Accounting Equation — Account STD 11 Commerce — Question

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.

From the following transactions, state the nature of account and state which account will be debited and which account credited:

S.No		₹
i	Manu started business with cash	1,00,000
ii	He purchased furniture for business	20,000
iii	Purchase goods on credit from Anshul	6,000
iv	Paid to his creditor, Anshul	2,000
v	Paid salary to his clerk	1,000
vi	Paid rent	500
vii	Received interest	200

Enter the following transactions in M/s Mukerjee & Bros. Single Column Cash Book:

2017		(₹)
April 1	Balance of Cash in hand	50,000
April 3	Purchased goods for cash	22,000
April 7	Purchased goods	15,000
April 10	Purchased goods from Gopi	30,000
April 13	Purchased goods from Gopi for cash	10,000
April 15	Sold goods	20,000
April 18	Sold goods to Vishwakarma	45,000
April 20	Sold goods to Raghunandan for cash	18,000
April 25	Received commission	5,000
April 30	Paid Rent	10,000

Prepare bank reconciliation statement of Shri Bhandari as on March 31, 2017

1. The Payment of a cheque for ₹ 550 was recorded twice in the passbook.
2. Withdrawal column of the passbook under cast by ₹ 200
3. A Cheque of ₹ 200 has been debited in the bank column of the Cash Book but it was not sent to bank at all.
4. A Cheque of ₹ 300 debited to Bank column of the cash book was not sent to the bank.
5. ₹ 500 in respect of dishonoured cheque were entered in the passbook but not in the cash book. Overdraft as per passbook is ₹ 20,000.

The Cash Book of a merchant showed an overdraft balance of ₹ 15,700 on 31st December 2018. On comparing it with the Pass Book, the following differences were noted:

1. Cheques amounting to ₹ 12,250 were deposited into the bank, out of which cheques for ₹ 8,200 have been credited in the Pass Book on 2nd January, 2019.
2. Cheques were issued amounting to ₹ 8,300 of which cheques for ₹ 2,000 have been cashed upto 31st Dec.
3. A cheque of ₹ 4,250 issued to a creditor, has been entered in the Cash Book as ₹ 4,520.
4. Bank charges of ₹ 180 on 30th November 2018 and ₹ 240 on 30th December 2018 have not been entered in the Cash Book.
5. A B/R for ₹ 6,000 discounted with the bank is entered in the Cash Book without recording the discount charges of ₹ 300.
6. A cheque for ₹ 2,000 deposited into the bank appear in the Pass Book, but not recorded in the Cash Book.
7. A cheque for ₹ 3,700 deposited into the bank appear in the Pass Book, was recorded in the cash column of the Cash book.

You are required:

1. To make appropriate adjustments in the cash book, bringing down the correct balance.
2. To prepare a bank reconciliation statement with the adjusted balance.

On the basis of the narrations, fill in the missing values:

Manohar drew a bill of exchange on Pushkar, his debtor, for ₹ 20,000 on 1st March 2016 for 3 months. Pushkar accepted the same and returned it to the drawer. Manohar endorsed the bill to Yadu on 1st April 2016 for a debt of equal amount. Yadu discounted it with the bank at 15% p.a. on 1st May 2016. On the due date the bill was dishonoured. (Noting charges amounted to ₹ 100). Show the journal entries in the books of:

1. Drawer
2. Drawee/Acceptor
3. Endorsee

On January 1, 2017, Ajay sold goods to Balbir for ₹ 10,000 at a discount of 20%. On that date, Balbir accepted a bill, drawn on him by Ajay for ₹ 8,000 payable 3 months after sight. Having surplus funds, Balbir paid off the bill on 4th March, 2017 and was allowed a rebate of 18% per annum. Show Journal entries in the books of Ajay and Balbir.

Explain the meaning and significance of “money measurement concept'.