OMTEX CLASSES

OMTEX CLASSES III RD PRELIMINARY EXAMINATION BOOK KEEPING & ACCOUNTANCY GROUP: B
TIME: - 3 HRS DATE: - DAY - THURSDAY MARKS: -100

Q1. Attempt any four of the following. (20 marks)

A. Answer in one sentence each. (5 marks)

1. Which types of expenses are debited to trading account?
2. What is Reserve Fund?
3. Who is an endorser?
4. What is non – profit organisation?
5. Why is Joint Bank Account opened?
B. Write the word/term/phrase which can substitute each of the following statement: (5 marks)
1. A statement showing financial position of the business.
2. Making the payment of bill before its due date.
3. Summary of actual cash receipts and cash payments.
4. The relationship between persons who have agreed to share profit or loss in Joint Venture Business.
5. A Partner who only lends his name to the firm.
C. Match the following pairs. (5 marks)
Group A Group B
1. Not for profit concerns a. Capital A/c. of partner.
2. Fixed capital method. b. Current A./c of Partner.
3. Unexpired expenses c. Joint venture
4. Temporary Partnership d. Asset
5. Pure Single Entry System e. Liability
f. Only personal A/cs.
g. Profit & Loss A/c.
h. Income and Expenditure A/c.
D. Select the most appropriate alternative from hose given below each statement. (5 marks)
1. Reserve for discount on ______________ has a debit balance.
a. Debtors
b. Creditors
c. Bills Receivable
d. Loan advanced.
2. Income Statements and Balance Sheet are prepared in a systematic and scientific manner under ________________
a. Double Entry System.
b. Single Entry System
c. Partial Entry System.
d. Indian System.
3. Before accepting a bill, it is called a _________
a. Note
b. Draft
c. Hundi
d. Request.
4. Valuation of goodwill depends upon ________ capacity of business.
a. Normal
b. Repaying
c. Earning
d. Capital
5. If two or more persons come together to carry on a business activity for a short period, it is known as ___________
a. Joint venture
b. Consignment
c. Partnership
d. Stock exchange
E. State with reason whether the following statements are true of false. (5 marks)
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1. Scrap value of asset reduces the amount of annual depreciation.
2. When the amount of the bill is paid on the due date, it is said to be retired.
F. Prepare bill of exchange from the following details.
Drawer - Shekhar Desai, Shastri Road, Mahad. (5 marks)
Drawee – Sharad Verma, Narayan Peth, Pune.
Amount - Rs. 3500/-
Period - 3 months.
Payee - Mukund Pande, Panvel
Date of Bill Drawn – 21st June, 2007
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Date of Acceptance - 23 June, 2007

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Q2. Avinash Traders, Nashik purchased furniture on 1.1.2002 for Rs. 25,000 on 1 July, 2002 additional furniture was purchased for
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Rs. 10,000. On 1 July 2003 his furniture purchased on 1.1.2002 was sold for Rs. 15,000 and on the same date new furniture was
purchased for Rs. 12,000. The company charges depreciation at 8% p.a. on diminishing balance method.
Prepare Furniture A/c for all the years and depreciation account for the last year. Assuming that the accounting year of the company
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closes on 31 December, every year.
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Q2. (A) For the purpose of valuation of goodwill it was agreed to consider net profits of the last 4 years and goodwill is to be
calculated at one year’s purchase of average net profits of last 4 years. The profits were
IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR
Rs. 80,000 Rs. 90,000 Rs. 1,05,000 Rs. 1,10,000
Q2. (B) Name the two output devices of computers and explain them in brief:

Q3. Abha purchased goods from Prabha on credit for Rs. 10,000 and accepted a bill drawn by Prabha for four months. Prabha
discounted the bill with her bank for Rs. 9,800. Before due date Abha accprached Prabha with a request to renew the bill. Prabha
agreed but with the condition that Abha should pay Rs. 6,000 with interest of Rs. 150 and accept a new bill for the balance. The
arrangements were duly carried out. New bill is met on due date. Pass the necessary journal entries in the books of Prabha.

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

1. Nita informs Smita about dishonor of Anita’s acceptance endorsed to her by Smita for Rs. 15,000. Nita paid noting charges
of Rs. 70.
2. Smita retired her acceptance for Rs. 7,000 one month before due date at a rebate of 12% p.a. to Smita.
3. The bank informs Smita that Sudha’s acceptance for Rs. 8,000 sent to bank for collection has been honoured. Bank charges
debited Rs. 160.
4. Our acceptance to Soni for Rs. 5100 is settled by endorsing Chitra’s acceptance to us for Rs. 4,950.

