1. Which is the last step of accounting as a process of information?

[ 1 ]
2. What are Fictitious Assets? [ 1 ]
3. Which basis of accounting gives a correct picture of operating results and financial position
of a business firm?
[1]
4. Rohan has returned goods worth ` 20,000 to Sachin as he found it was defective. What
document will be prepared by Sachin?
[1]
5. When is Closing Stock shown in the Trial Balance? [ 1 ]
6. Which accounting principle is followed under both single-entry system and double entry
system of accounting?
[1]
7. State any two external users directly connected with accounting information. [ 1 ]
8. Identify the nature of following account (Personal, Real or Nominal) –
(i) Accrued Interest (ii) Bill Receivable
[1]
9. Differentiate between General Reserve and Specific Reserve. (Any three) [ 3 ]
10. Prepare Accounting Equations based on the given transactions:
(a) Started business with cash ` 80,000.
(b) Credit purchase of goods ` 28,000 at 10% trade discount and 5% cash discount.
(c) Payment made to creditors in full settlement ` 27,000.
(d) Purchase of machinery for cash ` 15,000
[3]
11. Anju draws a bill on Kumar for ` 30,000 on 4th September, 2013 payable after 4 months. Anju
discounts the bill with the bank @ 12% p.a. on 7th October. The bill is dishonored on the due
date. Pass necessary entries in the books of Anju if the bank paid ` 300 as noting charges.
[3]
12. Give Journal Entries for following adjustments in final accounts:
(i) Closing stock ` 80,000.
(ii) Goods costing ` 8,000 destroyed by fire and Insurance Company admitted a claim for ` 5,000
only.
(iii) Goods costing ` 10,000 (Market value ` 11,000) were taken by proprietor for personal use.
[3]
13. Prepare Sales Book from the following information.
Date 2014 Details
March 4 Sold on Credit to M/s Mena Traders : Vide Invoice No.213 (a) Two Double Beds @ `
7,100 each. (b) Five Chairs @ ` 260 each
March 9 Purchased form M/s. Naresh Electronics: (Invoice No. 294)
10 Small T.V. @ ` 1,200 per piece 3 Colour T.V. 17′′ @ ` 12000 per piece Trade
[4]
( 2 ) P.T.O.
Discount 10%.
March 17 Sold on Credit to M/s Kohli Furniture : Vide Invoice No. 278; 5 Tables @ ` 1,400 each.
March 24 Sold on Credit to M/s Handa Furniture Mart : Vide Invoice No. 302; 4 Sofa Sets @ `
18,000 each
March 28 Purchased from M/s. East Electronics: (Invoice No. 456)
15 Stereos @ ` 4000 per piece 2 Color T.V. 14′′ @ ` 10500 per piece Trade Discount
@5%. 14. Briefly explain the following: (Any two)
(i) Materiality Principle
(ii) Revenue Recognition Concept
(iii) Matching Principle
[4]
15. Fill in the missing figures:

Bindu tells you that her capital on 31st December 2017 was ` 75,000 and his capital on 1st
January 2017 was ` 30,000. She further informs you that during the year she gave a loan of `
1,800 to her brother on private account and withdrew Rs 8,500 for his brother on private
account and withdrew ` 500 p.m. for personal purpose. He also used a flat for his personal
purpose, the rent of which @ ` 300 p.m. and electricity charges at an average rate of ` 100
p.m. was paid from the business account. During the year he sold his 5% government bonds
of ` 50,000 at 10% premium and brought that money into the business. You are required to
prepare a statement of profit or loss for the year ended 31st December 2017.
[4]
17. You are presented with a trial balance of S Ltd as on 30.06.2013 showing the credit is in
excess by ` 415 which was been carried to Suspense Account. On a close scrutiny of the
books, the following errors were revealed:
(i) A cheque of ` 3,456 received from Sankar after allowing him a discount of ` 46 was endorsed
to Sharma in full settlement for ` 3,500. The cheque was finally dishonored but no entries are
passed in the books.
(ii) Goods of the value of ` 230 returned by Sen were entered in the Purchase Day Book and
posted there from to Das as ` 320.
[4]
( 3 ) P.T.O.
(iii) Bill for ` 750 received from Mukherjee for repairs to Machinery was entered in the Inward
Invoice Book as ` 650.
(iv) ` 79 paid for freight on Machinery was debited to freight account as ` 97.
You are required to pass the necessary journal entries for correcting the books.
18. The transactions for the month of March 2017 of M/s Singhania & Co. are furnished here
as under. You are required to enter the same in an appropriate Cash Book:
March 1 Cash in hand ` 415 and Cash at Bank ` 2,530.
March 2 Paid wages by cheque ` 950.
March 15 Received ` 530 by cheque from Krishna and allowed him discount ` 20.
March 16 Paid cheque to Mohan ` 400 in full settlement of his account 415.
March 18 Krishna cheque is dishonoured by the bank and bank charges ` 30
March 22 Bank credited the account with ` 200 for interest.
March 30 Deposited cash into Bank ` 300.
[6]
19. On December 31, 2016, the cash book of Mittal Bros. Showed an overdraft of ` 6,920.
From the following prepare a Bank Reconciliation Statement and ascertain the balance as
per passbook.
(i) Debited by bank for ` 200 on account of Interest on overdraft and ` 50 on account of charges
for collecting bills.
(ii) Cheques drawn but not encashed before 31 December 2016 for ` 4,000.
(iii) The bank has collected interest and has credited ` 600 in passbook.
(iv) A bill receivable for ` 700 previously discounted with the bank had been dishonoured and
debited in the passbook.
(v) Cheques paid into bank but not collected and credited before 31 December 2016 amounted `
6,000.
[6]
20. On 1st April 2014 Ram Bros. Purchase a machine for ` 9,00,000. On 1st July 2015, another
machine was purchased for `3,00,000 and on 1st October 2016 a part of machine purchased on
1st April for `3,00,000 was sold at a profit of `15,000 and on the same date new machine was
purchased for `1,00,000 and cheque was issued from the saving account of Ram.
Depreciation is provided @ 10% p.a. on reducing balance method and books are closed on 31st
March every year. Prepare Machinery Account for three years.
[6]
21. Rajesh owed to Sunil ` 25,000 on 1st April 2013. On the same date Sunil drew a Bill of
exchange for the amount at 3 months on Rajesh, who accepted the bill and returned it to Sunil.
Sunil Discounted the same with his Bank on 4th April 2013 @ 18% p.a. On the due date, the
bill was dishonored and noting charges of ` 250 were paid by the bank. Rajesh agreed to pay `
5,250 and accepted another new bill for the remaining amount for 2 months together with
interest at 12% p.a. On the due date, the bill was duly met. Give Journal entries in the books of
Sunil.
[6]
22. From the following Trail Balance of Malhotra Handicraft Mart as on 31st March 2017.
Prepare Trading Account and Profit & Loss Account for the year ended and also show the
Balance Sheet as at that date:
Adjustment:
1. Taxes include Income Tax of `1,000
2. Salary is paid for 14 months and provide depreciation on Plant & Machinery @ 10%
3. Bhawani a debtor of `1,500 became insolvent and paid 20 paisa in a rupee only.
4. Maintain baddebts reserve at 10% on debtors and provision for discount on debtors @ 2%
5. Write off 30% of advertisement expenses
6. Stock on 31st March 2017 amounted to `30,000 (Market Value `25,000)
7. Goods of selling price ` 9,800 profit on cost 40% were destroyed by fire and Insurance Co.
accepted a claim up to 90%.
OR
Following is the Trail Balance of Shiv Kumar. Prepare Trading Account, Profit & Loss A/c
for the year ended 31st March 2017 and Balance Sheet on that date.
Adjustments:

