#GrowWithGreen

Grade XIAccountancy(Mock Test)

Q.1 Outstanding payment of honorarium is shown on the

I. Debit side of Receipts & Payments A/c

II. Credit side of Receipts & Payments A/c

III. Liabilities side of the Balance Sheet

IV. Debit side of Income & Expenditure A/c

Which of the following alternatives correctly describes its treatment? [1 mark]

a. II & IV

b. I, III & IV

c. III & IV

d. Only IV

Q.2 Write any one limitation of Single Entry System. [1 mark]

Q.3 Which of the following alternatives is an example of profit for a firm? [1 mark]

a. Compensation received from winning a court case

b. Excess of receipts over the book value of fixed asset

c. Excess of revenue over its related expenses during an accounting year

d. All of the above

Q.4 Ascertain the amount to be recorded in the Income and Expenditure A/c from the data given

below:

Receipts from annual function Rs 3,500

Annual function Expenses Rs 4,500. [1 mark]

a. Rs 500; Debit side

b. Rs 1,000; Credit side

c. Rs 1,000; Debit side

d. Rs 8,000; Debit side

Q.5 What do you understand by Customised Accounting Software? [1 mark]

Q.6 Subscription receivable at the end of the year is _____for the organisation. [1 mark]

a) an expense

b) an income

c) an asset

d) a liability

Q.7 State whether the following statements are true or false? [3 marks]

a) According to the Revenue Recognition Concept, cash received from debtors is considered as

revenue.

b) An asset is recorded at the price paid to acquire it.

c) According to the Full Disclosure Convention, business has indefinite life.

Q.8 Differentiate between Accounting and Accountancy on the following basis. [3 marks]

a) Purpose

b) Dependence

c) Scope

Q.9 As per the Matching Concept, which of the following transactions will be considered as

revenue expenditure? [3 marks]

(a) Wages due but not paid Rs 200

(b) Wages paid in advance for the next year Rs 100

(c) Depreciation charged on machinery Rs 400

(d) Purchase of plant for Rs 1,00,000

(e) Payment to creditors Rs 2,000

(f) Cash withdrawn Rs 1,000 for personal use

(g) Cash withdrawn from bank Rs 500

(h) Interest Rs 300 paid on loan for the current year

Q.10 Prepare Profit and Loss Account for the year 2017. [3 marks]

Particulars Rs Particulars Rs

Gross Profit 32,000 Loss on Exchange 150

Salaries and Wages 5,000 Safe of Old Newspaper 200

Rent 2,000 Sale of Machinery 5,000

Rent from Tenant 3,000 Stationery 200

Interest on Investment 500 Depreciation on Machinery 500

Interest on Loan 800 Provision for Doubtful Debt 600

Interest on Capital 400 Manager’s Commission 50

Interest on Drawing 200

Commission Paid 500

Commission Payable 100

Q.11 List any three advantages of readymade software. [3 marks]

Q.12 “Trial Balance is a conclusive proof of the accuracy of the books of accounts.” Comment

[3 marks]

Q.13 Name any four external users of accounting information and briefly explain their interest.

[4 marks]

Q.14 Prepare Two Column Cash Book of Mr. Deewan for April, 2017. [4 marks]

Rs

Apr.01 Cash in hand 500

Apr.01 Bank overdraft 1,200

Apr.02 Additional capital introduced 5,000

Apr.05 Cash sales 2,000

Apr.07 Cash purchases 3,000

Apr.10 Sold goods to Amrita 2,000

Apr.12 Received cheque from Amrita 1950

Discount allowed 50

Apr.15 Amrita’s cheque deposited into bank

Apr.18 With drawn from bank 300

Apr.20 Paid wages 800

Apr.22 Paid to Mr. B 1,500

Q.15 On December 31, 2017, Shyam Babu’s Pass Book showed an overdraft balance of Rs

7,200. On comparing with the Bank Column of the Cash Book, the following differences were

found.

a) Out of the two cheques of Rs 2,000 and Rs 1,200 deposited into the bank, the first cheque got

cleared in January 2018 but the second cheque was yet not cleared.

b) Out of the three cheques (totaling Rs 12,000), a cheque of Rs 5,000 was presented for

payment in the month of January 2018.

c) Bank debited interest of Rs 300, which was not recorded in the Cash Book.

d) A cheque of Rs 200 debited in the Cash Column of the Cash Book and credited in the Pass

Book in the month of December 2017.

