CBSE Sample Papers For Class 11 Accountancy Mock Paper 1

Q1. Which of the following is an example of contra entry?
a) Cash withdrawn from bank for office use Rs. 15,000
b) Purchased goods for cash Rs. 10,000
c) Sold goods on credit to Manisha Rs.15,000
d) Received cash from Samir Rs. 2,500, allowed him discount of Rs.70

Ans:

a) Cash withdrawn from bank for office use Rs. 15,000
Explanation:
Cash withdrawn from bank for office use Rs. 15,000 In this transaction, cash account is to be debited and bank account is credited. This transaction is entered on both sides of the cash book and the entry is known as contra entry

Q2. Assertion (A)- A journal presents chronological record of transactions.

Reasons (R) – Journal is primary book of account in which transactions are first recorded in chronological order.

a.
(A) is correct but (R) is wrong

b.
 Both (A) and (R) are correct, but (R) is not the correct explanation of (A)

c.
 Both (A) and (R) are incorrect.

d.
Both (A) and (R) are correct, and (R) is the correct explanation of (A)

Ans:

The correct option is (d).

explanation:

Journal is called a book of original entry because all business transactions are recorded first in this book.

Q3. A firm bought furniture for ₹ 1, 20,000 on 1st April 2020. The firm charges Depreciation at 10% p.a. of the cost every year. The books are closed on 31st March every year. The Depreciation for 31st March 2021 as per the Straight Line Method will be

a) ₹ 12,000

b) ₹ 12,400

c) ₹ 16,000

d) ₹ 20,000

OR

A machine of ₹ 6,000 was sold for ₹ 8,400. Depreciation provision to date was ₹ 800 and the commission paid to the selling agent was ₹ 840 and the wages paid to workers for removing the machine was ₹ 60. Profit from the sale of the machine will be:

a) ₹ 2,400

b) ₹ 2,000

c) ₹ 2,300

d) ₹ 2,500

Ans: a) ₹ 12,000

Explanation: Under SLM (straight line method), the same depreciation is charged from one year to another. Hence, depreciation for the first and consecutive years will be= ₹ 1,20,000 x 10/100 = ₹ 12,000

OR

c) ₹ 2,300

Explanation: Profit on sale of Machinery = Actual amount earned – Value of machinery= (₹8,400 – ₹ 840 – ₹ 60) – (₹ 6,000 – ₹ 800)= ₹ 7,500 – ₹ 5,200= ₹ 2,300

Q4. A product is manufactured in Tamil Nadu and travels through the country before it reaches Delhi, where the buyer or consumer pays tax for it. Which type of GST is discussed here?

(a) CGST

(b) SGST

(c) IGST

(d) a and b both

OR

The goods and services tax is a value-added tax levied on most goods and services sold for domestic consumption. Which of the following statement is NOT correct about GST?

(a)  GST will abolish all the direct tax levied in India.

(b) It will unify the tax structure in India.

(c) It is 0% on essential items including food.

(d) GST is like a last-point retail tax. GST is going to be collected at point of sale.

Ans:

CGST (Central Goods and Service Tax) + SGST (State Goods and Service Tax) are levied on local or intra-state sales.

OR

GST is an indirect tax. It will abolish all the Indirect Tax levied in India. The various taxes that were mandatory earlier are now obsolete. GST is based on the principle of “One Nation, One Tax, and One Market”.

Q5. The petty cash is kept on the Imprest system and the balance at the start of the month is Rs. 2,000. If petty cash expenses during the month were Rs. 1,440, the amount received from the cashier at the start of the next month should be

(a) 560

(b) 1,440

(c) 2,000

(d) 3,440

Ans:

Imprest amount is the amount of money given by the main cashier to the petty cashier in the beginning of a period. At the end of the period, the amount spent by the petty cashier gets reimbursed in such a manner, that he has the same amount of cash in hand in the beginning of the next period.

Q6. Tripathi’s trial balance was showing difference of  ₹ 10,000 (debit side exceeds). While checking the total sales register, he found that the total is overcast by ₹ 4,000. After correction in the sales register what would be the difference in his trial balance.

(a) Debit side exceeds by ₹ 14,000

(b) Debit side exceeds by ₹ 10,000

(c) Debit side exceeds by ₹ 6,000

(d) Credit side exceeds by ₹ 4,000

OR
An amount of  ₹ 10,000 due from Smith, which had been written off as a bad debt in a previous year, was unexpectedly recovered and had been posted to his personal account. The rectification entry will be-

(a)

Smith	Dr.	10,000
To suspense a/c			10,000

 (b)

Smith	Dr.	10,000
To Bad debts recovered a/c			10,000

 (c)

Suspense a/c	Dr.	10,000
To Bad debts recovered a/c			10,000

 (d)

Bad debts recovered a/c	Dr.	10,000
To Smith			10,000

Ans: To rectify the error sales account will be debited, while suspense account will be credited.

OR

In this case, bad debts recovered account should have been credited, instead, the personal account of Smith was wrongly credited.

