Question Bank

Q1 A) Select the most appropriate alternatives from those given below and rewrite the
statements.

1) RadhaRs.s Account is a type of...........................................account.

a) Nominal b) Personal c) Real d) Expenses
2) …… discount is not recorded in the books of accounts.
a) Trade b) Cash c) GST d) VAT
3) Overdraft means balance of Cash Book.
a) closing b) debit c) opening d) credit
4) Rectification entries are passed in-----------------------------.
a) Journal Proper b) Ledger c) Balance sheet d) Cash Book
5) Single Entry System may be useful for -----
a) Sole trader b) Company c) Government d) none of these
6) Amount which is not recoverable from customer is known as
Debtors, Doubtful Debts)
7) Prepaid Expenses is account.
(Real, Personal, Nominal)
8) Means explanation of the transactions recorded in the
Journal. (Journalizing, Posting, Casting, Narration)
9) Debtors Account show balance.
(Real, Credit, Debit, Negative)
10) Debit the receiver, Credit the
(Goes out, Giver, Income and Gains, Expenses and losses)

B) Find the Odd One. 05 MARKS

1) Wages, Salary, Royalty, Import Duty.
2) Building, Machinery, Furniture, Bills Payable.
3) Bad debts, depreciation, postage, dividends.
4) Postage, stationery ,advertising, purchase
5) Furniture, Debtors, Bank Overdraft, Cash in Hand,
6) Stationary A/c, Purchase A/c, Prepaid Rent A/c, Advertisement A/c
7) Creditors, Bank Loan, Investment, Bills Payable.
8) Royalty, Wages, Salary, Purchase
9) Commission Received, Discount allowed, Interest Received, Dividend Received
10) Capital , Bills Receivable , Reserve fund , bank overdraft

C) State Whether the Following Statements Are True or False 05MARKS

1) Ledger is a book of Original Entry.
False
2) Depreciation is charged on fixed assets.
True
3) Rectification entries are passed in Cash Book.
False
4) In every adjustment at least there are three effects.
False
5) Single Entry System is not useful for large organization.
True
6) Drawings account is a Nominal account.
False
7) Cash discount does not appear in the books of accounts.
False
8) Journal is a book of prime entry.
True
9) Ledger is a book of Original entry.
 True
10) Cash sales are entered in Sales Journal.
False

D) Classify the Following Accounts Under The Types Of Personal, Real And Nominal Account
05 MARKS

1. Sundry Income A/c 11 Live Stock A/c

2. Goods distributed as free sample A/c 12 RadhikaRs.s A/c
3. Outstanding Wages A/c 13 Loss on Sale of Furniture A/c
4. Bank of Maharashtra A/c 14 Loan A/c
5. Computer A/c 15 Legal Expenses A/c
6. Loose Tools A/c 16 Mr.Ankita Capital A/c
7. Cartage A/c 17 Sundry Expenses A/c
8. Repairs 18 Commission Received
9. Royalty 19 Computer
10 Outstanding income 20 Furniture

ANSWER

PERSONAL A/C REAL A/C NOMINAL A/C

Outstanding Wages A/c Computer A/c Sundry income A/c
Bank of Maharashtra A/c Loose Tools A/c Goods distributed as free sample
A/c
Outstanding income Live Stock A/c Cartage A/c
RadhikaRs.s A/c Computer Repairs
Loan A/c Royalty
Mr.Ankita Capital A/c Loss on Sale of Furniture A/c
Legal Expenses A/c
Commission Received
Furniture
Q2. Journalise The Following Transactions In The Books Of Kishor. (08 MARKS)
August
1 Shridevi started business with own Cash Rs.90,000 , Stock of goods worth Rs.40,000 Machinery
worth Rs.70,000 and borrowed money Rs.50,000 from her friend Konika at12% p.a.
4 Bought goods worth Rs.50,000 from Madhuri @ 10% trade discount .
6 Returned goods worth Rs.450 to Madhuri for not being as per sample
8 Sold goods worth Rs.80,000 to Kiran @ 10% trade discount and received cash afterallowing her 5%
cash discount.
13 Paid for Rent Rs 4,000.
17 Purchased a new Machinery worth Rs.1,00,000 from Bajaj Ltd. at 28% GST and amountpaid by debit card.
20 Paid for Salary Rs.27,000.
27Purchased 4 Computers of Rs.1, 20,000 @18% GST and amount paid by Debit Card.
31 Withdrew from Bank Rs.10,000 for personal use.
OR
Q.2 Journalise the following transaction in the books of Shravasti Medical
store (Marks 08)
2019
May 1. Started business with Cash Rs.50,000 Machinery Rs.1,00,000 & Stock of goods Rs 50,000.
5. Purchased goods from Mohan on credit Rs.80,000 at 10%Trade Discount
9. Sold goods to Urmila Rs.30,000 at 5% Trade Discount.
12. Paid into Dena Bank Rs.40,000.
18. Paid for Commission Rs.5,000.
24. Sold goods to Ashok for cash Rs.13000 @10% GST.
31. Purchased Laptop for Rs.20,000 @ 28% GST and amount paid by cheque.
Q.3 Prepare Bank Reconciliation statement from the following information
as on 31st March 2019 (Marks 10)
1) Balance as per Cash Book Rs.10,000.
2) Cheque of Rs.2,000 issued but not presented to Bank for payment.
3) Cheque deposited but not credited by bank Rs.3,500.
4) Bank Paid electricity bill on our behalf Rs.450.
5) Bank credited interest on Investment Rs.500.
6) Bank debited Bank charges Rs.150.

