TERM 1 EXAMINATION, 2023

SUBJECT: ACCOUNTANCY (055)

Grade: 11 Time: 3 hours

Date: 16/10/2023 Max. Marks: 80

General Instructions:
i. This question paper contains 34 questions. All questions are compulsory.
ii. Question Nos.1 to 20 carries 1 mark each.
iii. Questions Nos. 21 to 26 carries 3 marks each.
iv. Questions Nos. from 27 to 29 carries 4 marks each
v. Questions Nos. from 30 to 34 carries 6 marks each

1 Bank overdraft is a ___________. 1

a) current liability
b) contingent liability
c) current asset
d) unsecured loan

2 An Accounting Equation is based on the ___________ principle. 1

a) Consistency
b) Dual Aspect
c) Verifiable
d) Conservatism

3 What does credit balance in the Capital Account signify? 1

a) Amount payable by the owner of the business
b) Amount withdrawn by the owner of the business
c) Amount to be received from the owner of business
d) Amount due to the owner of business

4 By what amount will purchases account be debited with, if Riya buys goods at the 1
list price of ₹ 1,00,000 from Mary less 20% trade discount and 2% cash discount
and paid 50% by cheque?
(a) ₹ 1,00,000
(b) ₹ 80,000
(c) ₹ 78,000
(d) ₹ 50,000

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5 Amount received from debtor whose account was written off as bad debt, choose 1
the correct posting.
a) Bad debt recovered a/c debit side- to debtor and debtor a/c credit side – by
bad debt recovered
b) Debtor a/c debit side – to bad debt recovered and bad debt recovered a/c
credit side- by debtor
c) Cash a/c debit side – to bad debt recovered and bad debt recovered a/c
credit side – by cash
d) Cash a/c debit side – to debtor and debtor a/c credit side- by cash

6 When the number of accounts to be debited or credited is more than one, entry 1
made for recording the transaction is called ……… journal entry.
(a) single
(b) compound
(c) normal
(d) casting
OR
When the goods are sold to a customer on credit, and if the amount becomes
irrecoverable due to his insolvency or for some other reason, the amount not
recovered is called ……… .
(a) Doubtful debts
(b) Provision for doubtful debts
(c) Recoverable debt
(d) Bad debts

7 Indicate how Accounting Equation is affected if payment is made to a creditor. 1

a) Cash decreases and creditor increases
b) Creditor decreases and capital decrease
c) Cash decreases and creditor decrease
d) Cash decreases and capital decrease

8 Balance in the Petty Cash Book is ____________ 1

a) An expense
b) A profit
c) An asset
d) Income
OR
Mohit paid Rs. 9,800 in settlement of his account of Rs. 10,000. Discount allowed
will be recorded in.
a) Journal Book
b) Cash Book
c) Petty Cash Book
d) both cash book and journal

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9 Which of the following statements correctly describes the cost concept? 1
a) Assets are shown in the books at the price at which it was purchased plus
cost of improvement minus depreciation till date.
b) Assets are shown in the books at the price it was purchased.
c) Assets are shown in the books at the price it was purchased plus cost of
improvement.
d) Assets are shown in the books at the price it was purchased or market price
whichever is lower.

10 How is accrued income of ₹ 2,500 treated in journal? 1

(a) Accrued income account is debited and Bank account is credited.
(b) Accrued income account is debited and Income account is credited.
(c) Income account is debited and Accrued income account is credited.
(d) Accrued income account is debited and cash account is credited.

11 The entry passed to record closing balances of the previous year in the current year 1
is called _______________
a) Closing entry
b) Opening entry
c) Adjusting entry
d) Dual entry

12 How is bank overdraft recorded at the end of the period in the cash book? 1
a) To balance b/d
b) By balance c/d
c) By balance b/d
d) To balance c/d

13 Assertion (A) Journal is a book of original entry. 1

Reason (R) The transactions are first recorded in a journal in a chronological order.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct
explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, Reason (R) is not the correct
explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true

14 A Trial Balance is ....... 1

a) A statement
b) A summary
c) An account
d) A book of Journal

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15 Unfavourable balance as per Pass book is _________ balance 1
a) Debit
b) Credit
c) Equal
d) Unequal
OR

Unfavourable balance as per Cash book is _________ balance

a) Debit
b) Credit
c) Equal
d) Unequal

16 Assertion: Discount allowed has a debit balance. 1

Reasoning: As per the Rules of Debit and Credit an increase in an asset is to be
debited.
a) Both A and R are correct, and R is the correct explanation of A.
b) Both A and R are correct, but R is not the correct explanation of A.
c) A is correct but R is incorrect.
d) A is incorrect but R is correct.