Q7. Pankhi Ltd. purchased a machine on 01.01.2019 costing ₹12,00,000, installation expenses incurred were ₹1,00,000. Salvage value after 5 years ₹ 50,000. On 01.07.2021, expenses incurred for repairs on machinery were incurred to the extent of ₹ 20,000. Depreciation is provided under the straight-line method. The rate of depreciation charged is 10%. What will be the annual depreciation?

(a) ₹ 1,70,000

(b) ₹ 1,30,000

(c) ₹ 2,50,000

(d) ₹2,10,000​

Ans:

Cost of machinery            = ₹12,00,000

(+) Installation expenses =₹ 1,00,000

Total cost of machinery= ₹ 13,00,000

Rate of depreciation = 10%

Therefore, annual depreciation = ₹ 13,00,000 X 10%    = ₹ 1,30,000

Note:

1. Since the rate of depreciation is given, hence residual value will not be considered.
2. Repairs on machinery is a revenue expenditure, hence it will not be included in the cost of the asset.

Q8. From the following detail, state the effect of the transaction when balance as per passbook is given.

A cheque of ₹ 2,000 was received from Bhaskaran in March 2021, was recorded in the discount column of the cash book and was not banked.

(a) ₹ 2,000 will be added to overdraft balance as per the passbook

(b) ₹ 2,000 will be deducted from overdraft balance as per the passbook

(c) ₹ 2,000 will be added to overdraft balance as per the cashbook

(d) No change in the overdraft balance as per the passbook

OR

Mukbin Ltd. receives a cheque for ₹ 100 and records it in the cash book, and deposits it on the same day. A statement sent by the bank that day does not show ₹ 100. How is this shown on the bank reconciliation statement?

(a) Uncredited deposit added to the bank statement balance

(b) Uncredited deposit deducted from the bank statement balance

(c) Non-presented cheque added to the bank statement balance

(d) Non-presented check deducted from the bank statement balance

Ans:

​This transaction will not affect the bank reconciliation statement since it has not been recorded in the bank column of the cashbook and also has not been banked.

OR

​It will be added to the bank balance as it has already been added to the cash book.​

Q9. ABC Ltd. has a manufacturing plant in Noida. On 1^st July 2021, ABC Ltd. purchased a machine for Rs. 2,00,000 and spent Rs. 10,000 on its installation. At the time of purchase, it was estimated that the effective commercial life of the machine will be 10 years after which its salvage value will be Rs. 10,000. The machinery is such that the possibility of obsolence is low and do not require much repair expenses with passage of time. The accounts are closed on 31^st March every year.

Which of the following method should be used by ABC Ltd. to charge depreciation?

(a)
Written down value method

(b)
Straight line method

(c)
Reducing balance method

(d)
None of the above

Ans:

The correct option is (b).

explanation:

Under Straight line method, the amount of the depreciation each year remains same unless there is addition to or deletion from the assets.

Q10. ABC Ltd. has a manufacturing plant in Noida. On 1^st July 2021, ABC Ltd. purchased a machine for Rs. 2,00,000 and spent Rs. 10,000 on its installation. At the time of purchase, it was estimated that the effective commercial life of the machine will be 10 years after which its salvage value will be Rs. 10,000. The machinery is such that the possibility of obsolence is low and do not require much repair expenses with passage of time. The accounts are closed on 31^st March every year.

What is the original cost of the asset on which depreciation is to be charged?

(a)
Rs. 2,00,000

(b)
Rs. 10,000

(c)
Rs. 2,10,000

(d)
None of these

Ans:

The correct option is (c).

explanation:

Cost includes all expenses incurred for making the asset ready for use such as freight and installation charges.

Cost = Purchase price + freight and other costs + installation charges

therefore, purchase price  = Rs. 2,00,000

add- installation charges i.e. Rs. 10,000 = Rs. 2,00,000 + Rs. 10,000 = Rs. 2,10,000

hence, Rs. 2,10,000 the original cost of the asset on which depreciation is to be charged.

Q11. Match the following-

Column A	Column B
i. Balance as Cash book	a. credit balance as per Pass book
ii. Balance as per Pass book	b. debit balance of Cash book
iii. Overdraft as per Pass book	c. credit balance of Cash book
iv. Overdraft as per Cash book	d. debit balance as per Pass book

The given columns can be correctly matched as-
a) i-a, ii-b, iii-c, iv-d
b) i-b, ii-a, iii-c, iv-d
c) i-b, ii-a, iii-d, iv-c
d) i-d, ii-b, iii-a, iv- c

Ans:

c) i-b, ii-a, iii-d, iv-c Explanation:

Column A	Column B
i. Balance as Cash book	b. debit balance of Cash book
ii. Balance as per Pass book	a. credit balance as per Pass book
iii. Overdraft as per Pass book	d. debit balance as per Pass book
iv. Overdraft as per Cash book	c. credit balance of Cash book

Q12. Original cost = Rs. 2,00,000, Life = 5 years, Expected salvage value = Rs. 4,000. Rate of depreciation p.a. =?
a) 19.6%
b) 20%
c) 19.8%
d) 20.8%

