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INSTRUCTIONS TO CANDIDATES

Read the following instructions carefully before starting the paper :

1. Read each question carefully.

2. Maximum Marks : 100
3. Total time allotted = 3 hours
4. NOTE : Extra
xtra time of 15 minutes is allotted for reading the question paper.

HOW TO WRITE THE ANSWERS :

STEP 1 : Take a plain paper , write down your FULL NAME and MAIL ID ,and write down Question number
and answer thereafter. Take care of neatness and presenta
presentation.

STEP 2 : Download CAMSCANNER App from Play Store .

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Scann app and
scan it and mail us at unicomtestseries@gmail.com

STEP 4 : You can send us your answer sheets within 6 days from the test date i.e. till 11:59 pm on 7 March,
2020 (Saturday).

STEP 5 : Your evaluated answer sheets will be mailed to you at mail address provided by you by 11th
March, 2020

STEP 6 : THESE TEST PAPERS ARE DESIGNED BY FIELD EXPERTS KEEPING IN MIND STUDENT'S INTEREST , Please
Be HONEST and SINCERE while attempting the paper.
paper Give your 100% now and enjoy the fruits of success later.
ALL THE BEST GUYS !!!

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Question 1 is compulsory.
Answer any four questions from remaining five questions.
Answers to questions are to be given in English only.

1. (a) State with reasons, whether the following statements are true or false. (6*2=12 marks marks)
(i) Depreciation is a non-cash
cash expense and does not result in any cash outflow.
(ii) There are two ways of preparing an account current.
(iii) Expenses in connection with obtaining a license for running the Cinema Hall are Revenue Expenditure.
(iv) The Sales book is kept to record both cash and credit sales.
(v) Discount at the time of retirement of a bill is a gain for the drawee
drawee.
(vi) “Salary paid in advance”
ance” is not an expense because it neither reduces assets nor increases liabilities.

1. (b) Change in accounting policy may have a material effect on the items of financial statements.” Explain the
statement with the help of an example. (4 Marks)

1(C) State the advantages of setting Accounting Standards

Standards. (4 Marks)

2. (a) On 31st March 2017, the Bank Pass Book of Namrata showed a balance of ` 1,50,000 to her credit while
balance as per cash book was ` 1,12,050. On scrutiny of the two books, she ascertained the following causes of
difference:
i) She has issued cheques amounting to ` 80,000 out of which only ` 32,000 were presented for payment.
ii) She received a cheque of ` 5,000 which she recorded in her cash book but forgot to deposit in the bank
bank.
iii) A cheque of ` 22,000 deposited by her has not been cleared yet.
iv) Mr. Gupta deposited an amount of ` 15,700 in her bank which has not been recorded by her in Cash Book yet.
v) Bank has credit an interest of ` 1,500 while charging ` 250 as bank cha
charges.
Prepare a bank reconciliation statement. (10 Marks)

2.(b) The following mistakes were located in the books of a concern after its books were closed and a Suspense
Account was opened in order to get the Trial Balance agreed : (10 Marks)

(i) Sales Day Book was overcast by Rs. 1,000.

(ii) A sale of Rs. 5,000 to X was wrongly debited to the Account of Y.
(iii) General expenses Rs. 180 was posted in the General Ledger aas Rs. 810.
(iv) A Bill Receivable for Rs. 1,550 was passed through Bills Payable Book. The Bill was given by P.
(v) Legal Expenses Rs. 1,190 paid to Mrs. Neetu was debited to her personal account.
(vi) Cash received from Ram was debited to Shyam Rs. 1,500.
(vii) While carrying forward the total of one page of the Purchases Book to the next, the amount of Rs. 1,235 was
written as Rs. 1,325.
Find out the nature and amount of the Suspense Account and pass entries ((including
including narration)
narration for the rectification
of the above errors in the subsequent year's books.
books

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3. (a) Shri Ganpath of Nagpur consigns 500 cas

cases
es of goods costing Rs. 1,500 each to Rawat of Jaipur. (10 Marks)
Shri Ganpath pays the following expenses in connection with the consignment:
Particulars Rs.
Carriage 15,000
Freight 45,000
Loading Charges 15,000

Shri Rawat sells 350 cases at Rs. 2,100 per case and incurs the following expenses:
Clearing charges 18,000
Warehousing and Storage charges 25,000
Packing and selling expenses 7,000
It is found that 50 cases were lost in trans
transit
it and another 50 cases were in transit. Shri Rawat is entitled to a
commission of 10% on gross sales. Draw up the Consignment Account and Rawat’s Account in the books of
shri Ganpath.