Prepare a Bank Reconciliation Statement. [4 marks]

Q.16 Ram Kapur keeps his books on Single Entry System on April 01, 2017 his capital balance

is Rs 1,75,000. On March 31, 2018, accounts are showing the following balances.

Machinery Rs 20,000 Sundry Debtors Rs 45,000, Stock of Goods Rs 41,000, Cash in Hand Rs

15,000, Bills Receivable Rs 42,000, Bank (Cr.) Rs 4,500 and Creditors Rs 15,000.

Mr. Kapur deposited Rs 10,000 in National Savings Certificate in the name of his wife and

purchased an Office Furniture for Rs 2,500.

Interest on Capital is to be provided at 10% on opening Capital Balance.

Provide 2% as Provision for bad and doubtful debts.

You are required to prepare Statement of Profit and Loss for Mar 31, 2018 by following the

Alternative Method. [4 marks]

Q.17 The following data related to bats and balls of Delhi Sports Club. [4 marks]

Particulars Rs

Payment made for bats and balls during the year 2017 80,000

Creditors for bats and balls on January 01, 2017 20,000

Creditors for bats and balls on December 31, 2017 30,000

Stock of bats and balls on January 01, 2017 10,000

Stock of bats and ball on December 31, 2017 12,000

Ascertain the amount of bats and balls purchased and the amount of bats and balls to be shown in

the Income and Expenditure Account for the year ended 2017.

Q.18 What is meant by errors in accounting? Explain any three types of clerical errors. [6 marks]

Q.19 On May 01, 2017, A sold goods to B for 5,000 and on the same date A drew a three months

bill for the same amount on B. B accepted the bill and returned it to A. On May 04, 2017, A

discounted the bill with the bank at 12% p.a. On the due date, the bill dishonoured and bank paid

Rs 150 for noting charges. B paid immediately Rs 2,000 plus noting charges and got another bill

drawn together with interest 200 for another three months. On the due date B became insolvent

and nothing was recovered from his official receiver.

Pass the necessary Journal entries in the books of A and B. [6 marks]

Q.20 On January 01, 2009, a machinery was purchased for Rs 1,20,000 and another machine was

purchased on October 01, 2009 for Rs 50,000. On January 01, 2011, 1/3rd of the machine

purchased on January 01, 2009 was sold for Rs 25,000 and on the same date another machine

was purchased for Rs 1,00,000. Depreciation is charged at 10% p.a. on the original cost of the

machinery. Prepare a Machinery Account for three years. Accounts are closed on December 31,

every year. [6 marks]

Q.21 Pass the necessary rectification entries for the errors given below. [6 marks]

(1) Purchase of Rs 1,500 from Ramesh was wrongly passed through Sales Book.

(2) Sales day book on a folio was carried forward to next page as Rs 560 instead of Rs 650.

(3) Cash of Rs 800 paid to Pallav, but only Rs 80 were debited to his Account.

(4) Goods costing Rs 2,500 having the sale value of Rs 2,800 were returned by a customer

were not recorded.

(5) One item of Rs 250 relating to Prepaid Insurance Account was omitted to be brought

forward from the books of previous year.

(6) Purchases Return Book undercast by Rs 50.

Q.22 What is a computer? How computer is useful in accounting. [6 marks]

Q.23 The Trial Balance of Mr. Somnath is given below.

Particulars

Debit

Amount

(Rs)

Particulars

Credit

Amount

(Rs)

Bills Receivables 3,000 Sales 70,000

Debtors 6,000 Bills Payable 5,600

Pant & Machinery 30,000 Creditors 32,850

Land & Building 20,000 Bank Overdraft 4,000

Stock (Opening) 4,500 Capital 22,750

Purchases 40,000 Discount on issue of shares 2,000

Wages 3,000 Mortgage 1,500

Salaries 2,400

Royalty on Sales 2,000

Export Duty 1.500

Carriage 1,200

Drawings 20,000

Rent 1,100

Additional Information:

a) Building valued at Rs 16,250 and Machinery will be shown at 90% in the balance sheet.

b) Stock at the end valued at Rs 5,000. It includes goods costing Rs 500 which were sold and

recorded as Sales but not delivered to the customer.

c) Provide 10% Manager Commission on net profit after charging such commission.

d) 2% commission to be provided to salesmen on sales and Rent is paid for 11 months.

f) Ramesh who owed Rs 200 to firm and included in the list of debtors became insolvent and

nothing was recovered from his estate.