Ans:

a) 19.6%
Explanation:
Depreciation in SLM = cost of assets + installation charges – scrap value/ estimated useful life = 2,00,000 – 4,000 / 5 = Rs. 1,96,000/5
= Annual depreciation = 39,200
Rate of depreciation = Annual depreciation × 100 / cost of assets = 39,200 × 100 / 2,00,000 = 19.6%

Q13. The credit balance as per the pass book of Mr Ram was Rs. 65,600. Cheques were issued but were not presented for payment: Rs. 75,800. Cheques deposited by one of the customers of the bank, but wrongly credited in Mr Ram account Rs. 20,600. The balance as per cash book will be:-
a) Rs.30,800 debit
b) Rs.30,800 overdraft
c) Rs.1,20,800 debit
d) Rs.10,400 overdraft

Ans:

b) Rs.30,800 overdraft
Explanation:
Balance as per cash book will be = Rs.65,600 – Rs.75,800 – 20,600 = Rs.30,800 (Overdraft)

Q14. An asset is purchased for ₹ 6,00,000, and if at the time of preparing the final accounts, even its market value is ₹ 4,00,000 or ₹ 10,00,000, yet the asset shall be recorded at ₹ 6,00,000, according to the
a) Accrual convention
b) Business entity concept
c) Historical cost concept
d) Duality concept

Ans: 

c) Historical cost concept
Explanation: According to the Historical cost concept, assets are recorded in the books of account at the prices paid to acquire them, and it is the basis for all subsequent accounting of the assets. The asset is recorded at cost at the time of its purchase but is systematically reduced in value by charging depreciation.

Q15. During the financial year 2020-21, Mihika had cash sales of ₹ 5,85,000 and credit sales of ₹ 2,40,000. Her expenses for the year were ₹ 4,05,000, out of which ₹ 1,20,000 is still to be paid. Find out Mihika’s income for the year 2020-21 following the cash basis of accounting.

a) ₹ 5,40,000

b) ₹ 3,00,000

c) ₹ 2,85,000

d) ₹1,80,000

OR
Which basis of accounting is recognized under the Companies Act, 2013?

a) Cash basis of accounting

b) Accrual basis of accounting

c) Both cash and accrual basis of accounting

d) Hybrid basis of accounting

Ans:

b) ₹ 3,00,000Explanation:

Particular	(₹)
Revenue (inflow of cash, i.e., Cash sales	5,85,000
Less: Expenses (outflow of cash) ( ₹ 4,05,000 – ₹ 1,20,000)	2,85,000
Net income	3,00,000

Credit sales ₹ 2,40,000 and outstanding expenses ₹ 1,20,000 will not be considered under cash basis of accounting.

OR

b) Accrual basis of accountingExplanation: The Accrual basis of accounting is recognised by the Companies Act, 2013, while the Cash basis of accounting is not recognised by the Companies Act, 2013.

Q16. Which of the following transactions has the correct effect?

a. Purchase of machinery for cash

Increase in cash decrease in machinery

b.Capital introduced by proprietor

Increase in cash increase in capital

c. Payment to creditors

Increase in cash decrease in creditors

d. Purchase of machinery on credit

Decrease in machinery increase in liability

Ans:

b) Increase in cash}
increase in capital
Explanation:

a)

Purchase of machinery for cash

Increase in machinery and decrease in cash

b)

Capital introduced by proprietor

Increase in cash and increase in capital

c)

Payment to creditors

Decrease in cash and decrease in creditors

d)

Purchase of machinery on credit

Increase in machinery and increase in liability

Q17. Journalise the following:

(1) ₹1,200 paid for income tax of proprietor.

(2) Purchased goods from Samir of ₹80,000 plus IGST @ 12% at 10% Trade Discount and 2% Cash Discount. Paid amount at the time of purchase itself.

(3) Goods worth ₹4,000 were destroyed by fire (Assume No GST)

Ans:

In the Books of…… Journal Entries
S. No.	Particulars	Dr. ₹	Cr. ₹
(1)	Drawings A/c	Dr.	1,200
	To Cash A/c		1,200
	(Being income tax of owner paid by business)
(2)	Purchase A/c	Dr.	72,000
	Input IGST A/c	Dr.	8,640
	To Cash/Bank A/c		79,028
	To Discount Received A/c [2% (₹72,000+₹8,640)]		1,612
	(Being the goods purchased, paid IGST @ 12% at 10% Trade Discount and 2% Cash Discount)
(3)	Loss by Fire A/c	Dr.	4,000
	To Purchases A/c		4,000
	(Being goods destroyed by fire)

Q18. What are the reasons for differences in the balance of cash book and pass book?

OR

Prepare bank reconciliation statement as on December 31, 2021. On this day the passbook of Mr. Myke showed a balance of ₹20,000.

1. Cheques of ₹4,000 directly deposited by a customer.
2. The bank has credited Mr. Myke for ₹1,100 as interest.
3. Cheques for ₹3,000 were issued during the month of December but of these cheques for ₹1,500 were not presented during the month of December.

Ans:

Balances as per cash book and pass book may differ due to various reasons:

1.The difference in the time of occurrence of the transaction and its recording in the cash book.

2. Transactions recorded by the bank but are not in the knowledge of the customer.

3.Errors and omissions in any of the books.

