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Class 11 - Accountancy
Sample paper - 10 (2024-25)

Maximum Marks: 80
Time Allowed: : 3 hours

General Instructions:

1. This question paper contains 34 questions. All questions are compulsory.

2. This question paper is divided into two parts, Part A and B.
3. Question 1 to 17 and 27 to 29 carries 1 mark each.
4. Questions 18 to 20 and 30 to 32 carries 3 marks each.
5. Questions from 21 to 23 carries 4 marks each.
6. Questions from 24 to 26, 33 and 34 carries 6 marks each.

Part A
1. A ________ is prepared, when a party is to be given a credit for reasons other than credit purchase.
a) credit note
b) Oral
c) written note
d) debit note
2. Assertion (A): Accounting is an art as it involves recording, classifying, summarising business transactions with a view
to ascertain the net profit.
Reason (R): Accounting is a science since it is based on certain specified principles and accounting standards.
a) Both A and R are true and R is the correct explanation of A.
b) Both A and R are true but R is not the correct explanation of A.
c) A is true but R is false.
d) A is false but R is true.
3. Which of the following accounts has a credit balance?
a) Discount Allowed
b) Discount Received
c) Carriage Inward
d) Carriage Outward
4. Rohit is a sole proprietor has the following balances: Premises- Rs.55000, Cash at bank- Rs.6500, Inventory – Rs.12500
and creditors- Rs.14000. Find out the amount of capital.
a) Rs.15000
b) Rs.35000
c) Rs.31000
d) Rs.60000

OR

Purchase of machine by cash means:

a) increase in asset and decrease in another asset
b) Decrease in asset and decrease in liability.

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c) the decrease in asset and increase in capital
d) increase in asset and decrease in liability
5. A cheque is considered as an order in writing drawn upon a bank to pay a specified sum to the bearer or the person
named in it only if it is dated and signed by the ________.
a) drawee
b) Both drawee and drawer
c) bearer
d) drawer
6. Book-Keeping is which stage of Accountancy?
a) Secondary Stage
b) Advance stage
c) Professional Stage
d) Primary Stage

OR

________ need the information to form policies at the macro level and for providing subsidies.
a) Competitors
b) Management
c) Tax authorities
d) Government and its agencies
7. Reserves can be meant for the purpose of:
a) meeting a future contingency
b) strengthening the general financial position of the business
c) All of these
d) redeeming a long-term liability
8. Rule of Debit and Credit for Impersonal account is
a) Dr. the receiver and Cr. the giver
b) Dr. all expenses and Cr. all gains & Dr. what goes out and Cr. what comes in
c) Dr. all expenses and Cr. all gains
d) Dr. what goes out and Cr. what comes in

OR

Which of the following is not a type of personal account?

a) Ram's A/c
b) Investment A/c
c) SBI Bank A/c
d) Atul's Capital A/c
9. As per the law, which of the following is the correct accounting period?
a) 1st April to 31st December
b) 1st January to 31st December
c) 1st April to 31st March
d) Both 1st April to 31st March and 1st January to 31st December
10. At the time of goods sold, output CGST/SGST/IGST account is credited because it is a/an
a) Liability
b) Assets
c) Revenue/income

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d) Accrued income
11. Reserve created by undervaluation of closing stock is called:
a) Secret Reserve
b) Capital Reserve
c) General Reserve
d) Specific Reserve
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12. Sale is recognised as revenue:
A. when the contract for sale is entered into.
B. at the point of sale or performance of service.
C. after the expiry of credit period allowed to debtors.
D. after the money collected from the customers.
a) Only C
b) Only A
c) Only B
d) Only D
13. If XYZ Electronics Ltd. purchases 20 TV @ ₹2,000 per piece and 15 tape recorders @ ₹12,500 per piece. There was a
trade discount of 20%. What will be the amount recorded in the purchase book?
a) ₹2,27,500
b) ₹1,87,500
c) ₹40,000
d) ₹1,82,000
14. Voucher is prepared from:
a) Ledger Account
b) All of these
c) Source Documents
d) Journal Entry
15. Which of the following is the Capital expenditure?
a) Wages paid for cleaning of building
b) Repair expenses of building
c) Advertisement Expenses
d) Wages paid for construction of building

OR

Which of the following is not a long-term liability?

a) Creditors
b) Term-loan
c) Debentures
d) Capital
16. Sale of business asset on credit is recorded in:
a) Journal Proper
b) Special Journal
c) Sales Book
d) Cash Book

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17. Reserve is shown:
a) In Trading Account
b) In Assets side of Balance Sheet
c) In Liabilities side of Balance Sheet
d) In Profit and Loss Account
18. A ledger provides a number of utilities. List any three such utilities.

OR

Balance Sheet of H.J. & Co. as at 31st March, 2023 is as follows:

Liabilities ₹ Assets ₹

Capital 1,00,000 Land and Building 1,10,000

Bank Loan 50,000 Computers 20,000

Sundry Creditors 90,000 Furniture and Fixtures 10,000

Bills Payable 10,000 Inventory 70,000

Outstanding Expenses 10,000 Sundry Debtors 20,000

Cash in Hand 5,000

Cash at Bank 25,000

2,60,000 2,60,000

Pass the Opening Journal entry.

19. Materiality convention is an exception of the full disclosure concept. Do you agree with the above statement? Give
reason in support of your answer.

OR

Explain verifiable objective concept or objectivity principle.

