accounts question paper with answers

8/8/2019 ACCOUNTS QUESTION PAPER WITH ANSWERS

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OMTEX CLASSESTHE HOME OF SUCCESS

OMTEX CLASSES I ST PRELIMINARY EXAMINATION BOOK KEEPING & ACCOUNTANCY GROUP: B

TIME: - 3 HRS DATE: - 16.11.2010 DAY - TUESDAY 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?

Ans. The direct expenses related to purchase of goods are debited to trading account.

2. What is Reserve Fund?Ans. Reserve fund is the accumulated profit which is kept a side as a reserve to serve the firm for

the future needs.

3. Who is an endorser?Ans. A person who endorses the ownership of the bill he is known as endorser.

4. What is goodwill?Ans. Goodwill is the monetary value of the business expressed in terms of money.

5. Why is Joint Bank Account opened?Ans. Joint bank account is opened to record the coventurers bank transaction relation to the joint

venture business.

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.

Ans. Balance sheet

2. Making the payment of bill before its due date.Ans. Retirement of the bill of exchange

3. List of debit and credit balances of the ledger accounts.Ans. Trial balance

4. The relationship between persons who have agreed to share profit or loss in Joint VentureBusiness.

Ans. coventurers

5. A Partner who only lends his name to the firm.Ans. Nominal partner


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C. Match the following pairs. (5 marks)Group A Group B

1. Partnership deed2. Fixed capital method.3. Unexpired expenses4. Temporary Partnership5. Pure Single Entry System

a. Written agreement between the partnersb. Current a/c of partnersc. Assetsd. Joint venturee. Only personal account

D. Select the most appropriate alternative from hose given below each statement. (5 marks)1. Reserve for discount on ______________ has a debit balance.

a. Debtorsb.Creditorsc. Bills Receivabled. Loan advanced.

2. Income Statements and Balance Sheet are prepared in a systematic and scientific manner under________________

a.Double Entry System.b. Single Entry Systemc. Partial Entry System.d. Indian System.

3. Before accepting a bill, it is called a _________a. Noteb.Draftc. Hundid. Request.

4. Valuation of goodwill depends upon ________ capacity of business.a. Normalb. Repayingc. Earning


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d. Capital5. If two or more persons come together to carry on a business activity for a short period, it is

known as ___________

a. Joint ventureb. Consignmentc. Partnershipd. Stock exchange

E. State with reason whether the following statements are true of false. (5 marks)1. Scrap value of asset reduces the amount of annual depreciation.

Ans. The above statement is true because of the following reasons.

i. When we calculate the depreciation amount the expected scrap value of the asset isreduced from the total cost of the assets.

ii. Therefore, the total amount of depreciation per annum will also be get reduced.2. When the amount of the bill is paid on the due date, it is said to be retired.

Ans. The above statement is false because of the following reasons.

i. When the amount of the bill is paid on the due date, then it is called as honour of the billof exchange.

ii. When the amount of the bill is paid before the due date, then it is called as retirement ofthe bill of exchange.


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F. Prepare bill of exchange from the following details. (5 marks)Drawer - Shekhar Desai, Shastri Road, Mahad.

Drawee Sharad Verma, Narayan Peth, Pune.

Amount - Rs. 3500/-

Period - 3 months.

Payee - Mukund Pande, Panvel

Date of Bill Drawn 21st June, 2007

Date of Acceptance - 23rd

June, 2007


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Q2. On 1st April, 2004 Saikripa enterprises purchased two computers of Rs. 40,000 each. On 1st October, 2004

they purchased one more computer for Rs. 40,000. On 1st

October, 2006 they sold one of the computers,

which was purchased on 1st

April, 2004 for Rs. 18780.

Depreciation on computers was provided @ 10% p.a. on Diminishing Balance Method and the financial yearcloses on 31

stMarch every year.

Prepare: computer A/c and Depreciation A/c for years 2004 2005, 2005 2006, 2006 2007. (September,

2008 board exam question)

Ans.

M/s Saikripa enterprises

Computer Account.

