SAMPLE QUESTION PAPER - 1

Accountancy (055)
Class XI (2024-25)

Time Allowed: 3 hours Maximum Marks: 80

General Instructions:
1. This question paper contains 34 questions. All questions are compulsory.
2. This question paper is divided into two parts, Part A and B.
3. Question 1 to 17 and 27 to 29 carries 1 mark each.
4. Questions 18 to 20 and 30 to 32 carries 3 marks each.
5. Questions from 21 to 23 carries 4 marks each.
6. Questions from 24 to 26, 33 and 34 carries 6 marks each.
Part A
1. The business documents which serves as the evidence of the business transactions [1]
are known as

a) Notes b) Source documents

c) First hand documents d) Bills

2. Assertion (A): Accounting is an art as it involves recording, classifying, [1]

summarising business transactions with a view to ascertain the net profit.
Reason (R): Accounting is a science since it is based on certain specified principles
and accounting standards.

a) Both A and R are true and R is b) Both A and R are true but R is
the correct explanation of A. not the correct explanation of
A.

c) A is true but R is false. d) A is false but R is true.

3. Sundry Creditors Account is a: [1]

a) Liability Account b) Asset account

c) Capital Account d) Revenue Account

4. Calculate the amount of cash if: other assets( Except Cash) = Rs.10,000 liabilities= [1]
Rs.10,000 Total Capital= Rs.5000

a) Rs.3000 b) Rs.1000

c) Rs.5000 d) Rs.10000

OR
When cash is withdrawn by proprietor, what is its impact on accounting equation?

a) Increase in assets, increase in b) Decrease in assets, decrease in

capital capital

c) Increase in assets, increase in d) Decrease in assets, decrease in

liabilities liabilities

5. Pay-in-slip is a [1]

a) Document drawn upon a b) Both of these

specified banker and payable
on demand

c) Source document for having d) Document containing account

deposits made in the bank detail

6. Which stakeholder would be most interested in the earning capacity of a business [1]
firm?

a) Government and other b) Customers

regulators

c) Investors d) Suppliers

OR
Radheshyam is a furniture dealer. Which one of the following will not be recorded in
his books?
A. Purchase of Timber for Rs 50,000
B. Sofa set worth Rs 40,000 taken to his home
C. Sale of household furniture for Rs 5,000
D. Dining table of Rs 30,000 given to his friend as a gift
 a) Only A b) Only D

c) Only B d) Only C

7. Reserves can be meant for the purpose of: [1]

a) meeting a future contingency b) strengthening the general

financial position of the
business

c) All of these d) redeeming a long-term liability

8. Balance of Capital Account is shown as: [1]

a) Liability Account b) Revenue Account

c) Asset account d) Capital Account

OR
Goodwill account is a:

a) Nominal Account b) Real Account

c) representative personal d) Personal Account

account

9. The accounting principle that conforms to the tendency of accountants to resolve [1]
uncertainty and doubt in favour of understanding assets and revenues and
overstating liabilities and expenses is known as

a) Consistency b) Conservatism

c) Materiality d) Industry practice

10. Under the Cash Basis of Accounting, expenses are recorded: [1]

a) on event b) both payment and on being

incurred

c) on being incurred d) on payment

11. Which reserve are created for specific purpose [1]

a) Specific Reserve b) Dividend equalization fund

 c) Capital Reserves d) Dividend fund

12. Which of the following is Revenue Expenditure? [1]

a) Purchase of Investments b) Expenses on purchase of

Machinery

c) Building Construction d) Repair Expenses

Expenses

13. The periodic total of sales return journal is posted to [1]

a) Goods account b) Sales return account

c) Purchases return account d) Sales account

14. Main elements of accounting equation are: [1]

a) Bank balance, Investments and b) Capital, Creditors and Bills

Bills Receivable Payable

c) Assets, Liabilities and Capital d) Cash, Stock and Debtors

15. Out of the following assets which one is not an intangible asset? [1]

a) Investments b) Patents

c) Goodwill d) Trademark

OR
In a business Purchases refers to the:

a) All of these b) Purchase of goods for resale.

c) Purchase of an assets to be used d) Purchase of an article to be

in factory. used in office.

16. The advantages of Sales Book are: [1]

a) All of these b) Easiness in preparing Trading

Account

c) Price of goods sold to each d) Knowledge of total price of

party goods sold on credit
17. Reserve created by undervaluation of closing stock is called: [1]

a) Secret Reserve b) Capital Reserve

c) General Reserve d) Specific Reserve

18. When an account is said to have a debit balance and credit balance? [3]

OR
Ramesh purchased on credit goods for ₹ 5,00,000 Less 20% Trade Discount. As per the
terms, he can deduct 4% Cash Discount if he pays the full amount within 15 days. What
amount he will have to pay to avail the Cash Discount?

19. Anish of Gurugram, Haryana sold goods of ₹ 20,000 to Prakash of Noida, Uttar [3]
Pradesh. Rates of CGST and SGST are 6% each while that of IGST is 12%. Pass
the Journal entry in the books of Prakash.

OR
R & Co. paid professional fee to Ram, an advocate. If applicable rate of CGST and
SGST is 6% each, pass the Journal entry for payment of CGST and SGST.

20. What is the difference between trade discounts and cash discounts? [3]

21. What are the objectives of preparing a trial balance? [4]

22. Mr. Goel maintains two bank accounts. Prepare his columnar cash book from the [4]
following particulars:
2023 ₹
May
Cash in hand 34,000
1
Balance with PNB Bank 75,200
Balance with SBI Bank 1,20,000
May
Cash drawn from SBI for office use 25,000
3
Sold goods to Pradhan for ₹ 80,000 and received from him ₹
May 20,000 in cash and a cheque for the balance. The cheque is
8 deposited in PNB on the 9th and the bank credited the amount on
the 15th and debited ₹ 25 as its collection charges.
 Purchased goods for ₹ 40,000 at 20% trade discount. 25% of the
May
amount is paid in cash and issued a cheque on SBI for the balance
12
amount.
May
Paid Wages ₹ 36,000 and Salary ₹ 4,000.
20
May
A cheque for ₹ 50,000 is drawn on SBI and it is deposited in PNB.
22
May
Purchased land for ₹ 3,20,000 and a cheque is issued on PNB.
23
A cheque for ₹ 10,000 which was received from Mukesh and was
th
deposited in SBI on 25 April is dishonoured and the bank
May
debited ₹ 100 as bank charges on this cheque. The amount of
24
dishonoured cheque and bank charges is received from Mukesh in
th
cash on the 25 .
May
Deposited cash ₹ 30,000 in PNB.
26
May Sold old typewriter for ₹ 2,000 and old newspapers for ₹ 200 in
28 cash.
May
Interest charged by PNB Bank ₹ 400.
30
May
Bank charges by SBI Bank ₹ 180 and PNB Bank ₹ 340.
31

