| 1. | Explain any four of the following : | 5each | |
| | (i) | Accrual concept | | (0) |
| | (ii) | Journal proper | | (0) |
| | (iii) | Self–balancing ledgers | | (0) |
| | (iv) | Account current | | (0) |
| | (v) | Accommodation bill | | (0) |
| | (vi) | Accounting equation. | | (0) |
| 2. | (a) | Distinguish between the following : | 4each | |
| | | (i) | ‘Capital expenditure’ and ‘revenue expenditure’. | | (0) |
| | | (ii) | ‘Operating lease’ and ‘finance lease’. | | (0) |
| | | (iii) | ‘Hire–purchase system’ and ‘installment system’. | | (0) |
| | (b) | What is ‘loss of profit policy’ ? How is the claim calculated under the loss of profit policy ? | 8 | (0) |
| 3. | (a) | Explain accounting treatment of joint–venture transactions in the separate set of books maintained for the purpose. | 8 | (0) |
| | (b) | State, giving reasons, whether the following statements are true or false : | (i) | Cash book is both a subsidiary book as well as a part of the main books of account; | | (ii) | Being invisible, the goodwill is a fictitious asset. |
| 8 | (0) |
| 4. | From the following receipts and issues of a material during the month of January, 2006, prepare stores ledger account according to ‘FIFO method’ : | 2006 | | January 1
January 5
January 8
January 10
January 13
January 20
January 28 | Received 500 units @ Rs.10 per unit.
Received 250 units @ Rs.11 per unit.
Issued 300 units.
Received 400 units @ Rs.12 per unit.
Issued 250 units.
Received 100 units @ Rs.11 per unit.
Issued 400 units. |
On 1st January, 2006, the stock in hand was 200 units@ Rs.9 per unit. | 16 | (0) |
|
| 5. | A sole proprietor does not maintain complete books of account. From the following information, prepare trading and profit and loss account for the year ended 31st March, 2006 and balance sheet as at that date : | On 31-3-2005
(Rs.) | On 31-3-2006
(Rs.) | Debtors
Stock
Furniture
Creditors | 90,000
49,000
5,000
30,000 | 1,25,000
66,000
7,500
22,500 |
Transactions during the year ended 31st March, 2006 : | Rs. | Cash collected from debtors
Cash paid to creditors
Salaries
Rent
Office expenses
Drawings
Fresh capital introduced
Cash sales
Cash purchases
Discount received
Discount allowed
Returns inwards
Returns outwards
Bad debts
New furniture purchased | 3,04,000
2,20,000
60,000
7,500
9,000
15,000
10,000
7,500
25,000
3,500
1,500
5,000
4,000
1,000
2,500 |
He had Rs.25,000 cash at the beginning of the year. | 16 | (0) |
| 6. | Following was the balance sheet of a firm as at 31st March, 2006: | Liabilities | Rs. | Assets | Rs. | Creditors
P’s loan account
Q’s loan account
P’s current account
Q’s current account
Capital accounts: | 2,04,800
60,000
24,000
42,400
5,000 | Bank balance
Debtors
Stock
Machinery
Land
R’s current account | 11,000
1,92,120
1,28,000
57,200
1,68,000
19,880 | P
Q
R | 1,20,000
80,000
40,000
5,76,200 | |
5,76,200 |
It was decided to dissolve the firm on that date. The assets (with the exception of bank balance) realised Rs.4,53,600. The firm had to pay Rs.3,000 for an outstanding bill not recorded in the books. R became insolvent and Rs.2,000 were realised from his estate. Prepare necessary ledger accounts in the books of the firm when —
(i) Partners’ capitals were fixed; and
(ii) Garner vs. Murray rule was followed. | 16 | (0) |
| 7. | (a) | The trial balance of Sudhakar did not tally. The credit side exceeded by Rs.1,455. This amount was entered on the debit side of suspense account and the trial balance was made to tally. Later on, the following errors were discovered: | (i) | Goods worth Rs.1,250 were sold to Mahesh on credit. This was entered in the sales book, but was not posted. | | (ii) | Goods worth Rs.313 were returned by Ahmed. The amount was credited to his account, but was not recorded in the returns inwards book. | | (iii) | Manoj paid Rs.670, but his account was wrongly credited with Rs.607. | | (iv) | An amount of Rs.375 owed by Dinesh was omitted from the schedule of sundry debtors. | | (v) | The sales book was undercast by Rs.420. | | Pass journal entries to rectify the above errors and show the suspense account. |
| 8 | (0) |
| | (b) | A firm which depreciates its machinery at 10% on diminishing balance method had on 1st April, 2005 Rs.9,72,000 to the debit of machinery account. During the year ended 31st March, 2006, a part of machinery purchased on 1st April, 2003 for Rs.80,000, was sold for Rs.45,000 on 1st October, 2005 and a new machinery at a cost of Rs.1,50,000 was purchased and installed on the same date, installation charges being Rs.8,000. On 31st March, 2006 before providing depreciation for the year 2005–06, the firm wanted to change the method of charging depreciation from diminishing balance method to straight line method with effect from 1st April, 2003, the rate of depreciation remaining the same as before.
Show machinery account for the year ended 31st March, 2006 after incorporating the effect of the above transactions. | 8 | (0) |
| 8. | Omni Corporation Ltd. has two branches – one at Jaipur and another at Lucknow. Goods are invoiced to branches at cost plus 50%. Branches remit all cash received to head office and all expenses are paid by the head office. From the following particulars, prepare the necessary accounts on the ‘stock and debtors system’ to show the profit earned at Jaipur branch during the year ended 31st March, 2006: | Rs. | Stock on 1st April, 2005
Debtors on 1st April, 2005
Goods sent to branch, at cost
Sales at branch :
Cash
Credit
Cash collected from debtors
Goods returned by branch to head office
Goods transferred from Lucknow branch to Jaipur branch
Shortage of stock at branch
Discount allowed to customers
Cash expenses at branch | 93,000
68,000
3,40,000
2,50,100
3,10,000
3,04,000
12,000
15,000
4,500
2,000
54,000 |
| 16 | (0) |
