| 1. | (a) | In each of the following one is correct, indicate the correct answer. | 1x9=9 | |
| | | (i) | Opening Capital Rs.30,000, Closing Capital Rs.15,000, Loss during the year Rs.8,000. Drawings Rs.7,000, Additional Capital introduced will be: | (A) | Nil | (B) | 8,000 | | (C) | 16,000 | (D) | 23,000 |
| | (3) |
| | | (ii) | On purchase of goods of the list price of Rs.10,000 from Ram who allowed 10% trade discount and charged 10% Value Added Tax (VAT), Purchases Account to be debited with: | (A) | Rs.10,000 | (B) | Rs.9,000 | | (C) | Rs.9,900 | (D) | None of these |
| | (0) |
| | | (iii) | Goods costing Rs.1,000 (Sale Price Rs.1,200) used in making furniture should be credited to: | (A) | Sales Account with Rs.1,200 | (B) | Sales Account with Rs.1,000 | | (C) | Purchases Account with Rs.1,000 | (D) | Furniture A/c with Rs.1,000 |
| | (0) |
| | | (iv) | In Cash Book Debit balance of Rs.112 was brought forward as credit balance of Rs.121. While preparing a Bank Reconciliation Statement taking the balance as per Cash Book as the starting point: | (A) | Rs.112 to be added | (B) | Rs.233 to be added | | (C) | Rs.121 to be added | (D) | Rs.112 to be subtracted |
| | (0) |
| | | (v) | Sales Rs.3,00,000, Profit =l/3rd on cost, Cost of goods available for sale Rs.5,00,000, Purchases Rs.1,00,000, Closing Inventory is: | (A) | Rs.2,00,000 | (B) | Rs.3,00,000 | | (C) | Rs.2,75,000 | (D) | None of these |
| | (1) |
| | | (vi) | Date of purchase 1.7.2009, Purchase Price of an old Machine Rs.80,000, Repairs Rs.15,000, Installation Charges Rs.5,000, Residual Value Rs.20,000, Useful life 4 years, Accounting year–financial year. Date when Machine was put to use – 1.10.2009. Depreciation for the year 2009–2010 will be: | (A) | Rs.20,000 | (B) | Rs.15,000 | | (C) | Rs.10,000 | (D) | None of these |
| | (1) |
| | | (vii) | H’s Trial Balance contains the following information: | Rs. |
|---|
Bad debts
Discount allowed
Provision for discount on debtors
Provision for Doubtful debts
Sundry Debtors | 3,000
3,000
3,200
3,500
50,000 |
At the end of the year, it is desired to maintain a provision for Doubtful debts at 10% and provision for discount on debtors at 4%. Sundry Debtors will appear in the Balance Sheet at a figure of: | (A) | Rs.43,200 | (B) | Rs.39,744 | | (C) | Rs.44,700 | (D) | None of these |
| | (0) |
| | | (viii) | 2000 kg of apples are consigned to a wholesaler, the cost being Rs.3 per kg plus Rs.400 of freight, it is known that a loss of 15% is unavoidable. The effective cost per kg will be: | (A) | Rs.2.50 | (B) | 3.76 | | (c) | 1.70 | (D) | 1.50 |
| | (0) |
| | | (ix) | On 1.4.09 X drew a bill of Rs.1,00,000 after sight for 3 months on Y who accepted the bill on 1.5.09. On 4.6.09, the bill was discounted at 12% p.a. At maturity, the bill returned dishonoured, due to Y’s insolvency, noting charges Rs.500 and 40 paisa in a rupee is recovered from Y’s estate. The amount of , deficiency in Y’s books will be: | (A) | 60,000 | (B) | 40,000 | | (c) | 60,300 | (D) | 40,200 |
| | (0) |
| | (b) | Fill in the blanks : | 1x5=5 | |
| | | (i) | Reserve for discount on creditors has a ____________ balance. | | (0) |
| | | (ii) | WDV Rate of Depreciation =_____________________ | | (0) |
| | | (iii) | Discount charges on discounting a bill receivable accepted by consignee are debited to _________ account. | | (0) |
| | | (iv) | Only ___________ property may be the subject matter of consignment and joint venture. | | (0) |
| | | (v) | The term of bill after sight commences from the date of ______________ . | | (0) |