23. On 30th June, 2023, the bank Column of Anuj’s Cash Book showed a balance of [4]
₹8,250. On examination of the Cash Book and bank statement you find that:
i. Out of total cheques amounting to ₹8,000 issued, cheques amounting to ₹5,800
have been presented for payment upto 30th June, 2023.
ii. Out of total cheques amounting to ₹6,000 sent to bank for collection, cheques of
₹4,100 were credited in Pass Book upto 30th June, 2023.
iii. On 28th June a customer deposited ₹3,500 direct in the bank account but it was
entered only in the Pass Book.
iv. Debit side of Anuj’s Cash Book (Bank Column) has been overcast by ₹ 100.
v. No entry has been made in the Cash Book for the Rent of ₹800 paid by bankers
according to Anuj’s standing instructions.
 vi. The Pass Book showed a credit of ₹320 for interest and a debit of ₹40 for bank
charges, but these have not been entered in the Cash Book.
Prepare a Bank Reconciliation Statement as on 30th June, 2023.

OR
On checking Ram's Cash Book with the Bank Statement of his overdraft current
account for the month of November, 2013, you find the following :
i. Cash Book showed an overdraft of ₹ 45,000.
ii. The payment side of the Cash Book had been undercast by ₹ 1,500.
iii. A cheque for ₹ 7,500 drawn on his saving account has been shown as drawn on
current account.
iv. Cheques amounting to ₹ 70,000 drawn and entered in the Cash Book had not yet
been presented.
v. Cheques amounting to ₹ 60,000 sent to the bank for collection, though entered in the
Cash Book, had not been credited by the bank.
vi. Bank charges of ₹ 750 as per Bank Statement had not been taken into the Cash Book.
vii. Dividends of the amount of ₹ 25,000 had been paid directly into the bank and not
entered in the Cash Book.
You are required to prepare a Bank Reconciliation Statement on 30th November,
2013.

24. What is a journal? Give a specimen of journal showing at least five entries. [6]

OR
Record necessary Journal entries assuming CGST @ 5% and SGST @ 5% and all
transactions are occurred within Delhi)
i. Shobit bought goods ₹ 1,00,000 on credit
ii. He sold them for ₹ 1,35,000 in the same state on credit
iii. He paid for Railway transport ₹ 8,000
iv. He bought computer printer for ₹ 10,000
v. Paid postal charges ₹ 2000

25. Correct the following errors: (1) without Suspense Account and (2) with Suspense [6]
Account:
i. Sales Book has been totalled ₹ 8,000 short.
ii. Goods of ₹ 1,500 returned by Shivam & Co., have not been recorded.
 iii. Goods purchased of ₹ 2,500 was posted to debit of the supplier, Ram.
iv. Furniture purchased from Pink & Co., of ₹ 10,000 has been entered in Purchases
Book.
v. Cash received from Aniket ₹ 3,500 has not been posted in his account.
Also prepare Suspense Account.

OR
An accountant, while balancing his books found that there was a difference of ₹ 270 in
the trial balance. Being required to prepare the final accounts he placed the difference to
a newly opened Suspense Account, which was carried forward to the next year when
the following errors were discovered:
i. Salary for the month of March was posted twice, ₹ 155
ii. Interest on investments collected by the bankers, were posted directly in concerned
accounts through the pass book, but no entry was made in the bank column of the
cash book ₹ 75
iii. Goods worth ₹ 700 were distributed as free samples but this fact has not been taken
into Books.
iv. Rent of ₹ 350 received from Abhi credited both to Rent Account and Abhi Account.
v. A purchase of a chair from Wallmart Furniture Mart for ₹ 65 has been entered in
purchases book as ₹ 56
vi. Old Machinery sold to the proprietor Keshav for ₹ 400 was entered in Sales Book as
sale to Krishna.
vii. Cash Purchases from Ajit ₹ 189 were recorded in Cash Book as well as in Purchases
Book and posted from both.
viii. Closing Stock has been undervalued by ₹ 300
Give necessary rectifying entries and prepare the Suspense Account.

26. The following balances appear in the books of Y Ltd.: [6]

₹
Machinery A/c as on 1-4-2022 8,00,000
Provision for Depreciation A/c as on 1-4-2022 3,10,000
On 1-7-2022, a machinery which was purchased on 1-4-2019 for ₹ 1,20,000 was
sold for ₹ 50,000 and on the same date, another machinery was purchased for ₹
3,20,000.
The firm has been charging depreciation at 15% p.a. on Original Cost Method and
 closes its books on 31st March every year. Prepare the Machinery A/c and
Provision for Depreciation A/c for the year ending 31st March 2023.

OR
Following balance appear in the books of M/s Anandi as on 1st April 2022:
₹
Machinery Account 60,000
Provision for depreciation A/c 36,000
On 1st April 2022, they decided to dispose off machinery for ₹ 8,400, which was
purchased on 1st April 2018 for ₹ 16,000.
You are required to prepare Machinery Account, Provision for Depreciation Account
and Machinery Disposal A/c for the 2022-23. Depreciation was charged at 10% p.a. on
original cost method.