i. Closing Stock valued at ` 35,000 (Market Value ` 40,000).

ii. Wages include a salary of ` 7,000.
iii. Further Bad debts amounted to ` 800. Maintain a Provision for bad debts @ 5% and
( 5 ) P.T.O.
provision for discount on debtors @ 2%.
iv. Salary is paid for 13 months.
v. Goods worth` 2,000 given away as charity.

Which system of accounting is most widely used? [1]

2. Mr. Dinkar who owed us ` 5,000 has become insolvent and paid only 40% of this [1]
amount. What is the term used for the amount not received?
3. Name the basis of accounting followed by the organisation which records the [1]
transactions as and when they take place irrespective of payment/receipt.
4. What are Non- cash vouchers? Give examples. [1]
5. State the accounts which are not considered while preparing Trial Balance. [1]
6. What do you mean by Statement of Affairs? [1]
7. “Accounting information helps the users to make better financial decisions.” In the light of
this statement, write a detailed note on Internal Users of the Financial Statements.

Identify the nature Sales Return (ii) CST Collected

of the following Account Account
accounts (Personal,
Real or Nominal
Account): - (i)
(iii) Trading Account (iv) Cash Account

(v) Bank Account (vi) Patent Account

Prepare purchase return book from the following

transactions:
2015
March 4 Returned to Roy & Co. Kolkata: (Debit Note
No.225)
2 Collapsible Chairs @ Rs. 200 each.
March 8 Returned to Mohan Furniture Ludhiana (Debit
Note No. 245)
4 Chairs @ Rs. 150 each
Less: 10% Trade Discount
March 15 Returned to Rao Ltd. Mumbai (Debit Note
No.315)
1 Steel Almirah of Rs. 4000.

10. Write any two differences between Provision and Reserve and give two examples [3]
of each.
11. On 1st September, 2016, M/s Bhootra Garments, Mumbai sold readymade [3]
garments to M/s Khatri Garments, Thane for ` 2,00,000 plus VAT @ 5%. On 2nd
September, 2016, Khatri Garments accepted a promissory note of ` 90,000 payable 2
months after date. The balance amount was paid by a bank draft on 8th September,
2016 as well. On 10th September, 2016, M/s Bhootra Garments sent the bill to bank
for collection. Pass Journal entries in the books of M/s Bhootra Garments.
12. On 1st July, 2015, a company paid insurance premium ` 45,000 up to 30th June, [3]
2016 and total insurance premium paid during the year 2015-16 amounted to `
80,000. What will be amount written in Profit & Loss account for the year ended
31st March, 2016. Give journal entry/entries also.

13. Create Accounting Equation of M/s Verma Auto Parts from following information:

(a) Mr. Ashok, the owner, started the business with cash ` 2,60,000.

(b) Hired a building from Jitesh a rent of ` 2,000 per month by depositing ` 10,000 as
security. (prevailing rent in the market ` 5,000)

(c) Security money was forfeited by Jitesh as Mr. Verma vacated the building without
giving proper notice.

15. Following are the different concepts of Accounting. Identify them and explain
briefly –

1) The owner of a company lends loan to his company. It would be strictly

recorded as company‟s liability and that must be paid back to the owner.

2) M/s Giriraj Enterprises‟ books showed sundry debtors of ` 1,00,000 as at 31st

March 2016. It is anticipated that 2% of the amount of sundry debtors is likely to
become bad.

3) The CEO of Fine Enterprise delivers a lecture to the employees in a special

meeting that can be helpful in raising the employees‟ morale and completing the
current projects on time. It will indirectly increase the profits of the company
through efficient work of the employees.

4) M/s Swarnaprabha Jewellers ascertains its financial performance at the end of

each year rather than ascertaining only at the time of its dissolution (winding up).
Compute the capital of Kishan at the beginning of the year from the `
following information: Particulars
Capital at the end of the year 24,000

He withdrew during the year :

Cash ` 300 per month for domestic purpose
Goods costing `1,500 (selling price ` 2,000) for domestic purpose
He paid Life Insurance Premium ` 600.

Fresh capital introduced 4,500

Loss during the year 8,100

Prepare Bank Reconciliation Statement as on 31st July, 2011

1) Balance as per Cash Book is ` 25,000 as on 31st July, 2011.

2) Cheques for `15,000 were deposited into the Bank in the month of July but only
cheques for `11,000 were credited by the bank till 31st July, 2011.

3) Cheques issued for ` 13,000 in July, out of which a cheque for ` 3,800 was
presented for payment on 3rd August.

4) A customer directly deposited ` 1,550 in firm‟s bank account.

5) Bank paid the Insurance Premium of ` 1,200 as per standing instructions on

25.07.2011.

The totals of Zeema Jumbe‟s trial balance on 31st March, 2015 failed to agree. The
difference was a shortage on the credit side of 350. This was entered in a suspense
account. The following errors were later discovered :

1) A cheque of ` 540 paid to Zaheer had been debited to the account of Zahir as `
440.

2) The balance of the petty cash book being ` 50 had been omitted from the trial
balance.

3) Rent received, ` 250 had been debited to the rent account.

4) No entry had been made for goods costing ` 385 taken by Zeema Jumbe for her
own use.