17 The debit side total of the trial balance has got a total of ₹ 100,000, the credit side 1
has capital of ₹ 60,000; Loan ₹ 20,000. Give an imaginary item with amount and
on which side to tally the trial balance.
OR
State two limitations of Trial Balance.

18 According to which of the following concepts, while determining the net income 1
from business, all costs which are applicable to revenue of the period should be
charged against that revenue____________.

a) Matching concept
b) Cost concept
c) Money measurement concept
d) Dual aspect concept

19 If Cash-Book (Bank Column) shows a balance of Rs. 10,000 and following were 1
observed while comparing it with Pass-Book:
A cheque of Rs. 1000 deposited in Bank but not recorded in Cash-Book and the
payment side of Cash-Book was under cast by Rs. 100. The balance as per Pass-
Book would be:
a) 11,000
b) 10,900
c) 9,100
d) 8,900
OR

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 On which side (Plus side Or minus Side) the following item will be shown while
preparing bank reconciliation statement, if Debit balance as per Pass book Rs is
given?
 One outgoing cheque of Rs 700 was recorded twice in the cash book.
a) 15,000 Plus side
b) 15,000 Minus side
c) 700 minus side
d) 1400 plus side

20 1
Which of the following is not a fixed asset?
a) Building
b) Bank Balance
c) Plant
d) Goodwill

21 Differentiate between Book Keeping and Accounting on the basis of 3

a) Level of skills
b) Performance
c) Objective
OR
Explain any three qualitative characteristics of Accounting information.

22 Identify the following accounts into Personal, Real and Nominal 3

a) Interest
b) Outstanding salary
c) Prepaid commission
d) Investments
e) Bad debts recovered
f) Goodwill

23 You are working in a company as a chief accountant. While preparing the accounts 3
of your company, you are faced with a number of problems. These are summarized
as below. (Suggest suitable principle assumption and explain briefly what each
concept means)

a) The long-term future success of the company is doubtful due to market

competition
b) Although the sales have not yet actually taken place, some reliable customers of
the company have placed large orders from which company is expected to earn
large profits.
c) A debtor who owes an amount to the company is likely to be declared insolvent.

24 (a) A starts a business and invests ₹ 50000 on 1st April 2018. On 31st march 2019 3
his assets are ₹ 65000 and liabilities are ₹ 6000 . Find out the amount of capital on
31st march 2019 and his profit.
(b) on the above case if the proprietor had invested ₹ 5000 as additional capital and
withdrawn ₹ 2000, what will be your answer?
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 (c) if A had withdrawn from his business ₹ 3000 for personal use , find out the
profit in this case .
OR
Calculate the amount of External Equities as on 31st March, 2021 in the following
1) On 31st March, 2021, total assets and capital were ₹ 15,00,000 and ₹10,50,000
2) On 1st April, 2020, Mukesh started business with a capital of 3,00,000 and a
loan of 3,00,000 borrowed from a friend. During the year, he earned a profit of
1,50.000. On 31st March, 2021. the total assets were 15,00,000.

25 Mr. Gopal started business for buying and selling of readymade garments with ₹ 3
8,00,000 as an initial investment. Out of this he paid ₹ 4,00,000 for the purchase of
garments and ₹ 50,000 for furniture and ₹ 50,000 for computers and the remaining
amount was deposited into the bank. He sold some of the ladies and kids garments
for ₹ 3,00,000 for cash and some garments for ₹ 1,50,000 on credit to Mr. Rajesh.
Subsequently, he bought men's garments of ₹ 2,00,000 from Mr. Satish. In the first
week of the next month, a fire broke out in his office and stock of garments worth
₹ 1,00,000 was destroyed. He received only ₹ 74,000 from the insurance
company. Later on, some garments which cost ₹ 1,20,000 were sold for ₹
1,30,000. Expenses paid during the same period were ₹ 15,000. Mr. Gopal
withdrew ₹ 20,000 from business for his domestic use, ₹8000 in cash and rest in
goods.
From the above, answer the following:
(i) What fixed assets did he buy?
(ii) What is the value of the goods purchased?
(iii) Who is the creditor and state the amount payable to him?
(iv) Who is the debtor and what is the amount receivable from him?
(v) What is the actual loss by fire borne by Mr. Gopal?
(vi) State the amount of goods withdrawn by Mr. Gopal?

