Accounts answers

MCQ

1. trading account
2. Profit & Loss account
3. To identify causes of difference between cash book and bank statement
OR
dishonoured cheque.
4. Capital
OR
Journal book
5. None of these.
6. Suspense Account
OR
Final Accounts
7. book-keeping.
8. contra entry
OR
None of these
9. Continuing of business
10. Asset side
11. Wear and tear
OR
Decrease every year
12. Credit balance in the cash book
13. Capital
14. Personal account
15. Asset side
OR
Gross profit or Gross loss
16. Only cash transactions
17. 12 months
18. Error of commission
OR
Profit and Loss Account

19. Both of these

20. An art and science both
21. Solution
Trading Account
for the year ended March 31, 2017
Dr. Cr.
Particulars Amount (Rs) Particulars Amount (Rs)
21,40,00
Adjusted Purchases 15,00,000 Sales
0
Freight & Packing 15,000 Less: Return Inwards 40,000 21,00,000
Factory Expenses 60,000
Gross Profit (Balancing 5,25,000
Figure)
21,00,000 21,00,000

Note: Closing Stock will not be shown on the Credit side of Trading Account since it
has already been adjusted while calculating adjusted purchases.

Adjusted Purchases = Opening Stock + Net Purchases – Closing Stock

22.

OR
1. ORIdentifying and analyzing the business transactions.
2. Recording of the business transactions.
3. Classifying and summarising their effect and communicating the same to the
interested users of business information.
23.
DATE PARTICULAR LF DR CR
2019
May Purchase A/c Dr. 59,000
O2 To Rajesh A/c 59,000
(Being goods purchased from Rajesh)
May 06 Narmada A/c Dr. 24,000
To sales A/c 24,000
(Being goods sold to Narmada)
May 12 Insurance A/c Dr. 35000
To bank A/c 35000
(Goods insurance premium paid)
May 18 Bank A/c Dr. 16000
To Manu 16000
(Being cheque received from Manu)
May 24 Cash A/c Dr. 14000
To Sam A/c 14000
(Being Sam paid amount in cash)
May 25 Salary A/c Dr. 24000 2400
To Cash A/c
(Being Sam paid amount in cash)

24.

S.No
Amt.(+) Amt.(-)
Particulars

3,200
Balance as per Cash Book
1,800
Cheque issued but not presented for
2,000
payment
150
Cheque deposited but not cleared
2,850
Bank charges debited by bank
Balance as per Pass Book
5,000 5,000
OR
There are three types of errors that are classified based on the source they arise from; They are:

 Gross Errors
 Random Errors
 Systematic Errors
25.

Sales Return Book

Credit
Name of Customer Note Amount

Date (Account to be credited) No. L.F. (₹)

2017

Jul.04 M/s Gupta Traders 1,500

Jul.10 M/s Harish Traders 800

Jul.18 M/s Rahul Traders 1,200

Jul.28 Sushil Traders 1,000

Sales Return Account 4,500

Advantages of accounting:
(1) Provides Complete and Scientific Record: Accounting is meant to maintain the
Complete record of financial transactions during the accounting period of an entity. As
such the limitation of human memory is no handicap because of an accounting system.
(2) Information Regarding Performance and Position Accounting cycle after recording
moves on to prepare final accounts which reveal how much profit has been earned or loss
suffered during the period? Under this system balance sheet is also prepared which tells the
financial position of a business on that date.
(3) Enables Comparison of Costs: Expenses, sales, and profit etc., of the business related to
the current year, are compared with previous years and also with other units of the same
trade/industry.

27. a) ₹10,000 spent on constructing platform for a new machine – capital

b) GST paid on purchase of new machine – capital

 c) Repairs carried out on existing car – revenue
d) Insurance premium paid as a renewal premium – Revenue

28. (1) Identifying financial transactions and events

 Accounting records only those transactions and events which are of financial nature.
 So, first of all, such transactions and events are identified.
(2) Measuring the transactions

 Accounting measures the transactions and events in terms of money which are considered as a
common unit.
(3) Recording of transactions

 Accounting involves recording the financial transactions inappropriate book of accounts such as
Journal or Subsidiary Books.
(4) Classifying the transactions

 Transactions recorded in the books of original entry – Journal or Subsidiary books are classified and
grouped according to nature and posted in separate accounts known as ‘Ledger Accounts’.
OR
The main objectives of accounting are:
To maintain a systematic record of business transactions

 Accounting is used to maintain a systematic record of all the financial transactions in a book of
accounts.
 For this, all the transactions are recorded in chronological order in Journal and then posted to principle
book i.e. Ledger.
To ascertain profit and loss

 Every businessman is keen to know the net results of business operations periodically.
 To check whether the business has earned profits or incurred losses, we prepare a “Profit & Loss
Account”.
To determine the financial position

 Another important objective is to determine the financial position of the business to check the value of
assets and liabilities.
 For this purpose, we prepare a “Balance Sheet”.
To provide information to various users

 Providing information to the various interested parties or stakeholders is one of the most important
objectives of accounting.
 It helps them in making good financial decisions.

