Final Examination

GENERAL INSTRUCTIONS
1. This question paper contains 34 questions.
2. All questions are compulsory.
3. This question paper is divided into two parts, Part A and B.
4. Question Nos.1 to 15 and 25 to 29 carries 1 mark each.
5. Questions Nos. 16 to 18, 30 to 32 carries 3 marks each.
6. Questions Nos. 19, 20 and 33 carries 4 marks each.
7. Questions Nos. 21 to 24 and 34 carries 6 marks each.
8. There is no overall choice.
Part A
(Financial Accounting – I)
1. Which of the following points is/are correct regarding the steps of Accounting:
i) Identification of business transaction.
ii) Recording of transaction into Journal.
iii) Posting the transaction into Ledger.
iv) Purchasing Accounting Software.
(A) All of the given statements are correct
(B) Only (ii) and (iii)
(C) Only (i)
(D) All except (iv)
2. Assertion (A): Only financial transactions are recorded in Accounting.
Reason (R): According to the Money Measurement Concept, the events or transactions, which
cannot be expressed in terms of money, are not recorded in the books of accounts.
(A) Both A and R are correct, and R is the correct explanation of A.
(B) Both A and R are correct, but R is not the correct explanation of A.
(C) A is correct, but R is incorrect.
(D) A is incorrect, but R is correct.
3. The properties and resources owned by an enterprise are known as its:
(A) Assets
(B) Liabilities
(C) Capital
(D) Incomes
4. The capital receipts are:
(A) Recurring Transactions
(B) Non-Recurring Transactions
(C) Both
(D) None of the above
5. Which of the following limitations is related with the manipulation of accounts:
(A) Problem of window dressing
(B) Not fully exact
(C) Ignores qualitative factors
(D) Ignores the effect of price level changes
6. Who among the following is an external user of financial accounting?
(A) Chief Executive Officer
(B) Financial Manager
(C) Employees
(D) Potential Inventors
7. Mr. R, an accountant creates provisions for certain types of contingencies that may happen
in near future but does not anticipate any future profits. Identify the accounting concept being
followed by Mr. R.
(A) Conservatism concept
(B) Full disclosure concept
(C) Dual aspect concept
(D) Money measurement concept
OR
“Personal transactions of the owner are not recorded in the books of the business unless it
involves inflow or outflow of business funds.” To which accounting principle the above phrase
is related?
(A) Dual Aspect Concept
(B) Principle of Conservatism
(C) Business Entity Concept
(D) Accounting Period Concept
8. The written statements of uniform accounting rules and guidelines adopted while preparing
financial statements are called:
(A) Accounting Standards
(B) IFRS
(C) Both
(D) None of these
9. Pick the odd one out:
(A) Double Entry System
(B) Single Entry System
(C) Dual Aspect Principle
(D) Indian Accounting System
Read the following hypothetical situation, answer question no. 10 and 11.
A Ltd has balance of Rs.2,00,000 in its Machinery A/c as on 1st April 2020, which included a
boiler of Rs.40,000. On 1st October 2022, the boiler became obsolete and was scrapped for Rs.
15000. The company provided depreciation @10% on written down value method and the
books are closed on 31st March every year.
10. The profit or loss on sale of boiler will be:
(A) Loss of Rs. 14160
(B) Profit of Rs. 14160
(C) Profit of Rs. 15780
(D) Loss of Rs 15780
11. The balance of Machinery A/c as on 31st March 2023 will be:
(A) Rs. 1,16,640
(B) Rs. 1,29,600
(C) Rs. 1,45,800
(D) Rs. 1,30,000
12. The transactions relating to cash receipts and cash payments are recorded in which of the
following subsidiary books:
(A) Cash Account
(B) Journal Proper
(C) Cash Book
(D) Ledger
13. Which of the following is a limitation of Trial Balance?
(A) Helps in preparation of final accounts.
(B) Transactions that are not recorded at all cannot be found out.
(C) Helps in locating errors.
(D) Ascertains the arithmetical accuracy of books.
14. Which of the following transactions will be added to Balance as per Cash Book, while
making Bank Reconciliation Statement.
(A) Bank Interest
(B) Cheques deposited in bank but not yet credited
(C) Cheque issued but not yet presented for payment
(D) All of the above
15. Which of the following error is an error of omission?
(A) Cash purchases were recorded in Purchase Book.