OR

Bank Reconciliation Statement
As on 31st December 2021
S.N.	Particulars	₹ (+)	₹ (-)
	Balance as per Pass Book	20,000
(a)	Cheque directly deposit by a customer		4,000
(b)	Bank interest credited by bank		1,100
(c)	Cheque issued but not presented for payment		1,500
	Balance as per Cash Book		13,400
		20,000	20,000

Q19. How do we rectify the errors which do not affect the Trial Balance?

OR

Rectify the following errors:

i. A return of goods worth ₹5,000 by a customer was taken into stock but no entry was passed in the books.

ii. Outstanding telephone charges of ₹100 omitted to be recorded.

iii. The total of the debit side of expenses account has been cast in excess of ₹150.

Ans: These errors are committed in two or more accounts. Such errors are also known as two-sided errors. They can be rectified by recording a journal entry giving the correct debit and credit to the concerned account. In such cases the entry made previously wrong is to be reversed to nullify the effect and then a new correct entry is made with correct amount. For example Machinery purchased debited to Purchases account. To rectify Machinery account is to be debited now and Purchases account is to be credited.

OR
Journal

S.N.	Particulars	L.F.	Dr. ₹	Cr. ₹
i.	Returns Inward A/c Dr.		5,000
	To Customer			5,000
	(Goods returned by customer not recorded, now rectified)
ii.	Telephone Charges A/c Dr.		100
	To Outstanding Telephone Charges			100
	(Outstanding telephone charges not recorded now recorded)
iii.	Suspense A/c Dr.		150
	To Expenses A/c			150
	(Total of debit side of expenses account has been cast in excess, now corrected)

Q20. From the following particulars, Prepare a bank reconciliation statement as on September 30, 2021.
(1) Balance as per cash book is ₹35,000.
(2) The cheques from Rajiv ₹18,000 and Rohit ₹9,000 deposited in September but cleared in October.
(3) Bank charged ₹2,000.
(4) A payment of ₹3,500 was made directly by the bank.
(5) A cheque worth ₹12,000 was issued to Raman Lal but not presented for the payment.

Ans:

Bank Reconciliation Statement
As on 30 September, 2021
	Particulars	Amount (+) ₹	Amount (-) ₹
1.	Balance as per Cash Book	35,000
2.	Cheque deposited but not cleared: Rajiv: ₹18,000Rohit: ₹9,000		27,000
3.	Bank charges		2,000
4.	Payment made directly by the bank		3,500
5.	Cheque issued but not presented for the payment	12,000
6.	Balance as per passbook (favourable balance)		14,500
		47,000	47,000

Q21. Following balances appear in the books of Singh Ltd. as on 1^st April, 2017.
Machinery Account = ₹16, 00,000;
Provision for Depreciation Account = ₹6 20,000.
On 1^st July, 2017, a machinery which was purchased on 1^st April, 2014 for ₹2,40,000 was sold for ₹1,00,000 plus CGST and SGST @ 6% each and on the same date another machinery was purchased for ₹64,000 plus CGST and SGST @ 6% each. The firm charges depreciation @ 15% p.a. on Original Cost Method and closes its books its books on 31^st March every year.
Pass Journal entry for the sale of machinery.

Ans:

	Journal Entry for Sale of Machinery
Date	Particulars		L.F.	Dr.(₹ )	Cr.(₹ )
	Bank A/c	Dr.		1,12.000
	Provision for Depreciation A/c	Dr.		1,17,000
	Loss on Sale of Machinery A/c (Profit and loss A/c)	Dr.		23,000
	To Machinery A/c				2,40,000
	To Output CGST A/c				6,000
	To Output SGST A/c				6,000
	(Being the machinery sold and loss on sale of machinery is transferred to Profit and Loss Account)

Working Notes:

1. Calculation of Gain (Profit)/Loss on Sale of Machinery:

Particulars	(₹)
Cost of Machine (1st April, 2014)	2,40,000
Less: Provision for Depreciation up to 1st July, 2017 (₹36,000 + ₹36,000 + ₹36,000 + ₹9,000)	1,17,000
Book Value on 1st July, 2017	1,23,000
Less: Sale Proceeds	1,00,000
Loss on Sale of Machinery	23,000

 

2.	Depreciation to be charged on 31st March, 2018:	₹
	On Balance Machinery: ₹13,60,000 (i.e., ₹16,00,000 – ₹2,40,000) @ 15%	2,04,000
	On New Machinery: ₹64,000 @ 15% for 9 months.	7,200
		2,11,200

Q22. From the information given below prepare a Trial Balance:

Accounts	₹
Capital	1,00,000
Drawings	16,000
Machinery	20,000
Sales	2,00,000
Purchases	2,10,000
Sales return	20,000
Purchases return	30,000
Wages	40,000
Goodwill	60,000
Interest received	15,000
Discount allowed	6,000
Bank Overdraft	22,000
Bank loan	90,000
Debtors:
Nathu	55,000
Roopa	20,000
Creditors:
Reena	35,000
Ganesh	25,000
Cash	54,000
Stock on April 01,2021	16,000

Ans:

Trial Balance as at March 31,2022
Name of the Account	Dr. ₹	Cr. ₹
Capital		1,00,000
Drawings	16,000
Machinery	20,000
Sales		2,00,000
Purchases	2,10,000
Sales Return	20,000
Purchases Return		30,000
Wages	40,000
Goodwill	60,000
Interest received		15,000
Discount allowed	6,000
Bank overdraft		22,000
Bank Loan		90,000
Debtors:
Nathu	55,000
Roopa	20,000
Creditors:
Reena		35,000
Ganesh		25,000
Cash	54,000
Stock on April 01, 2021	16,000
Total	5,17,000	5,17,000

Q23. Prepare the Credit Vouchers from the source vouchers of M/s. Bhagat& Co., New Delhi based on the following transactions:

2018
Apr. 11	Sold good for ₹24,000 plus CGST and SGST @ 6% each vide cash Memo No. 77.
22	Sold old typewriter for cash ₹600, charged CGST and SGST @ 6% each vide cash receipt no. 222
30	Withdrew cash ₹30,000 from bank for office use vide cheque No. 54321

Prepare an accounting equation from the following informations:

2021		₹
April 1	Amit started business with cash	2,000
April 2	Paid into bank	1,000
April 3	Bought goods for cash	500
April 4	Drew cash from bank for office	100
April 13	Sold to Ramesh, goods on credit	450
April 20	Bought from Nisha, goods on credit	200
April 24	Received from Ramesh	450
April 28	Cash paid to Nisha	100
April 30	Paid rent	100
April 30	Paid salary to Mr. Kamal	700

Ans:

Voucher	M/s. Bhagat & Co. New Delhi	Date: 11.4.2018
Credit		₹
	Sales A/c	24,000
	Output CGST A/c	1,440
	Output SGST A/c	1,440
	(Being the amount of cash sales vide cash Memo No. 77, charged CGST and SGST)
		26,880
Sd/- Manager		Sd/- Accountant

 

Voucher	M/s. Bhagat & Co. New Delhi	Date: 22.4.2018
Credit		₹
	Typewriter A/c	600
	Output CGST A/c	36
	Output SGST A/c	36
	(Being the electrical goods purchased vide cash Memo No. 222; paid CGST and SGST)
		672
Sd/- Manager		Sd/- Accountant

OR

Date	Particulars	Assets				-Liabilities  + Capital
2021		Cash	+ Bank	+ Stock	+ Debtors	– Creditor	+ Capital
April 1	Business started	2,000
2	Paid into bank	-1,000	+1,000
	New Equation	1,000	+ 1,000				+2,000
3	Bought Goods	-500		+500
	New Equation	500	+1,000	+500			+2,000
4	Drew cash from bank	+100	-100
	New equation	600	+900	+500			+2,000
13	Goods sold to Ramesh			-450	+450
	New equation	600	+900	+50	+450		+2,000
20	Goods bought from Nisha			+200		+200
	New equation	600	+900	+250	+450	200	+2,000
24	Received from Ramesh	+450			-450
	New equation	1,050	+900	+250	+0	200	+2,000
28	Cash paid to Nisha	-100				-100
	New equation	+950	+900	250	0	100	+2,000
30	Rent and salary paid	-800	900				-800
	Final Equation	150	+900	+250		100	+1,200

Q24. On  Jain & Sons purchased a second hand plant costing ₹2,00,000 and spent ₹10,000 on its overhauling. It also spent ₹50,000 on transportation and installation of the plant. It was decided to provide for depreciation @ 20% on written down value. The plant was destroyed by fire on  and an insurance claim of ₹5,000 was admitted by the insurance company. Prepare plant account, accumulated depreciation account and plant disposal account assuming that the company closes its books on December 31, every year.

OR

M/s Singhania and Bros. purchased a plant for ₹5,00,000 on April, 01 2016, and spent ₹50,000 for its installation. The salvage value of the plant after its useful life of 10 years is estimated to be ₹10,000. Record journal entries for the year 2016-17 and draw up Plant Account and Depreciation Account for first three years given that the depreciation is charged using straight-line method if :

1. The books of account close on March 31 every year.
2. The firm charges depreciation to the assets account.

Ans:

Dr.	Books of Jain & Sons Machinery Account						Cr.
Date	Particulars	J.F.	₹	Date	Particulars	J.F.	₹
2018				2018
Jan. 01	To Bank		2,15,000	Dec. 31	By Bal. c/d		2,15,000
			2,15,000				2,15,000
2019				2019
Jan. 01	To Bal. b/d		2,15,000	Dec. 31	By Bal. c/d		2,15,000
			2,15,000				2,15,000
2020				2020
Jan. 01	To Bal. b/d		2,15,000	Dec. 31	By Bal. c/d		2,15,000
			2,15,000				2,15,000
2021				2021
Jan. 01	To Bal. b/d		2,15,000	Jul. 31	By Plant Disposal		2,15,000
			2,15,000				2,15,000

 