Pass the entries in Zeema Jumbe‟s Journal to correct the above errors.
Prepare Double Column Cash book (Cash and Bank) from the following information : 2016

`
March 1 Cash Balance 55,000
20,000
 Bank Balance

March 3 Sold goods to Balu on credit 21,000

March 4 Paid Insurance premium by cheque 14,200

March 7 Net Cash sales after allowing a cash discount of ` 800 12,000

March9 Payment for cash purchases 21,000

Cash discount 900
March 10 Cash deposited into bank 15,000

March 11 Telephone bill paid by cheque 2,300

March 14 Withdrew from bank for personal use 6,000

March 14 Purchases of goods from Jain 1,200

March 15 Withdrew from bank for official use 14,500

March 20 Received a cheque from Dinesh in full settlement of ` 11,000 and 10,700
deposited it with the bank on the same day.
March 24 Cheque received from Gupta, allowed him a discount ` 250 4,500

March 25 Cheque received from Gupta deposited with the bank.

March 31 Cheque deposited on 25th March, 2016 got dishonoured and returned by bank.

March 31 Paid rent by cheque 4,000

March 31 Paid salary to Ravi, the accountant, in cash 3,000

Paid wages to Rahim, the watchman, in cash 1,500

Anu Ltd. purchased a Machinery worth ` 80,000 on 1st January, 2011. Additional
machines were purchased on 1st July, 2011 worth ` 55,000 and on 1st October, 2012
for ` 25,500 and same date 1/4th part of machine (purchased on 1st January, 2011
became useless and was sold for ` 15,500. Depreciation is charged @ 10% per annum
by Diminishing Balance Method. Show the Machinery Account for first 3 years,
assuming that the accounts were closed on 31st March every year.

On 1st April, 2015 Anil accepts a bill drawn by Sunil for 2 months for ` 15000, in
payment of a debt. On the date of maturity the bill was dishonoured and Sunil had
to pay ` 150 as noting charges. On 4th June 2015, Anil requested to Sunil to draw a
new bill for the amount due. Sunil agreed to draw a new bill for 73 days but he
charged interest @ 15% per annum in cash. This bill is duly met on its maturity.
Pass Journal entries in the books of Sunil.

From the following balances as taken from Ledger of Das Surgicals inaugurated on
1st July, 2015 and adjustments, prepare Trading and Profit & Loss Account for the
accounting year ended 31st March, 2016 and Balance Sheet as at that date: -
Adjustments to be made:
(i) Salaries for the month of March 2016 amounting to ` 30,000 shall be paid in the
first week of April 2016.
(ii) Fire insurance premium was paid on 1st July, 2015 for 12 months ending 30th
June, 2016.
(iii) It is estimated that 2% of sundry debtors will become bad.
(iv) Goods costing ` 10,000 (selling price ` 15,000) were destroyed by fire. The
insurance company has accepted the claim at ` 8,000.
(v) Stock was valued on 31st March, 2016 as : Cost ` 50,000 and market value `
40,000.
OR
From the following balances as taken from Ledger of Garg & Company and
adjustments, prepare Trading and Profit & Loss Account for the year ended 31st
March, 2016 and Balance Sheet as at that date: -

Adjustments to be made:
(i) Wages for 31st March, 2016 amounting to ` 5,000 will be paid on 1st April, 2016.
(ii) Insurance Premium was paid by bank ` 2,000 during 2015-16 for the year 2015-
16 under standing orders but no entry was made in the Cash Book.
(iii) Dinesh, one of the debtors, who owes ` 6,000 has been declared insolvent by the
court.
(iv) 1/4th of the factory expenses belong to next accounting year.
(v) Stock was valued on 31st March, 2016 as: Cost ` 80,000 and market value `
90,000.

From the following Receipts and Payment

Accounts for the year ended 31.03.09 and Balance
Sheet as at 31.03.08, prepare Income and
Expenditure accounts of National Club for the year
ended 31st March, 2009 and identify the value
fulfilled by a Not-for Profit Organisation. Receipts
and Payments Account for the year ended 31.3.09

Prepare Income & Expenditure account of Leo Club, Mumbai for the year ended
31st December, 2007 from the following receipts and payments A/c for the year
ended 31-12-2007 and additional information. Also identify the value fulfilled by a
Not-for Profit Organisation (N.P.O.).
Receipts & Payments A/c (Year ended 31-12-2007)

