Accounts Test - 1

CA FOUNDATION ACCOUNTS TEST 1
(Bank Reconciliation Statement & Bills of Exchange)
Max. Marks: 50
Time Allowed: 1.5 hours
Question 1
State with reasons, whether the following statements are true or false:
(i) In case of bill of exchange, the drawer and the payee may not be the same person but in case
of a promissory note, the maker and the payee may be the same person.
(ii) Discount at the time of retirement of a bill is a gain for the drawee
(iii) Bank reconciliation statement is prepared to arrive at the bank balance.
(iv) The specific due date excludes the addition of grace days to arrive at the due date.
(v) Cheques issued, but not presented for payment will have to be deducted from balance as per the
Pass book while arriving at the balance as per the Cash book.
(5 Statements X 2 Marks = 10 Marks)
Question 2
On 30th September, 2022, the bank account of XYZ, according to the bank column of the cash book, was
overdrawn to the extent of ₹ 8,062. An examination of the Cash book and Bank Statement reveals the
following:
(i) A cheque for ₹ 11,14,000 deposited on 29th September, 2022 was credited by the bank only on
3rd October, 2022.
(ii) A payment by cheque for ₹ 18,000 has been entered twice in the Cash book.
(iii) On 29th September, 2022, the bank credited an amount of ₹ 1,15,400 received from a customer
of XYZ, but the advice was not received by XYZ until 1st October, 2022.
(iv) Bank charges amounting to ₹ 280 had not been entered in the cash book.
(v) On 6th September 2022, the bank credited ₹ 30,000 to XYZ in error.
(vi) A bill of exchange for ₹ 1,60,000 was discounted by XYZ with his bank. The bill was dishonoured
on 28th September, 2022 but no entry had been made in the books of XYZ.
(vii) Cheques issued upto 30th September,2022 but not presented for payment upto that date totalled
₹ 13,46,000.
(viii) A bill payable of ₹ 2, 00,000 had been paid by the bank but was not entered in the cash book and
bill receivable for ₹ 60,000 had been discounted with the bank at a cost of ₹ 1,000 which had also
not been recorded in cash book.
You are required:

To show the appropriate rectifications required in the cash book of XYZ, to arrive at the correct balance
on 30th September, 2022 and to prepare a Bank Reconciliation Statement as on that date.
(10 Marks)
Question 3
Rita owed ₹1,00,000 to Siriman. On 1st October, 2018, Rita accepted a bill drawn by Siriman for the
amount at 3 months. Siriman got the bill discounted with his bank for ₹99,000 on 3rd October, 2018.
Before the due date, Rita approached Siriman for renewal of the bill. Siriman agreed on the conditions
that ₹50,000 be paid immediately together with interest on the remaining amount at 12% per annum
for 3 months and for the balance, Rita should accept a new bill at three months. These arrangements
were carried out. But afterwards, Rita became insolvent and 40% of the amount could be recovered
from his estate. Pass journal entries (with narration) in the books of Siriman.
(5 Marks)
Question 4
From the following information, ascertain the Cash Book balance of Mr. Bajaj as on 31st March, 2023:
(i) Debit balance as per Bank Pass Book ₹ 3,500.

(ii) A cheque amounting to ₹ 2,500 deposited on 15th March, but the same was returned by the
Bank on 24th March for which no entry was passed in the Cash Book.
(iii) During March, two bills amounting to ₹ 2,500 and ₹ 500 were collected by the Bank but no
entry was made in the Cash Book.
(iv) A bill for ₹ 5,000 due from Mr. Balaji previously discounted for ₹ 4,800 was dishonored. The
Bank debited the account, but no entry was passed in the Cash Book.
(v) A Cheque for ₹ 1,500 was debited twice in the cash book.
(5 Marks)
Question 5
Journalise the following transactions in the books of J. Jaggi:
(a) Our acceptance to M. Madan for ₹ 5,000 retired before the due date, rebate allowed ₹ 10.
(b) K. Kaku’s acceptance for ₹ 400 renewed for a further period of 3 months, interest charged at 15%
p.a.
(c) Our acceptance to P. Swamy for ₹ 800 renewed for 3 months on the condition that ₹ 200 is paid
immediately and the remaining balance to carry interest @ 12% p.a.
(d) D. Dutt’s promissory note for ₹ 700 which we had endorsed in favour of P. Mukherjee dishonoured.
P. Mukherjee paid ₹ 10 as noting charges. We pay P. Mukherjee by cheque and accept from D. Dutt
another bill for the amount due plus interest ₹ 15.
(e) Our promissory note for ₹ 500 in favour of A. Alam returned unpaid due to lack of instructions to
the bank. A. Alam claim ₹ 510 which we pay by cheque.
(f) Our promissory note for ₹ 500 in favour of Patel settled by sending him Tanna’s acceptance of ₹
500.
(10 Marks)
Question 6
Shubham draws on Rajendra a bill for ₹45,000 on 1st June, 1998 for 3 months. Rajendra accepts the bill
and sends it to Shubham who gets it discounted for ₹44,100. Shubham immediately remits ₹14,700 to
Rajendra. On the due date, Shubham, being unable to remit the amount due, accepts a bill for ₹63,000
for three months which is discounted by Rajendra for ₹61,650. Rajendra sends ₹11,100 to Shubham. On
the due date, Shubham becomes insolvent, his estate paying forty paise in the rupee. Give Journal Entries
in the books of Shubham and Rajendra. (10 Marks)

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CA FOUNDATION ACCOUNTS TEST 1

(Bank Reconciliation Statement & Bills of Exchange)

Time Allowed: 1.5 hours

You are required:

(i) Debit balance as per Bank Pass Book ₹ 3,500.

Journalise the following transactions in the books of J. Jaggi:

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