5/26/2025 Question Paper

3.

-
,

Question 1

(a) State with reasons whether statements are true or false. (2×6)

(i) According to Going concern can be defined as business will

operate for a long period of time and will not be dissolved in the near
future.

(ii) According to consistency convention, accounting principles

should be factual.

P.T.O.

5018 2

(iii) Stock in trade is valued at net realisable value or lower historical

cost.

(iv) Life of a business is broken into several parts called accounting

years or financial years.

(v) Rent outstanding account is a personal account.

(vi) Depreciation cannot be provided in case of loss, in any financial

year.

(b) Difference between cash basis accounting and accrual basis

accounting. (6)

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OR

Write a short note on any three: (6×3)

(a) Accounting Estimate

(b) Extraordinary items

(c) Accounting Policies

(d) IFRS

(e) Prior Period Items

(f) Convention of Consistency

Question 2

(a) A company deals in three products A B and C which are neither similar
nor interchangeable.

At the time of closing of its account in the year 2022-23, the historical and
the net realizable value of all the items of closing stock are determined as
follows:

Item Historical Cost (in Lakhs) Net Realisable Value (in Lakhs)

A 40 28

B 32 32

C 16 20

What will be the value of closing stock? (8)

5018 3

(b) What are the provisions of AS10 (Revised) as regards depreciation on

property, plant and equipment. (10)

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OR

(a) State the silent features of AS-2 (Revised). (9)

(b) Explain the meaning and features of intangible assets as per AS26. (9)

Question 3

(a) The following Trial Balance was extracted from the books of Mr "A" as
on 31 March 2022:

Particulars Dr. (₹) Particulars Cr. (₹)

Plant & Machinery 78,000 Capital Account 1,00,000

Furniture 2,000 Sales 1,27,000

Purchases 60,000 Returns of Goods 750

Returns of Goods 1,000 Discount 800

Opening Stock 30,000 Sundry Creditors 25,000

Discount 425 Provision of Doubtful 525

debts

Sundry Debtors 45,000

Salaries 7,550

Manufacturing 10,000
Wages

Carriage Outwards 1,200

Rent, Rates and 10,000

Taxes

Advertisement 2,000

Cash 6,900

Total 2,54,075 Total 2,54,075

P.T.O.

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5018 4

Prepare Trading profit and Loss Balance Account for the year ended
March 31, 2022, and a Balance Sheet as on that date after taking into
account the following adjustments :-

(i) Closing Stock was valued at ₹34,220

(ii) Provision for the Doubtful debts is to be kept at ₹500.

(iii) Allow Interest on Capital at 10% p.a.

(iv) Furniture was old and the same was disposed off for ₹760 in
exchange of new furniture costing ₹1,680. The net invoice of ₹1920
was passed through Purchase Register. (No depreciation need to be
charge on old and new furniture).

(v) Depreciate Plant and Machinery by 10% p.a.

(vi) The proprietor Mr A has taken goods worth ₹5,000 for personal
use, and distributed goods worth ₹1,000 as samples. (12)

(b) Distinguish between Receipts and Payments Account and Income and
Expenditure Account. (6)

OR

Question 4

(a) A The Accountant of Diana Club Furnishes you the following Receipts
and Payments accounts for the year ending 31st March, 2021:

8 5

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Receipts ₹ Payment ₹

Opening Honoraria to Secretary 9,600

Balance:

Cash and Bank 16,760 Misc, Expenses 3,060

Subscriptions 21,420 Rates and Taxes 2,520

Sale of Old 4,800 Groundman's Wages 1,680

Newspapers

Entertainment 8,540 Printing and Stationery 940

fees

Bank interest 460 Telephone Expenses 4,780

Bar receipts 14,900 Payments for Bar purchases 11,540

Repairs 640

New car (less-sale Proceeds of 25,200

Old Car ₹6,000)

Closing Balance:

Cash and Bank 6,920

Total 66,880 Total 66,880

Additional Information:

1-10- 30-03-
2020 2021
₹ ₹

(i) Subscriptions due (not received) 2,400 1,960

(ii) Cheques issued, but not presented for 180 60

payment of printing

(iii) Club Premises at cost 58,000 ---

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1-10- 30-03-
2020 2021
₹ ₹

(iv) Depreciation on club premises provided so 37,600 ---

far

(v) Car at Cost 24,380 ---

(vi) Depreciation of car provided so far 20,580 ---

(vii) Value of Bar Stock 1,420 1,740

(viii) Amount unpaid for bar purchases 1,180 860

PTO

018 6

(ix) Depreciation is to be provided @ 5% p.a. on the written down

value of the club premises and @ 15% p.a. on car for the whole
year.

Required: Prepare an income and Expenditure account of Diana Club for

the year ending 31st March, 2021 and Balance Sheet as at that date. (12)

(b) What adjusting entries would you pass in regard to the following: (2×3)

(i) Outstanding Expenses

(ii) Prepaid Expenses

(iii) Accrued Income

Question 5

(a) Explain the salient features of dependent branches. (6)

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(b) Khushi of Delhi has a branch at Jaipur. She sends goods to the branch
at a profit of 20% on sales. Following information is available of the
transactions at Jaipur branch for the year ending 31st March, 2022:

Rs. Rs.