Part B
27. If the Opening capital is ₹60,000, drawings ₹5,000, capital introduced during the [1]
period ₹10,000, closing capital ₹90,000. The value of profit earned during the
period will be:

a) ₹30,000 b) ₹20,000

c) ₹25,000 d) ₹40,000

OR
Single entry system is also known as

a) Accounts for Real and Nominal b) Accounts from Auditors

nature

c) Accounts from complete d) Accounts from incomplete

records records

28. Revenue Expenditure means [1]

a) Both b) None

c) The expenditure which is d) The amount which is incurred

incurred for the day to day in acquiring or improving the
running of the business value of fixed assets
29. A new firm commenced business on 1st January 2022 and purchased goods costing [1]
₹ 90,000 during the year. A sum of ₹ 6,000 was spent on freight inward. At the end
of the year (on 31st March, 2023) the cost of goods still unsold was ₹ 15,000
(Realisable value 12,000). Sales during the year was ₹ 1,20,000. What is the gross
profit earned by the firm?

a) ₹ 39,000 b) ₹ 36,000

c) ₹ 30,000 d) ₹ 42,000

OR
Calculate provision for doubtful debt. If debtor closing balance is Rs.3,400 and
provision for the reserve of doubtful debts at 10% on sundry debtors

a) Rs.2,060 b) Rs.3,400

c) Rs.340 d) Rs.3,060

30. The following Expenses relate to a motor lorry, purchased by a limited company for [3]
its business:
i. Bought an old lorry for ₹ 1,20,000 in an auction and paid ₹ 1,500 as freight and
cartage.
ii. Its overhauling charges amounted to ₹ 30,000.
iii. Other Accessories were purchased for ₹ 18,000.
iv. Lorry was badly damaged in an accident and its repair cost was ₹ 42,600.
v. Compensation was paid to the person involved in accident ₹ 14,500.
vi. Lorry was sold for ₹ 1,25,000.
vii. Driver’s Salary, Petrol Expenses etc. were ₹ 34,720.
Pass the necessary Journal Entries of the above and Prepare a Lorry A/c.

31. State by giving reasons whether the following items of expenditure are Capital or [3]
Revenue:
i. Expenditure incurred for raising loans.
ii. Expenditure of registration of a trade mark.
iii. Carriage paid on goods purchased.
iv. Commission paid on net profit of the company to manager.
v. Travelling expenses of a director for trip abroad for purchasing capital goods.
 vi. Damages on account of contract.
vii. Compensation paid to a retrenched employee.

32. Ajay started business with capital of ₹ 5,00,000 on 1st April, 2022. He introduced [3]
additional capital of ₹ 3,00,000 on 1st October, 2022. He charged interest on capital
@ 10% p.a. Calculate the amount of interest on capital and show it in the final
accounts.

33. X who keeps incomplete records gives you the following information: [6]
ASSETS AND LIABILITIES
1st April, 2022 (₹) 31st March, 2023 (₹)
Stock in hand 18,700 20,400
Debtors 12,000 14,000
Creditors 9,000 1,500
Bills Receivable 4,000 5,000
Bills Payable 1,000 200
Furniture 600 600
Building 12,000 12,000
Bank Balance 4,350 3,350 (Overdraft)
You are also given the following information:
i. A provision of ₹ 1,450 is required for bad and doubtful debts.
ii. Depreciation @ 5% is to be written off on Building and furniture.
iii. Wages outstanding ₹ 3,000; salaries outstanding ₹ 1,200.
iv. Insurance has been prepaid to the extent of ₹ 250.
v. Legal Expenses outstanding ₹ 700.
vi. Drawings of Mr. X during the year were ₹ 7,520.
Prepare a statement of Profit as on 31st March, 2023, and a final statement of
affairs as at that date.

OR
A retailer had not kept proper books of account. From the details given, you are
required to ascertain the Profit or Loss for the year ended 31st March, 2023 and also to
prepare his Statement of Affairs as at that date:
 1st April, 2022 (₹) 31st March, 2023 (₹)
Stock-in-Trade 16,700 18,100
Sundry Creditors 15,400 19,200
Sundry Debtors 27,200 15,600
Cash in Hand 250 1,400
Bank Overdraft 19,200 Nil
Fixtures and Fittings 1,500 1,500
Motor Van 1,900 Nil
Bank Balance Nil 2,900
Drawings during the year amounted to ₹ 2,400. Depreciate Fixtures and Fittings by
10%. ₹ 600 is irrecoverable from Debtors. Provide ₹ 700 for Doubtful Debts.

34. Prepare Trading and Profit and Loss Account for the year ended 31st March, 2023 [6]
and Balance Sheet as at that date from the given Trial Balance after the following
adjustments:
i. Stock on 31st March, 2023 was valued at ₹ 14,000. Closing Stock includes
goods costing ₹ 10,000 which were sold and recorded as sales but not delivered
to the customer.
ii. Plant and Machinery includes a machine purchased for ₹ 20,000 on 1st October,
2022.
iii. Outstanding liabilities for Wages ₹ 1,200 and Salaries ₹ 2,800.
iv. Depreciation @ 5% p.a. on is to be provided on all fixed assets.
v. Write off bad debts ₹ 1,500.
vi. Insurance premium paid in advance ₹ 400.
vii. 80% of the commission earned was received and credited to Commission
Account during the year.
Debit Balances ₹ Credit Balances ₹
Stock on 1st April, 2022 50,000 Capital 3,20,000
Furniture 16,000 Creditors 80,000
Building 1,60,000 Purchases Return 2,000
Debtors 60,000 Commission 6,000
Drawings 20,000 Sales 4,65,600
Plant and Machinery 1,40,000 Bad Debts Recovered 1,400
Wages 24,000
Salaries 40,000
Bad Debts 2,000
Purchases 2,40,000
Electricity Charges 12,000
Telephone Charges 4,800
Sales Return 1,800
Insurance Premium 3,000
Cash in Hand 6,400
Cash at Bank 95,000
8,75,000 8,75,000

OR
The following balances were extracted from the books of Garim Aggarwal on 31st
March, 2013
Capital 98,000 Loan 31,520
Drawings 8,000 Sales 2,61,440
General expenses 10,000 Purchases 1,88,000
Building 44,000 Motor car 8,000
Machinery 37,360 Reserve fund 3,600
Stock 64,800 Commission (Credit) 5,280
Power 8,960 Car expenses 7,200
Taxes and insurance 5,260 Bills payable 15,400
Wages 28,800 Cash 320
Debtors 25,120 Bank overdraft 13,200
Creditors 10,000 Charity 420
Bad debts 2,200
Stock on 31st March 2013 was valued at Rs. 23,500. Prepare the final accounts for the
year ended 31st March 2013.
 Solution
SAMPLE QUESTION PAPER - 1
Accountancy (055)
Class XI (2024-25)

