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ACCOUNTS PAPER ONE

MODEL QUESTION PAPERR NO. I
Q. 1. Attempt any Three of the following.  [15]
A. Answer in one sentence only:
1. What is Balance Sheet?
2. What is Bad Debts?
3. What is Bill of Exchange?
4. What is Single Entry System?
5. When is Realisation account is opened?

B. Write the word / Term / Phrase which can substitute each of the following statement:
1. A person who draws a bill of exchange. (Drawer)
2. Winding up of partnership business. (Dissolution of Partnership).
3. The credit balance of Profit and Loss Account. (Net profit)
4. An excess of assets over liabilities. (Capital)
5. The account which shows change in the values of assets. (Revaluation Account)

C. Select the most appropriate alternative from the given below and rewrite the statement:
1. There are ______ parties to a bill exchange. (Three)
a. Three     b. Two        c. Four       d. Five
2. In case of dissolution assets and liabilities are transferred to ____ account. (Realisation )
a. Bank      b. Partner's Capital      c. Realisation      d. Partner's Current.
3. When goodwill is withdrawn by old partners _________ Account is credited. (Cash or Bank)
a. Cash or bank  b. Capital   c. Revaluation    d. Profit and Loss adjustment.
4. Generally incomplete records are maintained by ______ (Trader)
a. Trader    b. Company        c. Society            d. Government  
5. Excess of income over expenditure is termed as _____(Surplus)
a. Deficit,   b. Profit      c. Surplus  d. Loss

D. State whether the following statements are True or False.
1. Single entry system is based on certain rules and regulations. (False)
2. Not for profit concern do not have profit motive. (True)
3. Bill of exchange is an instrument in writing, containing an unconditional order. (True)
4. A bill of exchange is signed by the person on whom it is drawn. (True)
5. Realisation loss is not transferred to insolvent partner's capital account. (False).

E. Prepare a bill of exchange from the following details.
Drawer                              :         Soundariya, Neelam Bhawan, Kalyan    
      Drawee                             :         Sugandi, Dastur Nagar, Amaravati
      Payee                     :         Umesh , Deogad
      Period                     :         90 days
     Amount                    :         Rs. 7,555
     Date of bill               :         15th March 1995
     Accepted on            :         20th March 1995

Q2.  Following records of Mr. Raj were kept on single entry system. (March 2009) [Ans]  [8 MARKS]
Capital At the Beginning 116900
Capital At the End 114700
Trading Profit 8800
Net Profit 3325
Particular
31.3.2006
31.3.2007
Stock
Furniture
Plant and Machinery
Loan taken
Bank Balance
Debtors
Creditors
15000
53500
42500
21000
1900
43000
18000
14000
44000
55500
21000
2100
35000
14900
Mr. Raj invested Rs. 4000 in the business.
Also he had withdrawn Rs. 15,000 for his private expenses from business.
Rs. 500 to be provided for bad debts.
Depreciate plant and machinery @ 5% and furniture @5%
Prepare:
i.             Statement of Affairs as on 31.3.2006.
ii.            Statement of Affairs as on 31.3.2007.
iii.           Statement of Profit and Loss for the year ended on 31.3.2007.

OR
Q2. A. State the Objectives of Analysis of Financial Statements.(4)
(B) What is Cash Flow Analysis? (4)

Q3. The Balance Sheet of Rajkumar and Rajendra kumar as on 31st March, 2012 is set out below, they share profits and losses in the ratio of 2:1.
 [Ans. Profit and loss Adjustment A/c (Profit ) 10500, Tally = 570500]
Balance sheet as on 31st March, 2012 [10 MARKS]
Liabilities
Amount Rs.
Assets
Amount Rs.
Capital A/c
Rajkumar
Rajendrakumar
General Reserve
Creditors


200000
150000
120000
80000
Buildings
Furniture
Stock
Debtors
Cash
Profit and Loss A/c
100000
30000
60000
300000
30000
30000
550000
550000
They agreed to admit Dhirajkumar on 1st April, 2012 as a partner into the firm on the following terms.
1.   Dhirajkumar to bring Rs. 60000 as capital and Rs. 45000 as goodwill, which is to be retained in the business. He will be entitled to 1/4 th share of profit of the firm.
2.   50% of General Reserve is to remain as Reserve for doubtful debts.
3.   Furniture is to be depreciated by 5%
4.   Stock is to be revalued at Rs. 65,000.
5.   Creditors of Rs. 5000 are not likely to claim and hence should be written of.
6.   Rent of Rs. 2,000 due but not received has not been recorded in the books.
Pass necessary journal entries in the books of new firm and prepare Balance sheet of the new firm.

OR
Sanil, Nitish, Sapna were partners in a firm sharing profits and losses in the proportion of 1/2 , 1/3, 1/6 respectively. Their Balance Sheet as on 31st March, 2012 was as follows: [Ans. P/L Adj. Loss 2000, Sapna's loan a.c 27167, Tally = 212200]
Balance Sheet as on 31 - 03 - 2012
Liabilities
Amount
Assets
Amount
Bills Payable
Capitals:
Sanil
Nitish
Sapna
30000


80000
50000
30000
Machinery
Furniture
Sundry Assets
Stock
Debtors
Bank
40000
5000
60000
30000
32000
23000


190000


190000
Sapna decided to retire on 1st April, 2012 on following terms:
1. Goodwill of the firm will be valued at Rs. 30,000.
2. Furniture war taken over by Sanil for Rs. 4,700.
3. Make a Provision for unpaid expenses Rs. 1,700.
4. Out of the amount due to Sapna Rs. 7,500 to be paid by cheque and the remaining amount to be transferred to her loan account.
Prepare Profit and Loss Adjustment Account, Partners’ Capital Accounts and Balance sheet of New firm on 1st April, 2012.