Prepare the Trading Account, Profit and Loss Account and the Balance Sheet. [8 marks]

Q.24 From the following Receipts and Payment Account of Youth Club, prepare Income and

Expenditure Account and Balance Sheet for the year ended 31 March, 2014. [8 marks]

Youth Club

Receipts and Payments Account

for the year ending March 31, 2014

Dr. Cr.

Receipts Amount

(Rs) Payments Amount (Rs)

Balance b/d 550 Balance b/d 3,400

Sale of Billiard Table (at book value) 4,000 Consumables purchased 500

Donation for Building 35,000 Salaries 2,500

Subscription Tournament Fees 3,400

2012-13 1,000 Advance against construction of

Building

10,000

2013-14 16,000 Sports Material purchased 13,500

2014-15 1,000 Municipal Taxes (Rs 2,000 for

2012-13)

4,500

2015-16 2,000 20,000 Balance c/d

Interest on investments (for 6 months) 5,000 Cash 33,700

Legacies 12,000 Bank 5,050 38,750

76,550 76,550

Additional Information:

1) Subscription amounting to Rs 1,400 were outstanding on 31.03.13 and Rs 3,500 are still

outstanding for 2013-14.

2) Depreciation is charged on Fixed Assets @ 10% p.a.

3) Position of some Assets and Liabilities as on 31.03.13 and on 31.03, 2014 were as follows:

Particulars March

31, 2013

March

31, 2014

Advance Subscription Received 2,000 3,000

Furniture 40,000

Stock of Sports Material 10,800 21,500

Building 45,000

Billiard Table 12,000 8,000

Stock of Consumables 500 200

A.1 Receipts and Payments Account is a summary of cash and bank transactions of the NPO, so,

when honorarium is outstanding, it will not appear in the Receipts and Payments Account. We

know, outstanding expenses are recorded on the Expenditure side (Debit side) of Income and

Expenditure Account and Liabilities side of the Balance Sheet.

Hence, the correct answer is option (c).

A.2 Single Entry System is an incomplete and unscientific system because in this system, both

the aspects (debit and credit) of transaction are not taken while recording in the books of

account.

A.3 The excess of revenues of a period over its related expenses during an accounting year is

profit. But a profit that arises from the events that are incidental to business such as sale of fixed

assets, winning a court case, etc is called gain.

Hence, the correct answer is option (c).

A.4 Annual Function expenses are more than the receipts from annual function by Rs 1,000

(4,500 – 3,500).

So, the difference will appear on the Debit side i.e. Expenditure side of the Income and

Expenditure Account.

Hence, the correct answer is option (c).

A.5 Customised Accounting Software means altering the readymade software available in the

market as per the specific needs of the users.

A.6 Subscription receivable at the end of the year (i.e. outstanding subscription at the end of the

year) is an asset for the organisation because it is an income which is due but still not received.

Hence, the correct answer is option (c).

A.7 a) False, as according to the Revenue Recognition Concept, revenue is recognised when

sales take place and not when actual amount is received from the debtors for sales.

b) True, as according to the Cost Concept, an asset is recorded in the books of accounts at its

acquisition price, i.e. the price paid to acquire it and not the (current) market price of the asset.

c) False, as according to the Going Concern Concept, business has indefinite life. No matter

whether the owners of the business are alive or dead, business will continue.

A.8

Basis of

Distinction Accounting Accountancy

Purpose Main purpose is to find out the net

results and financial status of the

business and communicating the

results to its various users.

Main purpose of accountancy

includes decision making

function.

Dependence Accounting depends on the

information provided by book

keeping.

Accountancy independently

guides both book-keeping and

accounting.

Scope Accounting is narrow in scope. It

starts where book keeping ends.

It is wider in scope because it

explains the principles and

techniques that are required to be

followed in accounting and

includes both accounting and

book keeping.

A.9 According to the Matching Concept, the following transactions will be considered as

revenue expenditure.

(a) Wages due but not paid Rs 200

(c) Depreciation charged on machinery Rs 400

(h) Interest Rs 300 paid on loan for the current year

A.10

Profit and Loss Account

Dr. Cr.