The club has 300 members each paying an annual subscription of ` 10.
` 70 are still outstanding for the year 2006. In 2006, 10 members had paid their
subscription for 2007 in advance. Stock of stationery as at 31-12-2006 was ` 100 and
as at 31-12-2007 ` 140.
On 1-1-2007, club owned Land & Building valued at ` 20,000 & furniture of ` 1300.
Interest accrued on investment @ 6% p.a. for 3 months.
1 Use of common unit of measurement and common format of reporting promotes: [1]
a) Understandability b) Relevance
 c) Comparability d) Reliability
2 Distinguish between Loss and Expense. [1]
3 What are the disadvantages of Cash Basis of Accounting?(any two) [1]
4 Define a cheque. [1]
5 When is closing stock showed in the Trial Balance? [1]
6 Single Entry system can be adopted by. [1]
(a) Small firms (b) Joint stock company
(c) Co-operative society (d) None of these
7 The role of accounting has changed over the period of time”- Do you agree? [3]
Explain.
8 On which side will be the decrease in the following accounts recorded? Also [3]
mention the nature of the account.
(i) Cash (ii) Bank Overdraft
(iii) Outstanding Salary Paid (iv) Outstanding Rent
(v) Prepaid Insurance (vi) Mohan, proprietor of the
business
9 Prepare the „Purchase Book‟ of „Mahesh Furniture House, Kanpur‟ from the [3]
following transactions:
2014
March15 Purchased from Arora and Co., Nai Sarak, Delhi
10 Chairs @ ` 500 each
2 Tables @ ` 1,000 each
10 % trade discount
March18 Purchased from Suresh & Sons.
6 Computer @ ` 20,000 each
10 % trade discount
March25 Sold by Mohit Bros. to us
6 Tables @ ` 700 each
10 % trade discount
March30 Purchased from Kapil & Sons., Mumbai for cash
40 chairs @ ` 500 each
10 From the following balances extracted from the books of M/s Ahuja and Nanda. [3]
Calculate the amount of:
(a) Cost of goods sold during the year
(b) Gross Profit
Opening stock 25,000
Credit purchases 7,50,000
Cash purchases 3,00,000
Credit sales 12,00,000
Cash sales 4,00,000
Wages 1,00,000
Salaries 1,40,000
Closing stock 30,000
Sales return 50,000
Purchases return 10,000
11 On Jan 01, 2006, Shankar purchased goods from Parvati for ` 8,000 and immediately [3]
drew a bill in favour of Parvati payable after 3 months. On the date of maturity of
 the bill, the Government of India declared holiday under the Negotiable Instrument
Act 1881. Since, Parvati was unaware about the provision of the law regarding the
date of maturity of the bill, she handed over the bill to her lawyer, who duly
presented the bill and received the payment. The amount of the bill was handed
over by the lawyer to Parvati immediately. Record the necessary Journal entries in
the books of Parvati.
12 Explain any three differences between Provision and Reserve. [3]
13 State the accounting principle/assumption (any two) and identify any one value in [3]
each of them- (i) Conservatism Principle (ii)
Consistency Assumption
(iii) Verifiable Object Concept
14 Prepare the accounting Equation on the basis of the following. [3]
(i) Started business with cash ` 70,000
(ii) Credit purchases of goods ` 18,000
(iii) Payment made to creditors in full settlement ` 17,500
(iv) Purchase of machinery for cash ` 20,000
15 Give Journal entries for following transactions:- [3]
(i) Goods worth ` 500 given as charity
(ii) Received a cash ` 1000 of bad debt written off last year
(iii) Interest charged on drawings 5%, total drawings were ` 10000
(iv) Salary outstanding at the end of the year ` 200.
16 What are the two methods for providing depreciation? Give the two merits of each [3]
method.
17 Hari who keeps his books on single entry system tells you that his capital on 31 st [4]
March 2013 is ` 1,87,000 and his capital on 1st April 2012 was ` 1,92,000. He further
informs you that during the year, he withdrew for his household purposes ` 84,200.
He once sold his investment of ` 20,000 at 2% premium and brought that money
into business. You are required to prepare a statement of Profit and Loss.
18 Prepare Three Column Cash Book of Karan from the following particulars:- [4]
Jan 1 Cash balance ` 55,000, Bank Overdraft ` 20,000
Jan 4 Purchased goods costing ` 20,000 at 10% trade discount from Naresh and paid
carriage ` 1,000.
Jan 5 Withdrew ` 20,000 from bank and out of which ` 15,000 deposited in to the
owner‟s personal bank A/c and remaining kept for business use.
Jan 12 ` 50,000 was withdrawn by Karan from his personal saving bank account and
deposited ` 30,000 in to the current account of the business.
Jan 13 Received a cheque of ` 9,500 from Virat after deducting 5% cash discount.
Jan 15 Virat‟s cheque returned dishonoured and dishnonoured charges charged by
bank ` 500.
Jan 31 Bank Pass book showed debit of ` 2,000 as interest.
Jan 31 Deposited the entire cash into bank after retaining ` 5,000.
19 Prepare Bank Reconciliation Statement. [4]
(i) Overdraft shown as per cash book on December 31, 2005 ` 10,000.
(ii) Bank charges for the above period also debited in the passbook ` 100.
(iii) Cheques issued but not incashed prior to December 31, 2005 amounted to `
2,150.
(iv) Interest on Investment collected by the bank and credited in the passbook `
600.
 (v) Cheques paid into bank but not cleared before December, 31 2005 were `
1,100.

20 Pass rectify journal entries for following errors in the books of Mr. Dutt. [4]
(i) Total of Returns Inwards Book for December had been cast by ` 1000 short.
(ii) ` 3,750 paid for wages to workmen for making showcases had been charged
to the Wages Account.
(iii) A purchase of ` 670 had been posted to the Creditor‟s Account as ` 600.
(iv) ` 10,000 paid for the purchase of a motorcycle for Mr. Dutt had been charged
to the „Miscellaneous Expenses Account‟.
21 Mohit and Shehnaj were born in remote village of Rajasthan. They were very close [6]
friends since very beginning. Both of them were excellent in studies. When they
grew young and got the job in Government Department, they decided to do
something to promote education for the children of their village. They established a
not-for-profit Club in the year 2001 named as THE LITRACY CLUB. The following
is the Receipts and Payments Account for the year ended 31-3-2014 of their club
Receipts and Payments A/c
Receipts Amount Payments Amount
To Balance b/d 20,000 By Salaries 30,000
To Subscription By Rent 42,000
2012-13: 9,000 By Furniture (on Oct. 1, 20,000
2013)
2013-14: 74,000 By Stationary 8,000
2014-15: 17,000 1,00,000 By Balance c/d 2,30,000
To Interest on Investments 5,000
To Donation for Building 2,00,000
To Sale of Old Furniture 5,000
(Book value Rs. 6,000)
3,30,000 3,30,000
Additional information:
a) Subscriptions outstanding as on 31-3-2013 were `12,000 and 31-3-2014
`16,500.
b) On 31-3-2014 salary outstanding was `10,000 and rent outstanding `12,000.
c) The club owned furniture `16,000, 10% Investments ` 80,000 and Books
`10,000 on 1.4.13.
d) Depreciate Furniture and Books @ 10 %.
Prepare Income and Expenditure Account of the Club for the year ended 31-3-2014.

And Identify the value in the above mentioned club.

22 On Jan. 15, 2006 Sachin sold goods ` 30,000 to Narain and drew upon the later a bill [6]
for the same amount payable after 3 months. The bill was accepted by Narain. The
bill was discounted by Sachin from his bank for ` 29,250 on Jan. 31, 2006. On
maturity the bill was dishonoured. He further agreed to pay ` 10,500 in cash
including ` 500 interest and accept a new bill for two months for the remaining `
20,000. The new bill was endorsed by Sachin in favour of his creditor Kapil for
settling a debt of ` 20,800. The new bill was duly met by Narain on maturity.
Record the necessary journal entries in the books of Sachin.
23 Kapil Ltd. purchased a machinery on July 01, 2001 for ` 3,50,000. It purchased two [8]
additional machines, on April 01, 2002 costing ` 1,50,000 and on October 01, 2003
 costing ` 1,00,000. Depreciation is provided @10% p.a. on straight line basis. On
January 01, 2004, first machinery become useless due to technical changes. This
machinery was sold for ` 1,00,000, prepare machinery account for 4 years on the basis
of calendar year.
OR
On January 01, 2001, Satkar Transport Ltd, purchased 3 buses for ` 10,00,000 each.
On July 01, 2003, one bus was involved in an accident and was completely destroyed
and ` 7,00,000 were received from the Insurance Company in full settlement.
Depreciation is writen off @15% p.a. on Diminishing Balance Method. Prepare Bus
account from 2001 to 2004. Books are closed on December 31 every year.