Q4. Minal draws a bill on Usha for Rs. 5,000 at 3 months. Usha accepts the bill and return to Minal. Minal discounted the bill @ 12 % p.a. with the bank. On Maturity Usha finds herself unable to make payment of the bill and requested Minal to renew the bill. Minal accepts the proposal on the condition that Usha should Pay Rs. 2,000 in cash and accept a new bill at one month along with interest at 10% p.a. These arrangements were carried through. Usha retires the bill by paying Rs. 3015/- Pass Journal Entries in the books of Minal.  [10 MARKS]

Q5. X and Y are equal partners. The following is their Balance Sheet as on 31st March, 2012. [10 MARKS]
[Ans. Realisation A/c Loss :18,000, Amount paid to X = 35000 Y = 8000 bank A/c Total = 61500]

Liabilities
Rs.
Rs.
Assets
Rs.
Rs.
X’s Capital
Y’s Capital
Reserve Fund
X’s Loan
Creditors
40000
30000
8000
2000
15000
Building
Machinery
Furniture
Debtors
Less: R.D.D.
Stock
Investments
Commission REceivable
Bank



8800
- 800
30000
10000
12000

8000
20000
4000
1000
10000
95000
95000
The firm was dissolved on 31st March, 2012
(i) The Assets realised as follows:
Stock Rs. 19,000, Debtors Rs. 7,500, Machinery Rs. 11,000, Building Rs. 14,000
ii. Y took over the investments Rs. 5000 and Furniture at Book Value.
iii. X agreed to accept Rs. 1500 in full settlement of his Loan Account.
iv. Dissolution expenses amounted to Rs. 2000.
v. Commission Receivable could not be recovered.
Prepare Realisation Account, X’s Loan Account, Capital Accounts and Bank Account.

OR
ABC Industries Co. Ltd issued 15000 equity shares of Rs. 100 each. Payable as follows:
On Application : Rs. 20, On Allotment : Rs. 30. On First Call : Rs. 25. On Second call :Rs: 25
The company received application for 12000 shares. All the applications were accepted and shares were allotted. The company made both calls.
One shareholding holding 400 shares failed to pay the final call. His shares were forfeited.
Pass journal entries in the books of ABC industries Co. Ltd.

Q6. Dr. Narendra commenced practice in the month of April 2007. He prepared the following Receipts & Payments Account for the year ended 31st March, 2008. [12 MARKS]
Ans.
Surplus : 3895
Balance sheet Total 9300

Receipts and Payments A/c For the year ended 31st March, 2008
Receipts
Amount
Payments
Amount
To Cash
To Visits
To Sundry Receipts
10000
7000
400
By Furniture
By Equipment
By Drugs
By Salaries
By Rent
By conveyance
By Stationery
By Lighting
By periodicals
By Drawings
By Balance c/d
1500
2500
2000
1000
500
700
100
125
100
4375
4500
17400
17400
  1. Rs 200 were to be received on account of visits.
  2. Unpaid Salaries Rs. 200
  3. 60% of conveyance is for private purposes.
  4. Value of drugs on hand was estimated at Rs. 1,000.
  5. Depreciate furniture and equipment by 10%
  6. Prepare Income and Expenditure account and balance sheet.

Q7. From the following Trial Balance of M/s Sonia and Sufi, you are required to prepare Trading Profit and Loss Account for the year ended 31st December, 2004 and the Balance sheet as on that date. [15 MARKS]
Ans.
GROSS PROFIT 34200
GROSS LOSS 20700
PARTNER CAPITAL ACOUNT BALANCE 155200-129650
TALLY 487350

Trial Balance as on 31.12.2004
Particulars
Debit (Rs.)
Credit (Rs.)
Sonia’s Capital
Sufi’s capital
Sonia’s Drawing
Sufi’s Drawing
Stock on 1 – 1 – 2004
Bills Receivable
Purchases
Sales
Bills Payable
Return In ward
Return Outward
Plant and Machinery
Loose Tools
Patents
Sundry Debtors
Sundry Creditors
Cash at Bank
Wages
Salaries
Rent and Taxes
Insurance
Printing and Stationery
Power and Fuel


14, 450
10, 000
2, 00, 000
25, 000
2, 75, 000


5, 000

1, 00, 000
25, 000
25, 000
1, 25, 000

77, 550
19, 000
17, 500
7, 500
3, 000
2, 000
3, 500
1, 80, 000
1, 50, 000





4, 00, 000
60, 000

4, 500




1, 40, 000







9, 34, 500
9, 34, 500
Adjustments:
1.   Stock as on 31st December, 1978 Rs. 1, 30,000 and its market value were Rs. 1, 40,000.
2.   Write off Rs. 1000 for bad & Provide for Bad and Doubtful debts at 5% on Sundry Debtors.
3.   Goods worth Rs. 1000 were distributed as free samples.
4.   Prepaid Insurance Rs. 750.
5.   Depreciate Plant and Machinery by 10% p.a. and Patent by 15% p.a.
6.   Outstanding Salaries Rs. 2,500  
7.   Uninsured goods worth Rs 1200 were lost by fire.