| | (c) | State the reasons whether the following statements are True or False:
(No marks shall be awarded if reason is not given) | 2x8=16 | |
| | | (i) | Prudence is a concept to recognize realized losses and not profits. | | (0) |
| | | (ii) | Straight Line Method of Depreciation is followed to have a uniform charge for depreciation and repairs together. | | (0) |
| | | (iii) | Net Profit is reflected in higher cash balances. | | (0) |
| | | (iv) | The relationship between a Consignee and a Consignor is that of a principal and an agent. | | (0) |
| | | (v) | Deferred Revenue Expenditure is current year’s revenue expenditure to be paid in later years. | | (0) |
| | | (vi) | Fixed assets are valued at cost or net realizable value, whichever is lower. | | (0) |
| | | (vii) | Contingent liability is an unascertained liability but its amount and due date are determinate. | | (0) |
| | | (viii) | Discount columns of the cash book may show either debit balance or credit balance. | | (0) |
| 2. | (a) | Give one word or phrase that describe the following: | ½x10=5 | |
| | | (i) | Making provision for doubtful debts is an application of which Accounting Principle? | | (0) |
| | | (ii) | Accounting of a small calculator as an expense and not as an asset is an application of which Accounting Principle? | | (0) |
| | | (iii) | Appending notes to the financial statements is an application of which Accounting Principle? | | (0) |
| | | (iv) | An entry of which credit and debit aspects are simultaneously recorded in the cash book? | | (0) |
| | | (v) | The source document used for recording entries in the Returns Outward Book. | | (0) |
| | | (vi) | The error which arises when the transaction is recorded ignoring the distinction between the Capital item and Revenue item. | | (0) |
| | | (vii) | The order in which the least liquid asset is shown first and the most urgent payment to be made is shown last. | | (0) |
| | | (viii) | Nature of Provision for Depreciation Account. | | (0) |
| | | (ix) | Nature of Provision for Doubtful Debts Account. | | (0) |
| | | (x) | The type of accounts which are never balanced but are closed. | | (0) |
| | (b) | State the basic object of: | 1x5=5 | |
| | | (i) | Preparing Bank Reconciliation Statement. | | (0) |
| | | (ii) | Preparing the Trial Balance. | | (0) |
| | | (iii) | Opening a Suspense Account. | | (0) |
| | | (iv) | Using Profit and Loss Adjustment Account in the rectification of errors. | | (0) |
| | | (v) | Preparing Income Statement. | | (0) |
| 3. | (a) | Show the Accounting equation for the following transactions of Rakesh Bihari Mittal: | (i) | Sold goods costing Rs.30,000 for Rs.50,000 to Shyam. |
| (ii) | Purchased household goods for Rs.15,000 giving Rs.5,000 in cash and the balance through a loan. |
| (iii) | Received Rs.49,500 from Shyam in full settlement of an account of Rs.50,000. |
| (iv) | Paid Salary Rs.500 and Salary still outstanding Rs.100. |
| (v) | Paid Rent–in–advance Rs.200. |
| (vi) | Withdrew goods for personal use (Cost Rs.500, Sale Price Rs.600). |
| ½x6=3 | (0) |
| | (b) | Journalize the following transactions in the books of Anju Mittal: | (i) | Received Rs.975 from Shyam on his account of Rs.1,000. |
| (ii) | Sold goods costing Rs.40,000 to Anil at a profit of 20% on sales less 20% trade discount and charged 10% Value Added Tax. |
| (iii) | Vishal Pandey paid Rs.975 towards a debt of Rs.1,000 which was written off as bad in the previous year. |