26 These authorities use accounting information to arrive at various statistics which 3

enable policy decisions. Identify this user of accounting information and explain
two other external users who use the accounting information of the firm.

27 Ascertain the appropriate missing figures by preparing Total Creditors Account from 4
the following information:
Creditors as on March 31, 2018 ₹. 6,000
Creditors as on March 31, 2017 ₹ 36,000
Cash paid to creditors ₹ 1,04,400
Discount allowed by creditors ₹ 2,000
Purchase return ₹ 2,000
Cheques issued to creditors ₹ 20,000

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28 The following balances are extracted from the books of Ms. Maria Waseem, 4
Prepare Trial Balance as on 31.03.2019:
ACCOUNTS ₹
a) Owner’s Equity 470,200
b) Machinery 158,800
c) Cash in hand 6,000
d) Trade receivable 56,600
e) Building 325,400
f) Stock 44,000
g) Insurance premium 3,300
h) Sales 290,000
i) Commission 13,500
j) Purchases 165,000
k) Discount earned 1,100
l) Loan from Sidra 51,000
m) Salaries 71,250
n) Drawings 5,000
o) Bad debts 1,350
p) Trade payable 37,900

29 On 31st March, 2021, the bank pass book of Radha showed a balance of ₹15,000 to 4
her credit and it differed with the balance reflected in her cash book. Before that
date, she had issued cheques amounting to ₹8,000 out of which cheques amounting
to
₹3,200 have so far been presented for payment. A cheque of`₹ 2,200 deposited by
her into the bank on 26 th March, 2021 is not yet credited in the passbook. She had
also received a cheque of ₹ 500 which although entered by her in the bank column
of cash book, was omitted to be paid into the bank. On 30th, March 2021, a cheque
of ₹1,570 received by her was paid into bank but the same was omitted to be
entered in the cash book. There was a credit of ₹150 for interest on current account
and a debit of ₹ 25 for bank charges.
Read the following case study and answer the following questions.
a) How will a credit of ₹150 for interest on current account be treated while
preparing the bank reconciliation statement?
b) She had issued cheques amounting to₹ 8,000 out of which cheques
amounting to ₹3,200 have so far been presented for payment.’’ What will
be the amount deducted from the balance of pass book to reconcile it with
the balance of cashbook?
c) On 30th, March 2021, a cheque of ₹1,570 received by her was paid into
bank but the same was omitted to be entered in the cash book. State the
effect of the above cheque while preparing Bank reconciliation statement.
d) What will be the balance as per cashbook on 31st March, 2021?

30 Show the effect of the following transactions upon the Accounting Equation? 6
June 2021

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 Mr. Salman started business with cash Rs. 80,000, Inventory
1
Rs. 50,000 & Machinery Rs 5,000.
Purchased furniture for cash Rs. 4,000 and purchased goods
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from Naveed store of Rs. 25,000.
Sold goods to Rashid on credit basis for Rs. 8,000, costing Rs.
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6,500.
12 Open a bank account and deposited Rs. 40,000.
18 Sold goods for cash Rs. 15,000, which is 20% above cost.
Received Rs. 7,800 from Rashid in full settlement for June
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8th transaction.
OR
Show the accounting equation on the basis of the following transaction:
(a) Unit started business with:
(i) Cash ₹ 5,00,000
(ii) Goods ₹ 1,00,000
(b) Purchased building for cash ₹ 2,00,000
(c) Purchased goods from Himani ₹ 50,000
(d) Sold goods to Ashu (Cost ₹ 25,000) ₹ 36,000
(e) Rent outstanding ₹ 5,000
(g) Depreciation on building ₹ 8,000
(h) Rent received in advance ₹ 5000
(j) Cash paid to Himani on account ₹ 20,000

31 Pass the necessary Journal entries: show your working properly. 6

a) Shalini Silks. purchased 1500 tussar silk sarees @₹ 2,650 per saree.
Allowed 15% Trade Discount and 3% Cash Discount if payment is made
within 14 days. Shalini Silks. received 8 shawls of poor quality, which she
returned after 2 days. Shalini Silks. settled the payment in 10 days.
b) Paid cash ₹ 39,200 to Amala in settlement of his dues, availed discount of
2%
c) Deposited cheque from Savings Account in firm's account ₹ 200,000
d) Received cheque from Sharda &Co. for ₹9,750 in settlement of amount due
from them ₹10,000.
e) Deewan's cheque of ₹ 8,500 returned by the bank as dishonored

