999 By depreciation a/c 4500

31.3.1999 By balance c/d 49500

102000 102000

1.4.1999 To balance b/d 49500

Depreciation account

Date Particulars J

F

Amount Date Particulars J

F

Amount

31.3.1997 To machinery a/c 8000 31.3.1997 By profit & loss a/c 8000

8000 8000

31.3.1998 To Machinery a/c 10000 31.3.1998 By profit & loss a/c 1000010000 10000

1.10.1998 To Machinery a/c 3000

31.3.1999 To Machinery a/c 4500 31.3.1999 By profit & loss a/c

(balancing figure)

7500

7500 7500

OR


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Q2. (A) The books of a business showed that the capital employed on 31st

December, 1992 was

Rs.1, 00,000/-. Profits for the last five years are_1988, 1989, 1990, 1991 & 1992 were Rs,

60,000, Rs, 55,000, Rs, 75,000, Rs, 85,000 & Rs, 65,000 respectively. Goodwill is valued at 2

years purchase of the Super profit of the business. NRR is 10%.

&


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Q2. (B) Importance of computer in accounting.

Ans.

Today computers are put to a variety of uses. They have been designed with highly improved

performances. Computers can be used to process voluminous data at a high speed. As regards itsapplication in the field of accounting, a computer should be able to deal with routine accounting.

It means all normal accounting processes such as financial transactions should be dealt with the

use of a computer. All cash and bank transactions, handling of accounts of debtors and creditors

and calculation of wages and salaries etc should be handled with the use of computer. In

addition, computers can be put to other popular uses such as production, programming and

control, flexible budgetary control, variance analysis, sales and forward trends etc.

Following points explain the importance of computer in modern age.

Speed: - In the modern world, the desire of a man to complete tasks within the stipulated time

limits has been, to a large extent, fulfilled by using a computer. Computers enable us to do

arithmetical computations with a high degree of speed and ease. It has enables us to do things,

which would have been almost impossible earlier. The speed which computers functions aremeasured in Pico seconds (1/1000 of Nano second). Thus, computers are capable of

making millions of computations per second. Hence, a powerful computer is capable of

completing the tasks in less than an hour, which could have taken a year for a group of people to

compute.

Accuracy: - Computers are not only fast in completing a job at a great speed, but it is also

performed with a high degree of accuracy. Sometimes, it is common to say that there is a

Computer error. As a matter of fact, it is Human error and not a Computer error since a

computer carries out the instructions efficiently given by the programmer. As such, if the

instructions are faulty, the errors creep in the computers output.

Diligence: - By doing similar job continuously, human beings get tired which results into some

mistakes. As against this, a computer is capable of doing the same job continuously error free. A

computer takes the same time to complete the first calculation as well as the 10000th calculation.

Thus, the degree of diligence possessed by a computer is impossible in case the same job is done

by human beings.

Storage: - Another advantage offered by a computer is that of its enormous capability to store

data. A computer is capable of storing data along with the instructions given by the programmer

in the primary (main) memory. In case, the primary memory is not sufficient it can be stored in

its secondary (auxiliary) memory. There are various devices used for storing the secondary

memory. Some of the common devices used in secondary memory are Compact Disks, Tapes,

Drums, pen Drives etc. Having large capacity to store data.

Versatility: - A computer possesses great versatility, which is capable of performing arithmeticcalculations, logic operation of comparison and moving data within different sections of the

computer and in input and output operations. Although, a computer lacks a brain of its own, it

can be put to a varied uses such as preparation of mark lists, financial accounting, share

analysis etc.

Miscellaneous: - In addition to the above mentioned advantages, a computer can offer

economies in the form of effective managerial control, saving in labour cost because it is fully

automatic.


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Q3. Anil sold goods to Ravindra for Rs. 6000. Ravindra accepted Anils bill for Rs. 6000 payable

after 3 months. After a month, Anil discounted the bill with his bank at 10% p.a. On the due

date, Ravindra dishonoured his acceptance. Ravindra paid Rs. 3000 to Anil and accepted a fresh

bill for 3 months for the balance including interest @ 8% p.a. Anil sent the bill to bank for

collection. On due date, Ravindra honoured the bill. Pass the journal entries in the books ofAnil. (October 2002 board exam questions).