24 Hira Lal started a business on 1st January, 2014 and decided that 20% of net profit [8]
will be used for paying school fees of poor students. Prepare final Accounts of Shri
Hira Lal as on 31st December, 2014 from the following balances and identify the
value involved in it:
Particulars Debit ( ` ) Credit ( ` )
Cash in hand 1,200 -
Cash at bank 5,350 -
Purchases 81,350 -
Return outwards - 1,000
Sales account - 1,97,400
Return(inward) 1,300 -
Wages 20,900 -
Fuel and Power 9,300 -
Carriage on sales 6,400 -
Carriage on purchases 4,100 -
Stock (1.1.2014) 11,500 -
Buildings 60,000 -
Freehold land 20,000 -
Machinery 40,000 -
Salaries 30,000 -
Patents 15,000 -
General Expenses 6,000 -
Insurance 1,200 -
Capital - 1,42,000
Drawings 10,400 -
Sundry debtors 29,000 -
Sundry creditors - 12,600
3,53,000 3,53,000
Adjustments:
(i) Stock on hand as on 31 December 2014 is ` 13600.
(ii) Machinery is to be depreciated @ 10% and patents @ 20%.
(iii) Salaries for the month of December, 2014 amount to ` 3000 were unpaid.
(iv) Further bad debts of ` 1,000 and provision for Bad and Doubtful Debts is to
be created to the extent of 5% on Sundry Debtors.
OR
Narendra started a business on 1 January, 2014 and decided that 20% of net profit
st

will be donated to Prime Minister Relief Fund. Prepare final Accounts of Shri
 Narendra as on 31st December, 2014 from the following balances and identify the
value involved in it:
` `
Salaries 15,000 Opening Stock 6,100
Sales 60,000 Sundry Debtors 20,000
Investments 40,000 Wages 4,000
Capital 50,000 Bad Debts 1,800
Furniture 12,000 Cash at Bank 10,000
Purchase 30,000 Prepaid Wages 1,000
Interest on Loan 400 Provision for Doubtful 2,500
Debts
Office Expenses 1,520 10% Loan (01.07.2014) 10,000
Carriage 1,500 Sundry Creditors 22,720
Depreciation on Furniture 2,000 Outstanding Expenses 500
Advertisement 8,000 Bad Debts Recovered 600
Bills Payable 5,000 Rent Received 2,000
Adjustments :
i) Closing Stock is valued at`10,000 at market price and `8,000 at cost price.
ii ) Goods costing ` 2,000 were destroyed by fire and insurance company accepted
the claim at 80% but not recorded.
iii ) Maintain provision for Doubtful Debts @ 10%.
iv ) Rent was received on 1st April 2014 for one year.
1 Briefly explain the term „Relevance‟ as one of the Qualitative Characteristics of [1]
Accounting Information.
2 What do you mean by the term „Debtor‟? [1]
3 Full cost of an asset is not treated as an expense in the year of its purchase because [1]
of which accounting concept?
4 What are accounting standards? [1]
5 What are the two bases of accounting? [1]
6 What is a credit note? [1]
7 What is meant by the term „Legacy‟ ? [1]
8 How is General donation and Specific donation treated by Not-For-Profit [1]
Organisations ?
9 Find the due date of a bill of exchange drawn and accepted on 9 th December 2007 [1]
payable after 45 days.
10 What are the limitations of accounting ? ( any Three) [3]
11 From the following information, prepare Trading Account for year ended 31st [3]
March 2014:
Adjusted purchases ` 15,00,000; Sales ` 17,50,000; Freight and Carriage Inwards ` 20,000;
Manufacturing wages ` 10,000; Freight and carriage outwards ` 15,000; Closing stock `
6,00,000.
12 Differentiate between Not for Profit Organisation and Profit Earning Organisation. [3]
(Any three points)
13 Prepare the „Purchase Book‟ of Manpreet Singh Cloth Merchant Gurgaon‟. [3]
2015
06-Feb Purchased from Rajni Textiles
200 metres silk @ ` 40 per metre
120 metres cotton @ ` 20 per metre
 Less: 15 % Trade Discount
07-Feb Purchased from Dikshant Textiles for cash
100 metres cotton @ ` 20 per metre
200 metres silk @ ` 40 per metre
Less: 12 % Trade Discount
18-Feb Purchased from Nagpur Textiles
800 metres nylon @ ` 20 per metre
300 metres silk @ ` 60 per metre
Less: 10 % Trade Discount
17-Feb Purchased by Rajesh Textiles
120 metres cotton @ ` 50 per metre
60 metres silk @ ` 60 per metre
Less: 15 % Trade Discount

14 Fill in the missing figures : [3]

Date Particulars L Amt. (Dr) Amt. (Cr)
F
Sept. 2 Suresh A/c Dr. –
To Sales A/c –
To Carriage Outward –
A/c
(Being goods costing ` 45,000 sold to
Suresh at a profit of 33 1/3% on cost
less 20% trade discount & paid
carriage ` 400)
Sept. 5 ---------------------A/c Dr. 300
To Cash A/c 300
(Being ` 300 spent for refreshment of
customer)
Sept. 7 --------------A/c Dr. –
To Cash A/c –
(Being machinery purchased ` 10,000
and installation expenses paid `
2,500)
Sept. 9 Cash A/c Dr. –
To Sales A/c –
(Being the goods sold for ` 40,000 at
a profit of 25% on cost less 20%
trade discount)
15 Kanika tells you that her capital on 31st December 2014 is ` 37,400 and her capital on [4]
1st January, 2014 was ` 38,400. She further informs you that during the year she gave `
7,000 to her brother on private account and withdrew ` 600 [Link] her personal
purposes. She also used a flat for her personal purpose, the rent of which at ` 200 p.m.
and electricity charges @ ` 20 p.m. were paid from the business account. During the
year she sold her 10% Government Bonds ` 5,000 at 3% premium and brought the
money into the business.
You are required to prepare statement of profit or loss for the year ended 31st
 December 2014.
16 From the following extracts of Receipts and Payments A/c and additional [4]
information, you are required to calculate the income from subscriptions for the year
ended 31 March, 2015 and show them in the Income and Expenditure A/c and the
Balance sheet as on that date:
Receipts and Payment A/c
the year ended 31st March, 2015
Amount Amount
Receipts Payments
` `
To Subscription A/c: 64,000
2013 – 2014 3,000
2014 – 2015 59,000
2015 – 2016 2,000
Information: The club has 600 members, each paying a general subscription of `.
100. The Subscriptions outstanding on 31.3.2014 was ` 7,000
17 Enter the following transactions in Cash Book with cash and bank column of Rao & [4]
Sons.
June 2010 Particulars
1 Started business with cash ` 1,00,000.
3 Opened a bank current a/c with SBI ` 60,000.
8 Paid Ashok by cheque ` 14,700 and received discount ` 300.
10 Sold goods to Mohan for cash ` 10,000 and on credit ` 22,000.
12 Received cheque from Mohan 21,400 and allowed discount Rs. 600.
13 Cheque of Mohan deposited into bank.
15 Paid electricity charges ` 1100 & rent ` 2,000.
23 Withdrew cash from bank for office use ` 5,000 & for personal use `
3,500.
25 Bought a machine from Raman. He was paid by cheque ` 9,000.
29 Bank allowed interest ` 800 & bank charges were ` 200.
18 Briefly explain the following Principle / Concept of Accounting. (Any two) [6]
(a) Historical Cost Principle (b) Conservatism Principle (c) Money
Measurement Concept

