EXAMINATIONS

FACULTY OF COMMERCE
(YEAR-I) (B.COM)
Elements of Accountancy
Time: 2 Hours Max. Marks: 70
Note: 1-Attempt any seven questions. PAPER CODE: 101
2-All questions carry equal marks.(10X1)

Q.1: What is Double Entry system of book-keeping? Explain its advantages.

Q.2.: The following is the trial balance of Preetish of Chennai as on 31st

December 2006.

Debit Balances Rs Rs
Opening stock 6,200 Freight on purchase 1,120
Buildings 34,000 Carriage on sales 1,600
Furniture 2,000 Repairs 1,800
Purchase 42,400 Sundry Debtors 12,000
Salaries 4,400 Bad debits 240
Rent 1,200 Cash in hand 2,600
Miscellaneous expenses 1000 Return inwards 2,040
Postage 560
Stationary 520
Wages 10,400 1,24,080

Credit Balances
Sales 82,920
Capital 24,000
Bank loan 6,000
Sundry Creditors 9,840
Return outwards 840
Interest 260
Dividend 220
1,24,080

The value of stock on 31.12.2006 was estimated at Rs.5, 960. You are required to
make the necessary closing entries and prepare Trading and Profit and Loss
account and Balance Sheet on 31st December 2006.

Q.3: R owe S the following sums of money due from him on the dates stated:

Rs. 300 due to Mach 9,1999

Rs. 1000 due on April 2, 1999
Rs. 4000 due on April 30,1999
Rs 100 due on June1, 1999
He wants to make the complete payment on 30-6-1999.Calculate interest at 5% p.a
with the help of average due date method.

Q.4: From the following, prepare on Income and Expenditure account for the year
ended 31st March 2001.

2000 April 1 Rs 2001 March 31 Rs

To Balance: By Salaries 36,000
Cash at Bank 4,550 Rent 6,000
Cash in office 550 5,100 By Printing and stationary 1,450
2001 March 31
To subscription including Rs 2000 for 2001-02
To interest on investment
30,000

15,000 By postage 250

To Bank interest 100 By purchase of Bicycle 950
To sale proceeds of car 2,500 By purchase of Govt bonds 6,800
By balance
Cash in office
Cash at Bank
120
1,130
52,700 52,700

Q.5: On 1st September 2000, Mehra of Kanpur despatches on consignment to

Krishnan of Madras 50 cases of woolen goods invoiced proforma at Rs, 1500 per
case to be sold by the latter on consignor's account. A commission of 3% is
Payable to Krishnan upon sales and all charges are borne by Mehra.

Mehra pays freight and insurance at Kanpur amounting to Rs. 5,100 and draws
upon Krishnan at 3 months sight for Rs. 45,000 against dispatch.

Krishnan sells for cash 10 cases at Rs.1,800 a case on 1st October 2000, 25 cases at
Rs. 2025 on 10th October 2000 at Rs. 1,950 a case. He forwards an account sales
to Mehra on 2nd November, 2000 deducing the commission due and charges
incurred, such charges amounting to Rs 4050 for unloading, cartage, storage, etc
and remits a draft for the balance.
You are required to prepare the accounts in the consignor's books.

Q.6: Karim and Saleem entered into a joint venture in timber. Profits were to be
shared equally. Karim was to purchase timber and send it to Saleem who would
sell it.

On 1st January, 2001 Karim purchased timber worth Rs.40,000 and incurred Rs
1,600 as expenses on forwarding it to Saleem. He immediately drew upon Saleem
for Rs.40, 000 for 3 months. The acceptance was discounted at 18% p.a on 4th
January 2000.

Saleem paid Rs.3600 as fright Rs 1300 as commission to agents and Rs 3000 as

rent. The whole timber was disposed of for Rs.65, 000. He forwarded a cheque to
Karim for the amount due on 31st March 2000. Show the joint venture account and
Saleem's ledger account in the books pf Karim.
Q.7: Prepare sales ledger adjustment A/C from the following information relating
to the year ended 31-12-2001.

Opening balance of debtors 40,000 Bills receivable dishonoured 500

Sales (for cash Rs 10,000) 90,000 Bad debits 1,000
Cash received from debtors 80,000 Transfer to purchase ledger 2,000
Discount allowed to debt ors 500 Reserve for doubtful debts 1,500
Bills receivable from debtors 3,000 Bad debits for last year received 1,000
Sales returns 8,000

Q.8: A machine purchased on 1st July 2003 at a cost of Rs. 14,000 and Rs 1,000
was spent on installation. The depreciation is written off at 10% on the original
cost every year. The books are closed on 31st December each year. The machine
was sold for Rs. 9,500 on 31st March 2006. Show the machinery account for all
the years.

Q.9: A fire occurred at the premises of a trader on 31-5-2004, destroying a great

part of his goods. His stock at 1-1-2004 was Rs 60,000. The value of stock
salvaged was Rs. 13,500. The gross profit on sales was 30% and sales amounted to
Rs. 1, 53,000 from January to date of fire, while for the same period the purchase
amounted to Rs. 1, 03,500. Prepare a statement of claim.

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