Dr.	Accumulated Depreciation Account						Cr.
Date	Particulars	J.F.	₹	Date	Particulars	J.F.	₹
2018				2018
Dec. 31	To Bal. c/d		43,000	Dec. 31	By Dep.		43,000
			43,000				43,000
2019				2019
Dec. 31	To Bal. c/d		77,400	Jan. 01	By Bal. b/d		43,000
					By Dep.		34,400
			77,400				77,400
2020				2020
Dec. 31	To Bal. c/d		1,04,920	Jan. 01	By Bal. b/d		77,400
				Dec. 31	By Dep.		27,520
			1,04,920				1,04,920
2021				2021
Jul. 31	To Plant Disposal		1,17,763	Jan.01	By Bal. b/d		1,04,920
				Jul. 31	By Dep.		12,843
			1,17,763				1,17,763

 

Dr.	Plant Disposal Account						Cr.
Date	Particulars	J.F.	₹	Date	Particulars	J.F.	₹
2021				2021
Jul. 31	To Plant		2,15,000	Jul. 31	By Accumulated Depreciation		1,17,763
					By Insurance Co.		50,000
					By P & L ( Loss on sale)		47,237
			2,15,000				2,15,000

 

Working Note:

Calculation  of Depreciation Amount
Original cost on 01.01.2018 (2,00,000 + 10,000 + 5,000)	2,15,000
Dep. for the year 2018 (@20% of ₹2,15,000)	43,000
	1,72,000
Dep. for the year 2019 (@20% of ₹1,72,000)	34,400
	1,37,600
Dep. for the year 2020 (@20% of ₹1,37,600)	27,520
	1,10,080
Dep. for the year 2021 (@20% of ₹1,10,080)	12,843
	97,237
Insurance Claim	50,000
Loss on Disposal	47,237

Date	Particulars		L.F.	Dr.	Cr.
2016				₹	₹
Apr 1	Plant A/c	Dr.		5,00,000
	To Bank A/c				5,00,000
	(Being plant purchased for ₹5,00,000)
Apr 1	Plant A/c	Dr.		50,000
	To Bank A/c				50,000
	(Being expenses incurred on installation
2017
Mar 31	Depreciation A/c	Dr.		54,000
	To Plant A/c				54,000
	(Being depreciation charged on assets)
Mar 31	Profit and Loss A/c	Dr.		54,000
	To Depreciation A/c				54,000

 

Dr.	Plant Account						Cr.
Date	Particulars	J.F.	₹	Date	Particulars	J.F.	₹
2016				2017
Apr. 01	To Bank		5,00,000	Mar. 31	By Depreciation		54,000
	To Bank (installation charges)		50,000		By Balance c/d		4,96,000
			5,50,000				5,50,000
2017				2018
	To Balance b/d		4,96,000	Mar. 31	By Depreciation		54,000
					By Balance c/d		4,42,000
			4,96,000				4,96,000
2018				2019
Apr.01	To Balance b/d		4,42,000	Mar. 31	By Depreciation		54,000
					By Balance c/d		3,88,000
			4,42,000				4,42,000
2019
Apr.01	To Balance b/d		3,88,000

 

Dr.	Depreciation Account						Cr.
Date	Particulars	J.F.	₹	Date	Particulars	J.F.	₹
2017				2017
Mar.31	To Plant		54,000	Mar.31	By P & L A/c		54,000
2018				2018
Mar.31	To Plant		54,000	Mar.31	By P & L A/c		54,000
2019				2019
Mar.31	To Plant		54,000	Mar.31	By P & L A/c		54,000

Working Notes:

1. Calculation of Depreciation amount:

Purchase cost	5,00,000
Add: Installation charges	50,000
Original cost	5,50,000
Salvage value	10,000
Useful life	10 years
Depreciation amount	₹5,50,000 – ₹ 10,000/ 10 = ₹54,000

Q25. The cash book of Mr. Neil showed a balance of ₹10,760 on 31^st December, 2021 at the bank. A comparison of the pass and cash book revealed the following:

• The bank had debited Mr. Neil ₹1,920, the annual premium on his life policy according to his standing instructions and with ₹60 as bank charges.
• The bank has credited Mr. Neil by ₹2,800, the proceeds of a bill.
• Mr. Neil paid in cheques totaling ₹4,200 on December 26, of which those ₹3,120 were collected in December and one for ₹300 was returned as dishonoured, the information of which was received by Mr. Neil on 2^nd January 2021. The rest were collected and credited in January, 2021.
• The cash collection on 31^st December, 2021 totaling ₹1,220 was entered in the cashbook in the bank column on the same day but it was banked on the 2^nd January, 2021.
• In December, 2021 Mr. Neil issued cheques totaling ₹5,740 of which those of ₹1,700 have not been presented by 31^st December, 2021.

Show the corrections to be made in the cash book so as to ascertain the balance to be shown in the Balance Sheet and then prepare the Bank Reconciliation Statement.