19 On 1st July 2015, Balraj purchased goods from Amit. In consideration of the amount [6]
due, Amit drew on Balraj two Bills of Exchange for ` 15,000 and ` 40,000 payable after
3months and 4 months respectively. On 4th July, 2015, the first bill was discounted
from the Bank @ 12 % p.a. On the same day the second bill was endorsed to Chand.
The first bill was dishonoured on due date on which bank paid the noting charges of `
50. Balraj requested Amit to draw a new bill upon him for the amount due including
interest of ` 100 and paid ` 5000 immediately. Amit accepted Balraj‟s request and
drew a new bill for 2 months. The second bill was retired on 25th October 2015 at a
rebate of ` 160. The new bill was met on maturity.
Pass the necessary journal entries in the books of Amit.
20 Following is the receipts and payments account of Appollo Hospital for the ended [6]
31st March 2015.
Receipts And Payment A/C
for the year ended 31.03.15
 Receipts ` Payments `
By Payments of
To Balance b/d 10,000
Medicines 34,000
To Subscription 50,000 By Fees to doctors 25,000
To Donations 16,000 By Salaries 27,000
To Interest on Investments at 10% for By Equipment
10,000
the year purchased 16,000
To Proceeds from charity show 15,000 By Charity show exp. 8,000
To Grants 20,000 By Balance c/d 11,000
1,21,000 1,21,000

Other Information:
1/4/2014 31/3/2015
a) Subscriptions due 2,500 1,000
b) Subscriptions received in
2,000 4,000
advance
c) Stock of Medicines 10,000 15,000
d) Value of Equipment 25,000 33,000
e) Value of Buildings 70,000 65,000
f) Capital Fund 2,15,500
You are required to prepare an Income and Expenditure Account for the year ended
31st March 2015.
21 Prepare Bank Reconciliation Statement as on 31st December, 2013 from the following [6]
transactions :
a) A’s overdraft balance as per pass book ` 12,000.
b) On 30th December, cheques had been issued for ` 70,000 of which cheques worth `
3,000 only had been encashed upto 31st December.
c) Cheques amounting to ` 3,500 had been paid into the bank for collection but out of
these only ` 500 had been credited in the pass book.
d) The bank has charged ` 500 as interest on overdraft and the intimation of which has
been received on 2nd January, 2013.
e) Bank has collected ` 600 directly in respect of interest on A’s investment. A has no
knowledge of it.
f) A cheque of ` 200 has been debited in bank column of cash book by A but it was not
sent to bank at all.
22 Trial balance of Khosla did not agree and showed an excess debit of ` 16,300. He [6]
put the difference to a suspense account and discovered the following errors :
(a) Cash received from Rajat ` 5,000 was posted to the debit of Kamal as ` 6,000.
(b) Salaries paid to an employee ` 2,000 were debited to his personal account as ` 1200.
(c) Goods withdrawn by proprietor for personal use ` 1,000 were credited to sales account `
1,600.
(d) Depreciation provided on machinery ` 3,000 was posted to Machinery account as `
300.
(e) Sale of old car for ` 10,000 was credited to sales account as ` 6,000.
Rectify the errors and prepare suspense account.

23 Following is the Trial Balance of Pradeep Traders. He is determined to donate 10 % [8]

of the net profit for Swachh Bharat Abhiyan. Prepare Final Accounts of the firm as
on 31st December 2014 and identify the value involved in it.
Particulars Amount Particulars Amount
Dr. Cr.
Drawings 15,000 Capital 1,80,000
Purchases 90,000 Commission 6,000
5 %Investments 20,000 Loan from X 20,000
Sundry Debtors 31,000 Sales 1,69,000
Legal Expenses 3,000
Cash in Hand 19,500
Lease Hold Property 60,000
Machinery 80,000
Opening stock 25,000
Insurance 8,500
Carriage 3,000
Trade Marks 9,000
Factory Rent 5,000
Returns Inwards 4,000
Office Expenses 2,000
3,75,000 3,75,000
Adjustments :
(i) One third of the commission received is in respect of the work to be done in next year.
(ii) A fire occurred on 26 December 2014 in godown and the goods of value ` 10,000 was
destroyed but the insurance company admitted a claim for 60% loss.
(iii) The investment was made by the firm on 1st July 2014.
(iv) Goods of ` 6,000 was purchased on credit but was not recorded at all.
(v) Closing Stock was ` 33,000.
OR
Following is the Trial balance of Raman. He is determined to donate 10 % of the net
profit to the local Sports Club. Prepare Final Accounts of the firm as on 31 st
December 2014 and identify the value involved in it.
Particulars Amount ` Particulars Amount `
Dr. Cr.
Rates Taxes and 5,000 Capital 1,60,000
Insurance
Purchases 70,000 Profit on sale of 10,000
Furniture
Repairs of Machinery 7,000 Sundry Creditors 20,000
Sundry Debtors 25,000 Sales 1,44,000
Charity 3,000 Rent Received 24,000
Cash in Hand 28,000
Furniture 60,000
Machinery 80,000
Opening stock 25,000
Audit Fee 4,000
Loose Tools 18,000
Income Tax 3,000
Establishment Expense 9,000
Wages 5,000
Salaries 16,000
 3,58,000 3,58,000
Adjustments :
(i) Goods of ` 16,000 was sold on credit but was not recorded at all.
(ii) Closing Stock valued ` 45,000 market value ` 40,000.
(iii) Goods worth ` 10,000 was withdrawn for personal use and worth ` 12,000
distributed as free sample.
(iv) 1/4th of the salaries relates to factory.
(v) Furniture was valued at ` 50,000