Particulars

Amount

Rs Particulars

Amount

Rs

Salaries and Wages 5,000 Gross Profit 32,000

Rent 2,000 Rent from Tenant 3,000

Interest on Loan 800 Interest on Investment 500

Interest on Capital 400 Interest on Drawings 200

Commission paid 500 Sale of Old Newspaper 200

Loss on Exchange 150

Stationery 200

Depreciation on Machinery 500

Manager‟s Commission 50

Net Profit 26,300

35,900 35,900

A.11 Readymade software is the software that is designed and developed not for a specific

purpose but for the purpose in general. The following are the various advantage of readymade

software.

(i) The cost of readymade software is comparatively low. Thus, it is economical.

(ii) It is user-friendly and easier to implement and learn.

(iii) Training provision from vendor is available.

A.12 Trial Balance is a statement prepared with the debit and credit balances of ledger accounts

to test the arithmetical accuracy of books. If both the debit and credit column are equal, it is

assumed that books of accounts are arithmetically correct. But it should never be taken as

conclusive proof of accuracy of books of accounts as only those errors that affect the agreement

of a trial balance are detected. Such errors are generally one sided errors as they affect only one

side of the trial balance and due to this the one of the side of the trial balance does not match

with the other side, hence, these are detected and then rectified. However, certain errors like

errors of principle that do not affect the arithmetic accuracy of trial balance may be present.

These are two sided errors wrongly recorded in the books of accounts. In case of Errors of

Principle, Compensating errors and complete omission of transaction, the trial balance will

match but in reality there is an undetected error.

A.13 External users of information are the individual or the organisations that have direct or

indirect interest in the business firm; however, are not a part of management. They do not have

direct access to the internal data of the firm and uses published data or reports like profit and loss

accounts, balance sheets, annual reports, press releases, etc. Some examples of external users are

government, tax authorities, labour unions, etc.

1. Banks and other financial institutions– Banks provide finance in form of loans and

advances to various businesses. Thus, they need information regarding liquidity,

creditworthiness, solvency and profitability to advance loans.

2. Creditors– These are those individuals and organisations to whom a business owes money on

account of credit purchases of goods and receiving services; hence, the creditors require

information about credit worthiness of the business.

3. Investors and potential investors– They invest or plan to invest in the business. Hence, in

order to assess the viability and prospectus of their investment, creditors need information about

profitability and solvency of the business.

4. Tax Authorities- They need accounting information to know whether the amount of sales,

production, profits, revenues, etc. are correctly calculated and shown unambiguously in the

books. This is very important so that appropriate and correct tax rates (of taxes such as sales tax,

excise duty, etc.) are levied on the business.

A.14

Books of Mr. Deewan

Cash Book

Dr. Cr.

Date Particulars L.F. Cash

Rs

Bank

Rs Date Particulars L.F. Cash

Rs

Bank

Rs

2017 2017

Apr.01 Balance B/d 500 Apr.01 Balance b/d 1,200

(Overdraft)

Apr.02 Capital 5,000 Apr.07 Purchases 3,000

Apr.05 Sales 2,000 Apr.15 Bank (c) 1,950

Apr.12 Amrita 1,950 Apr.18 Cash (c) 300

Apr.15 Cash (c) 1,950 Apr.20 Wages 800

Apr.18 Bank (c) 300 Apr.22 Mr. B 1,500

Apr.30 Balance c/d 2,500 450

9,750 1,950 9,750 1,950

A.15

Bank Reconciliation Statement of Shyam Babu as on December 31, 2017

Particulars (+)

items

(–)

items

Over draft as per the Pass Book 7,200

a) Cheques deposited but not cleared in December 3,200

b) Cheques issued but not presented for payment in

December

5,000

c) Interest on overdraft charged by the bank 300

d) Cheques wrongly debited in the Cash Column of the

Cash Book but cleared in December

200

Overdraft as per the Cash Book 8,900

12,400 12,400

A.16

Statement of Profit and Loss as on March 31, 2018

Particulars Amount

(Rs)

Capital at the end as on March 01, 2018 1,46,000

Add: Drawings 10,000

1,56,000

Less: Capital in the beginning as on April 01, 2017 1,75,000

Loss incurred before adjustments 19,000

Less: Interest on Capital @ 10% 17,500

Less: Provision for bad and doubtful debts 900

Loss incurred during the year 37,400

Working Note:

Calculation of capital as on Mar 31, 2018

Statement of Affairs as on March 31, 2018

Liabilities Amount

(Rs) Assets

Amount

(Rs)

