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PART B

UNIT I
1. What is double entry system? What are its advantages?
2. Prepare trial balance
Rs
opening stock 10,600
carriage 200
purchases 12000
trade expenses 580
Plant 2,600
cash in hand 200
Debtors 3000
Drawings 700
Sales 25,200
Capital 7000
loan (cr) 1400
wages 2200
commission (dr) 300
returns inward 440
Rent 200
Repairs 460
cash @ bank 1000
income tax 500
returns outwards 150
discount received 400
Creditors 830

3. Journalize the following transactions in the books of Balan:

1985
1-Jan Balan started business with cash Rs. 50,000
he bought goods of Rs. 4000 and furniture Rs.500
2 purchased building for Rs. 10,000
3 purchased goods for Rs. 3,000
4 paid cartage Rs. 20
5 Purchased goods on credit rs. 2500
4. Enter the following transaction in a simple column cash book

2003
1-Mar cash in hand 22,400
5 received from arun 600
7 paid rent 60
9 sold goods 600
10 paid gokul 1400
27 purchased furniture 400
31 paid salaries 200

5. Enter the following in double column cash book

1999
1-Jul cash balance 13,750
2 received from balan by cheque 2500
discount allowed to him 125
3 purchased goods for cash 2150
4 paid into bank 1100
5 withdrew from bank for personal use 1500
7 paid office rent by cheque 800

6. What is journal? What are its importance?


7. Explain the significance of Ledger.

UNIT II
8. Prepare trading & Profit &loss account from the information given below:
Particulars Rs Particulars Rs
opening stock 3,600 rent (factory) 400
Purchases 18,260 rent (office) 500
Wages 3,620 sales return 700
closing stock 4,420 purchases returns 900
Sales 32,000 general expenses 900
carriage on purchases 500 discount to customers 300
carriage on sales 400 interest from bank 200

9. Find out the amount of salaries to be debited to income & expenditure account for 2009
from the details given below.
Rs
payment made for salaries during 2009 48,000
outstanding salary as in. 31.12.2008 2000
outstanding salary as in. 31.12.2009 3200
prepaid salary as on 31.12.2008 1200
prepaid salary as on 31.12.2009 1600
10. From the following details ascertain the amount of subscriptions to be credited to income
and expenditure account for the year 1999.
Subscription received in 1999 – Rs.48000 which include RS.4000 for 1998 and Rs. 8000
for 2000. Subscriptions due but not received at the end of the year 1999 were 20,000. Subscriptions
received in 1998 in advance for 1999 were Rs.12,000.
11. From the following particulars prepare receipts & payments A/c

Cash in hand 100


cash at bank 500
subscription received 3300
donation received 260
investment purchased 1000
rent paid 400
general expenses 210
postage and stationery 70
sundry expenses 30
cash balance @ close 20
12. Distinguish between receipts and payments account.
13. How do u prepare balance sheet for ‘Non Trading’ concern?
14. Distinguish between income & expenditure account.
UNIT III
15. Rectify the following errors:
a. Purchases book overcast by Rs. 300
b. Sales book has been under cast by Rs. 200
c. Purchases return book has been overcast by Rs. 75
d. Sales return book has been under cast by Rs. 50.
e. Purchases book carried forward Rs. 350 less.
f. Sales book total is carried forward Rs. 500 more.
g. A total of Rs. 758 in the purchases book has been carried forward as Rs. 857
h. The total of the sales book Rs. 755 on page 20 was carried forward to page 21 as
557.
i. Purchases returns book was carried forward as Rs. 5120 instead of Rs. 1520.
16. Prepare a bank reconciliation statement as on 31- 12- 1993, from the following details:
Balance as per cash book Rs.7, 225
Cheque deposited into bank but not collected Rs. 675
Cheque issued but not presented for payment Rs. 879
Bank charges debited in the passbook Rs. 20
Interest credited in the pass book Rs. 15
17. List out the causes for the differences between the balances shown by Cash book and Pass
book.
18. What is ‘BRS’? Why it should be prepared?
19. Describe the different types of errors with suitable examples.
20. What is suspense account? Why is it opened? How is finally closed?