Part A
1.
(b) Source documents
Explanation:
Source documents
2.
(b) Both A and R are true but R is not the correct explanation of A.
Explanation:
Art is the technique of achieving some pre-determined objectives and accounting is also done with
some pre-determined objectives.
3. (a) Liability Account
Explanation:
Sundry Creditors are the trade payables who come under the current liability.
4.
(c) Rs.5000
Explanation:
Total Assets = Capital + liabilities
Total Assets = 5000+ 10000
Total Assets = Rs. 15000
Total Assets = Other Assets + Cash
15000 = 10,000 + Cash
Cash= 15000- 10000
Cash =Rs. 5000
OR

(b) Decrease in assets, decrease in capital

Explanation:
As drawings are made by the proprietor, it will reduce the capital as well as cash (asset).
5.
(c) Source document for having deposits made in the bank
Explanation:
When a person wants to deposit cash or cheques in his bank account he customarily fills out a slip to
show the number of his account, the date, and the details of the deposit. This works as a source
document for the entity.
6.
(c) Investors
 Explanation:
Investors invest money in the business so they are interested in the return of the business so that they
can invest money into business.
OR

(d) Only C
Explanation:
Sale of household (personal furniture) furniture for Rs. 5,000 will not be recorded in his book.
7.
(c) All of these
Explanation:
All of these
8.
(d) Capital Account
Explanation:
The balance of Capital Account is shown as Capital Account. In accounting, the capital account
shows the net worth of a business at a specific point in time. It is also known as owner's equity for a
sole proprietorship or shareholders' equity.
OR

(b) Real Account

Explanation:
Goodwill account is a Real Account, goodwill is an intangible asset and all assets are real.
9.
(b) Conservatism
Explanation:
Conservatism Principle:- According to conservatism principle accountant follows the policy of
playing safe, So it removes uncertainty and doubts in favour of understating assets and overstating
liabilities and expenses like, maintain provisions for doubtful debts; showing depreciation but not
appreciation ignoring the provision of discount on creditors.
10.
(d) on payment
Explanation:
Under the Cash Basis of Accounting, expenses are recorded on the payment side of cash account.
11. (a) Specific Reserve
Explanation:
Specific reserves are created to meet specific purposes and contingencies. They can be utilised only
for that purpose. Example: Dividend equalisation reserve, Capital redemption reserve .
12.
(d) Repair Expenses
 Explanation:
Repair Expenses
13.
(b) Sales return account
Explanation:
Sales return account
14.
(c) Assets, Liabilities and Capital
Explanation:
Assets, Liabilities and Capital
15. (a) Investments
Explanation:
Investments is not an intangible assets.
OR

(b) Purchase of goods for resale.

Explanation:
Purchase of goods for resale.
16. (a) All of these
Explanation:
All of these
17. (a) Secret Reserve
Explanation:
Secret Reserve
18. The difference between the sum of the two sides of an account is called the balance. This is the most
important part of an account as it shows value or position of asset, liability, capital, income or
expenses of which the account is a record. If the total of the debit side exceeds the total of credit side
then this would be represented by a debit balance and opposite is true for a credit balance.
OR
₹
Purchase Amount 5,00,000
Less: Trade Discount @ 20% 1,00,000
Net purchase 4,00,000
Less: Cash Discount @ 4% on ₹ 4,00,000 (16,000)
Amount to be paid 3,84,000
Cash discount is shown in books and is availed if condition fulfills.