24 On 1st April 2010 Sohan Lal & Sons purchased a plant costing ` 60,000. Additional [8]
plant was purchased on 1st October 2010 for ` 40,000 and on 1st July 2011, for ` 2,000.
On 1st January 2012, one third of the plant purchased on 1st April 2010, was found to
have become obsolete and was sold for ` 6,000. Prepare the Plant account for the
first three years in the books of Sohan Lal & Sons. Depreciation is charged @ 10% p.a
on Straight Line Method. Accounts are closed on 31st December each year.
OR
On 1 April 2009, a company purchased machinery for ` 1,20,000. On 30th June 2010,
st

company purchased the another machinery for ` 1,00,000. On 1st July 2011, 1/3rd of
the machinery purchased in 2009 become obsolete, so it was sold at a profit of `
6,365. Prepare Machinery A/c from the year 2009 to 2012. The company charge the
depreciation @ 10% p.a. using the Diminishing Balance Method. Books of accounts
were closed on 31st December every year.
1. Which qualitative characteristic of accounting information is violated when [1]
accounting information is unable to influence the decision of the users?
2. Under which accounting principles, quality of manpower is not recorded in the books [1]
of accounts?
3. What is meant by residual or scrap value of the asset? [1]
4. Give an example of transaction for compensating error. [1]
5. Surplus of not-for-profit organisation is distributed among the members. State [1]
whether the statement is true or false.
6. State any two disadvantages of Incomplete Record System of Accounting [1]
7. Journalise the following transactions: [3]
a) Sold goods to Tony of the list price of `20,000 at trade discount of 5%. Received full
amount in cash.
b) ` 5,000 due from Sunny now is to be recorded as bad debts.
c) Wages due to labourers ` 2,000.
8. Record the following entries in a Cash Book with Cash and Bank Columns : [3]
April 1 Balance of Cash in hand `15,000; Bank Overdraft `40,000
April 2 Received a cheque for the goods sold `25,000. The cheque was
deposited into the bank on the next day.
April 3 Instructed the bank to issue a bank draft for `10,000 in favour of
Anil. The bank charged `20 for issuing the draft.
9. Enter the following transactions in Purchase book: [3]
Date Particulars
2012
March Purchased from Rajendra Bros,
1 Mathura:
50 tins ghee @ `500 per tin
 100 bags of sugar @ `900 per bag
Less: 10% trade discount
March Bought from Bharat Stores,
2 Mumbai
20 bags of gram @ `300 per bag
10 bags of sugar @ `1000 per bag
15 bags of wheat @ `400 per bag
Less: 10% trade discount
March Bought from Harish Kumar ,
3 Kaithal
10 bags of sugar @ `1000 per bag
30 tins ghee @ `400 per tin
10. State the differences between Reserve and Provision on any three basis. [3]
11. Which of the following errors will affect the trial balance? Give the reasons. [3]
1) The total of sales book has not been posted to the sales account.
2) `1,000 paid for repairs to building have been debited to building account.
3) Goods costing `4,000 taken by the proprietor have been debited to Debtors
account.
12. From the following extract of the Receipts & Payments Account and the additional [3]
information, you are required to compute the income from subscriptions for the year
ended 31st March,2012 :
RECEIPTS & PAYMENT ACCOUNT
for the year ended 31st March,2012
Dr. Cr.
Receipts ` Payments `
To Subscriptions 1,00,000
Additional information:-
31st March,2011 31st March,2012
` `
Subscriptions outstanding 20,000 40,000
Subscriptions received in advance 30,000 20,000
13. Define accounting. Briefly explain any two limitations of accounting. [3]
14. Prepare Trial balance from the following Ledger balance. [3]
Capital ` 13,400, Sales ` 15,300, Return inward `1,500, Discount allowed `300,
Purchases `17,000, Salaries ` 500, Drawing `5,000, Return outward ` 400, Cash ` 900
Bank Overdraft ` 4,100, Furniture ` 8,000.
15. What is meant by noting of bill of exchange? Mention two advantages of a Bill of [3]
Exchange.
16. The following balance appeared in the Trial Balance of M/s Sharma Traders as on 31st [3]
March‟ 13:
Dr. ` Cr. `
Provision for Doubtful Debts 15,000
Bad Debts written off during the year 11,300
Discount Allowed during the year 6,000
Debtors 4,00,000
Adjustments: Write off further Bad Debts ` 2,000 and create a provision for doubtful
debts @ 5 % and for discount on debtors @ 3 %. Show how the above items will appear
in Profit & Loss A/c and the Balance Sheet.
17. Mr. Amrut started a business with a capital of `5,00,000. At the end of the year his [4]
position was :
Cash in hand `15,000 ; Cash at bank `70,000 ; Sundry Debtors `1,20,000 ; Stock `2,40,000
; Furniture `75,000 ; Machinery `2,00,000 and Sundry creditors `80,000.
During the year he introduced a further capital of ` 1,50,000 and withdrew for
household expenses ` 90,000. You are required to calculate Profit and Loss during
the year.
18. Briefly explain the following (any two) and also give the values which can be identified [4]
from them –
a) Conservatism Principle
b) Consistency Assumption
c) Verifiable Object Concept
19. On 31st December 2012, the Bank Pass Book of Naresh and co. showed an overdraft of [4]
`10,700. From the following particulars, prepare a Bank Reconciliation Statement:
i. Cheques issued before 31st December 2012 but presented for payment after that date
amounted to ` 900.
ii. Cheque paid into bank not collected and credited until 31st December 2012
amounted to ` 2,200.
 iii. Interest on overdraft amounting to `1,200 did not appear in cash book.
iv. ` 5,000 being interest on investment collected by the bank and credited in the pass
book were not shown in the cash book.
v. Bank charges ` 50 were not entered in the cash book.
vi. ` 800 in respect of dishonoured cheque were entered in the pass book but not in the
cash book.
20. On 30th June 2011 a Machinery was purchased by John Ltd. Co. for ` 1,60,000. On 1st July [4]
2012 1/4th of this Machinery was sold at a loss of ` 11,075. On the same date new
Machinery was purchased for ` 60,000. Depreciation was provided @ 10 % p.a. using
Diminishing Balance Method. The books were closed on 31st March each year.
Prepare Machinery A/c upto 31st March, 2013.