Date Particulars JF

Amount Date Particulars JF

Amount

1.4.2004 To cash / bank a/c 40000 31.3.2005 By Depreciation a/c 10000

1.4.2004 To cash/ bank a/c 40000

1.10.2004 To cash/ bank a/c 40000 31.3.2005 By Balance c/d 110000

120000 120000

1.4.2005 To balance b/d 110000 31.3.2006 By depreciation a/c 11000

31.3.2006 By balance c/d 99000

110000 110000

1.4.2006 To balance b/d 99000 1.10.2006 By depreciation a/c 1620

1.10.2006 By cash/ bank a/c

[Machinery sold]

18780

1.10.2006 By profit / loss a/c

[ loss on machinery sold]

12000

31.3.2007 By depreciation a/c 6660

31.3.2007 59940 49500

99000 99000

1.4.2007 To balance b/d 59940

Depreciation account

Date Particulars J

F

Amount Date Particulars J

F

Amount

31..3.2005 To machinery a/c 10000 31.3.2005 By profit & loss a/c 10000

10000 10000

31.3.2006 To Machinery a/c 11000 31.3.2006 By profit & loss a/c 11000

11000 11000

1.10.2006 To Machinery a/c 1620

31.3.2007 To Machinery a/c 6660 31.3.1999 By profit & loss a/c

(balancing figure)

8280

8280 8280

OR


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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 years 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

Ans.

&


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Q2. (B) Explain the importance of computer in modern age.

Ans.

Today computers are put to a variety of uses. They have been designed with highly improvedperformances. Computers can be used to process voluminous data at a high speed. As regards itsapplication in the field of accounting, a computer should be able to deal with routine accounting. Imeans all normal accounting processes such as financial transactions should be dealt with the use of acomputer. All cash and bank transactions, handling of accounts of debtors and creditors andcalculation of wages and salaries etc should be handled with the use of computer. In additioncomputers can be put to other popular uses such as production, programming and control, flexiblebudgetary control, variance analysis, sales and forward trends etc.

Following points explain the importance of computer in modern age.SPEED - In the modern world, the desire of a man to complete tasks within the stipulated timelimits has been, to a large extent, fulfilled by using a computer. Computers enable us to doarithmetical computations with a high degree of speed and ease. It has enables us to do things, whichwould have been almost impossible earlier. The speed which computers functions are measured in

Pico seconds (1/1000 of Nano second). Thus, computers are capable of making millions ofcomputations per second. Hence, a powerful computer is capable of completing the tasks in less thanan hour, which could have taken a year for a group of people to compute.ACCURACY: - Computers are not only fast in completing a job at a great speed, but it is alsoperformed with a high degree of accuracy. Sometimes, it is common to say that there is a Computererror. As a matter of fact, it is Human error and not a Computer error since a computer carriesout the instructions efficiently given by the programmer. As such, if the instructions are faulty, theerrors creep in the computers output.DILIGENCE: - By doing similar job continuously, human beings get tired which results into somemistakes. As against this, a computer is capable of doing the same job continuously error free. Acomputer takes the same time to complete the first calculation as well as the 10000th calculation

Thus, the degree of diligence possessed by a computer is impossible in case the same job is done byhuman beings.STORAGE: - Another advantage offered by a computer is that of its enormous capability to storedata. A computer is capable of storing data along with the instructions given by the programmer inthe primary (main) memory. In case, the primary memory is not sufficient it can be stored in itssecondary (auxiliary) memory. There are various devices used for storing the secondary memorySome of the common devices used in secondary memory are Compact Disks, Tapes, Drums, penDrives etc. Having large capacity to store data.VERSATILITY: - A computer possesses great versatility, which is capable of performing arithmeticcalculations, logic operation of comparison and moving data within different sections of the computerand in input and output operations. Although, a computer lacks a brain of its own, it can be put to a

varied uses such as preparation of mark lists, financial accounting, share analysis etc.

MISCELLANEOUS: - In addition to the above mentioned advantages, a computer can offereconomies in the form of effective managerial control, saving in labour cost because it is fullyautomatic.