Ans:

Amended Cash Book (Bank Column)
Receipts	₹	Payments	₹
To Balance b/d	10,760	By Drawings (LIC)	1,920
To B/R (Proceeds of a bill)	2,800	By Bank Charges	60
		By Balance c/d	11,580
	13,560		13,560
To Balance b/d	11,580

 

Bank Reconciliation Statement of Neil As on December 31, 2021
Particulars	Plus Items	Minus Items
	₹	₹
Balance as per Adjusted Cash book (Dr.)	11,580
Cheques issued but not presented for payment	1,700
Cheques paid into bank but not credited (2,100 -1,560)		1,080
Cash collection entered in the Cash Book in the bank column but banked on 2nd Jan, 2018		1,220
	13,280	2,300
Balance as per Pass Book (Cr.)	10,980

Q26. Prepare a petty Cash Book on the Imprest System from the following:

2021		₹
Jan. 1	Received for petty cash	1,000
Jan. 2	Paid bus fare	5.00
Jan. 2	Paid Cartage	25.00
Jan. 3	Paid for Postage and telegrams	50.00
Jan. 3	Paid wages for casual laborers	60.00
Jan. 4	Paid for stationery	40.00
Jan. 4	Paid tonga charges	20,00
Jan. 5	Paid for repairs to chairs	150.00
Jan. 5	Bus fare	10.00
Jan. 6	Cartage	40.00
Jan. 6	Postage and telegrams	70.00
Jan. 6	Tonga Charges	30.00
Jan. 6	Cartage	30.00
Jan. 6	Stationery	20.00
Jan. 6	Refreshment to Customers	50.00

Ans:

Date	Particulars	Total	Conveyance	Cartage	Stationery	Postage	Wages	Misc.
2021		₹	₹	₹	₹	₹	₹	₹
Jan.
1	To Cash	1,000
2	By Conveyance	5	5
2	By Cartage	25		25
3	By Postage & Telegrams	50				50
3	By wages	60					60
4	By Stationery	40			40
4	By Conveyance	20	20
5	By Repairs of Furniture	150						150
5	By Convenience	10	10
6	By Cartage	40		40
6	By Postage  & Telegrams	70				70
6	By Conveyance	30	30
6	By Cartage	30		30
6	By Stationery	20			20
6	By General Expenses	50						50
31	Total exp.	600	65	95	60	120	60	200
31	By Balance c/d	400
Feb.1	By Balance b/d	400
	To Cash	600
	By Balance c/d	1,000

Q27. Mr. A commenced business on Jan 01, 2021 and purchased goods costing ₹47,500 during the year. A sum of ₹ 2,500 was spent on freight Inwards. On Dec 31, 2021, cost of unsold goods was ₹ 5,000 and  sales during the year were ₹ 65,000. The gross profit earned by firm will be_________.

(a) ₹  10,000

(b) ₹  15,000

(c) ₹  17,500

(d) ₹  20,000

OR

Sundry Debtors on 31st March, 2021 are ₹  20,800. The provision for doubtful debts is to be on debtors at 10% and further bad debts are ₹ 2,000. The provision of discount on debtors is to be made on debtors at 2%. The amount of debtors to be shown on the assets side of the balance sheet will be:

(a) ₹  15,618

(b) ₹  15,600

(c) ₹  16,582

(d) ₹ 16, 920

Ans:

Gross Profit = sales + Unsold stock- Purchases – Freight Inward

= 65,000 + 5,000 – 47,500 – 2,500 = ₹ 20,000

OR
Debtors   20,800;  Less: further bad debts  2,000; Less: Provision for doubtful debts  1,880;  Less: provision for discount on debts 338

Q28.

	₹
Sales during the year	2,00,000
Purchases	1,60,000
Other Direct expenses	10,000
Opening stock	20,000
Lighting	5,000
Gross loss	25,000

Find out the value of stock at the end of the year.

(a) ₹ 30,000

(b) ₹ 25,000

(c) ₹ 40,000

(d) ₹ 60,000

Ans:

Cost of goods sold = Sales + Gross loss

= 2,00,000 + 25,000

= 2,25,000

Closing stock = cost of goods sold – (purchases + Other direct expenses + opening stock + lighting)

= 2,25,000 – (1,60,000 + 10,000 + 20,000 + 5,000)

= ₹ 30,000

Q29. X had started a business with ₹ 2,00,000 in the beginning of the year. During the year, he borrowed ₹ 1,00,000 from Y. He further introduced ₹ 2,00,000 in the business. He also gave ₹ 50,000 as a loan to his son. Goods given away as a charity by him were ₹ 20,000. Profits earned by him were ₹ 2,50,000. He also withdraws ₹ 30,000 from the business. His capital at the end of the year would be__________.

(a) ₹ 5,00,000

(b) ₹ 4,00,000

(c) ₹ 6,20,000

(d) ₹ 4,80,000

OR
​If the rate of gross profit on sales is 25% and the cost of goods sold is ₹ 75,000, then the amount of total sales will be _______.

(a)₹ 1,00,000

(b) ₹ 93,750

(c) ₹ 92,150

(d) None of the above​

Ans:

Opening Capita                                  ₹ 2,00,000

Add: Capital Introduced                     ₹ 2,00,000

Add: Profit for the year                      ₹ 2,50,000

Less: Loss for the year                       ₹ NIL   

Less: Drawings                                   ₹ 30,000                                                         

                                                        ——————–

Capital at the end of the year               ₹ 6,20,000                                                          

                                                             ——————-

Loan taken is a liability, and a loan given is an asset that will not affect the capital.

