Note: Answer all the questions.

11. Explain any two concepts of accounting with examples. (10 marks)

12. Prove that accounting equation is satisfied in all the following transactions of Mr.X
21. Commenced business with cash – Rs.80,000 (10 marks)
32. Purchased goods for cash – Rs.40,000 and on credit Rs.30,000
43. Sold goods for cash – Rs.40,000 costing Rs.25,000
54. Paid salary – Rs.2,000 and salary outstanding Rs.1,000
65. Bought scooter for personal use for cash at Rs.20,000

13. Show the rectification entries for the following: (10 marks)
2a. The Sales account is undercast by Rs.15,000
3b. Goods returned by the customer Mr.X of Rs.5650 has been posted in the Return
Inward Account as Rs.5560 and in Mr.X a/c as Rs.6,550.
4c. Salary paid Rs.6,000 has been posted to Rent account
5d. Cash received from Ram posted to Shyam account Rs.7,000
6e. Cash received from Jadu Rs.8,640 has been posted to the debit of Madhu’s a/c

14. The following balances are extracted from the books of Kiran Trading Co on 31st
March 2000. You are required to prepare trading and profit and loss account and a
balance sheet as on that date: (20 marks)

Opening Stock 5,000 Commission received 2,000

B/R 22,500 Return Outward 2,500
Purchases 1,95,000 Trade Expenses 1,000
Wages 14,000 Office furniture 5,000
Insurance 5,500 Cash in hand 2,500
Sundry Debtors 1,50,000 Cash at bank 23,750
Carriage Inwards 4,000 Rent and Taxes 5,500
Commission Paid 4,000 Carriage Outward 7,250
Interest on Capital 3,500 Sales 2,50,000
Stationery 2,250 Bills Payable 15,000

Return Inwards 6,500 Creditors 98,250

Capital 89,500

The closing stock was valued at Rs.1,25,000

15. Write short notes on : (10 Marks)
2a. Outstanding Expenses
3b. Prepaid Expenses

Note: Answer all the questions: Each question carries 10 Marks

11. Budgetary Control is a technique of managerial control through budgets.
Elaborate.
22. a. Given: Current ratio = 2.6

Liquid ratio = 1.4

Working Capital = Rs.1,10,000
Calculate (1) Current assets (2) current liabilities (3) Liquid Asset (4) Stock
1b. Calculate Gross Profit Ratio from the following figures:

Sales Rs.5,00,000
Sales return Rs.50,000
Closing stock Rs.35,000
Opening stock Rs.70,000
Purchases Rs.3,50,000
13. From the following Balance Sheet of William & Co Ltd., you are required to
prepare a Schedule of Changes in Working capital & Statement of Sources and
Application of funds.

Balance Sheet
Liabilities 2002 2003 Assets 2002 2003
Rs. Rs. Rs. Rs.
Capital 80,000 85,000 Cash in Hand 4,000 9,000
P&L a/c 14,500 24,500 Sundry Debtors 16,500 19,500
Sundry Creditors 9,000 5,000 Stock 9,000 7,000
Long-term Loans - 5,000 Machinery 24,000 34,000
Building 50,000 50,000
Total 1,03,500 1,19,500 Total 1,03,500 1,19,500

14. Bring out the difference between cash flow and funds flow statement.

5a. DELL computers sell 100 PCs at Rs.42,000. The variable expenses amount
to Rs.28,000 per PC. The total fixed expenses is Rs.14,00,000. Prepare an
income statement.
b. Calculate BEP and MOS
Sales at present are 55,000 units per annum. Selling price is Rs.6 per unit. Prime
cost Rs.3 per unit. Variable overheads is Re.1 per unit. Fixed cost Rs.80,000 per
annum.
16. What is cost variable analysis?