3(b) Which subsidiary books are normally used in a business? (5 Marks)

3. (c) Answer any one of the two questions: (5 Marks)

(i) Mr. Alok owes Mr. Chirag Rs. 650

0 on 1st January 2018. From Jan
January
uary to March, the following further transactions
took place between Alok and Chirag :

January 15 Alok buys goods Rs. 1,200

February 10 Alok buys goods Rs. 850
March 7 Alok receives Cash loan Rs. 1,500
Alok pays the whole amount on 31st March, 2018 together with interest @ 6% per annum. Calculate the interest by
average due date method.

OR

(ii) From the following prepare an account current, as sent by Avinash to Bhuvanesh on 31st March, 2018 by means
of products method charging interest @ 5% per annum :

Date Particulars Amount

2018 January 1 Balance due from Bhuvanesh 1,800
January 10 Sold goods to Bhuvanesh 1,500
January 15 Bhuvanesh returned goods 650
February 12 Bhuvanesh paid by cheque 1,000
February 20 Bhuvanesh accepted a bill drawn 1,500
by Avinash for one month
March 11 Sold goods to Bhuvanesh 7720
March 14 Received cash from Bhuvanesh 800

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4. (a) Prepare a bank reconciliation statement from the following particular as on 31st March, 2018. (10 Marks)

Particulars (Rs.)
Debit balance as per bank column of the cash book 18,60,000
Cheque issued to creditors but not yet presented to the
Bank for payment 3,60,000
Dividend received by the bank but not entered in the
Cash book 2,50,000
Interest allowed by the Bank 6,250
Cheques deposited into bank for collection but not
collected by bank up to this date 7,70,000
Bank
ank charges not entered in Cash Book 1,000
A cheque deposited into bank was dishonored, but no
intimation received 1,60,000
Bank paid house tax on our behalf, but no intimation
received from bank in this connection
ction 1,75,000

4.(b) A merchant’s trial balance as on June 30, 2017 did not agree. The difference was put to a Suspense Account.
During the next trading period, the following errors were discovered:
discovered (10 marks)

(i) The total of the Purchases Book of one page, `4,539 was carried forward to the next page as `4,593.
(ii) A sale of `573 was entered in the Sales Book as `753 and posted to the credit of the customer.
(iii) A return to a creditor, `510 was entered in the Returns Inward Book; however, the creditor’s account was
correctly posted.
(iv) Cash received from C. Dass, `620 was posted to the debit of G. Dass.
(v) Goods worth `840 were despatched to a customer before the close of the year but no invoice was made out.
(vi) Goods worth `1,000 were sent on sale or return basis to a customer and entered in the Sales Book.
At the close of the year, the customer still had the option to return the goods. The sale price was 25% above cost.
You are required to give journal entries to rectify the errors in a way so as to show the current year’s profit or loss
correctly.

5. (a) Prepare Journal entries for the following transactions in K. Katrak’s bookbooks. (5 Marks)
(i) Katrak’s acceptance to Basu for Rs. 2,500 discharged by a cash payment of Rs. 1,000 and a new bill for the balance
plus Rs. 50 for interest.
(ii) G. Gupta’s acceptance for Rs. 4,000 which was endorsed by Katrak to M. Mehta was dishonoured. Mehta paid Rs.
20 noting charges. Bill withdrawn against cheque.
(iii) D. Dalal retires a bill for Rs. 2,000 drawn on him by Katrak for Rs. 10 discount.
(iv) Katrak’s acceptance to Patel for Rs. 5,000 discharged by Mody’s acceptance to him (Katrak) for a similar amount.

5. (b) Classify the following expenditures as capital or revenue expenditure: (5 Marks)

(i) Amount spent on making a few more exists in a Cinema Hall to comply with Government orders.
(ii) Travelling expenses of the directors for trips abroad for purchase of capital assets.
(iii) Amount spent to reduce working expenses.
(iv) Amount paid for removal of stock to a new site.
(v) Cost of repairs on second-hand
hand car purchased to bring it into working condition.