OR
​Sales – Cost of goods sold = Gross Profit

If sales is ₹ 100

Then Gross Profit becomes ₹ 25 (25% of sales)

Cost of Goods sold will be ₹ 75 (₹ 100 – ₹ 25)

Cost of goods sold = 75% of sales

Sales = Cost of goods sold/75%

Sales = ₹ 1,00,000​

Q30. ​Calculate credit sales from the following details:Opening debtors ₹ 3,50,000; Closing debtors ₹ 2,80,000; Cash received from Debtors ₹ 7,80,000; Discount allowed to Debtors ₹ 85,000

(a) ₹ 9,35,000

(b) ₹ 9,80,000

(c) ₹ 8,30,000

(d) None of the above​

Ans:

​Credit Sales = Cash Received + Discount Allowed + Closing Debtors – Opening Debtors  = ₹ 7,80,000 + ₹ 85,000 + ₹ 3,50,000 – ₹ 2,80,000  = ₹ 9,35,000​

Q31. What is the need for adjustments in preparing the Final Accounts?

Ans:

Need for adjustments in preparing the Final Accounts:
1. Expenditure whether paid or not be included,
2. Income whether received or not be included,
3. Expenditure relating to the succeeding years be excluded, and
4. Income relating to the succeeding years is excluded.

Q32. From the following information you are required to ascertain the total sales:

Details	₹
Cash sales of goods	56,000
Debtors as on April 1, 2020	20,000
Cash received from debtors	60,000
Sales return	5,000
Debtors as on March 31, 2021	27,000
Bad debts	1,100
Discount received	600
Bad debts recovered	1,500
Provision for discount on Debtors	700

Ans:

Total Debtors A/c
Particulars	₹	Particulars	₹
To balance b/d	20,000	By cash recd.	60,000
To credit sales	73,100	By sales returns	5,000
(Bal. figure)		By bad debts	1,100
		By balance c/d	27,000
	93,100		93,100

Total sales = Cash sales + Credit sales

= ₹56,000 + ₹73,100

= ₹1,29,100.

Note: Bad debts recovered and Provision for discount on debtors do not affect the Total Debtors Account.

Q33. Preparing a Trading Account for the year ending March 31, 2021 From the following balances as at March 31,2021:

	₹
Stock	10,000
Purchases	1,00,000
Wages	5,000
Carriage Inwards	1,000
Sales (inclusive of GST)	1,70,000
Return Inwards	5,000
Returns Outward	8,000
GST Included in Sales	15,000
Freight	500
Direct Expenses	2,500

Closing Stock as on March 31,2021 was valued at ₹20,000

OR
Differentiate between Capital and Revenue Expenditure.

Ans:

TRADING ACCOUNT For year ending March 31,2021
Particulars		₹	Particulars		₹
To Opening Stock		10,000	By Sales	1,70,000
To Purchase	1,00,000		Less GST	15,000
Less Return	8,000	92,000		1,55,000
To wages		5,000	Less: Return	5,000	1,50,000
To Carriage Inward		1,000	By Closing Stock		20,000
To Freight		500
To Direct Expenses		2,500
To Profit and Loss A/c		59,000
		1,70,000			1,70,000

Capital Expenditure	Revenue Expenditure
The benefit of expenditure extends to more than one accounting period	The benefit of expenditure extends up to one accounting period
It increases the earning capacity of business	It is incurred to maintain the earning capacity.
It is incurred to acquire fixed assets for operation of business.	It is incurred on day-to-day conduct of business.
It is of non-recurring nature	It is of recurring nature.
It benefits more than one accounting year	It benefits one accounting year.
It is recorded in balance sheet.	It is transferred to trading and profit and loss account

Q34. Kumar, a trader, does not keep proper books of account. However he furnishes you the following particular:

Particulars	31.3.2020₹	31.3.2021₹
Cash at Bank	4,500	3,000
Cash-in-hand	300	4,000
Stock-in-trade	40,000	45,000
Debtors	12,000	20,000
Office Equipment	5,000	5,000
Sundry Creditors	30,000	20,000
Furniture	4,000	4,000

During the year Kumar introduce ₹6,000 as further Capital and withdrew ₹4,000 as Drawings. Write off depreciation on furniture at 10% and on office equipment at 5%.

Prepare a statement showing the Profit and Loss made by him for the year ended 31^st March, 2021.

Ans: STATEMENT OF AFFAIRS

As at March 31,2020

Liabilities	₹	Assets	₹
Sundry Creditors Capital	30,000 35,800	Cash at Bank Cash-in-Hand Stock-in-Trade Debtors Office Equipment Furniture	4,500 300 40,000 12,000 5,000 4,000
	65,800		65,800

STATEMENT OF AFFAIRS

As at March 31, 2021

Liabilities	₹	Assets	₹
Sundry Creditors	20,000	Cash at Bank	3,000
Capital	60,350	Cash in Hand	4,000
		Stock-in-trade	45,000
		Debtors	20,000
		Office Equipment (5,000 -250)	4,750
		Furniture (4,000 – 400)	3,600
	80,350		80,350