Theory Base of Accounting — Account STD 11 Commerce — Question

What is Trial Balance? Does the balancing of this ensure accuracy of books of accounts.

Prepare an Accounting Equation and Balance Sheet on the following basis:

1. Ajeet started business with cash ₹ 20,000.
2. He purchased furniture for ₹ 2,000.
3. He paid rent of ₹ 200.
4. He purchase goods on credit ₹ 3,000.
5. He sold goods (cost price ₹ 2,000) for ₹ 5,000 on cash.

What are the rules of posting in the Ledger?

A Company, which closes its books on 31st March every year, purchased on 1st July, 2010, machinery costing ₹ 30,000. It purchased further machinery on 1st January, 2011, costing ₹ 20,000 and on 1st October, 2011, costing ₹ 10,000. On 1st April, 2012, one-third of the machinery installed on 1st July, 2010, became obsolete and was sold for ₹ 3,000.
Show how the machinery account would appear in the books of the Company, it being given that machinery was depreciated by Diminishing Balance Method at 10% per annum. What would be the balance of Machinery Account on 1st April, 2013?

Journalise the following transactions:

2019
April 1	Paid into bank ₹ 21,000 for opening a Current Account.
April 2	Withdrew for personal expenses ₹ 5,000.
April 4	Withdrew from bank ₹ 3,000.
April 5	Placed an amount in Fixed Deposit at Bank by transfer from Current Account ₹ 5,000.
April 10	Received a cheque from Shiv & Co. to whom goods were sold for ₹ 3,000 last year. Allowed him 2% discount.
April 14	Shiv & Co.'s cheque deposited into bank.
April 16	Shiv & Co.'s cheque dishonoured (Bank charges ₹ 10)
April 17	Shiv & Co. settled his account by means of a cheque for ₹ 3,000, ₹ 40 being interest charged.

Rectify the following errors which are detected before preparation of the Trial Balance:
i. Sale to Prakash ₹ 50,000 posted to his account as ₹ 5,000 .
ii. Sale to Prakash ₹ 30,000 debited to his account as ₹ 3,000 .
iii. Sale to Prakash ₹ 20,000 credited to his account as ₹ 2,000 .
iv. Sale to Ravi ₹ 5,600 posted to his account as ₹ 6,500 .
v. Purchases of ₹ 8,755 from Nitin posted to his account as ₹ 5,578 .
vi. Purchases of ₹ 6,580 from Nitin posted to his account as ₹ 8,560 .
vii. Cash sale to Abhi of ₹ 30,000 posted as ₹ 3,000 .
fiii. Debit balance of ₹ 5,000 was carried forward as a credit balance in Ritesh's Account.
ix. Credit purchase of furniture ₹ 30,000 from Rohit was posted as ₹ 3,000 .

Pass Journal Entries to rectify the following errors:-

1. Machinery purchased for ₹ 5,000 has been debited to Purchases A/c.
2. ₹ 700 paid to Sh. Mohan Kapoor as Legal Charges were debited to his personal account.
3. ₹ 10,000 paid to Escorts Company for Machinery purchased stand debited to Escorts Company account.
4. Typewriter purchased for ₹ 6,000 was wrongly passed through purchase book.
5. ₹ 20,000 paid for the purchase of a Motor Cycle for proprietor has been charged to 'General Expenses' A/c.
6. ₹ 15,000 paid for the purchase of 'Gas Engine' were debited to 'Purchases' A/c.
7. Cash paid to Ram ₹ 400 was debited to the account of Shyam.

Rectify the following errors by means of Journal entries:

1. A cheque of ₹ 5,000 received from Ashish was dishonoured and was debited to Discount Account.
2. Purchase of ₹ 540 from Ramneek was written in Sales day book, but was correctly posted to correct side of Ramneek’s Account.
3. Salary paid to Miss Yugakshi ₹ 1,000 was debited to her personal account as ₹ 900.
4. Furniture costing ₹ 500, purchased from Jyoti, was wrongly entered in Purchase book as ₹ 450.

​​From the following information supplied by Mr. D.H., prepare his Bank Reconciliation Statement as on 31st March, 2019:

		₹
(i)	Bank overdraft as per Pass Book.	33,000
(ii)	Cheques issued but not presented for payment.	17,500
(iii)	Cheques deposited but not collected.	21,000
(iv)	Cheques recorded in the Cash Book but not sent to the bank for collection.	4,000
(v)	Payment received from customers directly by the bank.	7,000
(vi)	Bank charges debited in the Pass Book.	40
(vii)	Premium of Life Insurance Policy of Mr. D.H. paid by the bank on standing instructions.	360
(viii)	A bill for ₹ 6,000 dishonoured on 30th March, 2019 and bank paid Noting charges ₹ 20. This bill was discounted on 30th January, 2019.

Prepare an Accounting Equation from the following:

1. Started business with cash ₹ 50,000 and goods ₹ 30,000.
2. Purchased goods for cash ₹ 30,000 and on credit from Karan ₹ 20,000.
3. Goods costing ₹ 40,000 were sold for ₹ 55,000.
4. Withdrew cash for personal use ₹ 10,000.
5. Rent outstanding ₹ 2,000.