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Q3. Anjali of Nagpur sold goods worth Rs. 25,000 to Rupali of Amaravati. On next day Ruapali paid Rs. 10,000

in cash and accepted two months bill for the balance drawn by Anjali. Anjali discounted the bill at 12% p.a.

with her bank. Before due date, Rupali finds herself unable to make payment of the bill; and requests Anjali to

renew it. Anjali accepts the proposal on the condition that Rupali should pay Rs. 5,000 in cash and accept new

bill for one month along with interest Rs. 200 for the balance. These arrangements were carried through. Thenew bill was met on due date. Give journal entries in the books of Anjali.

Journal of Anjali

Date Particulars L

F

Debit Credit

? 1 Rupalis A/cDr.

To Sales A/c(Being the goods are sold)

25000

25000

2 Cash / bank a/c Dr

Bills Receivable A/c Dr.To Rupalis A/c

(Being the part payment is made and bill is drawn)

10000

1500025000

3 Cash/ Bank A/c Dr.

Discount A/c Dr.To Bills Receivable A/c

(being the bill is discounted)

14700300

15000

4 Rupalis A/c Dr

To Cash/Bank A/c

(being the bill is dishonored)

15000

15000

5 Cash/ bank a/c Dr

To Rupalis A/c(being the part payment is made)

5000

5000

6 Rupalis A/c Dr.To Interest a/c

(being the interest is charged on balance amount)

200

200

7 Bills Receivable A/c Dr.

To Rupalis A/c

(being the new bill is drawn along with interest)

10200

10200

8 Cash/ bank a/c Dr.

To Bills receivable a/c(being the new bill is honored)

10200

10200

OR


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Q3. Journalize the following transactions in the books of M/s Tirupati:

1. Kailas informed Tirupati that Ameets acceptance for Rs. 1,000/- endorsed to him, has beendishonoured. Noting Charged amounted Rs. 40/-.

2. Vilas renews his acceptance to Tirupati for Rs. 800/- by paying Rs. 400/- in cash and accepting a freshbill for the balance plus interest at 12% p.a. for 3 months.

3. Kalpanas acceptance to tirupati for Rs. 6,000 retired one month before due date at a discount of 10%p.a.

4. Bank informs Tirupati the dishonor of Kavitas acceptance of Rs. 2,500 discounted with Bank. Notingcharges Rs. 50/-.

Journal entries in the books of Tirupati

Date Particulars L

F

Debit Credit

a Amitss A/c Dr.To Kailasss

(being the endorsed bill is dishonored along with noting charges)

1040

1040

b i. Vilas A/c Dr.To Bills Receivable a/c

(being the bill is dishonored)

800800

ii. Cash / bank a/c Dr.To Vilas a/c(being the part payment is made)

400

400

iii. Vilas A/c Dr.To Interest A/c

(being the interest is charged on balance amount)

1212

iv. Bills receivable a/c Dr.To Vilas A/c

(being the new bill is drawn along with interest)

412412

c Cash/ bank a/c Dr.

Rebates A/c Dr.To Bills Receivable A/c

(being the bill is retired)

5950

50

6000

d Kavitas A/c Dr.To Cash/ bank A/c

(bein the discounted bill is dishonored along with noting charges)

2550

2550


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Q4. Harsha and Varsha entered into a joint venture to buy and sell computers and share the profit or loss in

the proportion of 2:1 respectively. Harsha purchased 10 computers @ Rs. 40000 each and paid Rs. 12,000 for

transport charges, insurance charges, etc. Varsha bought 8 computers @ 42000 each and spent Rs. 10000 on

freight and insurance. Harsha sold 8 computers @ 48,000 each and paid selling expenses Rs. 2000 and took

over one computer at an agreed price of Rs. 32000 for personal use. Remaining computer were sold by varsha

@ Rs. 45000 each and spent Rs. 2500 on miscellaneous expenses. The co ventures closed their venture and

settled their accounts. Prepare the Joint venture A/c and the coventures account in the books of Harsha.