20. Distinguish between debtors and creditors; profit and gain.
21. From the following information, draw up a Trial Balance in the books of Shri Haridas Chaki as on 31st March, 2023:
Capital ₹ 1,40,000; Purchases ₹ 36,000; Discount Allowed ₹ 1,200; Carriage Inwards ₹ 11,000; Sales ₹ 60,000; Returns
Inward ₹ 300; Returns Outward ₹ 700; Plant and Machinery ₹ 1,15,300; Stock on 1st April, 2022 ₹ 16,700; Sundry
Debtors ₹ 20,200; Sundry Creditors ₹ 12,000; Investments ₹ 3,600; Commission Received ₹ 1,800; Cash in Hand ₹ 100;
Cash at Bank ₹ 10,100 and Stock on 31st March, 2023 (not adjusted) ₹ 20,500.
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22. Enter the following transactions in the Two Column Cash Book of Mr. Mahesh:
2023 ₹
Jan. 1 Cash in Hand 2,200

Cash at Bank 50,000

Jan. 3 Purchased goods for ₹ 75,000; Trade Discount 20%; CGST 6%, SGST 6%; Payment made by Cheque
Jan. 4 Sold goods for ₹ 40,000; Trade Discount 15%; IGST 12%; Payment received by Cheque

Jan. 5 Received a cheque from Nilesh 1,000

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Jan. 8 Cheque received from Nilesh endorsed to Sohan in full settlement of his account of ₹ 1,050
Jan. 10 Paid Life Insurance premium of Mr. Mahesh 100

Jan. 13 Received a cheque from Preetam in full settlement of his account of ₹ 750. 700

Jan. 16 Preetam's cheque returned dishonoured by bank ____

Jan. 20 Deposited into Bank, the balance of Cash in excess of ₹ 250
23. From the following particular, prepare the bank reconciliation statement of Shri Krishan as on 31st March, 2017
i. Balance as per pass book is ₹ 10,000.
ii. Bank collected a cheque of ₹ 500 behalf of Shri Kishan but wrongly credited it to Shri Kishan’s account.
iii. Bank recorded a cash deposit of ₹ 1,589 as ₹ 1,598.
iv. Withdrawal column of the passbook undercast by ₹ 100.
v. The credit balance of ₹ 1,500 as on the passbook was recorded in the debit balance.
vi. The payment of a cheque of ₹ 350 was recorded twice in the passbook.
vii. The passbook showed a credit balance for a cheque of ₹ 1000 deposited by Shri Kishan.

OR

From the following particulars, prepare a Bank Reconciliation Statement:-

i. Balance as per pass book on 31st March, 2023 Overdrawn ₹ 15,000.
ii. Cheques drawn on 31st March, 2023 ₹ 2,000; ₹ 6,000; ₹ 2,400 and ₹ 3,600, but out of these, the last two cheques
were not presented for payment upto 5th April 2023.
iii. Interest on bank overdraft not entered in the cash book ₹ 845.
iv. Out-station cheques for ₹ 20,000 lodged in the bank on 25th March, 2023 but out of these, cheques worth ₹ 18,000
were credited in April, 2023.
v. ₹ 200 being Chamber of Commerce subscription paid by the bank under a standing order on 31st March 2023, was
not entered in the cash book.
24. Journalise the following transactions of Govind:
2023 ₹

Jan. 1 Govind started business with cash 2,00,000

Jan. 2 Paid into bank 60,000

Jan. 3 Bought goods from Pawar & Co. 20,000

Jan. 3 Paid cartage on goods purchased 300

Jan. 4 Purchased furniture 2,000

Jan. 4 Paid advance for purchase of HP Printers for ₹ 15,000 5,000

Jan. 4 Purchased calculator 1,000

Jan. 4 Purchased computer and paid by cheque 13,000

Jan. 6 Paid for Mobile bill and Internet (Office) 5,700

Jan. 8 Sold goods for cash 4,000

Jan. 9 Sold goods to Siya & Co. 10,000

Jan. 9 Paid cartage on goods sold to Siya & Co. 200

Jan. 15 Paid to Pawar & Co. on account 17,500

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Jan. 25 Sold goods to Rao & Co. 5,600

Jan. 27 Received cheque from Siya & Co. in settlement of amount due from them 9,750
Jan. 31 Paid for electricity charges 1,000

Jan. 31 Paid salary to office staff 1,500

Jan. 31 ​Cash withdrawn for hospital expenses of owner 7,500

OR

Journalise the following transactions:

2017 Amount (₹)
Dec.01 Hema started business with cash 1,00,000

Dec.02 Open a bank account with SBI 30,000

Dec.04 Purchased goods from Ashu 20,000

Dec.06 Sold goods to Rahul for cash 15,000

Dec.10 Bought goods from Tara for cash 40,000

Dec.13 Sold goods to Suman 20,000

Dec.16 Received cheque from Suman 19,500

Discount allowed 500

Dec.20 Cheque given to Ashu on account 10,000

Dec.22 Rent paid by cheque 2,000

Dec.23 Deposited into bank 16,000

Dec.25 Machine purchased from Parigya 10,000

Dec.26 Trade expenses 2,000
Dec.28 Cheque issued to Parigya 10,000

Dec.29 Paid telephone expenses by cheque 1,200

Dec.31 Paid salary 4,500
25. Trial Balance of Rahul did not agree. Rahul put the difference to Suspense Account. Subsequently, he located the
following error:
i. Wages paid for the installation of Machinery ₹ 600 was posted to Wages account.
ii. Repairs to Machinery ₹ 400 debited to Machinery account.
iii. Repairs paid for the overhauling of second-hand machinery purchased ₹ 1,000 was debited to Repairs account.
iv. Own business material ₹ 8,000 and wages ₹ 2,000 were used for the construction of the building. No adjustment was
made in the books.
v. Furniture purchased for ₹ 5,000 was posted to Purchases account as ₹ 500.
vi. Old machinery sold to Karim at its Book value of ₹ 2,000 was recorded through sales book.
vii. Total of Sales Returns Book ₹ 3,000 was not posted to the ledger.
Rectify the above erro₹ and prepare Suspense Account to ascertain the original difference in Trial Balance.

OR

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An accountant, while balancing his books found that there was a difference of ₹ 270 in the trial balance. Being required
to prepare the final accounts he placed the difference to a newly opened Suspense Account, which was carried forward to
the next year when the following errors were discovered:
i. Salary for the month of March was posted twice, ₹ 155
ii. Interest on investments collected by the bankers, were posted directly in concerned accounts through the pass book,
but no entry was made in the bank column of the cash book ₹ 75
iii. Goods worth ₹ 700 were distributed as free samples but this fact has not been taken into Books.
iv. Rent of ₹ 350 received from Abhi credited both to Rent Account and Abhi Account.
v. A purchase of a chair from Wallmart Furniture Mart for ₹ 65 has been entered in purchases book as ₹ 56
vi. Old Machinery sold to the proprietor Keshav for ₹ 400 was entered in Sales Book as sale to Krishna.
vii. Cash Purchases from Ajit ₹ 189 were recorded in Cash Book as well as in Purchases Book and posted from both.
viii. Closing Stock has been undervalued by ₹ 300

Give necessary rectifying entries and prepare the Suspense Account.