Q4. Yash and Jay entered into joint venture to purchase and sell cycles. They decided to share profit and losses equally.
Yash purchased 150 cycles at Rs. 400 each and spent Rs. 2,000 for carriage Rs. 4,000 for insurance and draws a bill for Rs.
35,000 on Jay, which is duly accepted by Jay.
Jay purchased 210 cycles at Rs. 400 each and spent Rs. 1,400 for carriage and Rs. 2,000 for selling expenses.
Yash sold 180 cycles at Rs. 750 each. All the remaining cycles of venture were sold by Jay at Rs. 550 each.
Joint venture was completed and both the parties settled their accounts you are required to pass journal entries in the books
of Yash.
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Q5. The following is the balance sheet of M/s A, B, and C as on 31 march 06:
Liabilities Amt Asset Amt
Sundry creditors 12,600 Cash in hand 1,200
Bills payable 8,400 Cash at bank 11,400
Capital A/c Sundry debtors 25,200
A 45,000 Stock 20,100
B 30,000 Furniture 6,000
C 15,000 90,000 Plant and machinery 48,000
Current A/c Current A/c - C 1,560
A 1,440
B 1,020 2,460
1,13,460 1,13,460
A, B and C share profit and losses in the ration of 3:2:1 after charging interest on capital at 5%p.a. During 07, the monthly drawing on
the partners were: A-1,200 , B-900,C-750.
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On 31 march 07, the asset and liabilities of the firm were :
Cash in hand Rs.900; stock Rs 30,600; Plant and machinery Rs 75,000; Bill payable Rs7,200; sundry debtors Rs 28,800 , Furniture
Rs5,400 , sundry creditors Rs 10,200 and Bank overdraft Rs 18,000.
You are asked to : 1. Ascertain the profit or loss made by the firm as on 31/03/07
2. Show the Balance sheet of the firm 31.03.07

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Q6. Following is the Receipts and Payments Account for the year ended 31 March 2006, of Residency Sports Club, Raipur.
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Receipts and Payments Account for the year ended 31 March 2006.
Receipts Amount Payments Amount
To Balance B/D By Rent and Rates 4600
i. Cash in Hand 1500 By Stationery Expenses 1300
ii. Cash at bank 9000 By Printing 1800
To Entrance Fees 1250 By Salaries 9900
To Membership Fees 1000 By Repairs to Furniture 900
To subscriptions: By Honorarium to Secretary 3600
2004 – 05 1,500 By other expenses 600
2005 – 06 15,000 By Telephone Charges 750
2006 – 07 300 16800 By Insurance 1000
To Miscellaneous Receipts 500 By Social Events Expenses 200
To Locker Rent for thirteen months 2600 By Balance C/D
To Sale of Old Furniture (on 1-4-2005) 2000 i. Cash in Hand 350
To Non – Member’s Fees 400 ii. Cash at Bank 13000
To Grant from local Authority 1600
To Social Events 1350
38000 38000
Additional Information:
1. The assets and liabilities as on 1-4-2005 were as follows: cash in hand 1500, Cash at Bank 9000, Furniture 30000,
Subscriptions Receivable 1800, 6% investments 30000, Outstanding Salaries 900, Rent Payable 600, Stationery Expenses
due but not paid 300, Capital Fund 70,500.
2. Subscription of Rs. 3,000 is receivable for 2005 – 06.
3. Entrance Fees and Membership Fees are to be treated as capital receipts in full.
4. Provide depreciation on Furniture @ 10% p.a.
5. You are required to prepare Income and Expenditure account for the year ended 31 – 3 – 2006 and Balance sheet as on that
date.
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Q7. From the following Trial Balance, Prepare Final Account for the year ended 31 December, 2002
Trial Balance
Debit Balance Rs. Credit Balance Rs.
Land and Building 30, 000 Sundry Creditors 49, 000
Sundry Debtors 45, 000 Reserve for Bad debts 1, 000
Machinery 25, 000 Capital: Uma 20, 000
Purchases 48, 000 Priya 25, 000
Opening Stock ( 1- 1- 2002) 25, 000 Unpaid Wages 1, 000
Wages 23, 000 Sales 1, 31, 000
Factory Expenses 8, 000 Discount 1, 300
Royalties 1, 800
Carriage Inward 1, 300
Carriage Outward 1, 700
Office Expenses 2, 550
Bad debts 750
Furniture 3, 000
Drawing: Uma 3, 000
Priya 2, 000
Cash at Bank 4, 300
Cash in hand 500
Advertisement( for 6 year) 3, 000
Insurance 400
2, 28, 300 2, 28, 300

ADJUSTMENTS:

a. Closing stock on 31st December, 2002 was Rs. 18500

b. Goods worth Rs. 3, 000 taken by Uma for his personal use were not entered in the books of accounts.
c. Fire occurred in the godown and goods worth Rs. 5, 000 were destroyed, but Insurance Company admitted Claim for Rs. 3, 500.
d. Write off Rs. 1, 000 for bad debts and create bad debts reserve on debtors at 5%
e. Insurance is paid for the year ended 31st March 2002.
f. Charge depreciation at 2.5% on Land and Building 10% on Machinery, 15% on Furniture.