| 1x3=3 | (0) |
| | (c) | Pass the necessary rectifying entry for the following errors in the subsidiary books of Prarthana Mittal, a dealer in cloth: | (i) | A cash sale of Goods to X Rs.17 posted as Rs.71. |
| (ii) | A credit sale of Goods to Y Rs.17 posted as Rs.71. |
| (iii) | A credit sale of Furniture to Z Rs.17 posted as Rs.71. |
| (iv) | A credit sale of Goods of Rs.423 to Krishan passed through the Purchase Book as Rs.432 and posted therefrom to the credit of Kishan as Rs.423. |
| 1x4=4 | (0) |
| 4. | Answer any four of the following: | 2.5x4=10 | |
| | (a) | X draws on Y a bill for Rs.2,00,000 on 1.4.09 for 3 months. Y accepts the bill and sends it to X who gets it discounted for Rs.1,95,000. X immediately remits Rs.97,500 to Y. On due date, X being unable to remit the amount due accepts a bill for Rs.1,20,000 for 2 months which is discounted by Y for Rs.1,17,600. Y sends Rs.7,800 to X out of the same. How much discount will be borne by X at the time of remittance of Rs.7,800? | | (0) |
| | (b) | Bharat Tushar Ltd. which depreciates its machinery at 10% p.a. on diminishing balance method, had on 1st April, 2009 Rs.29,160, to the debit of Machinery Account. On 31st March, 2010, the company decided to change the method of depreciation to straight line method with effect from 1st April, 2006, the rate of depreciation remaining the same. Pass the necessary journal entry on account of change in method of depreciation. | | (0) |
| | (c) | On 1.7.2009, Nikita Mittal commenced her business with Rs.5,00,000. On 1.10.2009 she sold her private investments (Cost Rs.50,000, Face value Rs.40,000) at 125% of face value and brought the proceeds into her business. Her drawings were Rs.1,000 p.m. Goods costing Rs.11,000 were taken by her for personal use. On 31.3.2010, Capital before the following adjustments is Rs.7,00,000, Outstanding Expenses Rs.21,000 and Prepaid Expenses Rs.4,000. Provide Interest on Capital @ 12% p.a. and for group incentive to staff @ 5% on Net Profit after charging such incentive and interest on capital. Calculate the Profit/Loss for the year ended 31st March, 2010. | | (0) |
| | (d) | Himanshu Gupta sent out goods costing Rs.80,000 to Navin Joshi as to show 20% profit on invoice price. 40% goods were lost in transit. 60% of the goods received were sold half at invoice price and the balance at 25% above the invoice price. Rate of Commission is 10% on sales at invoice price plus 50% of gross sales less all commission exceeds sales at invoice price. Calculate the amount of commission. | | (0) |
| | (e) | A and B enter into a joint venture sharing profit and losses in the ratio 3 : 2. A purchased goods costing Rs.2,00,000. B sold 95% goods for Rs.2,50,000. A is entitled to get 1% commission on purchase and B is entitled to get 5% commission on sales. A drew a bill on B for an amount equivalent to 80% of original cost of goods. A got it discounted at Rs.1,50,000. Calculate B’s share of profit. | | (0) |
| | (f) | How will you deal with the following items while preparing the Income and Expenditure Account for the year ending on 31st December, 2009 and the Balance Sheet as on that date? Subscription outstanding as on 31.12.2008 : Rs.9,500 (including Rs.500 for 2007) Subscription received in advance as on 31.12.,2008: Rs.3,000 (including Rs.200 for 2010) Subscription received during 2009 for 2007 Rs.400, for 2008 Rs.8,900, for 2009 Rs.1,34,400, for 2010 Rs.4,000, for 2011 Rs.1,200. Subscription outstanding as on 31.12.2009 : Rs.7,000. | | (0) |