21. On Jan. 15, 2006 Sachin sold goods ` 30,000 to Narain and drew upon the latter a bill [6]
for the same amount payable after 3 months. The bill was accepted by Narain. The bill
was discounted by Sachin from his bank for ` 29,250 on Jan. 31, 2006. On maturity the
bill was dishonoured. He further agreed to pay `10,500 in cash including ` 500 interest
and accept a new bill for two months for the remaining ` 20,000. The new bill was
endorsed by Sachin in favour of his creditor Kapil for settling a debt of ` 20,800. The
new bill was duly met by Narain on maturity.
Record the necessary journal entries in the books of Sachin.
22. Rectify the errors from the following transaction: [6]
1) Furniture purchased for ` 15,000 wrongly debited to purchases account as ` 9,000.
2) Machinery purchased from Naman for ` 25,000 recorded through purchase book as
` 11,000
3) Depreciation provided on Machinery for ` 3,000 was posted to machinery account
as ` 300.
4) Cash received from Rajat ` 5,000 was posted to the debit of Kamal ` 6,000
5) Goods worth ` 700 distributed as free samples but this fact has not been taken into
books.
6) Closing stock has been undervalued by ` 300.
23. Naushad and Sanjeev were born in small town of Uttarakhand. They were very [7+1=8]
close friends since very beginning. Both of them were fond of playing Badminton
from their childhood. When they grew young they decided to do something to
promote this game for their own and for the children of their town. They
established a not-for-profit Sports Club in the year 2001 named as THE GARHWAL
BADMINTON CLUB. The following is the Receipts and Payments Account for the
year ended 31-12-2009 of their club.
RECEIPTS AND PAYMENT ACCOUNT
for the year ended 31st December 2009
Dr. Cr.
Receipts Amount Payments Amount `
`
To Balance b/d By Salaries 30,000
In Hand 2,500 By Rent 6,000
At Bank 24,500 27,000 By Printing & Stationery 1,500
To Subscriptions By Postage 400
To Bank Interest 40,000 By Typewriter Purchase 4,000
To Sale of Old Car 200 By Investments 8,000
 4,000 By Balance c/d:
In Hand 1,300
At Bank 20,000 21,300
71,200 71,200

You are required to:

1. Prepare Income and Expenditure Account and the Balance sheet as on 31st
December 2009 after making the following adjustments.
2. Identify the value in the above mentioned club.
Investments were purchased on 1st July, 2009 and yielded interest @ 5% p.a.
Subscriptions included ` 8,000 for 2008 and ` 4,000 for 2010. Subscriptions for 2009 still
in arrear were ` 8,000. Rent for December, 2009, ` 500 is still unpaid. ` 300 are
payable against a bill for stationery. The book value of the car was ` 5,[Link] Fund
as on 1 Jan 2009 was ` 40,500.
OR
John and Ahmed were born in small town of Madhya Pradesh. They were very close
friends since very beginning. Both of them were fond of playing Lawn Tennis from
their childhood. When they grew young they decided to do something to promote this
game for their own and for the children of their town. They established a not-for-profit
Sports Club in the year 2006 named as THE MADURA SPORTS CLUB. The following
is the Receipts and Payments Account for the year ended 31-12-2012 of their club.
 RECEIPTS AND PAYMENT ACCOUNT
for the year ended 31st December 2012
Particulars Amount ` Particulars Amount `
To Balance b/d 60,000 By Salaries 1,24,500
To Subscription By Stationery 24,000
Arrear 2,400 By Rates and Taxes 36,000
Current 1,26,600 By Telephone 6,000
Advance 4,800 1,33,800 By Investments 75,000
To Profit from canteen 90,000 By Advertisements 10,500
To Miscellaneous Receipts 4,500 By Postage 10,000
To Sale of old news paper 11,200 By Sundries 35,000
To Dividends 48,500 By Balance c/d 27,000
3,48,000 3,48,000
You are required to:
1. Prepare Income and Expenditure Account and the Balance Sheet as on 31 st
December 2012 after making the following adjustments.
2. Identify the value in the above mentioned club.
a) There are 450 members each paying an annual subscription of ` 300, ` 2700
being in arrears for 2011 in the beginning of this year.
b) Stock of Stationery on 31st December 2011 was ` 3000 and on 31st December 2012
was ` 5400.
c) Cost of building is ` 6,00,000. Depreciate it at 5%.
Capital Fund as on 1 Jan 2012 was ` 6,65,700.
24. From the following Trial Balance of Shri O.P. Sharma, prepare his Final accounts for [8]
the year ended 31st March 2011.
Particulars Debit ` Credit `
Purchases and Sales 2,50,000 5,00,000
Returns Inward and Returns 12,000 10,000
Outward
Carriage 8,000
Wages 60,000
Trade expenses 2,000
Insurance 1,200
Repairs 8,000
Debtors and Creditors 1,15,000 1,00,000
Printing and stationary 6,000
Advertisement 15,000
Bills Receivable and Bills 4,000 2,000
Payable
Opening stock 30,000
Cash in hand 12,000
Interest on bank loan 2,800
Machinery 2,80,000
Furniture 34,000
Drawings 20,000
Commission 1,000
Loan from bank @ 12% 30,000
Capital 2,40,000
Rent received 5,000
 Cash at bank 28,000
Total 8,88,000 8,88,000
Additional information:
i. Closing Stock on 31st March 2011 was ` 21,000.
ii. Rent of ` 1,200 has been received in advance.
iii. Outstanding liability for trade expenses ` 12,000.
iv. Commission earned during the year but not received ` 2,100.
OR
Prepare the final accounts from the following Trial balance for the year ended 31st
March, 2013
Head of the accounts Debit Credit
balances ` balances `
Drawings 8,500
Purchases 2,80,000
Capital 1,50,000
Creditors 45,000
Outstanding expenses 9,000
Rent 2,000
Carriage inward 4,000
Wages 30,000
Power 11,000
Depreciation on 2,000
Machinery
Advertisement 21,000
Plant and Machinery 70,000
Goodwill 18,000
Purchase return 15,000
Sales 4,40,000
Provision for bad debts 2,000
Discount 7,000 3,500
Taxes and Insurance 23,000
Salaries 71,000
General expenses 17,000
Opening stock 35,000
Debtors 26,200
Cash in Hand 19,800
Cash at Bank 16,000
Prepaid expenses 900
Sales returns 2,900
Commission 3,200
Total 6,66,500 6,66,500
Adjustments:
a) Closing Stock was valued at `50,000.
b) Goods costing ` 5,000 was destroyed by fire. The insurance company admitted a
claim for ` 3,000 only.
c) Write off ` 2,200 as bad debts and create a provision for doubtful debts on debtors
at 5%.