19. Particulars Dr. (₹) Cr. (₹)

Purchase A/c Dr. 20,000
Input IGST A/c Dr. 2,400
 To Anish's A/c
22,400
(Goods purchased from Anish on credit)
OR
Particulars Dr.(₹) Cr.(₹)
Legal fee A/c Dr.
Input CGST A/c Dr.
Input SGST A/c Dr.
To Cash A/c
20. Difference between Trade and Cash Discount
Basis of
Trade Discount Cash Discount
Difference
It is allowed when goods are purchased
Meaning It is allowed at the time of payment.
or sold.
Recording in It is recorded in invoice/bill but not in It is recorded in the Journal Proper book
books the books of accounts and not in Cash Book.
It is allowed for earlier payment from
Purpose It is allowed to increase sale of business.
customer or party.
It is deducted from the price-list of the It is not deducted from the price-list of
Deduction
goods. the goods.
21. Objectives of preparing a trial balance are as follows:
i. Ascertain the arithmetical accuracy of ledger accounts: The trial balance helps to ascertain whether
all the debits and credits are properly recorded in the ledger. If the debit and the credit balances are
equal, it is said that the posting and the balancing of the accounts are arithmetically correct.
However, the tallying of the trial balance cannot be considered as conclusive proof of the accuracy
of the books since some errors remain sometimes.
ii. Helps in identifying errors: Trial balance helps in identifying the errors in bookkeeping work. The
error may occur at any one of the stages of an accounting process such as totalling of the subsidiary
books, posting of journal entries in the ledger, calculating account balances, carrying account
balances to the trial balance and totalling the trial balance columns.
iii. Assists in the preparation of the financial statements: A trial balance is a statement with the record
of debit and credit balances of all ledger accounts which helps in the preparation of the financial
statements. Hence, it is considered as a connecting link between the accounting records and the
preparation of financial statements. Trial balance is useful for further processing.
22. CASH BOOK
Dr. Cr.
PNB SBI PNB SBI
Cash Cash
Date Particulars L.F. Bank Bank Date Particulars L.F. Bank Bank
(₹) (₹)
(₹) (₹) (₹) (₹)
2023 2023
May To Balance May By Cash
34,000 75,200 1,20,000 C 25,000
1 b/d 3 A/c
By
To Bank
3 C 25,000 12 Purchases 8,000 24,000
A/c
A/c
By
To Sales Collection
8 20,000 15 25
A/c Charges
A/c
To
By Wages
9 Cheques- C 60,000 20 36,000
A/c
in-hand A/c
To SBI By Salary
22 50,000 20 4,000
Bank A/c A/c
To Mukesh By PNB
25 10,100 22 50,000
A/c Bank A/c
To Cash By Land
26 C 30,000 23 3,20,000
A/c A/c
To Office
By Mukesh
28 Equipments 2,000 24 10,100
A/c
A/c
To Sundry By PNB
28 200 26 C 30,000
Income A/c Bank A/c
To Balance By Interest
31 1,05,565 30 400
c/d A/c
By Bank
30 Charges 340 180
A/c
By Balance
____ ____ ____ 31 13,300 10,720
c/d
91,300 3,20,765 1,20,000 91,300 3,20,765 1,20,000
June To Balance June By Balance
13,300 10,720 1,05,565
1 b/d 1 b/d
Working Note:
JOURNAL ENTRY
Date Particulars L.F. Debit (₹) Credit (₹)
 2023
May 8 Cheques-in-hand A/c Dr. 60,000
To Pradhan's A/c
60,000
(cheque received from Pradhan)
Only cash and bank transactions are recorded in the respective column of the cash book.
23. BANK RECONCILIATION STATEMENT
as on 30th June 2023
Plus Minus
Particulars
Items Items
₹ ₹
Balance as per Cash Book (Dr.) 8,250
Add : (i) Cheques issued but not presented for payment upto 30th June, 2023
2,200
(₹8,000 - ₹5,800)
(ii) Direct deposit by a customer in the bank 3,500
(iii) Interest credited by bank 320
Less : (i) Cheques sent for collection but not credited by the bank upto 30th
1,900
June 2023 (₹6,000 - ₹4,100)
(ii) Debit side of the Cash Book overcast 100
(iii) Rent paid by bank according to standing instructions 800
(iv) Bank Charges 40
14,270 2,840
Balance as per Pass Book. (Cr.) 11,430
In the above illustration, it has not been clearly stated whether the Cash Book balance given at the
start is a debit or credit balance. Hence, it will be treated as debit balance.
When opening balance of cash book is given all the rectification is done only in cash book not pass
book.
OR
Bank Reconciliation Statement
th
as on 30 November 2013
Plus Items Minus Items
Particulars
(₹) (₹)
Bank Overdraft Balance as per Cash Book 45,000
Payment side of Cash Book is undercast 1,500
Cheque is drawn on saving account wrongly shown on the current account 7,500
Cheques issued but not yet presented for payment 70,000
Cheques paid into bank but not yet credited 60,000
 Bank Charges debited by the bank 750
Direct payment of dividend into a bank account 25,000
1,02,500 1,07,250
Bank Overdraft Balance as per Pass Book (₹ 1,07,250 - ₹ 1,02,500) 4,750
24. A journal is a book of original entries that records transactions as they take place, such an entry into
the journal must contain a source document. Maintaining a journal ensures all transactions are
recorded and in one place and debit and credit for each transaction are linked properly. A journal
consists of the following sections:
Business started with cash ₹ 10,000
Goods purchased from Ramesh for ₹ 2,000
Stationary purchased for cash for ₹ 200
Opened a bank account for ₹ 3,000
Goods sold to Sakshi for ₹ 1,000
Received a cheque of ₹ 1,000 from Suresh
Journal Entry
Date Particulars L.F Debit (₹) Credit (₹)
Cash A/c Dr. 10,000
To Capital A/c 10,000
(Business started with cash)
Purchases A/c Dr. 2,000
To Ramesh A/c 2,000
(Goods purchased on credit)
Stationary A/c Dr. 2,00
To Cash A/c 2,00
(Purchase of Stationary for cash)
Bank A/c Dr. 3,000
To Cash A/c 3,000
(Opened a bank account)
Sakshi A/c Dr. 1,000
To Sales A/c 1,000
(Goods sold to Suresh on credit)
Bank A/c Dr. 1,000
To Suresh A/c 1,000
(Cheque received from Suresh)
Total c/f 17,200 17,200
 OR
Journal
Date Particulars L.F. Dr. (₹) Cr. (₹)
(i) Purchases A/c Dr. 1,00,000
Input CGST A/c Dr. 5,000
Input SGST A/c Dr. 5,000
To Creditors A/c 1,10,000
(Goods bought on credit)
(ii) Debtors A/c Dr. 1,48,500
To Sales A/c 1,35,000
To Output CGST A/c 6,750
To Output SGST A/c 6,750
(Goods sold on credit)
(iii) Transport Charges A/c Dr. 8,000
Input CGST A/c Dr. 400
Input SGST A/c Dr. 400
To Bank A/c 8,800
(transport charges paid)
(iv) Computer printer A/c Dr. 10,000
Input CGST A/c Dr. 500
Input SGST A/c Dr. 500
To Bank A/c 11,000
(Computer-Printer bought)
(v) Postal charges A/c Dr. 2,000
Input CGST A/c Dr. 100
Input SGST A/c Dr. 100
To Bank A/c 2,200
(Paid for Portage)
(vi) Output CGST A/c Dr. 6,7503
Output SGST A/c Dr. 6,7504
To Input CGST A/c 6,0001
To Input SGST A/c 6,0002
To Electronic Cash Ledger A/c 1,500
 (GST set off and balance paid)
Working Notes :-
1
Total Input CGST = ₹ 5,000 + ₹ 400 + ₹ 500 + ₹ 100 = ₹ 6,000
2
Total Input SGST = ₹ 5,000 + ₹ 400 + ₹ 500 + ₹ 100 = ₹ 6,000
3
Total Output CGST = ₹ 6,750
4
Total Output SGST = ₹ 6,750
Net CGST Payable = ₹ 6,750 - ₹ 6,000 = ₹ 750
Net SGST Payable = ₹ 6,750 - ₹ 6,000 = ₹ 750
25. I. Without Suspense Account:
i. Since Sales Book has been casted (totalled) short by ₹ 8,000, Sales Account has been credited
short by ₹ 8,000. The correcting entry is to credit the Sales Account by ₹ 8,000 as “By wrong
totalling of the Sales Book ... ₹ 8,000”
ii. To rectify the omission, Returns Inward Account has to be debited and the account of Shivam &
Co. credited. The entry:
₹
Returns Inward A/c ...Dr.
1,500
₹
To Shivam & Co.
1,500
(goods returned by the firm, previously omitted from the Returns Inward
Book)
iii. Ram has been debited ₹ 2,500 instead of being credited. His account should now be credited by
₹ 5,000 to remove the wrong debit and to give the correct credit. The entry will be on the credit
side “By error in posting ... ₹ 5,000".
iv. By this error, Purchases Account has been debited by ₹ 10,000 whereas the debit should have
been to the Furniture Account. The rectifying entry will be:
₹
Furniture A/c ...Dr.
10,000
₹
To Purchases A/c
10,000
(correction of the mistake by which Purchases Account was debited
instead of the Furniture Account)
v. Cash received from Aniket of ₹ 3,500 has not been credited to his account. For the rectification
of this error, Aniket’s Account should be credited as follows:
Aniket’s ACCOUNT
Dr. Cr.
Date Particulars J.F. ₹ Date Particulars J.F. ₹
By Omission of Posting 3,500
II. With Suspense Account:
 Dr. Cr.
Date Particulars L.F.
(₹) (₹)
(i) Suspense A/c ...Dr. 8,000
To Sales A/c
8,000
(correction arising from undercasting of Sales Book)