Sundry Creditors 15,000 Machinery 20,000

Bank overdraft 4,500 Sundry Debtors 45,000

Capital (Balancing

Figure)

1,46,000 Stock of Goods 41,000

Cash in Hand 15,000

Bills Receivable 42,000

Office Furniture 2,500

1,65,500 1,65,500

A.17

Particulars Rs

Amount paid for bats and balls during the year 2017 80,000

Less: Creditors for bats and balls on January 01, 2017 (20,000)

Add: Creditors for bats and balls on December 31, 2017 30,000

Bats and balls purchased 90,000

Bats and balls purchased 90,000

Add: Stock of bats and balls as on January 01, 2017 10,000

Less: Stock of bats and balls as on December 31, 2017 (12,000)

Bats and balls to be shown in Income and Expenditure Account 88,000

The amount of bats and balls purchased during the year 2017 is Rs 90,000 and bats and balls to

be shown in the Income and Expenditure Account as on December 31, 2017 is Rs 88,000

A.18 Errors in simple terms are unintentional mistakes committed at the time of recording any

business transactions or at the time of their posting in the Ledgers. Examples of these errors are

recording of wrong amount, recording in wrong Account (Ledger), posting in wrong ledger, or

incorrect calculations.

Clerical Errors are those errors that arise due to mistake committed in ordinary course of

accounting work. Following are two types of clerical errors:

(i) Errors of Omission: Whenever any transaction is altogether omitted to be recorded in the

books then such type of an error will be called as “Error of Omission”. These types of error do

not effect trial balance as transaction is not at all recorded so neither debit nor credit aspect of

transaction has been considered. If transaction is although recorded but omitted to be posted in

their respective ledgers then such an error is also Error of Omission.

(ii) Errors of Commission: These errors are related to wrong recording of amount, wrong totaling,

wrong calculation, wrong balancing of Ledgers and often are regarded as clerical errors. All

these errors are either recorded wrongly or they may be recorded correctly but incorrectly

posted in the Ledger Account.

(iii) Compensating Errors: Compensating Errors are those errors in which effect of one error is

compensated by the effect of another error or errors with the same amount. So in this way two

different errors simultaneously counterbalance effect of each other. These errors do not affect

Trial Balance.

A.19

Books of A

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

2017

May 01 B Dr. 5,000

To Sales A/c 5,000

(Goods sold to B)

May 01 Bills Receivable A/c Dr. 5,000

To B 5,000

(B's acceptance for three months received)

May 04 Bank A/c Dr. 4,850

Discount A/c Dr. 150

To Bills Receivable A/c 5,000

(Bill discounted)

Aug. 04 B Dr. 5,150

To Bank A/c 5,150

(B's acceptance dishonoured and the bank paid Rs 150

noting charges)

Aug. 04 Cash A/c Dr. 2,150

To B 2,150

(Amount received from B)

Aug. 04 Bills Receivable A/c Dr. 3,000

To B 3,000

(B's acceptance for three months received)

Nov. 07 B Dr. 3,000

To Bills Receivable A/c 3,000

(Bill dishonoured)

Nov. 07 Bad Debt A/c Dr. 3,000

To B 3,000

(Amount due from B became bad)

Books of B

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

2017

May 01 Purchases A/c Dr. 5,000

To A 5,000

(Goods bought from A)

May 01 A Dr. 5,000

To Bills Payable A/c 5,000

(Bill accepted drawn by A for three months)

Aug. 04 Noting Charges A/c Dr. 150

Bills Payable A/c Dr. 5,000

To A 5,150

(Bill dishonoured on the due date)

A Dr. 2,150

To Cash 2,150

(Cash paid to A)

Aug. 04 A Dr. 5,000

To Bills Payable A/c 5,000

(Bill accepted drawn by A for three months)

Nov. 07 Bills Payable A/c

To A

(Bill dishonoured)

Nov. 07 A 3,000

To Deficiency A/c 3,000

(Amount due to A transferred to Deficiency Account)

A.20

Machinery Account

Dr. Cr.

Date Particulars J.F. Amount

Rs Date Particulars J.F.