OR

Q3. On 31st March 2019 the Cash Book of Mr. Arvind showed a bank balance of Rs.57,400, but
Pass Book showed a different balance. On comparing the Cash Book with the Pass Book the
following discrepancies were noted:

1. Cheque of Rs.6,350 deposited into bank but was not yet collected by bank.
2. Bank paid our electricity bill Rs.9,700 which was not recorded in the Cash Book.
3. Cheque issued to our supplier Rs.15,100was not presented for payment up to31st March 2019.
4. Interest on investment Rs.8,800 was collected by bank was not recorded in Cash Book.
5. Bank charges Rs. 650 was debited in Pass Book6. Mr. Tanmay our debtor directly deposited Rs.
12,000 into our bank account on 28th March 2019,which was not, entered in Cash Book.

Prepare a Bank Reconciliation Statement as on 31st March 2019.

Q4. Prepare two column Cash Book of Seema Traders (10 MARKS)

Jan2019 01 Started business with Cash 60,000

04 Cash deposited into Bank of India 25,000
06 Cash Purchases 6,000
10 Purchased Computer for office use 22,000
15 Sold goods to Rakesh & Co.
and received a bearer cheque. 10,000
20 Rakesh's cheque deposited into Bank.
24 Paid Carriage 300
25 Cash withdrawn for personal use 3,000
30 Paid Rent by cheque 1,200
OR

Q.4 Enter the following Transactions in cash book with cash and bank columns of
Vishal Traders (Marks 10)
2019 Jan
01. Started business with cash Rs.60,000
04. Cash deposited into Bank of India Rs.25,000
06. Cash Purchases Rs.6,000
10. Sold goods to Vaibhav & Co. and Received a Bearer cheque. Rs.10,000
15. Purchased Machinery for Office Use Rs.22,000.
20. Vaibhav’s cheque deposited into Bank Rs.10,000.
24. Paid Carriage Rs.300.
25. Cash withdrawn for personal use Rs.3,000
30. Paid Rent by Cheque Rs 1,200.
Q5. Mukesh and Sons Kolhapur, made Furniture for their own office on 1st October 2015. For this
they had spent Rs.72,000 on Materials and Rs.32,000 on Wages. The estimated life of the Furniture
is to be for 10 years and its expected scrap value at the end of it would be Rs.24,000.They sold the
entire Furniture for Rs.80,000 on 1st October 2018. They close the books of accounts on 31st March
every year. Show the Furniture A/c and Depreciation A/c for first four years.

OR

Q.5. M/s Rubina Traders, Pune purchase Machinery worth Rs.30,000 on 1 st April 2016 and additional
Machinery on 1st October 2016 worth Rs.20,000. They charged depreciation at 10% p.a. on
Fixed Installment Method.
on 1st October 2018 they sold a part of Machinery for Rs.5,000 original cost of which on 1st
April 2016 was Rs.10,000. On the same date a new Machinery was purchased for Rs.15,000.
Show the Machinery A/c and Depreciation A/c for the years 2016-17,2017-18 and 2018-19.
(Marks 10)

Q6 Rohit a trader keeps his books on Single Entry System. His financial position as on 1.4.2018 and
31.3.2019 were as under; 10MARkS

