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Reg. No. :

OCTOBER 2019 U/4801/1963101

FINANCIAL ACCOUNTING — I

Time : Three hours Maximum : 100 marks

SECTION A — (10  2 = 20 marks)

Answer any TEN questions.

1. What is Journal?

2. Write a short note on Non-trading concern?

3. What is Bank Reconciliation Statement?

4. What do you mean by Fire Insurance Claim?

5. What is Networth Method?

6. What is Income and Expenditure Account?

7. Calculate the Gross Profit from the following :

Sales 4,20,000
Return inwards 10,000
Return outwards 20,000
Purchases 1,00,000
Closing stock 30,000
Opening stock 20,000
Wages and expenses 2,00,000

8. Pass necessary Adjusting Entries

(a) 6,000 were received in advance for commission

(b) 4,000 is interest accrued on Investment

(c) 2,000 for wages is outstanding

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9. Calculate the profit on the truck from the following

Cost of Truck on 1.1.2006 40,000
Total depreciation provided till 31.12.2006 10,000
Sales price of the truck on 31.12.2006 33,000

10. From the following data calculate capital at the beginning of the
year

Capital at the end of the year 50,000

Drawings during the year 8,000

Capital introduced during the year 12,000

Profit made during the year 18,000

11. From the following calculate the amount of claim in respect of a

fire occurred in a business on 31-12-1999

Sales 1-4-99 – 31-12-99 12,00,000

Purchases 1-4-99 – 31-12-99 8,00,000

Stock on 31-3-99 2,00,000

Gross profit – 25% on sales

12. Rectify the following errors :

(a) Purchases Book is overcast by 300

(b) Sales book has been undercast by 200

SECTION B — (5 × 7 = 35 marks)

Answer any FIVE questions.

13. What are the differences between single entry and Double Entry
systems of Accounting?

14. Prepare Trial balance from the balance. Capital 40,000; Sales
25,000; opening stock 5,200; Debtors 2,500; Creditors
1,000; Purchases 15,000; Salaries 2,000; Rent 1,500;
Cash 2,000; Insurance 300; Drawing 5,000; Plant 28,000;
Bank 4,500

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15. Prepare Trading and Profit and Loss Account for the year ended
31-3-2006
Particulars
Bad debts 125
Opening stock 3,460
Purchases 5,475
Sales 15,450
Sales Return 200
Purchase return 125
Postage and stationery 875
Advertising 450
Interest (Dr) 118
Commission (Cr.) 1,250
Taxes and Insurance 1,250
General Insurance 782
Salaries 3,300
Closing stock 3,250

16. A company whose accounting year is the calendar year,

purchased on 1st April 2004, Machinery costing 30,000. It
Purchased further machinery on 1st October 2004 costing
20,000 and on 1st July 2005 costing 10,000. On 1st January
2006 one third of the machinery installed on 1st April 2004
became obsolete and was sold for 3,000. Machinery is
depreciated on fixed installment method at 10% per annum.
Show the machinery account.

17. Prepare a bank reconciliation statement :

(a) Overdraft as per pass book 3,000

(b) Two Cheques from P and Q for 500 600 were deposited
with the bank but were still not collected by the bank

(c) A cheque for 2,000 issued to Mr. X not yet presented to

the bank for payment

(d) Interest on overdraft 800 appears in the pass book.

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18. X keeps his books on the single entry system and the following
information is available
Particulars 1.1.2006 31.12.2006
( ) ( )
Furniture 600 600
Stock 2,800 3,050
Sundry debtors 3,000 4,000
Cash 150 200
Sundry creditors 1,000 2,000
Bills payable - 300
Loan payable - 500
Investments - 1000

He has drawn out of the business 2,500 during the year.

Prepare a statement showing his profit for the year ended 31st
December, 2006 after writing off 10 percent per annum
depreciation of furniture and making a provision for bad debts of
10% on sundry debtors.

19. Distinguish between receipts and payments account and income

and expenditure account.

SECTION C — (3  15 = 45 marks)

Answer any THREE questions.

20. Journalise the following transactions, post the ledger and Trial
balance on 31st Jan 1999
Date Particulars Amount
Jan 1 Lakshmi started business with a capital 50,000
2 She purchased goods from Mala 10,000
5 She paid cash to Mala 5,000
7 She sold goods to Shanti 10,000
10 She received cash from Shanti 8,000
15 She further purchased goods from Mala 12,000
20 She paid cash to Mala 4,000
25 She further sold goods to Shanti 13,000
30 She received cash from Shanti 3,000

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21. From the following Trial Balance of Ravi, Prepare Trading and
Profit and Loss Account and Balance sheet for the year ended
31-12-1993.

Trial balance
Particulars Amount ( ) Particulars Amount ( )
Purchases 15,000 Capital 40,000
Salaries 2,000 Sales 25,000
Rent 1,500 Creditors 1,000
Insurance 300
Drawings 5,000
Machinery 28,000
Bank balance 4,500
Cash 2,000
Stock 1-1-93 5,200
Debtors 2,500

Adjustments required :
(a) Stock on 31-12-93 4,900
(b) Salaries unpaid 300
(c) Rent paid in advance 200
(d) Insurance prepaid 90

22. Distinguish between straight line method and written down

value method

23. From the following particulars, prepare

(a) Bills Receivable account
(b) Total Debtors A/c
(c) Bills Payable
(d) Total creditors
On 1.1.92 ( ) on 3l.12.92
Total debtors 40,000 70,000
Total creditors 15,000 15,000
Total bills Receivable 16,000 16,000
Total Bills payable 6,000 8,000

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Transactions during the year

Cash received from debtors 30,000
Discount allowed to debtors 6,000
Bad debts written off 3,000
Returns inward 5,000
Cash sales 16,000
Cash purchases 7,000
Cash received against B/R 10,000
Cash paid to suppliers 10,000
(including a payment of 1000 for
Purchasing machine)
Cash paid against B/P 3,000
Discount received from suppliers 600
Return outward 1,500
Bills payable dishonored 600

24. From the following receipts and payments account of the city
club. For the year ended 31st March, 1998, Prepare Income and
Expenditure Account.
Particulars Amount Particulars Amount

To balance 1-4-97 3,485 By books 6,150

To Entrance fees 650 By Printing and
To Donations 6,000 stationery 465
To Subscriptions 6,865 By News papers 1,110
To Interest on Investments 1,900 By Sports materials 5,000
To Sale of furniture 685 By Repairs 650
To Sale of old newspapers 465 By Investments 2,000
To Proceeds from By furniture 1,000
Entertainment 865 By Salary 1,500
To Sundry receipts 125 By Balance on 31-3-98 3,165
21,040 21,040

The entrance fees and donations are to be capitalized ; sports

materials are valued at 4,000 as on 31-3-1998.

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