32 Enter the following transactions in Cash Book with Cash & Bank columns on 31st 6
March, 2019: -

2019
Mar 01 Cash in hand ₹ 5,00,000 ; Bank Overdraft ₹ 1,50,000
Mar 07 Purchased goods from Suresh on the terms of 5% Cash discount if the
payment is made within 3 days ₹ 20,000
Mar 12 Payment made to Suresh; half in Cash and half by cheque.
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 Mar 14 Paid Income Tax ₹. 700 & Fire Insurance Premium ₹. 1,000 by
cheque.
Mar 16 Paid Rent to Landlord ‘Rakesh’ by cheque ₹. 2,000.
Mar 17 X settled his account by payment of ₹ 10,150; ₹.150 being the interest
charged.
Mar 19 Withdrawn from Bank ₹ 20,000 and Furniture was purchased for ₹
15,000; the balance was taken by the proprietor.
Mar 23 Received repayment of a loan advanced to Ram ₹3,000 and deposited
out of it ₹2,500 into the bank.
Mar 25 Received a cheque for ₹800 from Abhay, which was endorsed to
Vibhay.
33 Read the following case study and answer the following questions on the basis of 6
the same of Karim & Co. who has the following transactions for the month of
January.
Jan 4 Returned to Mohan Mills, Kerala,10 polyester sarees @ ₹ 1,600 each.
(−) Trade discount @ 10%
Jan 7 Janani silks sold to us 12 cotton silk sarees @ 840 each.
Jan 8 Srimala Mills, Kota accepted the returns of goods (which were purchased for
cash) from us, 8 Kota sarees @ ₹ 640 each
Jan 12 Returned to Sonica Mills, Bombay, 12 silk sarees @ ₹ 1,040 each.
(−) Trade discount @ 10%
Jan 18 Lakshmi mills, Bangalore purchased from us 7 cotton silk sarees @ 900
each
Jan 30 Returned one typewriter (being defective) @ ₹ 7,200 to Vishaka & Co

a) Calculate the total amount recorded in the purchase returns book relating to
the returns to Mohan Mills on 4th January?
b) In which books will the return of Kota Sarees on 8th January be recorded?
c) The return of typewriter on 30th January be recorded in which book?
d) What will be the total amount reflected in purchase returns book as on 31st
January?
e) Identify from the given above transactions that should be recorded in
Purchase book and sales book.
34 From the following particulars, prepare the bank reconciliation statement of Shri 6
Krishan as on March 31, 2017.
(a) Balance as per passbook is ₹10,000.
(b) Bank collected a cheque of ₹500 on behalf of Shri Krishan but wrongly
credited it to Shri Kishan’s account.
(c) Bank recorded a cash book deposit of ₹1,589 as ₹1,598.
(d) Withdrawal column of the passbook under cast by ₹100.
(e) The credit balance of ₹1,500 as on the pass-book was recorded in the debit
balance.
(f) The payment of a cheque of ₹350 was recorded twice in the passbook.
(g) The pass-book showed a credit balance for a cheque of ₹1,000 deposited by
Shri
OR
On 31st March, 2019, Cash Book of a merchant showed bank overdraft of ₹ 1,72,985.
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 On comparing the Cash Book with Bank Statement, following discrepancies were
noted:
(i) Cheques issued for ₹ 60,000 were not presented in the bank till 7th April, 2019.
(ii) Cheques amounting to ₹ 75,000 were deposited in the bank but were not collected.
(iii) A Cheque of ₹ 15,000 received from Mahesh Chand and deposited in the bank was
dishonoured but the non-payment advice was not received from the bank till 1st April,
2019.
(iv) ₹ 1,50,000 being the proceeds of a bill receivable collected appeared in the Pass
Book but not in the Cash Book.
(v) Bank charges ₹ 1,500 and interest on overdraft ₹ 8,500 appeared in the Pass Book
but not in the Cash Book.
(vi) Overdraft balance as per Cash Book of ₹ 500 on 28th February, 2019 was wrongly
carried forward as debit balance. The error was noted at the time of preparing the Bank
Reconciliation Statement as on 31st March, 2019.
Prepare Bank Reconciliation Statement.

______________________________________________________________________________

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