26. On 1st June, 2020, S Ltd. purchased a plant for ₹ 9,00,000. On 1st December 2022 a part of the plant purchased on 1st
June, 2020 for ₹ 1,50,000 was sold for ₹ 60,000. On 1st January, 2023 a new plant was purchased for ₹ 3,00,000.
Depreciation is provided @ 10% p.a. on Diminishing Balance Method. The books are closed on 31st March each year.
Prepare Plant A/c and Provision for Depreciation A/c for the relevant years.

OR

A company purchased a machine for ₹ 50,000 on 1st October 2020. Another machinery costing ₹ 10,000 was purchased
on 1st December 2021. On 31st March 2023, the machinery purchased in 2020 was sold at a loss of ₹ 5,000. The
company charges depreciation at the rate of 15% p.a. on Diminishing Balance Method. Accounts are closed on 31st
March every year. Prepare Machinery Account for 3 years.
Part B
27. When closing capital is less than opening capital, it means
a) Profit
b) no profit no loss situation
c) Loss
d) Loss, if there is no drawing

OR

The opening statement of affairs is prepared to know:

a) Credit Purchases
b) Closing Balance of Cash
c) Credit Sales
d) Opening Capital
28. Choose Current Assets from the following:
a) Cash
b) Stock
c) Debtors
d) All of these
29. A new firm commenced business on 1st January 2022 and purchased goods costing ₹ 90,000 during the year. A sum of ₹
6,000 was spent on freight inward. At the end of the year (on 31st March, 2023) the cost of goods still unsold was ₹

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15,000 (Realisable value 12,000). Sales during the year was ₹ 1,20,000. What is the gross profit earned by the firm?
a) ₹ 39,000
b) ₹ 36,000
c) ₹ 30,000
d) ₹ 42,000

OR

A firm spent a huge amount of Rs.200000 on advertisement to introduce a new product in the market and it is estimated
that its benefit will last for 4 years. How much will be charged to Profit and Loss A/c each year for 4 consecutive years?
a) Rs.50000
b) Rs.30000
c) Rs.6000
d) Rs.40000
30. What are the objectives of preparing financial statements?
31. Calculate missing values
Case Cost of goods sold (₹) Gross profit Sales (₹)

1. 1,50,000 20% on sales ?

2. ? 25% on cost of goods sold 5,00,000
3. 2,25,000 20% on cost of goods sold ?
32. Give the adjustment entry and accounting treatment of the following items while preparing financial statements:
i. Outstanding Salaries
ii. Accrued Interest
33. C maintain his books according to Single Entry System. Following figures were available from the books for the six
months ended 31st December, 2017-
1st July, 2017 (Rs.) 31st Dec. 2017 (Rs.)

Plant and Machinery 1,50,000 1,40,000

Debtors 65,000 60,000
Cash and Bank balances 25,000 31,000

Stock 40,000 45,000

Creditors 9,000 10,000

Adjustments-
a. He had withdrawn Rs.200 in the beginning of every month for household purposes.
b. Depreciation on Plant and Machinery @ 10% p.a.
c. Further Bad Debts Rs.5,000 and Provision for Doubtful Debts to be created @ 2%.
d. During the period, salaries have been prepaid by Rs.500 while wages outstanding were Rs.1,000.
e. Interest on drawings to be reckoned @ 6% p.a.
You are required to prepare the Statement of Profit or Loss for the half year ended 31st December, 2017, followed by
Revised Statement of Affairs as on that date.

OR

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Mahesh commenced business on 1st April, 2022 with a capital of ₹ 50,000.
On 1st January, 2023, he introduced ₹ 25,000 into the business of which ₹ 10,000 was borrowed from Rahul. His
position on 31st March, 2023 was as under:
Assets: Cash in hand ₹ 4,000; Bank (Cr.) ₹ 6,500; Debtors ₹ 24,000; B/R ₹ 18,600. Stock ₹ 25,400; Furniture ₹ 15,000;
Prepaid expenses ₹ 1,000.
Liabilities: Creditors ₹ 13,500; B/P ₹ 4,800; Rahul’s Loan ₹ 10,000; Outstanding expenses ₹ 700. Actual drawings were
not known but his living expenses are ₹ 1,000 p.m. Depreciate furniture by 10%. Interest on the loan is due to @12%
p.a.
Ascertain his profit or loss for the year 2022-23 & prepare a final statement of affairs.
34. Following balances are taken from the books of Neeraj. Prepare Trading and Profit & Loss Account for the year ended
31st March, 2023 and Balance Sheet as on that date:
Particulars ₹ Particulars ₹
Capital 12,00,000 Drawings 2,10,000
Opening Stock 4,50,000 Plant and Machinery 2,40,000

Furniture 15,000 Purchases 29,50,000

Sales 43,50,000 Insurances 15,000
Purchases Return 40,000 Sales Return 70,000

Rent 50,000 General Expenses 20,000

Salaries 2,40,000 Wages 4,00,000
Bad Debts 10,000 6% Investments 5,00,000

Sundry Debtors 4,00,000 Sundry Creditors 1,98,000

Advertisement Expenses 60,000 Cash 1,22,000
Patents 48,000 Miscellaneous Income 12,000

Adjustments:
i. Closing Stock ₹ 7,50,000.
ii. Depreciate Machinery by 10% and Furniture by 20%.
iii. Wages ₹ 50,000 and salaries ₹ 20,000 are outstanding.
iv. Write off ₹ 50,000 as further Bad Debts and create 5% Provision for Doubtful Debts. Also, create a reserve for
Discount on Debtors @ 2%.
v. Investments were made on 1st July, 2022 and no interest has been received so far.