Ans.

Journal of Anil

Date Particulars L

F

Debit Credit

? 1 Ravindras A/cDr.

To Sales A/c

(Being the goods are sold)

6000

6000

2 Bills Receivable A/c Dr.

To Ravindras A/c(Being the bill is drawn)

60006000

3 Cash/ Bank A/c Dr.

Discount A/c Dr.

To Bills Receivable A/c(being the bill is discounted)

5900

100

6000

4 Ravindras A/c DrTo Cash/Bank A/c

(being the bill is dishonored)

60006000

5 Cash/ bank a/c DrTo Ravindras A/c

(being the part payment is made)

30003000

6 Ravindras A/c Dr.

To Interest a/c

(being the interest is charged on balance amount)

60

60

7 Bills Receivable A/c Dr.

To Ravindras A/c

(being the new bill is drawn along with interest)

30603060

8 Bank for collection A/c Dr.

To Bills Receivable a/c

(being the bill is send to bank for collection)

3060

3060

9 Cash/ bank a/c Dr.

To Bank for collection a/c(being the sent to bank for collection bill is honored)

3060

3060

OR


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Q3. Journalize the following transactions in the books of Motilal:

a. Bhavna informed Motila that Jyotis acceptance for Rs. 3600 endorsed to Bhavna hasbeen dishonoured and noting charges have been Rs. 150.

b. Anil renews his acceptance to Motilal for Rs. 3400 by paying Rs. 900 in cash andaccepting a new bill for the balance plus interest at 8% p.a. for 3 months.

c. Prabhakar retired his acceptance to Motilal for Rs. 4000 by paying Rs. 3850 in cash.d. Bank informed Motilal that Aruns acceptance of Rs. 7000 which was discounted with

bank has been dishonoured with noting charges Rs. 100. (March 2008 board exam

questions)

Date Particulars LF

Debit Credit

a Jyotis A/c Dr.

To Bhavnas(being the endorsed bill is dishonored along with noting charges)

3750

3750

b i. Anils A/c Dr.To Bills Receivable a/c

(being the bill is dishonored)

34003400

ii. Cash / bank a/c Dr.To Anils a/c

(being the part payment is made)

900900

iii. Anils A/c Dr.To Interest A/c

(being the interest is charged on balance amount)

50

50

iv. Bills receivable a/c Dr.To Anils A/c

(being the new bill is drawn along with interest)

2550

2550

c Cash/ bank a/c Dr.

Rebates A/c Dr.To Bills Receivable A/c

(being the bill is retired)

3850

150

4000

d Aruns A/c Dr.To Cash/ bank A/c

(bein the discounted bill is dishonored along with noting charges)

7100

7100


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Q4. Ajay and Abhijeet were partners in a Joint Venture sharing profits and losses in theproportion of 4/5 and 1/5 respectively. Ajay supplied goods to the value of Rs. 25000 and

incurred expenses amounting to Rs. 2700. Abhijeet also supplied goods to the value of Rs. 7000

and his expenses amounted to Rs. 400. Abhijeet sold all the goods for Rs. 46000. Abhijeet is

entitled to a commission at 5% on sales. Abhijeet settled Ajays account by bank draft. Prepare

Joint venture account and Abhijeet account in the books of Ajay. (March 2006 board exam

questions.)

