Depreciation, Provisions and Reserves — Account STD 11 Commerce — Question

Prepare a debit voucher for furniture purchased for ₹ 60,000 from Globe Furniture Mart on 02-01-2017.

Explain any three of the following:

1. Retiring of a bill of exchange.
2. Discounting of a bill of exchange.
3. Bill sent to bank for collection.
4. Noting Charges.

“Revenue earned and cost of earning that revenue should be properly identified for a period." Explain this statement.

Prepare a debit voucher for furniture purchased for ₹ 60,000 from Globe Furniture Mart on 02-01-2017.

What is meant by error of omission? Give any one example.

On 31st March 2015 your bank Pass Book showed a balance of ₹ 6,000 to your credit. Before that date you had issued cheques amounting to ₹ 1,500 of which cheques worth ₹ 900 only have been presented. You also deposited cheques worth ₹ 2,000 of which cheque of ₹ 800 paid by you into bank on 29th March is not yet credited in Pass Book. You had also received a cheque for ₹ 160 which although entered by you in the bank column of the Cash Book, was omitted to be paid into the bank. On 31st March a cheque of ₹ 250 received by you was paid into the bank but the same was omitted to be entered in the cash book. There was a credit of ₹ 85 for interest on current account and debit of ₹ 10 for bank charges. Draw up a Reconciliation Statement showing adjustment between your Cash Book and pass book.

Why assets are classified into current and non-current?

Journalise the following trasactions:

2019		₹
March 1	Started business with cash	50,000
March 2	Purchased Machinery for cash	20,000
	Paid installation charges on machinery	2,000
March 5	Purchased goods from X of the list price of ₹ 25,000, Trade Discount 20% and cash discount 5%. Payment was made in cash immediately
March 10	Sold goods to Y costing ₹ 10,000 at 30% profit on cost less 10% trade discount
March 15	Paid Rent	1,000
March 20	Goods stolen from business	2,000
March 22	Gave as charity: Cash	100
	Goods	200
March 31	Purchased Post Cards and Envelopes	50
March 31	Purchased a Computer for business	25,000

On checking the Bank Pass Book it was found that it showed an overdraft of ₹ 5,220 as on 31.12.2014, while as per Ledger it was different to Bank Debit. The following differences were noted:

1. Cheques deposited but not yet credited by bank ₹ 6,000.
2. Cheques dishonoured and debited by bank but not given effect to it in the Ledger ₹ 800.
3. Bank charges debited by bank but Debit Memo not received from bank ₹ 50.
4. Interest on overdraft excess credited in the Ledger ₹ 200.
5. Wrongly credited by bank to account, deposit of some other party ₹ 900.
6. Cheques issued but not presented for payment ₹ 400.

Explain the terms 'Reserve' and 'Provision' with examples.