(ii) Returns Inward A/c ...Dr. 1,500

To Shivam & Co.
1,500
(recording of goods returned by Shivam & Co., a customer)

(iii) Suspense A/c ...Dr. 5,000

To Ram
(correction of the error by which Ram were debited instead of 5,000
being credited by ₹ 2,500)

(iv) Furniture A/c ...Dr. 10,000

To Purchases A/c
(correction of recording purchase of furniture as ordinary 10,000
purchases)

(v) Suspense A/c ...Dr. 3,500

To Aniket
3,500
(cash received from Aniket, now posted to his account)
SUSPENSE ACCOUNT

III. Dr. Cr.

Date Particulars J.F. ₹ Date Particulars J.F. ₹
To Sales A/c 8,000 By Difference in 16,500
To Ram 5,000 Trial Balance
To Aniket 3,500 (Balancing Figure)
16,500 16,500
Notes:
i. One should note that the opening balance in the Suspense Account will be equal to the difference in
the Trial Balance.
ii. If the question is silent as to whether a Suspense Account has been opened or not, the student
should make his assumption, state it and then proceed.
OR
RECTIFYING JOURNAL ENTRIES
Dr. Cr.
S. No. Particulars L.F.
(₹) (₹)
(i) Suspense A/c Dr. 155
 To Salary A/c 155
(Salary posted twice in the books now rectified)

(ii) Bank A/c Dr. 75

To Suspense A/c 75
(Interest collected by the bank not entered in Cash Book now rectified)

(iii) Advertisement or Free Samples A/c Dr. 700

To Purchases A/c 700
(Goods distributed as free samples not recorded in the books now
rectified)

(iv) Abhi A/c Dr. 350

To Suspense A/c 350
(Rent received wrongly credited to Abhi Account now rectified)

(v) Furniture A/c Dr. 65

To Purchases A/c 56
To Wallmart Furniture Mart A/c 9
(Furniture purchased wrongly entered in the purchase book with the
wrong amount now rectified)

(vi)
Drawings A/c Dr. 400
(a)
To Machine A/c 400
(Old Machinery sold to Proprietor recorded)

(vi)
Sales A/c Dr. 400
(b)
To Krishna A/c 400
(Sale of machinery wrongly debited to Krishna’s Account reversed)

(vii) No rectification entry to be passed since correct entry is entered

(viii) Closing Stock A/c Dr. 300

To Trading A/c 300
(Under-valuation of stock corrected)
SUSPENSE ACCOUNT
Dr. Cr.
Particulars J.F. ₹ Particulars J.F. ₹
 To Difference in
270 By Bank A/c 75
Trial Balance (Balancing Figure)
To Salary A/c 155 By Abhi 350
425 425
26. MACHINERY ACCOUNT
Dr. Cr.
Amount Amount
Date Particulars Date Particulars
(₹) (₹)
2022 2022
Apr. Balance b/d (6,80,000 +
8,00,000 July 01 Provision for Depreciation A/c 58,500
01 1,20,000)
July
Bank A/c 3,20,000 July 01 Bank A/c (Sale) 50,000
01
Profit and Loss A/c (Loss on
July 01 11,500
Sale)
2023
Mar.
Balance c/d 10,00,000
31
11,20,000 11,20,000
PROVISION FOR DEPRECIATION ACCOUNT
Dr. Cr.
Amount Amount
Date Particulars Date Particulars
(₹) (₹)
2022 2022
July 01 To Machinery April 1 By Balance b/d 3,10,000
(54,000 + 4,500) 58,500 2022
July 01 By Depreciation A/c (1,20,000 × 15

100
×
3

12
) 4,500
2023
By Depreciation A/c
Mar. 31 1,02,000
I. (6,80,000 × 15

100
)
II. (3,20,000 × 15

100
×
9

12
) 36,000
2023
March 31 To Balance b/d 3,94,000
4,52,500 4,52,500
Working Note:-
Value of Machinery = ₹ 6,80,000 + ₹ 1,20,000 = ₹ 8,00,000
Calculation of Profit and Loss on Sale of machinery:
Particulars Amount
Value of Machinery on Apr. 01, 2019 1,20,000
Less: Depreciation for 3 years 3 months 58,500
Value of Machinery July 01, 2022 61,500
Less: Sale Value 50,000
Loss on Sale 11,500
Calculation of Depreciation:-
₹ 6,80,000 × 15% = ₹ 1,02,000
₹ 1,20,000 × 15% × 3