In the books of Harsha

Joint venture account

Particulars Amount Amount Particulars Amount Amount

To Goods a/c

To cash / bank account

To Varshas accountTo Varshas Account

To Cash/ Bank account

To Varshas AccountTo profit on joint venture transferred to

Profit / loss A/c

Varshas account39000

19500

400000

12000

33600010000

20002500

58500

By Cash / bank a/c

By varshas a/c

By cash /bank a/c

384000

405000

32000

821000 821000

Varshas Account

Particulars Amount Amount Particulars Amount AmountTo Joint venture a/c 405000 By Joint venture a/c

By Joint venture a/c



(profit)

By cash/ bank a/c

(balancing figure)

33600010000

2500

19500

37000

46000 46000


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Q5. Following is the records of Mr. Raj were kept on single entry system. ( March 2009 board examquestions)

Particulars 31.3.2006 31.3.2007

Stock

FurniturePlant and machinery

Loan taken

Bank balanceDebtors

Creditors

15000

5350042500

21000

190043000

18000

14000

4400055500

21000

210035000

14900

Mr. Raj invested Rs. 4000 in the business. Also he had withdrawn Rs. 15000 for his private expenses from

business. Rs. 500 to be provided for bad debts. Depreciate plant and machinery @5% and furniture @ 5%.

Prepare : (1) statement of affairs as on 31.3.2006. (2) statement of affairs as on 31.3.2007. (3) statement ofprofit and loss for the year ended on 31.3.2007.

In the books of Mr. Raj

Statement of affairs as on 31st

March, 2006

Liabilities Amount Assets Amount

Loan taken

Creditors

Capital at the beginning of the year

21000

18000

116900

Stock

Furniture

Plant and machineryBank balance

Debtors

15000

53500

425001900

43000

155900 155900

Statement of affairs as on 31st

March, 2007

Liabilities Amount Assets Amount

Loan takenCreditors

Capital at the end of the year

2100014900

114700

StockFurniture

Plant and machinery

Bank balance

Debtors

1400044000

55500

2100

35000

150600 150600


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Statement of profit or loss for the year ended 31st

March, 2007

Particulars Amount

Capital at the end of the year 114700

Add: Drawings 15000

Less: Additional capital introduced129700(4000)

Less: Capital at the beginning of the year

125700

(116900)

GROSS PROFIT

Less: DepreciationOn Machinery = (55000)(5/100)(12/12) = 2775

On Furniture = (44000)(5/100)(12/12) = 2200

8800

(4975)

LESS: BAD DEBTS

3825

(500)

NET PROFIT 3325


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Q6. Ashok, kishor and Anup undertook the construction of office building at a contract price of Rs.10,00,000. The contract price is to be received in cash Rs. 6,00,000 and Rs. 4,00,000 in shares of that company

They opened a Joint bank account and contributed the following amounts: Ashok Rs. 3,00,000, Kishor Rs.

3,00,000 and Anup Rs. 2,00,000. Ashok pays Rs. 10,000 towards an Architects fee, Kishor brings into the

venture mixer of Rs. 25,000. Anup brings into venture a truck worth Rs. 55,000.

The following transactions were made from the joint bank account

1. Purchase of material Rs. 4,50,000.2. Payment of wages Rs. 1,50,000.3. Purchase of plant Rs. 30,000.

At the close of the venture. Ashok took over the unused material worth Rs. 8,000. Kishor took back the mixer

worth Rs. 15,000. Anup took back truck worth Rs. 35,000. The scrap value of plant realised Rs. 6,000.

The contract price was received as agreed and Kishor took over shares at a value of Rs. 4,10,000.

Prepare : (1) Joint venture account (2) Joint bank account (3) Coventurers account. (October 2006 , board

exam questions)

In the books of Joint venture

Joint venture account


To Join bank a/c

Materials

Wages

Plant

To Ashoks A/c(architect fees)

To Kishors A/c(venture mixture)

To Anups A/c(truck)

To profit on joint venturetransferred to

Ashok

Kishor

Anup

450000

150000

30000

118000

118000

118000

630000

10000

25000

55000

354000

By Joint Bank a/c

(contract price)

By Shares a/c

(contract price)

By joint bank a/c(plant sold)

By Ashoks A/c

(Materials taken

over)