Particulars 1.4.2018 31.3.2019

(Rs.) (Rs.)
Cash 12,000 18,000
Bank Balance 10,000 15,000
Stock in Trade 35,000 50,000
Sundry Debtors 30,000 35,000
Sundry Creditors 20,000 32,000
Building 40,000 60,000
Furniture 15,000 20,000

During the year he had withdrawn Rs.100 per month for household expenses. Depreciate
Building by 10 % p.a. and Furniture by 12% p.a. (Assume additions to both were made on 1 st
Oct. 2018) Debtors Rs.1,000 are bad and to be written off. Create Reserve for Doubtful Debts at
5% and maintain reserve for discount on debtors at 2%. Allow interest on capital at 5% p.a. and
interest on drawings at 5% p.a. Prepare Opening and Closing Statement of Affairs and Statement
of Profit or Loss for the year ended 31.3.2019.
OR
Q.6 Mr. Morya keeps his books on Single Entry System and gives the following information
(Marks 10)
Particulars 31.3.2017 31.3.2018
Cash at Bank 10,000 40,000
Sundry Debtors 25,000 42,000
Stock in Trade 20,000 35,000
Furniture 30,000 30,000
Machinery 60,000 60,000
Bills Payable 4,000 4,000
Sunday Creditors 10,000 15,000
Bank Loan @10% p.a. 4,300 4,300
 Additional Information:

1. Mr. Morya withdrew from business account Rs.6,000 for personal use.
2. He introduced Additional Capital of Rs.30,000.
3. Depreciation is to be charged at 10% p.a. on Furniture and
Machinery. Prepare 1) Opening and Closing Statement of Affairs
2) Statement of Profit & Loss for the year ended 31.3.2018

Q7. From the following Trial Balance of Omkar you are required to prepare Trading Account and Profitand
Loss Account for the year ending on 31st March 2018 and Balance Sheet as on that date. 12MARKS
Trial Balance as on 31st March, 2018
Debit Balances Amt (Rs.) Credit Balances Amt (Rs.)
Debtors 45,000 Capital 1,20,000
Opening Stock 11,550 Sales 60,750
Purchases 53,250 Return Outward 450
Sales Return 1,050 Dividend Received 2,250
Bad debts 600 Creditors 37,500
Rent. Rates & taxes 2,670 Bank Overdraft 24,000
Insurance 2,400 R.D.D. 1,200
Office Equipment 42,900
Furniture & Fixtures 28,500
Cash at Bank 32,280
Legal Expenses 3,000
Advertisement 1,800
Brokerage 2,100
Drawings 3,000
Wages 2,250
Coal, Gas, Fuel & Water 1,800
Machinery 12,000

2,46,150 2,46,150

Adjustments:

1) Closing Stock valued at Rs.42,000.

2) Write off Rs.1,200 Bad Debts and create a provision for bad & doubtful debts at 2% on
debtors.
3) Outstanding expenses - Legal Expenses Rs.750 and Wages Rs.225
4) Charge depreciation on Office Equipment 2.5% and Machinery 5%.
5) Prepaid - Insurance Rs.900
 OR

Q.7.From the following Trail Balance of Reena Enterprices you are require to prepare
Trading Account, Profit and Loss Account for the year ending 31st March 2018 and Balance
sheet as on that date
Trail Balance as on 31st march 2018
Particulars Debit(Rs) Credit
(Rs.)
Opening Stock 45,200
Capital 3,00,000
Drawings 20,000
Furniture 60,000
Prepaid Insurance 1770
Debtors & Creditors 70,000 1,29,250
Purchases & Sales 57,000 1,20,000
Plant & Machinery 50,000
Investment 68,000
Factory Insurance 26,000
Audit Fees 21,000
Carriage Inward 1,800
Land & Building 1,40,000
Rent 7,120
Reserve for bad Debts 6,000
Carriage Outward 8,360
Returns 2,000 9,000
Discount 1,000 7,000
Commission Received 8,000
5,79,250 5,79,250

Adjustment:
1) Write off bad debts Rs. 2,000 and Provide 2.5% reserve for Bad debts on debtors.
2) Closing Stock valued at Cost Price Rs 46,000 and Market Price Rs.40,000.
3) Provide Depreciation @5% on Building and 10% on Machinery.
4) Rent Prepaid Rs.3,560.
5) Outstanding Carriage Inward is Rs. 1,200.