Amount

Rs

2009 2009

Jan.01 Bank (i)

(80,000 + 40,000) 1,20,000

Dec.31 Depreciation

(i) 12,000, (ii) 1,250 13,250

Oct.01 Bank (ii) 50,000 Dec.31 Balance c/d

(i) 1,08,000, (ii) 48,750 1,56,750

1,70,000 1,70,000

2010 2010

Jan.01 Balance c/d Dec.31 Depreciation

(i) 1,08,000, (ii) 48,750 1,56,750 (i) 12,000, (ii) 5,000 17,000

Dec.31 Balance c/d

(i) 96,000, (ii) 43,750 1,39,750

1,56,750 1,56,750

2011 2,011

Jan.01 Balance c/d Jan.01 Bank (i) 1/ 3rd

of Machinery 25,000

(i) 96,000, (ii) 43,750 1,39,750 Jan.01 Profit and Loss (loss) 7,000

Jan.01 Bank (iii) 1,00,000 Dec.31 Depreciation

(i) 12,000 × (2/3) = 8,000

(ii) 5,000, (iii) 10,000 23,000

Balance c/d

(i) 56,000 (ii) 38,750

(iii) 90,000 1,84,750

2,39,750 2,39,750

Working Note: Calculation of Loss on Sale of 1/3rd

of the Machinery (i)

Years Opening Balance – Depreciation = Closing Balance Jan 01, 2009 1,20,000 – 12,000 = 1,08,000

Jan 01, 2010 1,08,000 – 12,000 = 96,000

Jan 01, 2011 96,000

January 01, 2011

Book Value of (1/3)rd

of Machinery (i) = 96,000 × (1/3) = 32,000

Sale of 1/3rd

of the Machinery (25,000)

Loss on Sale of Machine Rs 7,000

January 01, 2011

Book Value of (2/3)rd

of the Machinery (i) = 96,000 × (2/3) = Rs 64,000

Depreciation will be charged on the original cost of the Machinery (i) on December 31, 2011

= 1,20,000 × (2/3) × (10/100) = Rs 8,000

A.21

Journal

Date Particulars L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

1. Purchases A/c Dr. 1,500

Sales A/c Dr. 1,500

To Ramesh 3,000

(Goods purchased from Ramesh was wrongly passed

through Sales Book, now rectified)

2. Suspense A/c Dr. 90

To Sales A/c 90

(Sales day book total of one page Rs 560 was carried

forward to next page as Rs 650, now rectified)

3. Pallav Dr. 720

To Suspense A/c 720

(Cash paid to Pallav Rs 800 was wrongly debited to his

Account as Rs 80, now rectified)

4. Sales Returns A/c Dr. 2,800

To Customer A/c 2,800

(Goods returned by customer not recorded, now recorded)

5. Prepaid Insurance A/c Dr. 250

To Suspense A/c 250

(Prepaid Insurance was omitted to be brought forwarded

from Previous Year, now rectified)

.

6. Suspense A/c Dr. 50

To Purchases Return A/c 50

(Purchases Return Book undercast, now rectified)

A.22 A computer may be defined as an electronic device whose basic function is to take

information storing and processing it according to the set of information and gives back the

output (result) to the user.

The following are the various characteristics of computer.

(i) Speed- Speed of a computer is faster than the manual techniques. It can perform a task in

much lesser time with very high speed. It is capable of performing millions of calculation per

second.

(ii) Accuracy- A computer performs any function or computation with very a high degree of

accuracy. Errors if any exist only due to wrong commands or wrong programming.

(iii) Reliable- Function performed by a computer are more reliable as it can work for

comparatively long hours without any tiredness, lack of concentration and without creating any

mistakes. It can perform any number of calculations with the same degree of accuracy.

(iv) Versatility- A computer has the capacity to perform variety of tasks. A task may be simple

as well as complicated. It is able to perform variety of jobs.

(v) Storage- A computer has in-built capacity to store huge data in a very small space. It stores

the data in a safe way. If needed, its storage capacity can also be increased through secondary

storage devices such as floppy disks, optical disks, etc.

A.23

Trading Account

Dr. Cr.

Particulars Amount

(Rs) Particulars

Amount

(Rs)

Opening Stock 4,500 Sales 70,000

Purchases 40,000 Closing Stock 5,000

Wages 3,000 Less: Sold and Wrongly

included 500 4,500

Carriage 1,200

Gross Profit (Balancing

Figure)

25,800

74,500 74,500

Profit and Loss Account

Dr. Cr.