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5. (c) Miss Rakhi consigned

igned 1,000 radio sets costing `900 each to Miss Geeta, her agent on 1st July,2016. Miss
Rakhi incurred the following expenditure on sending the consignment. (10 marks)

Freight Rs. 7,650

Insurance Rs. 3,250

Miss Geeta received the delivery of 950 radio sets. An account sale dated 30th November,2016 showed that 750
sets were sold for `9,00,000
000 and Miss Geeta incurred `10,500 for carriage.
Miss Geeta was entitled to commission 6% on the sales effected by her. She incurred expenses amounting to `2,500
for repairing the damaged radio sets remaining in the inventories.
Miss Rakhi lodged a claim with the insurance company which was admitted at `35,000. Show the Consignment
Account and Miss Geeta’s Account in the books of Miss Rakhi
Rakhi.

6. (a) The following errors were committed by the Accountant of Geete Dye-Chem.
Dye (5 Marks)
(i) Credit sale of ` 400 to Trivedi & Co. was posted to the credit of their account.
(ii) Purchase of ` 420 from Mantri & Co. passed through Sales Day Book as ` 240
How would you rectify the errors assumingg that :
(a) they were detected before preparation of Trial Balance.
(b) they were detected after preparation of Trial Balance but before preparing Final Accounts, the
difference was taken to Suspense A/c.
(c) they were detected after preparing Final Accounts.

6.(b) Stock taking of XYZ Stores for the year ended 31st March,
March,2019 was completed by 10th April, (5 marks)
2019, the valuation of which showed a stock figure of ` 1,67,500 at cost as on the completion date. After the
end of the accounting year and till the date of completion of stock taking, sales for the next year were made
for ` 6,875, profit margin being 33.33 percent on cost. Purchases for the next year included in the stock
amounted to ` 9,000 at cost less trade discount 10 percent. During this period, goods were added to stock of
the mark-upup price of ` 300 in respect of sales returns. After stock taking it was found that there were certain
very old slow moving items costing ` 1,125 which should be taken at ` 525 to ensure disposal to an int interested
customer. Due to heavy floods, certain goods costing ` 1,550 were received from the supplier beyond the
delivery date of customer. As a result, the customer refused to take delivery and net realizable value of the
goods was estimated to be ` 1,250 on 31st March, 2019.
You are required to calculate the value of stock for inclusion in the final accounts for the year ended 31st March,
2019. Closing stock is valued by XYZ Stores on generally accepted accounting principles.

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6. (c) Sales of goods on approval or return basis (5 marks)

X supplied goods on sale or return basis to customers, the particulars of which are as under:
Date of dispatch Party's name Amount Rs. Remarks
10.12.2019 M/s ABC Co. 10,000 No information till 31.12.2019
12.12.2019 M/s DEF Co 15,000 Returned on 16.12.2019
15.12.2019 M/s GHI Co 12,000 Goods worth Rs. 2,000 returned on
20.12.2019
20.12.2019 M/s DEF Co 116,000
6,000 Goods Retained on 24.12.2019
25.12.2019 M/s ABC Co 11,000 Good Retained on 28.12.2019
30.12.2019 M/s GHI Co 13,000 No information till 31.12.2019
Goods are to be returned within 15 days from the dispatch, failing which it will be treated as sales. The books of X
are closed on the 31st December, 2019. Prepare the follow
following account in the books of 'X':
 Goods on ''sales
ales or return, sold and returned day books".
 Goods on sales or return total account.

6. (d) M/s. Green Channel purchased a second-hand

second hand machine on 1st January, 2015 for ` 1,60,000.
1,60,000 (5 marks)
Overhauling and erection charges amounted to ` 40,000. Another machine was purchased for ` 80,000 on 1st July,
2015.
On 1st July, 2017, the machine installed on 1st January, 2015 was sold for ` 1,00,000. Another machine amounted to
` 30,000 was purchased and was installed on 30th September, 2017.
Under the existing practice the company provides depreciation @ 10% p.a. on original cost. However, from the year
2018 it decided to adopt WDV method and to charge depreciation @ 15% p.a.
You are required
quired to prepare Machinery account for the years 2015 to 2018.

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