Q1) Answer the following questions

(i)Why are recording of journals important from a business point of view?

(ii)What kinds of transactions are not recorded in cashbook?
(iii)Give two objectives of preparing Bank reconciliation statement.
(iv)State two differences between Trial balance and Balance sheet.
(v)Why is single entry system of accounting not dependable. Give 2 points.
(vi)State the 2 differences between Trading a/c and Profit & Loss a/c.
(vii)Give two reasons why depreciation is important from a firms point of view.
(viii)Why is bills of exchange preferred over debtors. Give two points
(ix)State two differences between Income & Expenditure a/c and Receipts &
Payments a/c
(x)What are the journal entry for interest on capital allowed by the firm to a
proprietor.

Q2) Give journals for the following transactions.

(i)Started business with Cash Rs 12000 and loan from Mr R Rs 18000
(ii)Deposited all cash except Rs 5000 into current a/c
(iii)Purchased goods from Mr Rahul 2000.Cash discount of 5% and trade 10% cash
discount allowed.
(iv)Sold goods worth Rs 25000 to Sunny and a cash discount of 10% allowed
(v)Goods costing Rs 2100 market value Rs 2600 was distributed as free samples
(vi)

Q3)The following is the Income and Expenditure of a club for the year ended
1993.Prepare
Expenditure Amount Income Amount
To Postage & Stationery 2300 By Subscriptions 53600
To Drama Expenses 25440 By Donations 8000
To Salaries 26000 By Profit from Annual meet 7200
To Printing & Souvenirs 28700 By Sale of souvenirs 44100
To Newspapers, magazine, 1200
etc. 7460
To General Expenses 6800
To Depreciation 15000
To Surplus
112900 112900
Other information:
Particulars 31.12.1992 31.12.1994
Subscriptions outstanding 4000 3000
Subscription received in advance 2000 2500
Salaries unpaid 1000 2000
Insurance prepaid(paid in as general expenses) 50 40
The club had sports equipment on 1st January 1993 valued at Rs 25000. At the end
of the year, after depreciation of Rs 5000 these amounted to Rs 28000. Also the
club had furniture costing Rs 10000 at the beginning of the year. At the end of the
year, after depreciation of Rs 1800 this amounted Rs 12000. On 31st December
1993 cash in hand amounted to Rs 11480.
Prepare Receipts & Payments accounts for the year ended on 31 st December 1993
and a balance sheet as on that day.
Q4)Page 861 mld Mr Wise keeps his books on single entry and the following
information is disclosed from his records.
Particulars 31.12.2008 31.12.2009
Bank Balance 3150(Cr) 8400
Stock 22500 30000
Debtors 45000 42800
Furniture 7500 7500
Investments 7500 7500
Cash 150 600
Creditors 37500 40500
Bills Payable 1500 750
Loan from Mr Faithful -- 4500
Mr Wise transferred Rs 375 each month during the first half of the year and Rs 300
each month for the remaining period from the business to his private banking
account by way of drawings. In addition he withdrew Rs 7500 for his daughters
marriage & Rs 3000 for domestic purposes. In September 2009 he had received a
lottery prize for Rs 6000 which he invested in the business. He sold his private car
for Rs 7000 and the proceeds were utilized for business. He wants furniture to be
depreciated @10% and a provision for doubtful debts to be created @5%. He had
not paid 2 months to his peon @ Rs 225 pm and two months rent outstanding
amounting to Rs 300.Commission earned but not received Rs 3600.
From the above data find Gross profit earned by him for the year, statement for Net
profit and a adjusted Statement of affairs as on the closing date.

Q5)Mr A has a bank account with State Bank of India. Prepare an amended Cash
Book and a Bank Reconciliation Statement for the month of Jan 2011 from the
details given to you:
(1)Balance as per Cashbook favorable Rs 70000
(2) A cheque of 8000 deposited into the bank has been shown as a payment y the
Bank
(3)Cheques issued worth 60000 on 27/1/11 but cheques worth 7000 has been lost
by the creditor
(4)A Direct payment of electricity of 6000 by the bank in Dec 2010 has been
recorded in Jan 2011 by the cashier in the cash book
(5)The bank has credited into A’s personal account 8000 as interest whereas the
Cashier in the cash book has recorded 9000
(6) An amount of 80000 paid by the cashier has been posted as a receipt of 8000 by
the bank
(7)A payment of 10000 by the bank for insurance premium has been recorded as a
payment of 12000 by the Cashier
(8)Y, a debtor who had paid 10000 by a cheque directly in dec 2010 has paid again
a cheque of 3000 as interest on overdue balances .No entry has been passed for
interest in the books.
Q6)MLD 33,pg 829 On 31st December 2009, at the time of preparation of the final
accounts, Niraj wrote off a sum of Rs 2000 due by Suhas as bad debts. However, on
31st March 2010, Suhas paid Rs 1200 to settle the issue. On 1st April 2010, Niraj sold
further goods to Suhas invoiced at Rs 1500 for which Suhas paid Rs 500 in cash &
accepted a bill for the remainder amount for 2 months. This bill was discounted by
Niraj for Rs 980. On due date the bill was dishonored & Suhas had to take it up and
pay the noting charge of Rs 20.
Next day Suhas accepted a new bill for 1 month for the amount due, paying interest
of Rs 30 and noting charges in cash. When the bill became due, Suhas met the
same by paying Rs 500 in cash & accepting a new bill for Rs 525.
Before the due date Suhas became insolvent & paid a compensation of 20 paise in a
rupee.
You are required to give journals in books of both the parties.