OR

From the following particulars taken out from the books of Anand General Store, prepare trading and profit and loss
account for the year ended 31st March 2013 and balance sheet as on that date.
Name of Accounts Amt(Rs) Name of Account Amt(Rs)
Plant and machinery on 1st April 2012 16,00,000 Rent 24,000
Plant and machinery purchased on 1st Insurance premium paid from 1st January 2012 to 31st
40,000 2,400
July, 2012 December, 2013
Sundry debtors 2,40,000 Cash at Bank 10,800

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Creditors 64,000 Wages 40,000
Furniture 10,000 Octrol 800

Motor car 1,40,000 Advertising 9,600

Purchases 3,20,000 Carriage Inwards 20,400
Sales 5,60,000 Carriage Outwards 4,000

Sales Returns 30,000 Fuel and Power 31,400

Salaries 72,000 Majoj's capital 7,00,000
Opening Stock 1,20,000 Majoj's drawings 24,000

Motor Car Expenses 12,000 Brokerage 1,400

Stationery 1,000 Donation 10,200

Additional Information
i. Closing stock Rs 1,10,000 stock valued at Rs 20,000 was destroyed by fire on 18th March, 2013 but the insurance
company admitted a claim of Rs 13,600 only which was received in April, 2013.
ii. Stationery for Rs 300 was consumed by the proprietor.
iii. Goods costing Rs 2,400 were given away as charity.
iv. A new signboard costing Rs 3,000 is included in advertising.
v. Rent is to be allocated 2/3rd to factory and 1/3rd to office.
vi. Depreciate machinery by 10% and motor car by 20%.To practice more questions & prepare well for exams,
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Class 11 - Accountancy
Sample paper - 10 (2024-25)

Solution

Part A
1. (a) credit note
Explanation: credit note
2. (b) Both A and R are true but R is not the correct explanation of A.
Explanation: Art is the technique of achieving some pre-determined objectives and accounting is also done with some
pre-determined objectives.
3. (b) Discount Received
Explanation: As per the Nominal accounting rules discount received is profit and has a credit balance.
4. (d) Rs.60000
Explanation: Assets = Premises+ cash at bank + inventories
Assets = 55000+6500+12500
Assets = Rs. 74000
Creditors are liabilties.
Assets = Liabilities + Capital
74000= 14000+ Capital
Capital = 74000-14000
Capital = 60000Rs.

OR

(a) increase in asset and decrease in another asset

Explanation: Purchase of machine by cash means an increase in asset and decrease in the asset. For example Machinery
purchase at Rs. 10,000 so Machinery increase and Rs. 10,000 Cash decrease.
5. (d) drawer
Explanation: drawer
6. (d) Primary Stage
Explanation: Bookkeeping is the first stage of accounting as it includes recording and classifying the financial
transactions.

OR

(d) Government and its agencies

Explanation: Government and its agencies
7. (c) All of these
Explanation: All of these
8. (c) Dr. all expenses and Cr. all gains
Explanation: Dr. all expenses and Cr. all gains

OR

(b) Investment A/c

Explanation: Personal account is an account for use by individual for that person's own need. These account are in the

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name of person. Like Ram ,Shyam, SBI Bank Account.
Hence Assets are having real account ,so Investment Account is a Real Account not a personal account.
9. (c) 1st April to 31st March
Explanation: 1st April to 31st March
10. (a) Liability
Explanation: Liability
11. (a) Secret Reserve
Explanation: Secret Reserve
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12. (c) Only B
Explanation: As per the revenue recognition concept the sale is recognized as revenue after the money collected from
the customers.
13. (d) ₹1,82,000
Explanation: Amount recorded in Purchase Book.
20 TV @ ₹2,000 40,000
(+) 15 Tape Recorders @ ₹12,500 1,87,500

₹2,27,500

(-) Trade Discount @ 20% (45,500)

₹1,82,000
14. (c) Source Documents
Explanation: Source Documents
15. (d) Wages paid for construction of building
Explanation: Wages paid for building construction is a capital expenditure and it will be added to building Account.

OR

(a) Creditors
Explanation: Creditors is not a long-term liability. It is current liability.
16. (a) Journal Proper
Explanation: Other than subsidiary book transactions we record in Journal Proper
17. (c) In Liabilities side of Balance Sheet
Explanation: In Liabilities side of Balance Sheet
18. i. Ledger is prepared from journal.
ii. Trial balance are prepared from ledger accounts.
iii. Financial statements i.e, trading and profit and loss account and balance sheet are also prepared from ledger accounts.

OR

JOURNAL

Date Particulars L.F. Dr. (₹) Cr. (₹)

2023 Land and Building A/c ...Dr. 1,10,000

April 1 Computers A/c ...Dr. 20,000

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Furniture and Fixtures A/c ...Dr. 10,000
Sundry Debtors A/c ...Dr. 20,000

Inventory A/c ...Dr. 70,000

Cash A/c ...Dr. 5,000

Bank A/c ...Dr. 25,000

To Capital A/c 1,00,000

To Bank Loan A/c 50,000

To Sundry Creditors A/c 90,000

To Bills Payable A/c 10,000

To Outstanding Expenses A/c 10,000

(Balances of assets, liabilities and capital brought forward)
19. Yes, materiality convention is an exception to the concept of full disclosure. According to the materiality convention,
items having an insignificant effect or being irrelevant to the user need not be disclosed due to unnecessarily
overburdened while full disclosure concept states that there should be a sufficient disclosure/complete disclosure of
informations.

OR

The objectivity principle states that accounting information and financial reporting should be independent and supported
with unbiased evidence. This means that accounting information must be based on research and facts, not merely a
preparer’s opinion. The objectivity principle is aimed at making financial statements more relevant and reliable.
The concept of relevance implies that financial statements can have predictive value and feedback value. This means the
financial statements are accurate and can be used to predict future company performance.
The concept of reliability implies that financial information can be verified by many sources with evidence and that all
financial information is presented. In other words, the favorable and unfavorable financial information is presented in the
financial statements.
The two concepts of relevance and reliability encompass the objectivity principle. By making financial statements more
relevant and reliable, the objectivity principle makes the financial information more usable for investors and creditors.
20. Debtors are the persons or organizations that are liable to pay money to a firm while creditors are the persons or
organizations to whom the firm is liable to pay money
Profit is the excess of revenues over expenses during an accounting period. It is the result of business transactions that
are of regular or routine nature in business while gain arises from events or transactions which are incidental to business
such as the sale of a fixed asset or winning a lottery prize.
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21. TRIAL BALANCE as on 31st March, 2023

Heads of Accounts L.F. Dr. Balance (₹) Cr. Balance (₹)

Capital - 1,40,000

Purchases 36,000 -
Discount Allowed 1,200 -

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Carriage Inwards 11,000 -

Sales - 60,000

Returns Inward 300 -

Returns Outward - 700

Plant and Machinery 1,15,300 -

Stock (1st April,2022) 16,700 -

Sundry Debtors 20,200 -

Sundry Creditors - 12,000

Investments 3,600 -
Commission Received - 1,800

Cash in Hand 100 -

Cash at Bank 10,100

Total 2,14,500 2,14,500
Note: Closing Stock will not be taken in the Trial Balance because it is a part of the goods purchased but not yet sold. As
the opening stock and purchases are given in the Trial Balance, Closing Stock will not be shown in the Trial Balance. It
is shown in the Trial Balance only if Adjusted Purchases is given which is Opening Stock + Purchases (Net) - Closing
Stock.