UNIT IV

21. What are the causes for depreciation?


22. Explain the meaning of and objectives for providing depreciation.
23. From the following particulars, prepare Machinery A/c for 3 years under S.L.M
Price of the Machine: Rs. 36,000
Freight charges: Rs. 2500
Installation charges: Rs. 1500
Life of the machine: 5 years
24. A machine was purchased for Rs. 30,000 on 1-1-1996. This is expected to last for 5 years.
Estimated scrap at the end of 5 years is Rs. 5000. Find out the rate of depreciation under
the straight line method.
25. A fire occurred at the premises of a trader on 31.5.94 destroying in a great part of his goods.
His stock at 1.1.94 was Rs. 60000. The value of stock salvaged was Rs. 13,500. The gross
profit on sales was 30% and sales amounted to Rs. 1, 53,000 from January to date of fire,
while for the same period the purchases amounted to Rs. 1, 03,500. Prepare the statement
of claim.
26. Calculate the insurance claim from the following facts assuming that the insurers met their
liability under the policy on ‘average basis’. A traders stock valued at Rs. 40,000 was
totally destroyed. The stock in the godown was insured for Rs. 30,000 subject to average
clause. The balance of stock, left after fire, appeared in the books at Rs. 24,000.
27. What is average clause? What is its purpose?
28. Write a short notes on: indemnity period & annual turnover.

UNIT V

29. Find out the total purchases for 2008 on the basis of the following particulars:

Rs
total creditors ( 1.1.2008) 37,000
total bills payable as on 1.1.08 22,000
total trade creditors ( 31.12.08) 39,560
total bills payable as on 31.12.08 18000
cash paid for bills payable during the year 80000
discount received from creditors during the year 1370
cash paid to trade creditors during the years 39,950
cash purchases made during the year 32,540

30. What are the limitations of single entry system?


31. From the following information calculate the total sales of the year 1994:

Rs
Debtors (1.1.94) 17,425
Debtors (31.12.94) 15,300
Bad debts 2500
Discounts 1800
Cash received from debtors 49,200
Sales returns 3700
Bills receivable 5000
Cash sales 12,000

32. Briefly explain the features of single entry system?


33. Ravi a retail merchant commenced business with a capital of Rs. 12,000 on 1.1.2009.
Subsequently on 1.5.09 he invested further capital of Rs. 5000. During the year, he has
withdrawn Rs. 2000 for his personal use. On 31st Dec 2009 his assets and liabilities were
as follows:

Rs.
Cash at bank 3000
Debtors 4000
Stock 16000
Furniture 2000
Creditors 5000
Calculate the profit or loss made during the year 2009.
PART C
UNIT I
1. Prepare a three column cash book from the following particulars:

2008
1-Jan Cash in hand Rs. 1600 and Bank Overdraft Rs. 1000.
7-Jan Discounted a bill for Rs. 5,000 @ 1% through bank
9-Jan paid into bank Rs. 1000
11-Jan Ganesh who owed as Rs. 200 becomes bankrupt and paid us 50 paise in the rupee
15-Jan Withdraw from bank for private expenses Rs. 100
20-Jan Received repayment of loan Rs. 3000 and deposited out of it Rs. 2000 in the bank.
2. Journalize the following transactions of Mr. Ravi.

2003
1-Mar Ram commenced business with cash Rs. 1,60,000
2 Opened current account with Indian bank Rs. 40,000
3 Bought goods from Sandy Rs. 20,000
4 Sales to Radha Rs. 16000
5 Sold to Ram Rs. 80,000
6 Swamy sold goods to us Rs. 10,000
7 Kannan bought goods from us Rs. 6000
8 Typewriter purchased Rs. 12000
9 Paid salaries Rs. 5000
25 Drew cheque for personal use Rs. 3000
3. What are Final accounts and why they are prepared?
4. Prepare Trial Balance as on 31.3.2008 from the books of Mr. Gokulanathan.
Rs. Rs.
Capital 2,49,000 Drawings 24,000
General Expenses 97000 Buildings 78,000