In the books of Ajay

Joint venture account

Particulars Amount Amount Particulars Amount Amount

To Goods a/c

To cash/bank a/c

To Abhijeets a/c

To Abhijeets a/cTo Abhijeets a/cTo profit on joint venture transferred to

Profit / loss A/c

Abhijeets A/c6880

1720

25000

2700

7000

4002300

8600

By Abhijeets A/c 46000

46000 46000

Abhijeets Account


To Joint venture a/c 46000 By Joint venture a/c

By Joint venture a/cBy Joint venture a/c

By Joint venture a/c

(profit)

By cash/ bank a/c

(balancing figure)

7000

4002300

1720

34580

46000 46000


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Q5. Mrs. Archana keeps her books on single entry system and gives the following information:

(March 2008 board exam question)

Particulars 31.3.2006 31.3.2007

Cash at bank

Sundry debtors

Stock in trade

FurnitureMachinery

Bills payable

Sundry creditors

5000

25000

30000

2000050000

5000

15000

32000

40000

50000

2000050000

5000

20000

Further information:

1. Mrs. Archana withdrew from business Rs. 15000 for personal use.2. She further introduced fresh capital of Rs. 25000.3. Depreciation is to be charged @ 10% p.a. on Furniture and Machinery.Prepare : (1) statement of affairs as on 31.3.2006. (2) statement of affairs as on 31.3.2007.

(3) statement of profit and loss for the year ended on 31.3.2007.

ANS.

In the books of Mrs. Archana

Statement of affairs as on 31st

March, 2006

Liabilities Amount Assets AmountBills payableSundry creditors

Capital at the beginning of the year

500015000

110000

MachineryFurniture

Stock in trade

Sundry debtorsCash at bank

5000020000

30000

250005000

130000 130000

Statement of affairs as on 31st

March, 2007

Liabilities Amount Assets Amount

Bills payable

Sundry creditorsCapital at the end of the year

5000

20000167000

Machinery

FurnitureStock in trade

Sundry debtors

Cash at bank

50000

2000050000

40000

32000

192000 192000


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Statement of profit or loss for the year ended 31st

March, 2007

Particulars Amount

Capital at the end of the year 167000

Add: Drawings 15000

Less: Additional capital introduced182000

25000

Less: Capital at the beginning of the year157000110000

GROSS PROFIT

Less: Depreciation

On Machinery = (50000)(10/100)(12/12) = 5000On Furniture = (20000)(10/100)(12/12)=2000

47000

7000

NET PROFIT 40000

Q6. Sanjay, Ajay and Vijay undertook the construction of building at a contract price of Rs.

6,00,000 payable in cash Rs. 4,00,000 and in the form of debentures of company Rs. 2,00,000.

They shared profits and losses in the ration of 3:2:1 respectively. They opened a Joint Bank

account wherein they deposited the following amounts. Sanjay Rs. 3,00,000, Ajay Rs. 2,00,000

and Vijay Rs. 1,00,000.

The following payments are made out through Joint bank account.

1. Purchase of materials Rs. 2,50,000.2. Payment of wages Rs. 77,000.3. Purchase of plant Rs. 45,000 and4. Other charges Rs. 11,000.

Sanjay bring the truck of Rs. 40,000. Ajay brings in the material of Rs. 55,000. Vijay brings mixer

worth Rs. 10,000. At the close of venture the unused materials were taken by Sanjay for Rs.

5,000. Ajay took over the mixer and plant for Rs. 27,000. The truck was sold in the market for

Rs. 22,000. The contract price was received as per ther agreement and Vijay agreed to take over

the debentures at Rs. 1,90,000.

Prepare : Joint venture account, Joint Bank account and Co ventureres account. (March 2008

board exam questions)


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In the books of Joint venture

Joint venture accountParticulars Amount Amount Particulars Amount Amount

To Join bank a/c

MaterialsWages

Plant

Other chargesTo Sanjays A/c

(Truck)

To Ajays A/c(materials)

To Vijays A/c(mixture)

To Debentures A/c

(discount on debenture)

To profit on joint venturetransferred to

Sanjay

Ajay

Vijay

25000077000

45000

11000

78000

52000

26000

38300040000

55000

10000

10000

156000

By Joint Bank a/c

(contract price)By Debentures a/c

(contract price)

By joint bank a/c(truck sold)

By Sanjays A/c(Materials taken

over)

By Ajays A/c(Mixer and plant)