22. Cash Book

Dr. Cr.

Date Particulars L.F. Cash (₹) Bank (₹) Date Particulars L.F. Cash (₹) Bank (₹)

2023 2023
Jan. 1 To Balance b/d 2,200 50,000 Jan. 3 By Purchases A/c 60,000

4 To Sales A/c 34,000 3 By Input CGST A/c 3,600

4 To Output IGST A/c 4,080 3 By Input SGST A/c 3,600

13 To Preetam's A/c 700 10 By Drawings A/c 100 ____

20 To Cash A/c C 1,850 16 By Preetam's A/c ____ 700

20 By Bank A/c C 1,850 ____

31 By Balance c/d 250 22,730

2,200 90,630 2,200 90,630

Feb. 1 To Balance b/d 250 22,730

Working Note:

Journal Entry

Date Particulars L.F. Debit (₹) Credit (₹)

2023

Jan. 5 Cheques-in-hand A/c Dr. 1,000

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To Nilesh's A/c
1,000
(cheque received from Nilesh)

Jan. 8 Sohan's A/c Dr. 1,050

To Cheques-in-Hand A/c 1,000

To Discount Received A/c
50
(Cheque received from Nilesh is endorsed to Sohan)

Jan. 16 Preetam's A/c Dr. 50

To Discount Allowed A/c
50
(discount allowed to Preetam)

23. Bank Reconciliation Statement as on March 31, 2017

Particulars (+) Amount ₹ (-) Amount ₹

1. Credit balance as per passbook 10,000

2. Cheque wrongly credited to another customer account 500

3. Error in carrying forward 3,000

4. Cheque recorded twice 350

5. Excess credit for cash deposit 9

6. Under casting of withdrawal column 100

7. Wrong credit 1,000

8. Debit balance as per cash book 12,741

13,850 13,850

OR

BANK RECONCILIATION STATEMENT

as on 31st March, 2023

Particulars Plus Items Minus Items

₹ ₹

(i) Overdraft as per Pass Book 15,000

(ii) Cheques issued but not presented for payment (₹ 2,400 + ₹ 3,600) 6,000
(iii) Interest on overdraft charged by the bank 845

(iv) Cheques paid into bank but not credited 18,000

(v) Subscription paid by the bank under standing order 200

19,045 21,000

Overdraft as per Cash Book 1,955

Since balance as per pass, book is given so any errors can be rectified only in pass book.

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24. BOOKS OF GOVIND
Journal

Debit Amount
Date Particulars L.F. Credit Amount (₹)
(₹)

2023
Jan.
Cash A/c Dr. 2,00,000
01

To Capital A/c 2,00,000

(Business started with cash)

Jan.
Bank A/c Dr. 60,000
02
To Cash A/c 60,000

(Cash deposited into bank)

Jan.
Purchases A/c Dr. 20,000
03

To Pawar And Co. A/c 20,000

(Goods purchased on credit from Pawar and Co. on
Credit)

Jan.
Cartage A/c Dr. 300
03

To Cash A/c 300

(Cartage paid)

Jan.
Furniture A/c Dr. 2,000
04
To Cash A/c 2,000

(Furniture purchased by Cash)

Jan.
HP Printers A/c Dr. 5,000
04

To Cash A/c 5,000

(Advance paid for placing an order for printer)

Jan. Calculator A/c Dr. 1,000

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04

To Cash A/c 1,000

(Calculator purchased)

Jan.
Computer A/c Dr. 13,000
04

To Bank A/c 13,000

(Computer purchased by cheque)

Jan.
Mobile bill & Internet office A/c Dr. 5,700
06
To Cash A/c 5,700

(Mobile & Internet office bill paid)

Jan.
Cash A/c Dr. 4,000
08

To Sales A/c 4,000

(Goods Sold on cash)

Jan.
Siya & Co. A/c Dr. 10,000
09
To Sales A/c 10,000

(Goods sold to Siya & Co.)

Jan.
Cartage A/c Dr. 200
09

To Cash A/c 200

(Cartage paid)

Jan.
Pawar & Co. A/c Dr. 17,500
15

To Cash A/c 17,500

(Cash paid to Pawar & Co.)

Jan.
Rao & Co. A/c Dr. 5,600
25

To Sales A/c 5,600

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(Goods Sold to Rao & Co.)

Jan.
Bank A/c Dr. 9,750
27

Discount Allowed A/c Dr. 250

To Siya & Co. A/c 10,000

(Cheque received from Siya & Co. in full settlement)

Jan.
Electricity Charges A/c Dr. 1,000
31

To Cash A/c 1,000

(Electricity Charges paid)

Jan.
Salary A/c Dr. 1,500
31
To Cash A/c 1,500

(Salary paid)

Jan.
Drawings A/c Dr. 7,500
31

To Cash A/c 7,500

(Cash withdrawn for personal use)

OR

Journal of Hema

Date Particulars L.F. Debit (₹) Credit (₹)

2017

Dec. 01 Cash A/c Dr. 1,00,000

To Capital A/c 1,00,000

(Started business with cash)

Dec. 02 Bank A/c Dr. 30,000

To Cash A/c 30,000

(Bank account opened with SBI)

Dec. 04 Purchases A/c Dr. 20,000

To Ashu 20,000

(Goods purchased from Ashu)

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Dec. 06 Cash A/c Dr. 15,000

To Sales A/c 15,000

(Goods sold for cash)

Dec. 10 Purchases A/c Dr. 40,000

To Cash A/c 40,000

(Goods purchased for cash)

Dec. 13 Suman Dr. 20,000

To Sales A/c 20,000

(Goods goods to Suman)

Dec. 16 Bank A/c Dr. 19,500

Discount Allowed A/c Dr. 500

To Suman 20,000

(Cheque received from Suman and discount allowed)