By Kishors A/c

(Mixer taken over)By Anups A/c

(truck taken over)(

600000

400000

6000

8000

15000

35000

1074000 1074000


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COVENTURERS ACCOUNT

Particulars Ashok Kishor Anup Particulars Ashok Kishor Anup

To Joint venture a/c

To shares a/c

To joint bank a/c

8000

420000

15000

410000

18000

35000

338000

By joint bank a/c

By joint venture A/c

By joint venture A/c

300000

10000

118000

300000

25000

118000

200000

55000

118000428000 443000 373000 428000 443000 373000

Joint Bank A/c

Particulars Amount Particulars Amount

To Ashoks A/c

To Kishors A/cTo Anups A/cTo joint venture A/c

To Joint Venture A/c

300000

300000

200000

6000

600000

By joint venture a/c

By Ashoks A/cBy Kishors A/cBy Anups A/c

630000

420000

18000

338000

1406000 1406000

Shares A/c


To Joint venture A/c

To Joint venture a/c

(Bal. Fig.)

400000

10000

By Kishors A/c 410000

410000 410000


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Q7. Following is the Trial Balance of Kalavati and Lilavati as on 31st March, 2005 who share profits and

losses in the ration of 3:2. Interest on capital was allowed @5% p.a.

Trial balance as on 31st March, 2005


Opening stock

Sundry debtorsPurchases

Wages

Salaries

Office expensesDiscount

Rent, rates and taxesPlant and machineryReturn inwards

Land and buildings

Cash at bank

Current account :KalavatiLilavati

Government bonds

10000

1410020000

4250

1350

1223650

90015000

1750

32000

4327

2100600

3000

Return outwards

Sundry creditorsSales

R.D.D.

Capital accounts : Kalavati

LilavatiLoan @ 9% p.a. (taken on 1-10-2004)

Bills payable

1250

1580035000

200

35000

100002000

12000

1,11,250 1,11,250

Additional information:

1. Closing stock was valued at Rs. 20,500.2. Unpaid wages Rs. 750; outstanding salary Rs. 657.3. Write off Rs. 100 as bad debts and provide R.D.D. at 5% on debtors.4. Provide depreciation and plant and machinery at 10% p.a. and on Land and building at 5% p.a.5. Rent, Rates & Taxes were prepaid Rs. 100.6. Bills payable included a dishonoured bill of Rs. 3000.

Prepare Trading account and profit and loss account for the year ending 31st

March, 2005 and a balance sheet

as on that date. (October 2006 board exam questions.)


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In the books of Kalavati & Lilavati

Trading account for the year ended 31st

March, 2005.


To opening stockTo purchases

(-)return

To wages

(+) outstanding

To Gross profit c/d

20000

(1250)

4250

750

10000

18750

5000

20000

By sales(-) return

By closing stock

35000(1750) 33250

20500

53750 53750

Profit and loss account for the year ended 31st

March, 2005


To Salaries

(+) outstanding

To Office expensesTo discount

To rent, rates & taxes

(-) prepaid

To Bad debts

(+) FBD

(+) NRDD

(-) ORDD

TO DepreciationPlant & machinery

Land & buildings

To interest on loan

To interest on capitalKalavati

LilavatiTo current a/c

Kalavati

Lilavati

1350

657

900

100

-----

100

700

200

1500

1600

1750

500

5568

3712

2007

1223650

800

600

3100

90

2250

9280

By gross profit b/d 20000

20000 20000

Partners current accounts

Particulars Kalavati Lilavati Particulars Kalavati LilavatiTo balance b/d

To balance c/d

2100

5218

600

3612

By interest on capital 1750

5568

500

3712

7318 4212 7318 4212


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Balance sheet as on 31st

March, 2005

Liabilities Rs. Rs. Assets Rs. Rs.

Capital account

Kalavati

LilavatiCurrent account

Kalavati

Lilavati

Sundry creditors

(+) bills payable dishonoured

Bills payable

(-) bills payable dishonoured

Outstanding

SalariesWages

Load @ 9%

(+) interest

35000

10000

5218

3612

15800

3000

12000

3000

657750

2000

90

45000

8830

18800

9000

1407

2090

Land & building

(-) depreciation@5%

Plan & Machinery(-) depreciation @10%

Sundry debtors

(-) F.B.D.

(-) N.R.D.D.

Closing stock

Prepaid rent, rates, & tax

Cash at bank

32000

1600

150001500

14100

100

14000

700

30400

13500

13300

20500

100

7327

85127 85127

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