(B) Discount received of Rs.521 was posted as Rs.512.
(C) Cash Sales of Rs.10000 were not recorded in books.
(D) The Sales Return book was overcast by Rs.500
16. Pass necessary journal entry for the following transaction:
(a) Goods costing Rs.30000 were purchased at 10% trade discount from Ramesh. 50%
payment was made through cheque at a cash discount @ 2% .
(b) Goods sold for Rs.50000 to Suresh at 10% trade discount. 60% payment was received
through cheque at a cash discount @ 5% .
17. Write 3 points of difference between Capital Reserve and Revenue Reserve.
18. Pass necessary entries to rectify the following errors:
i) Credit purchase of Rs.8000 from Ajay was posted to the debit of his account.
ii) Cash sales of Rs.12000 was posted to Sales A/c as 2000.
iii) Depreciation on Machinery of Rs.5000 was omitted to be recorded in books.
19. Mr Manoj started a new business with cash of Rs.6,00,000. A piece of furniture was
purchased for Rs.1,00,000. Goods worth Rs.2,50,000 were purchased for cash and worth Rs.
5,00,000 on credit. 75% of the goods were sold at Rs.6,00,000 on credit. Prepare Accounting
Equation for the given transactions.
20. The Trial balance of Anurag did not agree. It showed an excess credit Rs.1,800. Anurag put
the difference to suspense account. He located the following errors:
(i) Sales return book over cast by Rs.200.
(ii) Purchases book was undercast by Rs.1,200.
(iii) In the sales book total of page no. 4 was carried forward to page 5 as Rs.2,000 instead
of Rs.2,400 and total of page 8 was carried forward to page 9 as Rs.11,200 instead of Rs.10,000.
(iv) Goods returned to Mohan Rs.2,000 were recorded through sales book.
Prepare Suspense A/c.
21. Pass necessary journal entry for the following:
i) Cash paid for installation of Machinery Rs.1500.
ii) Goods costing Rs.2000 were given as charity and Goods costing Rs.3000 were
destroyed by fire.
iii) A customer Ajeet, who owed Rs.5000 became insolvent and a final dividend of 40p in
a rupee was received.
iv) Outstanding Rent Rs.3000.
v) Goods worth Rs.2500 were used by proprietor for his personal use.
vi) Cash paid to Radheshyam Rs.18500 in full settlement of his claim of Rs.20000.
OR
Record necessary Journal entries in the books of Gyanchand of Delhi assuming CGST @ 9%
and SGST @ 9% :
i) Bought goods Rs.3,50,000 from Uttarakhand.
ii) Sold goods for Rs.2,00,000 in Uttar Pradesh.
iii) Sold goods for Rs.4,00,000 in Delhi.
iv) Paid Insurance premium Rs.30,000.
v) Paid postal charges Rs.2000
22. On 1st Jan 2020, the company had assets costing Rs.6,00,000. On 1st April 2022 one-third
of the assets were sold for Rs. 1,50,000. On 30th June 2023, one-fourth of the remaining assets
were sold for Rs.70,000. The depreciation was provided @10% per annum on reducing balance
method. Prepare Asset A/c for the years 2020 to 2023. The books are closed on 31st December
every year. (Express the values to the nearest rupee)
OR
A machinery costing Rs.2,00,000 was purchased on 1st April 2022. It was decided to provide
for depreciation @ of 20% on original cost method. On 30th June 2024 one-fourth of the
machinery was sold for Rs.15,500. Prepare Machinery account, Accumulated Depreciation
account and Machinery Disposal account for the years 2022-23 to 2024-25 assuming that the
company closes its books on March 31, every year.
23. Rectify the Trial Balance given below:
Trial Balance
As at 31st December 2023
Particulars Dr Cr
Capital 3,90,000
Drawings 35,000
Purchases 6,50,000
Sales 3,00,000
Carriage Inward 800
Return Inward 1,200
Carriage Outward 1,500
Return Outward 10,000
Debtors 35,000
Creditors 20,000
Bad Debts 5,000
Provision for Bad debts 3,500
Outstanding Salaries 5,500
Discount Received 2,500
Commission Received 2,000
Cash 10,000
Bank Overdraft 5,000
7,45,000 7,32,000

24. From the following particulars, prepare a bank reconciliation statement as on March 31,
2023.