Dec. 20 Ashu Dr. 10,000

To Bank A/c 10,000

(Cheque forwarded to Ashu)

Dec.b22 Rent A/c Dr. 2,000

To Bank A/c 2,000

(Rent paid by cheque)

Dec.b23 Bank A/c Dr. 16,000

To Cash A/c 16,000

(Cash deposited into bank)

Dec. 25 Machinery A/c Dr. 10,000

To Parigya 10,000

(Machinery purchased from Parigya)

Dec. 26 Trade Expenses A/c Dr. 2,000

To Cash A/c 2,000

(Trade expenses paid)

Dec. 28 Parigya Dr. 10,000

To Bank A/c 10,000

(Cheque issued to Parigya)

Dec. 29 Telephone Expenses A/c Dr. 1,200

To Bank A/c 1,200

(Telephone expenses paid through cheque)

Dec. 30 Salaries A/c Dr. 4,500

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To Cash A/c 4,500

(Salary paid)
Total 3,00,700 3,00,700

25. In the Books of Rahul

Journal Entries

Debit Credit
Date Particulars L.F. Amount Amount
(₹) (₹)
(i) Machinery Account Dr. 600

To Wages Account 600

(Being wages paid for the installation of machinery wrongly debited to wages
account, now entry is rectified)

(ii) Repairs Account Dr. 400

To Machinery Account 400

(Being Repairs paid wrongly debited to Machinery account now entry is
rectified)

(iii) Machinery Account Dr. 1,000

To Repairs Account 1,000

(Being Repairs for overhauling of second-hand machinery purchased, wrongly
debited to Repairs account, now entry is rectified)

(iv) Building Account Dr. 10,000

To Purchases Account 8,000

To Wages Account 2,000

(Being material and wages used for the construction of the building, not debited
to building accounts, now entry is rectified)

(v) Furniture Account Dr. 5,000

To Purchases Account 500

To Suspense Account 4,500

(Being Furniture purchased for ₹ 5,000 wrongly debited to purchases account

as ₹ 500, now entry is rectified)
(vi) Sales Account Dr. 2,000

To Machinery Account 2,000

(Being Sale of Machinery wrongly recorded in the sales book, now entry is
rectified)
(vii) Sales Return Account Dr. 3,000

To Suspense Account 3,000

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(Being total of Sales Returns Book not posted to the ledger, now entry is
rectified)

Suspense Account

Date Particulars L.F. Amount (₹) Date Particulars L.F. Amount (₹)

To Difference as per Trial Balance 7,500 By Furniture A/c 4,500

By Sales Returns A/c 3,000

7,500 7,500

OR

RECTIFYING JOURNAL ENTRIES

S. Dr. Cr.
Particulars L.F.
No. (₹) (₹)
(i) Suspense A/c Dr. 155

To Salary A/c 155

(Salary posted twice in the books now rectified)

(ii) Bank A/c Dr. 75

To Suspense A/c 75
(Interest collected by the bank not entered in Cash Book now rectified)

(iii) Advertisement or Free Samples A/c Dr. 700

To Purchases A/c 700

(Goods distributed as free samples not recorded in the books now rectified)

(iv) Abhi A/c Dr. 350

To Suspense A/c 350

(Rent received wrongly credited to Abhi Account now rectified)

(v) Furniture A/c Dr. 65

To Purchases A/c 56
To Wallmart Furniture Mart A/c 9

(Furniture purchased wrongly entered in the purchase book with the wrong amount
now rectified)

(vi) Drawings A/c Dr. 400

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(a)
To Machine A/c 400

(Old Machinery sold to Proprietor recorded)

(vi)
Sales A/c Dr. 400
(b)

To Krishna A/c 400

(Sale of machinery wrongly debited to Krishna’s Account reversed)

(vii) No rectification entry to be passed since correct entry is entered

(viii) Closing Stock A/c Dr. 300

To Trading A/c 300

(Under-valuation of stock corrected)

SUSPENSE ACCOUNT

Dr. Cr.
Particulars J.F. ₹ Particulars J.F. ₹

To Difference in
270 By Bank A/c 75
Trial Balance (Balancing Figure)

To Salary A/c 155 By Abhi 350

425 425

26. PLANT ACCOUNT

Dr. Cr.

Amount Amount
Date Particulars Date Particulars
(₹) (₹)
2020 June 2021 Mar.
To Bank A/c 9,00,000 By Balance c/d 9,00,000
1 31

2021 April To Balance 2022 Mar.

9,00,000 By Balance c/d 9,00,000
1 b/d 31
2022 April To Balance 2022 Dec.
9,00,000 By Bank A/c 60,000
1 b/d 1

Dec. 1 By Provision for Depreciation A/c 34,500

2023 Jan. By Statement of Profit and Loss (₹1,50,000 - 60,000 -
To Bank A/c 3,00,000 Dec. 1 55,500
1 34,500)

2023 Mar. By Balance c/d 10,50,000

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31

12,00,000 12,00,000

PROVISION FOR DEPRECIATION ACCOUNT

Dr. Cr.

Amount Amount
Date Particulars Date Particulars
(₹) (₹)
2021 Mar. 31 To Balance c/d 75,000 2021 Mar. 31 By Depreciation A/c 75,000

2022 Mar. 31 To Balance c/d 1,57,500 2021 April 1 By Balance b/d 75,000

2022 Mar. 31 By Depreciation A/c (₹ 13,750 + ₹ 68,750) 82,500

1,57,500 1,57,500
2022 Dec. 1 To Plant A/c 34,500 2022 April 1 By Balance b/d 1,57,500

2023 Mar. 31 To Balance c/d 2,00,625 Dec. 1 By Depreciation A/c (Dep. on plant sold) 8,250

2023 Mar. 31 By Depreciation A/c 69,375(2)

2,35,125 2,35,125
Working Notes:
1. Calculation of depreciation provided on Plant sold:
Book Value Accumulated Depreciation

Original cost as on 1st June, 2020 1,50,000

Less: Depreciation for 2020-21 for 10 months @ 10% p.a. (12,500) 12,500

1,37,500
Less: Depreciation for 2021-22 (@ 10% on ₹ 1,37,500) (13,750) 13,750

1,23,750

Less: Depreciation for 2022-23 (@ 10% on ₹ 1,23,750 for 8 months) (8,250) 8,250

1,15,500 34,500
2. Depreciation on Plant in use will be calculated on the balance of ‘Plant A/c’ minus balance of ‘Provision for
Depreciation A/c’:
₹
Balance of Plant A/c (₹ 9,00,000 - ₹ 1,50,000) 7,50,000

Less: Balance of Provision for Depreciation A/c (₹ 1,57,500 + ₹ 8,250 - ₹ 34,500) (1,31,250)

6,18,750

Depreciation for 2022-23 (@ 10% on ₹ 6,18,750) 61,875

Add: Depreciation on new plant for 3 months on ₹ 3,00,000 7,500

69,375

OR

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MACHINERY ACCOUNT

Dr. Cr.