12
= ₹ 4,500
₹ 1,20,000 × 15% × 3 years = ₹ 54,000
₹ 3,20,000 × 15

100
×
9

12
= 36,000
OR
MACHINERY ACCOUNT
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(₹) (₹)
To Balance By Machinery Disposal
01.04.2022 60,000 01.04.2022 16,000
b/d A/c
31.03.2023 By Balance c/d 44,000
60,000 60,000
MACHINERY DISPOSAL ACCOUNT
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(₹) (₹)
To Machinery
01.04.2022 16,000 01.04.2022 By Cash A/c - Sale 8,400
A/c
By Provision For
" 6,400
Depreciation A/c
By Profit & Loss A/c -
" 1,200
Loss
16,000 16,000
PROVISION FOR DEPRECIATION ACCOUNT
Dr. Cr.
 Amount Amount
Date Particulars J.F. Date Particulars J.F.
(₹) (₹)
To Machinery Disposal
01.04.2022 6,400 01.04.2022 By Balance b/d 36,000
A/c
By
31.03.2023 To Balance c/d 34,000 31.03.2023 4,400
Depreciation
40,400 40,400
01.04.2023 By Balance b/d 34,000
Working Note:
₹
Cost 16,000
Less: Depreciation for 2018-19 @ 10% -1,600
W.D.V. 14,400
Less: Depreciation for 2019-20 @ 10% -1,600
W.D.V. 12,800
Less: Depreciation for 2021-22 @ 10% -1,600
W.D.V. 11,200
Less: Depreciation for 2022-2023 @ 10% -1,600
W.D.V. 9,600
Less: Sale Value (8,400)
Loss on sale 1,200
In fixed instalment method or straight line method of depreciation amount of depreciation remain the
same year after year and always depreciation is calculated on the cost of the asset during the useful
life of the asset. The value of asset tends to zero after the useful life of the asset i.e. asset completely
written off in its life.
Part B
27.
(c) ₹25,000
Explanation:
Profit = Closing capital + Drawings – (Additional capital + Opening capital)
Profit = 90,000 + 5,000 – (10,000 + 60,000)
Profit = 25,000.
OR

(d) Accounts from incomplete records

 Explanation:
every transaction in single entry system has only one effect. only pesonal and real account are there in
single entry system. nominal account is not there.
28.
(c) The expenditure which is incurred for the day to day running of the business
Explanation:
revenue expenditure are the expenses incurred to match the revenue. these are the expenses which are
done to run the day to day business.
29.
(b) ₹ 36,000
Explanation:
Gross Profit = Total Sales - (Cost of goods + Freight - Unsold goods)
Gross Profit = ₹ [1,20,000 - (90,000 + 6,000 - 12,000)]
= ₹ 36,000
OR

(c) Rs.340
Explanation:
Amount of Provision for doubtful debts = 10% of 3,400 = 340
30. Journal Entry
Amount Amount
Date Particulars L.F.
(Dr.) (Cr.)
Lorry A/c Dr. 1,21,500
To Bank 1,21,500
(Lorry Purchased)

Lorry A/c Dr. 30,000

To Bank 30,000
(overhauling charged to Lorry)

Lorry A/c Dr. 18,000

To Bank 18,000
(Related to Lorry)

Repair A/c Dr. 42,600

To Bank 42,600
(due to accident)

Compensation A/c Dr. 14,500

To Bank 14,500
 (Compensation paid to person)

Bank A/c Dr. 1,25,000

To Lorry 1,25,000
(Lorry sold)

Expense A/c Dr. 34,720

To Bank 34,720
(expense paid related Driver etc.)
Lorry A/c
Particulars Amount (₹) Particulars Amount (₹)
To Bank 1,21,500
To Bank 30,000
To Bank 18,000 By Bank 1,25,000
By Loss on sale of Lorry 44,500
1,69,500 1,69,500
31. i. Capital expenditure, reason its benefit exhaust more than a accounting period.
ii. Capital expenditure, reason expense related to registration is added to cost of trade mark.
iii. Revenue expenditure, reason its a normal course of business activity.
iv. Revenue expenditure, reason Its a operating expense.
v. Capital expenditure, reason it's included in the cost of capital goods.
vi. Revenue expenditure, reason it's a normal course of business expense.
vii. Revenue expenditure, reason it's a operating expense.
32. In the Books Ajay
st
Profit and Loss Account for the year ended 31 March
Particulars Amount (₹) Particulars Amount (₹)
To Interest on Capital
65,000
(50,000+15,000)
Balance Sheet
Liabilities Amount (₹) Assets Amount (₹)
Capital 8,00,000
Add: Interest on Capital 65,000 8,65,000
Working Note:-
Calculation of Interest on Capital:-
₹ 5,00,000 × 10