29.
 Books of M/s. Bansal Electronics
Sales Book
Name of the Customer Invoice Details Amount
Date L.F.
(Accounts to be debited) No. (₹) (₹)

Sept.01 Amit Traders 4321

20 Pocket Radio @ ₹70 Per Radio 1,400
2 T.V. Set, B&W (6") @ ₹800 per T.V. 1,600 3,000

Sept.10 Arun Electronics 4351

5 T.V. sets (20") B&W @ ₹3,000 per T.V. 15,000
2 T.V. sets (21") Colour @ ₹4,800 per
T.V. 9,600 24,600

Sept.22 Handa Electronics 4399

10 Tape Recorders @ ₹600 each 6,000
5 Walkman @ ₹300 each 1,500 7,500

Sept.28 Harish Traders 4430

10 Mixer Juicer Grinder @ ₹800 each 8,000 8,000

Sales Account 43,100

30. Bank Reconciliation Statement as on....

S.N Particulars Amt.(+)

Amt.(-)

7,800
Balance as per Cash Book
3,000
Cheque deposited in Bank but not credited
i 1,500
Cheque issued but not presented for
ii 2,000
payment
iii 400
Insurance premium paid by bank directly
iv 100
Bank interest credited by the bank
v 4,000
Bank charges
vi 8,600
Amount directly deposited by customer
Balance as per Pass Book
13,700 13,700

32.
 Particulars Amt. (Rs.) Particulars Amt. (Rs.)
Opening Stock 6000 Sales 73,500
Purchase 58000 Closing Stock 22,400
Wages 15000
Carriage Inward 450
Gross Profit c/d 15950

95900 95900
Sundry Expenses 600 Gross Profit b/d 15,950
Rent and Taxes 1350
Net Profit 14000
15950 15,950

Balance Sheet
as on 31st March, 2011
Liabilities Amt. (Rs.) Assets Amt. (Rs.)
Capital 60,000 Machinery 27,000
(+)Net Profit 14,000 Sundry Debtors 21,600
----------
74,000 Bank 4,500
(-)Drawings 2,700 71,300 Closing Stock 22,400
Bills Payable 2,800
----------------
Sundry Creditor 1,400

75,500 75,500

33.

Books of M/s. Lokesh Fabrics

Machinery Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2011 2012
Apr.01 Bank (i) 1,00,000 Mar.31 Depreciation 15,000
Mar.31 Balance c/d 85,000
 1,00,000 1,00,000

2012 2013
Apr.01 Balance b/d 85,000 Mar.31 Depreciation
July.01 Bank (ii) 2,50,000 (i) 15,000 + 28,125 43,125
Mar.31 Balance c/d
(i) 70,000, (ii)
2,21,875 2,91,875
3,35,000 3,35,000

2013 2014
Apr.01 Balance b/d Mar.31 Depreciation
(i) 70,000, (ii)
2,21,875 2,91,875 (i) 15,000, (ii) 37,500 52,500
Mar.31 Balance c/d
(i) 55,000, (ii)
1,84,375 2,39,375
2,91,875 2,91,875

2014 2015
Apr.01 Balance b/d Mar.31 Depreciation
(i) 5,500, (ii)
1,84,375 2,39,375 (i) 15,000, (ii) 37,500 52,500
Mar.31 Balance c/d
(i) 40,000, (ii)
1,46,875 1,86,875

2,39,375 2,39,375

2015 2015
Apr.01 Balance b/d Oct.01 Depreciation 7,500
(i) 40,000, (ii)
1,46,875 1,86,875 Oct.01 Machinery Disposal 32,500
2016
Mar.31 Depreciation (ii) 37,500
Mar.31 Balance c/d 1,09,375

1,86,875 1,86,875

Machinery Disposal Account

Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2015 2015
Oct.01 Machinery 32,500 Oct.01 Bank 25,000
Oct.01 Profit and Loss 7,500
32,500 32,500

34. Trading and Profit and Loss Account

as on 31st December,2010
Dr Cr
Amt. Amt.
Particulars Particular
(Rs.) (Rs.)
To Opening Stock 35,000 By Sales 2,50,000
25,000
To Purchase 1,25,000 (-) Sales Return
2,25,000
(-) Purchase By Closing Stock 10,000
6,000
Return
1,19,000
To Wages 3,000
1,000
(-) Prepaid Wages
2,000
79,000
To Gross Profit c/d 2,35,000
2,35,000
To Salary 12,300 By Gross Profit b/d 79,000
By Accrued Interest on
To Postage and Telegram 600 1,155
Investment
To Rent and Rates 1,000 By Discount 1,000
To Packing and Transport 500 By Interest Received 5,400
To General Expenses 400
To Insurance 4,000
 To Lighting and Heating 5,000
To Discount 3,500
To Bad Debts 3,500
(+) Further Bad
Debts 1,500
(+) New Provisions 2,910
(-) Old Provision 4,500
2,280
(+) Discount
5,690
To Depreciation on
1,000
Machinery
To Net Profit 52,565
86,555 86,555

Balance Sheet
Liabilities Amt. (Rs.) Assets Amt. (Rs.)
Capital 75,000 Investment 23,100
52,565 1,155
(+) Net Profit Accrued Interest
1,27,565 24,255
Creditors 10,000 Closing Stock 10,000
Bills Payable 20,000 Prepaid Wages 1,000
Machinery 20,000
1,000
(-) Depreciation @ 5%
19,000
Cash in Hand 20,000
Cash at Bank 40,000
Debtors 50,000
1,500
(-) Bad Debts
48,500
 2,910
(-) New Provision
45,590
2,280
(-) Discount
43,310
1,57,565 1,57,565
Working Note
Sundry Debtors 50,000
(-) Further Bad Debts 1,500
48,500
(-) Provision (6%) 2,910
45,590
(-) Discount (5%) 2,280
43,310.

OR

Trading Account contains the following details

 Opening stock details of raw material, semi-finished goods and

finished goods.
 Closing stock details of raw material, semi-finished goods, and
finished goods.
 Total purchases of goods fewer Purchase Returns.
 Total sales of goods fewer Sales Returns.
 All direct expenses related to purchases or sales or
manufacturing of goods.