Stock at invoice price 200,000 Cash sales 525,000

(on 1-4-2021)

Debtors (on 1-4-2021) 60,000 Credit sales 900,000

Debtors (on 31-3-2022) 55,000 Insurance company 15,000

paid to branch

Petty cash (on 1-4- 750 Bad debts 2,000

2021)

Goods sent to branch at 2,100,000 Cash sent for petty 163,000

invoice price expenses

Goods returned by 75,000 Goods transferred to 60,000

branch other branches

Normal loss at invoice 1,750 Insurance charges 1,000

price paid by H.O.

Goods lost by fire at 20,000 Goods returned by 2,500

invoice price debtors to H.O.

Goods pilfered at 15,000 Petty cash (on 31-3- 4,250

invoice price 2022)

Prepare:

(i) Branch Stock A/c

(ii) Branch Debtors A/c

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(iii) Branch Adjustment A/c

(iv) Branch Profit and Loss A/c (12)

OR

(a) Explain the accounting treatment for the following items under stock
and debtors system (8)

(i) Surplus

(ii) Authorized reduction in selling price of goods sold

(iii) Loss-in-transit

(iv) Goods-in-transit

(b) Kanpur branch receives all goods from its Allahabad Head Office who
pays all branch expenses except petty expenses which are met by the
branch manager who maintains petty cash on imprest system.

All cash received is deposited in Head Office Bank Account the same day.
From the following particulars, you are required to ascertain profit or loss
made by branch under debtors system.

Jan 1.22 Amount Amount

(₹) (₹)

Petty Cash 2,500 Petty expenses paid by branch 1,200

Debtors 28,500 Furniture purchased by branch 15,000

with the prior permission of H.O.

Stock 37,500

Goods sent to 2,56,000

Branch

Allowances to 3,000 Goods returned by customers 3,500

customers

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Jan 1.22 Amount Amount

(₹) (₹)

Goods 15,000 Cash sent for:

returned by
branch

Cash sales 87,000 Salaries 30,000

Credit sales 2,45,000 Rent 20,000

Bad debts 1,500 Dec 31,22

Stock 50,800

Debtors 35,000

Petty Cash ?

It is decided to charge depreciation @10% on furniture. (10)

P.T.O.

5018 8

Question 6

(a) Explain the meaning of department accounts and enumerate the

difference between branch accounts and departmental accounts. (8)

(b) The following balances as at 31.3.2023 have been extracted from the
books of Sri Ram & Co which has two departments:

Particulars Deptt A (Rs.) Deptt B (Rs.)

Opening Stock as on 1.4.2022 25,000 20,000

Purchases 2,30,000 1,90,000

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Particulars Deptt A (Rs.) Deptt B (Rs.)

Purchases Returns 2,000 1,000

Sales 6,33,000 4,92,000

Sales Return 3,000 2,000

Wages 1,80,000 1,60,000

Miscellaneous Charges 35,000 32,000

General:

Sundry debtors Rs. 1,90,000; Sundry Creditors Rs. 1,73,000; Plant and
Machinery Rs. 2,40,000; Leaseholds Rs. 80,000; Buildings - Rs. 1,20,000;
Furniture and Fittings Rs. 48,000; Office and Selling expenses Rs.
1,28,000; Cash in hand on 31.3.2023 - Rs. 8,000; Cash at bank on
31.3.2023 Rs. 1,10,000; Capital Rs. 5,00,000.

Plant and machinery is to be depreciated by 10%; Buildings by 2%,

Furniture and Fittings by 5%; Leaseholds are to be written off by Rs.
8,000. The stock on hand as on 31.3.2023: Department A - Rs. 26,000;
Department B - Rs. 24,000.

All unallocated expenditure is to be apportioned in the ratio of net sales of

each department.

Prepare in columnar form, the Trading, Profit and Loss Account of the two
departments and Balance Sheet of the combined business as a whole on
31.3.2023. (10)

18 9

OR

(a) A Company carries on its business five departments A, B, C, D and E.

The Trial Balance as at 31st March, 2019 was as follows:

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A B C D E
₹ ₹ ₹ ₹ ₹

Opening Stock 5,000 3,000 2,500 4,000 4,500

Purchases 50,000 30,000 10,000 26,000 34,000

Sales 48,000 21,000 9,500 23,000 30,000

Closing Stock 6,000 4,000 3,500 5,000 5,500

The Opening and Closing Stocks have been valued at Cost. The
expenses, which are to be charged to each department in proportion to
the cost of goods sold in the respective departments, are as follows:

Salaries and Commission ₹ 5,510

Miscellaneous Expenses ₹ 1,305

Rent and Rates ₹ 1,450

Insurance ₹ 580

Show the final results and the percentage on sales in each department
and also the combined result with percentage on sales. (12)

(b) What are the salient features of Operating Lease? (6)

P.T.O.

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