Amount Amount
Date Particulars J.F. Date Particulars J.F.
(₹) (₹)

2020 2021

Mar.
Oct. 1 To Bank A/c 50,000 By Depreciation A/c (for 6 months) 3,750
31

By Balance c/d 46,250

50,000 50,000

2021 2022

Mar.
Apr. 1 To Balance b/d 46,250 By Depreciation A/c
31

Dec. 1 To Bank A/c 10,000 Machinery 1 6,938

Machinery 2 500 7,438

Mar.
By Balance c/d
31

Machine 1 39,312

Machine 2 9,500 48,812

56,250 56,250

2022 2023

Mar.
Apr. 1 To Balance b/d By Depreciation A/c 5,897
31

Machine
39,312 " By Bank A/c (Sale of Machine 1) 28,415
1
Machine By Profit and Loss A/c (Loss on Sale of
9,500 48,812 " 5,000
2 machine 1)

Mar.
By Depreciation A/c (Machine 2) 1,425
31

Mar.
By Balance c/d 8,075
31

48,812 48,812

2023 Apr.
To Balance b/d 8,075
1
Working Notes:
Particulars Machine I Machine II Total
Cost 50,000 10,000 60,000

Less: Depreciation for 2020-21 @ 15% -3,750 3,750

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W.D.V. 46,250 10,000 56,250

Less: Depreciation for 2021-22 @ 15% -6,938 -500 7,438

W.D.V. 39,312 9,500 48,812

Less: Depreciation for 2022-23 @ 15% -5,897 -1,425 7,322

W.D.V. 33,415 8,075

Less: Loss on sale -5,000

Sale Value 28,415

Depreciation is calculated by Diminishing value method so it is calculated on balance value of asset or written down
value of asset not on the cost of the asset.
Part B
27. (d) Loss, if there is no drawing
Explanation: When closing capital is less than opening capital, it denotes loss if there is no drawing mention in the
question.

OR

(d) Opening Capital

Explanation: If opening or closing capitals are not given in the questions then opening or closing statement of affairs
needs to be prepared to calculate capitals of firm. A statement of affairs is a statement of all assets and liabilities. The
difference between the amount of the two sides is taken as capital. A statement of affairs is just like the balance sheet.
28. (d) All of these
Explanation: Cash, stock and debtors all are Current Assets.
29. (b) ₹ 36,000
Explanation: Gross Profit = Total Sales - (Cost of goods + Freight - Unsold goods)
Gross Profit = ₹ [1,20,000 - (90,000 + 6,000 - 12,000)]
= ₹ 36,000

OR

(a) Rs.50000
Explanation: the amount of advertisement will be distributed equally for four years = 50,000
30. The basic objectives of preparing financial statements are:
i. To present a true and fair view of the financial performance of the business.
ii. To present a true and fair view of the financial position of the business.
iii. To enable the stakeholders of the business to get a fair view of the business.
₹ 100
31. Case 1. Let Sales = ₹ 100, Gross Profit = 20% of Sales, i.e., ₹ 20, Cost = ₹ 100 - ₹ 20 = ₹ 80 Sales = ₹ 80
× ₹ 1,50,000
= ₹ 1,87,500.
₹ 20
Alternatively, Gross Profit on Cost = = ​
1

₹ 80 4

Gross Profit = ₹ 1,50,000 × 1

4
= ₹ 37,500
Sales = Cost of Goods Sold + Gross Profit
= ₹ 1,50,000 + ₹ 37,500 = ₹ 1,87,500.
Case 2. Let Cost = ₹ 100, Gross Profit = ₹ 25, Sales = ₹ 100 + ₹ 25 = ₹ 125
₹ 100
Cost of Goods Sold = ₹ 5,00,000 × = 4,00,000.
₹ 125

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Case 3. Gross Profit = 20% of Cost = 2,25,000 × 20

100
= ₹ 45,000
Sales = ₹ 2,25,000 + ₹ 45,000 = ₹ 2,70,000.
32. Accounting treatment of items are as follows:-
Treatment in Balance
Adjustment Entry Treatment in P &L A/c
Sheet

Added in Salaries on the Debit side of Profit & Loss Shown on the
Salary A/c Dr.
Outstanding A/c Liabilities side.
Salaries To Outstanding
Salary

Accrued Interest Added to Interest Received on the Credit side of Shown on the Assets
A/c Dr. Profit & Loss A/c side.
Accrued Interest
To Interest
Received A/c

33. STATEMENT OF AFFAIRS

as at 1st July, 2017 & 31st December, 2019

July, 2017 Dec., 2017

Liabilities Rs. Rs.

Creditors 9,000 10,000

O/s Wages 1000

Capital (Balancing Figure) 2,71,000 2,65,500

2,80,000 2,76,500

Assets

Plants & Machine 1,50,000 1,40,000

Debtors 65,000 60,000

Cash & Bank Balances 25,000 31,000

Stock 40,000 45,000

Prepaid Salaries - 500

2,80,000 2,76,500

STATEMENT OF PROFIT AND LOSS

For the year ended 31st December, 2017

Particulars Rs. Rs.

Closing Capital 2,65,500

Add: Drawings (200 × 06) 1,200

2,66,700

Less: Opening Capital (2,71,000)

Gross loss for the year (4,300)

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Add : Interest on Drawings [1,200 × 6% × 3.5/12] 21

(4,279)

Less : Depreciation On Plant [1,40,000 × 10%]

7,000
× 6/12

Further Bad debts 5,000

Provision for Bad Debts [(60,000 - 5,000) × 2%] 1,100 (13,100)

Net loss for the year (17,379)

REVISED STATEMENT OF AFFAIRS

as at 31st December, 2017

Liabilities Rs. Assets Rs.