400000

200000

22000

5000

27000

654000 654000

COVENTURERS ACCOUNT

Particulars Sanjay Ajay Vijay Particulars Sanjay Ajay VijayTo Joint venture a/c

To debenture a/c

To joint bank a/c

5000

413000

27000

280000

190000

By joint bank a/c

By joint venture A/c

By joint venture A/c

By joint Bank A/c

300000

40000

78000

200000

55000

52000

100000

10000

26000

54000

418000 307000 190000 418000 307000 190000

Joint Bank A/c

Particulars Amount Particulars Amount

To Sanjays A/cTo Ajays A/c

To Vijays A/cTo joint venture A/c

To Joint Venture A/c

To Vijays A/c

300000200000

100000

400000

22000

54000

By joint venture a/c

By Sanjays A/c

By Ajays A/c

383000413000

280000

1076000 1076000


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Debentures A/c


To Joint venture A/c 200000 By Vijays A/cBy Joint Venture A/c

(balancing figure)

190000

10000

200000 200000

Q7. Following is the Trial Balance of Premlal and Sundarlal as on 31st

March 2006.

Trial balance as on 31st

March, 2006.


Stock on 1-4-2005Purchases

Drawings: Premlal

SundarlalSales return

Wages : productiveUnproductive

SalariesRent, rates and insurance

Bad debts

Discount allowed

MachineryBuilding

Sundry debtorsCashGovernment bonds

90000225000

33000

300007200

105001800

1860010200

1200

3900

45000108600

15300010002000

SalesPurchase returns

Discount received

Sundry creditorsCapital : Premlal

SundarlalBank overdraft

3750003000

3000

90000105000

13500030000

741000 741000

1. Closing stock was valued on 31.3.2006 at market price Rs. 60,000 which was 20% aboveits cost price.

2. Outstanding productive wages Rs. 6003. Rent, Rates and insurance include insurance Rs. 1600 paid for one year ending on 30 th

June 2006.4. Maintain Reserve for doubtful debts at 5% on debtors.5. Depreciate buildings by 5% and machinery at 10% p.a.6. Goods costing Rs. 2500 were distributed as free samples for which no record has been

made in the books.

7. Six months interest is due on Bank Overdraft at 10% p.a.Prepare trading and profit and loss account for the year ended 31

stMarch 2006 and Balance

Sheet as on that date. (September 2008 board exam questions)


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In the books of Premlal and Sunderlal

Trading account for the year ended 31st

March, 2006.


To opening stock

To purchases

(-)return

To productive

wages

(+) outstanding

To Gross profit c/d

225000

(3000)

10500

600

90000

222000

11100

97200

By sales

(-) return

By goods distributed as free

samples

By closing stock

375000

(7200) 367800

2500

50000

420300 420300

Profit and loss account for the year ended 31st

March, 2006


To SalariesTo unproductive wages

To rent, rates and insurance

(-) prepaid insurance

To bad debts

(+) FBD

(+)NRDD

(-) ORDD

To discount allowed

To advertisementTo depreciation:

Buildings

MachineryTo interest on bank over draft

To net profit c/dPremlal

Sundarlal

10200

(400)

1200

NIL

7650

NIL

5430

4500

21660

21660

186001800

9800

8850

3900

2500

99301500

43320

By gross profit b/dBy discount received 972003000

100200 100200

Partners capital accounts

Particulars Premlal Sunderlal Particulars Premlal Sunderlal

To drawings

To balance c/d

33000

93660

30000

126660

By balance b/d

By Net profit b/d

105000

21660

135000

21660

126660 156660 126660 156660


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Balance sheet as on 31st

March, 2006

Liabilities Rs. Rs. Assets Rs. Rs.

Capital account

Premlal

SunderlalSundry creditors

Bank overdraft

Add: interest

Outstanding productive wages

93660

126660

30000

1500

22032090000

31500

600

Buildings

(-) Deprn@5%

Machinery(-) Deprn@10%

Sundry Debtors

(-) N.R.D.D. @5%

Closing stock

Cash

Prepaid insurance

Government Bonds

108600

5430

450004500

153000

7650

103170

40500

145350

50000

1000

400

2000

342420 342420

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