Particulars Amount

(Rs) Particulars

Amount

(Rs)

Depreciation on: Gross Profit 25,800

Building 3,750

Machinery 3,000 6,750

Outstanding Commission on sale 1,400

Royalty on Sales 2,000

Export Duty 1.500

Bad Debts 200

Salaries 2,400

Rent 1,100

Add: Outstanding rent 100 1,200

Outstanding Manager‟s Commission 941

Net Profit 9,409

25,800 25,800

Balance Sheet

Liabilities Amount

(Rs) Assets

Amount

(Rs)

Capital 22,750 Fixed Assets

Less: Drawings 20,000 Plant & Machinery 30,000

Add: Net Profit 9,409 12,159 Less: Depreciation 3,000 27,000

Mortgage 1,500 Land and Building 20,000

Current Liabilities Less: Depreciation (3,750) 16,250

Bank Overdraft 4,000 Current Assets

Bills Payable 5,600 Closing Stock (5,000 – 500) 4,500

Creditors 32,850 Bills Receivables 3,000

Outstanding Rent 100 Debtors 6,000

Outstanding commission on sale 1,400 Less: Bad Debts 200 5,800

Outstanding Manager‟s Commission 941 Discount on issue of shares 2,000

58,550 58,550

Working Note:

10Manager's Commission 10,350 Rs 941

110

A.24

Youth Club

Income and Expenditure Account

for the year ending March 31, 2014

Dr. Cr.

Expenditure Amount

(Rs) Income

Amount

(Rs)

Consumables consumed (WN4) 800 Subscription (WN3) 21,500

Sports Material (WN5) 2,800 Interest on Investments 5,000

Municipal Taxes 4,500 Deficit (balancing figure) 4,800

Less:Paid for 2012-13 (2,000) 2,500

Salaries 2,500

Tournament Fees 3,400

Advance against construction of

Building

10,000

Depreciation

Furniture 4,000

Billiard Table 800

Building 4,500 9,300

31,300 31,300

Balance Sheet

as on March 31, 2014

Liabilities Amount

(Rs) Assets Amount (Rs)

Capital Fund 3,02,850 Furniture 40,000

Less: Deficit (4,800) 2,98,050 Less: Depreciation (4,000) 36,000

Donation for Building 35,000 Building 45,000

Subscription received in

Advance

3,000 Less: Depreciation (4,500) 40,500

Legacy 12,000 Billiard Table 8,000

Less: Depreciation (800) 7,200

Cash and Bank 38,750

Subscription Outstanding

2012-13 400

2013-14 3,500 3,900

Stock of Sports Material 21,500

Stock of Consumables 200

Investments 2,00,000

3,48,050 3,48,050

Working Notes:

(1) Calculation of Capital Fund

Balance Sheet as on March 31, 2013

Liabilities Amount

(Rs) Assets Amount (Rs)

Subscription received in

Advance

2,000 Furniture 40,000

Outstanding Municipal Taxes 2,000 Cash 550

Bank overdraft 3,400 Stock of Sports

Material

10,800

Capital Fund 3,02,850 Building 45,000

Billiard Table 12,000

Investments 2,00,000

Subscription Outstanding 1,400

Stock of Stationery 500

3,10,250 3,10,250

(2) Calculation of Investments in the beginning of the year

Let the investment be „x‟

Interest on investment for 6 months = 5,000

5 65,000

100 12

5,000 100 12Rs 2,00,000

5 6

x

x

(3)

Statement Showing Calculation of Subscription Income

Particulars Amount

(Rs)

Subscription received during the current year 20,000

Add: Subscription outstanding at the end (3,500 + 400) 3,900

Add: Subscription received in Advance in the beginning 2,000

Less: Subscription outstanding in beginning 1,400

Less: Subscription received in Advance at the end 3,000

Subscription Income to be shown on the Income side of I&E A/c 21,500

(4) Calculation of amount of goods consumed during the year

Particulars Amount

(Rs)

Consumables purchased during the year 500

Add: Stock of consumables at the beginning 500

Less: Stock of consumables in the end (200)

Consumables consumed during the year 800

(5)

Stock of Sports Material Account

Dr. Cr.

Particulars Amount

(Rs) Particulars

Amount

(Rs)

Balance b/d 10,800 Income and

Expenditure A/c

(balancing figure)

2,800

Receipt and Payment A/c 13,500 Balance c/d 21,500

24,300 24,300