Machinery 1,18,680 Stock (1.4.07) 1,32,400


Wages 14,400 Insurance 2610
Baddebts 1100 Creditors 5,000

Sales 3,30,720 Loan (Cr) 75000


Commission 5,500 Purchases 2,10,800
Bills Payable 7,700 Reserve fund 15,000
Bank O/D 28,600 Cash in hand 25,230

5. How do you prepare a “Three column cash book”? Explain its utility?
UNIT II
6. From the following trial balance, prepare trading profit and loss a/c for the year ended
31.12.1994 and a balance sheet as on the date.
Trial Balance

Rs Rs
Purchases 11,870 Capital 8000
Debtors 7580 Bad debts recovered 250
Returns inward 450 Creditors 1250
Bank deposit 2750 Return outwards 350
Rent 360 Bank overdraft 1570
Salaries 850 Sales 14,690
Travelling Expenses 300 Bills Payable 1350
Cash 210
Stock' 2450
Discount Allowed 40
Drawings 600
27,460 27460

Adjustments:
i) The closing stock on 31.12.2009 was Rs. 4200
ii) Write off Rs. 80 as Bad debts and create a reserve for bad debts @ 5% on sundry debtors
iii) 3 months rent is outstanding.

7. Prepare final accounts with the help of Trial balance


Debit Credit
(Rs) (Rs)
Capital 8500
Drawings 1420
Machinery 1900
Opening stock 2920
Purchases & Sales 20,72 23,81
4 2
Purchase returns & Sales returns 420 582
General Expenses 880
Rent 240
Rates 400
Premium 160
Bank Overdraft 480
Bad debts 344
Debtors & Creditors 8400 4000
Cash in hand 96
Bad debts Provision 210
37744 37744
Adjustments:
1. Write off depreciation @ 20% on Machinery
2. Closing stock Rs. 3400
3. Rates Prepaid Rs. 160
4. Create a provision for bad and doubtful debts on debtors 10%
5. Outstanding rent Rs.80
8. Distinguish between Receipts & Payment A/C and Income & Expenditure A/C?

9. On 31st March, 2017, the following trail balance were extracted

Debit Balances Rs. Debit Balances (Contd.) Rs


Drawings 3000 Rates, Taxes and insurance 2,891

Sundry Debtors 20100 Advertising 3,264


Interest on loan 300 General Expenses 3,489
Cash-in Hand 2,050 Bills Receivable 6,882

Stock on 1st April, 6,839 Credit Balances


2016
Motor vehicles 10,000 Capital 28,000
Cash at Bank 3,555 Sundry Creditors 10,401
Land and Buildings 12,000 Loan on Mortgage 9,500
Bad Debts 525 Provision for Doubtful debts 710

Purchases 66,458 Sales 1,10,243


Sales Returns 7,821 Purchases Returns 1,346
Carriage Outward 2,404 Discounts 540
Carriage Inward 2,929 Bills Payable 2,614
Salaries 9,097 Rent Received 250
ADJUDTMENTS
a) Stock as on 31st march 2017 valued at 6250 ( market price – 8500)
b) Provision for doubtful debts to be maintained at 5%
c) Rent receivable during the year 100
d) Depreciate building at 10%

Prepare trading and profit/ loss account for the year ended 31st march 2017 and balance sheet
on same date.
10. On 31st march 1992, the following was extracted from the book of saravanan.