Q7)MLD no 18,pg 774 The trial balance of S & company drawn up on 31 st December
2009 failed to agree. The following are the errors discovered later:
(i)The owner had taken goods worth Rs 70 each month for his personal use. But no
entry was made to correct this fact.
(ii)A credit sale of the goods for Rs 940 to G was recorded correctly in the sales
books but as Rs 490 in his personal a/c
(iii)The returns outwards book was undercast by Rs 100.
(iv)Goods worth Rs 225 were returned by Navin. This was correctly recorded in the
returns inwards book but not posted to the ledger.
(v)Motor expenses Rs 1475 were debited to motor car account.
Give the journals and prepare a Suspense a/c from the above data.

Q8) The balance of machinery on 1st January 2010 Rs 300000. 30% of the machine
was damaged by fire on 1 st April 2010 and a insurance claim of Rs 32000 was
passed by the insurance company. A new machine was purchased for Rs 250000
from Ali ltd. A customs duty of 30000 was paid. On 30th june 2011 a new machine
was purchased for Rs 120000.On 1 st August 2011 half of the machine purchased in
April 2010 was sold @20% profit on book value. Prepare Machinery a/c and
depreciation a/c for the years 2010 and 2011.Show working in details. Working
carry marks.

Q9)MLD 718 The following is the trial balance for the year ended 31.12.2010 of Mr
Mukesh. You are required to prepare the final accounts for the year ended
31.12.2010
Particulars Debit Credit
Cash 1000
Stock 3500
Creditors 3900
Debtors 19200
Drawings 5130
Sales 92800
Purchases 81200
Wages 7200
General expenses 5170
Furniture 4000
Goodwill 3000
Capital 32700
129400 129400
Additional information:
(i)Furniture (Rs 400 being book value on January 1,2009) was sold on 30th June
2009 for Rs 450 & passed through sales book.
(ii)Depreciate furniture @10% pa
(iii)Private purchases amounting to Rs 100 were passed through the purchases day
book.
(iv)Wages for furniture were Rs 50
(v)Stock on last day was Rs 15000 at market price, but was purchased for 14000.
(vi)Goodwill was valueless.

Q10)MLD 13,pg 205 Prepare a triple column cashbook from the following data for
the month of January
1-Started business with Rs 420 in hand and Rs 3500 in bank.
2-Paid into bank out of office cash Rs 340
3-Cash sales Rs 720
4-Drew a cheque for private use Rs 200.Paid wages from personal a/c Rs 120
5-Paid rent by cheque Rs 300 of which 40% is for personal use.
6-
Q10)Goel pg 8.27 no 11 Enter the following transactions in a triple column cashbook
for month of may
1-Balance of cash in hand Rs 15600, Overdraft balance Rs 7400
2-Further capital introduced Rs 30000 of which Rs 25000 was deposited into bank
3-Purchased goods from a list price Mohan Rs 15000. Discount of 20% was allowed
by Mohan.
6-Settled the account of Mohan by paying Cash Rs 11600
8-An amount of Rs 2500 due from C & sons was to be written off as bad debts
10-Cashed a cheque for Rs 7500
14-Received Rs 500 from sale of old chairs
15-Received from X on behalf of Y Rs 2200.A discount of Rs 100 was allowed
20-Received from Naresh Rs 4210 in full settlement of Rs 4400.
22-SC who owed us Rs 10000 was declared insolvent an a dividend of 40 paise in a
rupee was recovered from his private estate
25-Cheque of Naresh was sent to bank for collection
26-Received a repayment of loan from Mr X Rs 3600and deposited Rs 2000 was
deposited in bank
28-Interest debited by bank Rs 650
31-Mr Naresh’s cheque was returned dishonored.
31-All cash but Rs 200 was deposited into bank.