100
= ₹ 50,000
₹ 3,00,000 × 10

100
×
6

12
= ₹ 15,000
Total Interest on Capital = ₹ 50,000 + ₹ 15,000
Total Interest on Capital = ₹ 65,000
33. STATEMENT OF AFFAIRS
as on 1 April, 2022
Dr. Cr.
Liabilities Amount (₹) Assets Amount (₹)
Bills Payable 1,000 Cash at Bank 4,350
Creditors 9,000 Stock 18,700
Capital (Balancing Figure) 41,650 Debtors 12,000
Bills Receivable 4,000
Furniture 600
Building 12,000
51,650 51,650
STATEMENT OF AFFAIRS
as on March 31, 2023
Liabilities Amount (₹) Assets Amount (₹)
Bills Payable 200 Stock 20,400
Creditors 1,500 Debtors 14,000
Bank Overdraft 3,350 Bills Receivable 5,000
Capital (Balancing Figure) 46,950 Furniture 600
Building 12,000
52,000 52,000
Statement of Profit or Loss
for the year ended March 31, 2023
Particulars Amount (₹)
Capital at the end of the year 46,950
Add: Drawings made during the year 7,520
Adjusted capital at the end of the year 54,470
Less: Capital in the beginning of the year 41,650
Profit Before Adjustment 12,820
Less: Depreciation on Furniture 30
Less: Depreciation on Building 600
Less: Provision for Doubtful Debts 1,450
Less: Outstanding Wages 3,000
Less: Outstanding Salaries 1,200
Less: Outstanding Legal Expenses 700
Add: Prepaid Insurance 250
Profit made during the year 6,090
Final Statement of Affairs
as on March 31, 2023
Liabilities Amount (₹) Assets Amount (₹)
Creditors 1,500 Prepaid Insurance 250
Opening Capital 41,650 Bills Receivable 5,000
Add: Net Profit 6,090 Stock 20,400
Less: Drawings 7,520 40,220 Furniture 600
Outstanding Wages 3,000 Less: Depreciation 30 570
Outstanding Salaries 1,200 Debtors 14,000
Bills Payable 200 Less: Provision for Bad Debts 1,450 12,550
Bank Overdraft 3,350 Building 12,000
Outstanding Legal Expenses 700 Less: Depreciation 600 11,400
50,170 50,170
Statement of affairs is like balance sheet of company. It is prepared to know capital of business. It is
prepared when books of accounts of business are incomplete and accountant wants to know full
details.
OR
STATEMENT OF AFFAIRS
st
as at 1 April, 2022
Liabilities ₹ Assets ₹
Sundry Creditors 15,400 Cash in Hand 250
Bank Overdraft 19,200 Sundry Debtors 27,200
Capital (Balancing Figure) 12,950 Stock-in-Trade 16,700
Fixtures and Fittings 1,500
Motor Van 1,900
47,550 47,550
STATEMENT OF AFFAIRS (BEFORE ADJUSTMENTS)
st
as at 31 March, 2023
Liabilities ₹ Assets ₹
Sundry Creditors 19,200 Cash in Hand 1,400
Capital (Balancing Figure) 20,300 Cash at Bank 2,900
Sundry Debtors 15,600
Stock-in-Trade 18,100
 Fixtures and Fittings 1,500
39,500 39,500
STATEMENT OF PROFIT OR LOSS
st
for the year ended 31 March, 2023
Particulars ₹
st
Capital on 31 March, 2023 20,300
Add: Drawings during the year 2,400
22,700
st
Less: Capital on 1 April, 2022 12,950
Gross Profit made during the year 9,750
PROFIT AND LOSS ACCOUNT
st
for the year ended 31 March, 2023
Dr. Cr.
Particulars ₹ Particulars ₹
To Depreciation on Fixtures and Fittings 150 By Gross Profit 9,750
To Bad Debts 600
To Provision for Doubtful Debts 700
To Net Profit transferred to Capital A/c 8,300
9,750 9,750
STATEMENT OF AFFAIRS (AFTER ADJUSTMENTS)
st
as at 31 March, 2023
Liabilities ₹ Assets ₹
Sundry Creditors 19,200 Cash in Hand 1,400
Capital 12,950 Cash at Bank 2,900
Add: Net Profit 8,300 Sundry Debtors 15,600
21,250 Less: Bad Debts 600
Less: Drawings 2,400 18,850 15,000
Less: Provision for Doubtful Debts 700 14,300
Stock-in-Trade 18,100
Fixtures and Fittings 1,500
Less: Depreciation 150 1,350
38,050 38,050
34. TRADING AND PROFIT AND LOSS ACCOUNT
st
for the year ended 31 March, 2023
Dr. Cr.
Particulars ₹ Particulars ₹
To Opening Stock 50,000 By Sales 4,65,600
To Purchases 2,40,000 Less: Sales Return 1,800 4,63,800
Less: Purchases Return 2,000 2,38,000 By Closing Stock 14,000
Less: Goods sold but not
To Wages 24,000 10,000 4,000
delivered
Add: Outstanding Wages 1,200 25,200
To Gross Profit c/d
1,54,600
(Transferred to Profit and Loss A/c)
4,67,800 4,67,800
To Salaries 40,000 By Gross Profit b/d 1,54,600
Add: Outstanding Salaries 2,800 42,800 By Commission 6,000
To Bad Debts 2,000 Add: Accrued Commission 1,500 7,500
Add: Further Bad Debts 1,500 3,500 By Bad Debts Recovered 1,400
To Electricity Charges 12,000
To Telephone Charges 4,800
To Insurance Premium 3,000
Less: Prepaid Insurance 400 2,600
To Depreciation on:
Plant and Machinery* 6,500
Furniture (₹ 16,000 × 100
5
) 800
Building (₹ 1,60,000 × 100
5
) 8,000 15,300
To Net Profit transferred to Capital
82,500
A/c
1,63,500 1,63,500
*Depreciation on Plant and Machinery @ 5% p.a.:
On ₹ 1,20,000 (₹ 1,20,000 × 5

100
) = 6,000
On ₹ 20,000 (for six months, i.e., ₹ 20,000 × 5

100
×
6

12
) = 500
= 6,500
BALANCE SHEET
st
as at 31 March, 2023
Liabilities ₹ Assets ₹
Creditors 80,000 Cash in Hand 6,400
Wages Outstanding 1,200 Cash at Bank 95,000
Salaries Outstanding 2,800 Prepaid Insurance 400
Capital Accrued Commission (Note) 1,500
Opening Balance 3,20,000 Debtors 60,000
Add: Net Profit 82,500 Less: Bad Debts 1,500 58,500
4,02,500 Closing Stock 4,000
Less: Drawings 20,000 3,82,500 Plant and Machinery 1,40,000
Less: Depreciation 6,500 1,35,500
Furniture 16,000
Less: Depreciation 800 15,200
Building 1,60,000
Less: Depreciation 8,000 1,52,000
4,66,500 4,66,500
Note: 80% of Commission earned is received. It means 20% of commission earned has accrued but
not received. it is calculated as follows:
Let Total Commission Earned during the year be x. It means 80% of x = ₹ 6,000 or x = ₹ 6,000× 100

80

= ₹ 7,500.
Accrued Commission = 20% of ₹ 7,500 = ₹ 1,500.
OR
In the books of Garrim Agarwal
Trading And Profit & Loss Account
Amount Amount
Particulars Particulars
(Rs) (Rs)
To Opening Stock 64,800 By Sales 2,61,440
To Purchase 1,88,000 By Closing Stock 23,500
To Power 8,960 By Gross Loss 5,620
To Wages 28,800
2,90,560 2,90,560
======== ======
To Gross Loss 5,620 By Commission 5,280
To General expense 10,000 By Net Loss 25,420
Taxes and insurance 5,260
To Bad Debts 2,200
To Car expense 7,200
To Charity 420
30,700 30,700
 Amount Amount
Particulars Particulars
(Rs) (Rs)
======== ======
Balance Sheet
Amount Amount
Liability Asset
(Rs) (Rs)
Capital 98,000 Closing Stock 23,500
Less Drawings 8,000 Building 44,000
Less Net Loss , 25,420 64,580 Machine 37,360
Creditors 10,000 Debtors 25,120
Reserve fund 3,600 Loan 31,520
Bills Payable 15,400 Motor Car 8,000
Bank Overdraft 13,200 Cash 320
1,69,820 1,69,820
======== =========