1. Debit balance as per cash book is Rs.20,000.
2. A cheque for Rs.2,000 deposited but not recorded in the cash book.
3. A cheque issued for Rs.500 was recorded as Rs.410 in the cash column.
4. The debit balance of Rs.3,000 as on the previous day was brought forward as a credit
balance.
5. A cash discount allowed of Rs.224 was recorded as Rs.242 in the bank column.
6. A cheque of Rs.1000 received from a debtor was recorded in the cash book but not
deposited in the bank for collection.
7. One outgoing cheque of Rs.600 was recorded twice in the cash book.
8. Credit balance as per pass book is Rs.26,858.
 Part B
(Financial Accounting – II)
25. Which of the following is the correct formula to calculate Cost of Goods Sold?
(A) Net Sales – Gross Profit
(B) Opening Stock + Net Purchases + Direct Expenses – Closing Stock
(C) Both
(D) None of these
Read the information given below and answer Question 26 and 27.
In the Trial Balance of Raichand Bros, the debtors were of Rs.50,000; bad debts Rs.3,000 and
Provision for doubtful debts Rs.2500.
Additional information:
Further bad debts amounted to Rs.2000 and a provision for doubtful debts was to be maintained
at 5% on debtors.
26. The new provision for bad debts will be:
(A) Rs.2400
(B) Rs.2250
(C) Rs.2500
(D) Rs.2200
27. The amount to be debited in P&L A/c will be:
(A) Rs. 5500
(B) Rs. 4400
(C) Rs. 4900
(D) Rs. 9900
28. Which of the following statements is/are the limitations of single entry system:
(i) Arithmetical accuracy cannot be determined as Trial Balance cannot be prepared.
(ii) Figures or profits cannot be relied upon as the system is incomplete and unscientific.
(iii) True and fair financial health of the business concern cannot be shown.
(A) Only (i) and (ii)
(B) Only (ii) and (iii)
(C) Only (i) and (iii)
(D) All the given statements
29. Mr. Z maintains his books on single entry system. His opening capital was Rs.30,000 and
closing capital was Rs.34000. During the year, he withdrew Rs.10000 for personal use and
introduced further capital of Rs.4500. His profit during the year will be:
(A) Rs.10,000
(B) Rs.9,000
(C) Rs.8,500
(D) Rs.9,500
30. Distinguish between Single Entry System and Double Entry System on the basis of:
Meaning, Recognition and suitability.
31. Calculate Operating Profit from the information given below:
Rs
Opening Stock 50,000
Purchases 1,25,000
Wages 25,000
Salaries 35,000
Depreciation 10,000
Sales 3,50,000
Office Rent 18,000
Commission Received 3,000
Profit on sale of asset 1,500
Carriage inward 1000
Closing Stock 30,000

32. Give a brief explanation of any two:

(a) Statement of Affairs
(b) Deferred Revenue Expenditure
(c) Capital Expenditure.
33. A shopkeeper Junaid maintains his books on single entry system. His books provide the
following information:
Particulars 1.1.2024 31.12.2024
Furniture 4000 4000
Stock 56000 61000
Sundry Debtors 42000 74000
Cash 3000 4000
Sundry Creditors 35000 38000
Additional Information:
His drawings were of Rs.10000. Depreciate furniture @10% per annum, and provide for bad
and doubtful debts @10% on Sundry Debtors.
Prepare Statements showing profits for the year.
34. The Trial Balance of Shivanshu Goel as on 31st March 2016 is given below:
Adjustments
(i) Closing Stock was Rs.20,000
(ii) Goods worth Rs.5000 were destroyed by fire and insurance claim of Rs.3000 was
received.
(iii) Building and Machinery was depreciated by 10%.
(iv) Bad debts amounted to Rs.1000 and a provision for bad and doubtful debts was
maintained @10% on debtors.
(v) Provision for discount on creditors amounted to Rs.300.
Prepare Trading and Profit and Loss A/c for the year ended on 31st March 2016 and the Balance
Sheet on that date.
OR
From the Trial Balance given below, prepare Trading and Profit and Loss A/c for the year ended
on 31st March 2023 and the Balance Sheet on that date.
Additional Information:
i) Interest on capital was provided @10% per annum.
ii) The Loan was borrowed @12% per annum.
iii) One-fifth of wages were prepaid and the monthly salary was of Rs.500.
iv) Goods worth Rs.1000 were distributed as sample.
v) The commission received was for next accounting year.