Particulars Amount
Capital 50,000
Plant and machinery 80,000
Sales 1,77,000
Purchases 60,000
Returns 1,000
Opening stock 30,000
Discount (cr) 3,50
Bank charges 75
Debtors 45,000
Creditors 25,000
Salaries 6,800
Wages 10,000
Carriage (in) 7,50
Carriage(out) 1,200
Bad debts provision(cr) 5,25
Rent and rates 10,000
Advertisement 2,000
Cash in hand 9,00
Cash at bank 6,000
Additional information:
(a) Closing stock- Rs. 35,000.
(b) Depreciate plant at 6%.
(c) Interest on capital 5% p.a.
(d) Bad debts provision to be adjusted to Rs. 5,00.
11. Prepare final accounts as on 31st march 1992. From the following Trial Balance of Mr.
Ramkumar as on 31st March 2009, prepare Trading
And profit & Loss A/C and Balance sheet taking into account the adjustments:
Debit balances Rs. Credit Balances Rs.
Land and Buildings 84,000 Capital 1, 24,000
Machinery 40,000 Sales 1, 97,560
Patents 15,000 Return Outwards 1,000
Stock 1-4-2005 11,520 Sundry Creditors 12,600
Sundry debtors 29,000 Bills payable 18,000
Purchases 81,350
Cash in hand 1,080
Cash at Bank 5,260
Return Inwards 1,360
Wages 16,960
Fuel & Power 9,460
Carriage on Sales 6,400
Carriage on Purchases 4,080
Salaries 30,000
General Expenses 6,000
Insurance 1,200
Drawings 10,490
--------------- -----------------
3,53,160 3,53,160
---------------- -----------------
Adjustments:
1) Stock on 31-3-2009 was Rs. 13,600. 2) Salary outstanding Rs. 3,000. 3) Insurance Prepaid
Rs. 300.
4) Depreciate machinery @ 10% and patents @ 20%. 5) Create a provision of 2% on debtors for
bad debts.

UNIT III

UNIT IV
17. On 1.7.99 ‘A’ Co. Ltd. Purchased a second hand machine for Rs. 40,000 and spent. 6,000 on
reconditioning and installing it. On 1.1.2000 the firm purchased new machinery Worth Rs.24, 000.
On 30.6.2001, the machinery purchased on 1.1.2000 was sold for Rs. 16,000 and on 1.7.90 fresh
plant was installed at a cost of Rs. 30,000.
The company writes off 10% on the original cost of Machinery each year. The accounts are
closed every year ending 31st March. Show the Machinery A/c for three years ending 31.3.2002.

18. A fire occurred at the premises of a trader on 31.5.2004 destroying a great part of his goods.
His stock at 1.1.2004 was Rs. 60,000. The value of stock salvaged was Rs. 13,500. The gross profit
on sale was 30% and sales amounted to Rs. 1,53,000 from January to date of fire, while for the
same period the purchased amounted to Rs. 1,03,500. Prepare a statement of claim.

19. Motia Ltd., purchased machine for Rs. 30,000 on January, 2009. An additional machinery was
purchased on July 1,2010, costing Rs. 25,000. On 31st March, 2011, one of the original machines
which had cost Rs. 15000 on January 1, 2009 obsolete so was sold for Rs. 12500. On the same
date a new machine was purchased for Rs. 6,000. You are required to draw up Machinery Account
& depreciation account for three years if company closes its books of accounts on 31st December,
each year and charges depreciation @10% p.a. on the basis of Reducing balance method.

20. Explain the meaning and objectives for providing depreciation.

21. Breifly explain the various methods of providing for depreciation of fixed assets.
UNIT V

22. From the following particulars of Mr. Vivek who keeps his books on single entry, prepare
Trading and profit & loss A/c and Balance sheet for the year ended 31.12.2004.

01.01.2004 31.12.2004
Rs. Rs.
Machinery 36,000 36,000
Stock 24,000 21,000
Debtors 6,000 9,000
Creditors 15,000 12,000
Cash 13,980 15,360
During the year Mr.Karnan had taken goods from his business for his own use amounted
to Rs.45 per week. He had not paid any money into business. He had also taken cash Rs.9,
360 for domestic purposes.
The following transactions took place during the year ending 31.12.2004:
Wages 18,000 Lighting 2,340
Sundry expenses 7,500 Cash purchases 1, 93,020
Printing 3,360 Carriage 5,040
Rent 7,500 Purchase returns 500
Cash collected from customers 2, 47,500
23.

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