Cash & Bank
Creditors 10,000 31,000
Balances

O/s Wages 1,000 Stock 45,000

Capital (Opening) 2,71,000 Plant & Machine 1,40,000

Less: Drawings 1,200 Less: Depreciation 7,000 1,33,000

Interest on Drawings 18,600 Debtors 60,000

Net Loss 17,379 2,52,400 Less: Bad Debts 5,000

55,000

Less: Provision for

1,100 53,900
Bad Debts

Prepaid Salaries 500

2,63,400 2,63,400

OR

Statement of Affairs
as on March 31, 2023

Dr. Cr.
Liabilities Amount (₹) Assets Amount (₹)

Bank Overdraft 6,500 Bills Receivable 18,600

Creditors 13,500 Cash in hand 4,000

Bills Payable 4,800 Stock 25,400

Ram's Loan 10,000 Debtors 24,000

Outstanding Expenses 700 Furniture 15,000

Capital (Balancing Figure) 52,500 Prepaid Expenses 1,000

88,000 88,000

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Statement of Profit or Loss

Particulars Amount (₹)

Capital at the end of the year 52,500

Add: Drawings made during the year 12,000

Less: Additional capital introduced during the year (25,000 - 10,000) (15,000)

Adjusted capital at the end of the year 49,500

Less: Capital at the beginning of the year 50,000

Loss Before Adjustment (500)

Less: Depreciation on Furniture (1,500)

Less: Outstanding interest on Loan (300)

Loss: for the year (2,300)

Final Statement of Affairs

as on March 31, 2023

Dr. Cr.

Liabilities Amount (₹) Assets Amount (₹)

Creditors 13,500 Cash in hand 4,000

Opening Capital 50,000 Debtors 24,000

Add: Additional Capital 15,000 Bills Receivable 18,600

Less: Net Loss 2,300 Stock 25,400

Less: Drawings 12,000 50,700 Furniture 15,000

Loan from Ram 10,000 Less: Depreciation (1,500) 13,500

Bank Overdraft 6,500 Prepaid Expenses 1,000

Outstanding Expenses 700

Outstanding Interest on Loan 300

Bills Payable 4,800

86,500 86,500
Closing capital = Opening capital + additional capital + profit (loss) - drawings

34. Trading and Profit & Loss Account for the year ended March 31, 2023

Dr. Cr.

Particulars Amount (₹) Particulars Amount (₹)

To Opening Stock 4,50,000 By Sales 43,50,000

To Purchases 29,50,000 Less: Sales Return (70,000) 42,80,000

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Less: Purchases Return (40,000) 29,10,000 By Closing Stock 7,50,000

To Wages 4,00,000

Add: Outstanding wages 50,000 4,50,000

To Gross Profit (B/F) 12,20,000

50,30,000 50,30,000

To Rent 50,000 By Gross Profit 12,20,000

By Interest Accrued on Investment

To Salaries 2,40,000 22,500
(5,00,000× 6%× ) 9

12

Add: Outstanding Salaries 20,000 2,60,000 By Miscellaneous Receipts 12,000

To Bad Debts 10,000

Add: Further Bad Debts 50,000

Add: Provision for Doubtful Debts 17,500 77,500

To Advertisement expenses 60,000

To Provision for discount on debtors 6,650

To Insurances 15,000

To Trade Expenses 20,000

To Depreciation on:

Machinery 24,000
Furniture 3,000 27,000

To Net Profit (B/F) 7,38,350

12,54,500 12,54,500

Balance Sheet as on March 31, 2023

Liabilities Amount (₹) Assets Amount (₹)

Capital 12,00,000 Fixed Assets

Less: Drawings (2,10,000) Patents 48,000

Add: Net Profit 7,38,350 17,28,350 Plant and Machinery 2,40,000

Current Liabilities Less: 10% Depreciation (24,000) 2,16,000

Sundry Creditors 1,90,000 Furniture 15,000

Wages Outstanding 50,000 Less: 20% Depreciation (3,000) 12,000

Salaries Outstanding 20,000 6% Investment 5,00,000

Bills Payable 8,000 Add: Accrued Interest 22,500 5,22,500

Current Assets

Closing Stock 7,50,000

Debtors 4,00,000

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Less: Further Bad Debts (50,000)

Less: Prov. for DD (17,500)

3,32,500

Less: Prov. for Discount (6,650) 3,25,850

Cash 1,22,000

19,96,350 19,96,350

OR

In the books of Anand General Stores

TRADING AND PROFIT & LOSS ACCOUNT

For the year ended 31st March 2013

Amount
Particulars Particulars Amount
(Rs)
(Rs)

To Opening Stock 1,20,000 By Sales 5,60,000

To Purchase 3,20,000 Less Sales Returns 30,000 5,30,000

Less Loss by Fire 20,000 By Closing Stock 1,10,000

Less Charity 2,400 2,97,600

To Wages 40,000

To Octroi 800

To Carriage Inward 20,400

To Fuel & Power 31,400

To Rent 16,000
To Gross Profit c/d 1,13,800

6,40,000 6,40,000
========= ========

To Insurance Premium 2,400 By Gross Profit b/d 1,13,800

Less Life 600 1,800 By Net Loss 44,300

To Salaries 72,000

To Motor Car Expenses 12,000

To Stationery 1,000

Less Drawings 300 700

To Rent 24,000

Less Factory Rent 16,000 8,000

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To Advertising 9,600

Less Sign Board 3,000 6,600

To Carriage Outward 4,000

To Brokerage 1,400

To Donation 10,200

To Loss by Fire 6,400

To Charity 2,400

To Depreciation:

Machine 4,600

Motor Car 28,000 32,600

1,58,100 1,58,100
======== =======

BALANCE SHEET

As on 31 March 2013

Liability Amount Asset Amount

(Rs) (Rs)
Creditors 64,000 Plant & Machinery 16,000

Capital 7,00,000 Add Addition 40,000

Less Drawings 24,000 Less Depreciation 4,600 51,400

Less Drawings 300 Sign Board 3,000

Less Net Loss 44,300 6,31,400 Debtors 2,40,000

Furniture 10,000
Motor Car 1,40,000

Less Depreciation 28,000 1,12,000

Bank 10,800

Insurance Company 13,600

Closing Stock 1,10,000

6,95,400 6,95,400
======== =======

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