Introduction to Accounting — Account STD 11 Commerce — Question

Ravi sold goods for ₹ 40,000 to Sudershan on Feb 13, 2016. He drew four bills of exchange upon Sudershan. The first bill was for ₹ 5,000 payable after one month. The second bill was for ₹ 10,000 payable after 40 days; the third bill was for ₹ 12,000 payable after three months and fourth bill was for the balance amount payable after 19 days. Sudershan accepted all the bills and returned the same to Ravi. Ravi discounted the first bill with his bank at 6% p.a. He endorsed the second bill to his creditor Mustaq for the full settlement of a debt of ₹ 10,200. The third bill was kept by Ravi with him till the date of maturity. Five days before the maturity of the fourth bill, Ravi sent the bill to his bank for collection. All the four bills were dishounoured by Sudarshan on maturity. Sudershan settled Ravi’s claim in cash three days after the dishonour of each bill along with interest @ 12% p.a. for the terms of the bills. You are requested to record the necessary journal entries in the books to Ravi, Sudershan, Mustaq and bank for the above transaction. Also prepare Sudershan’s account and Mustaq’s account in the books of Ravi.

What are the attributes (features) of accounting?

From the following particulars make out the Bank Reconciliation Statement as on 31st December 2016.

1. Pass book showed a credit balance of ₹ 15,000 on 31st December 2016.
2. Cheques of ₹ 17,500 were issued but cheques of ₹ 12,000 only presented for payment till 31st December.
3. Cheques of ₹ 10,000 were sent to the bank for Collection. Out of which cheques of ₹ 2,000 were credited in the month of January 2017.
4. Bank paid ₹ 300 as per standing instructions but no record made in the cash book.
5. Bank charged interest on overdraft ₹ 800 and it was entered twice in pass book by bank.
6. ₹ 40 as bank charges not recorded in the cash book.
7. Bank receives ₹ 200 as interest on debentures, but no information being sent to the customer.

On Jan 01, 2017 Vibha sold goods worth ₹ 18,000 to Sudha and drew upon the latter a bill of exchange for the same amount payable after two months. Sudha accepted Vibha’s draft and returned the same to Vibha after acceptance. Vibha endorsed the bill immediately in favour of her creditor Geeta. Five days before the maturity of the bill Sudha requested Vibha to cancel the bill since she was short of funds. She further requested to draw a new bill upon her including interest of ₹ 200. Vibha accepted Sudha’s request. Vibha took the bill from Geeta by making the payment to her in cash and cancelled the same. Then she drew a new bill upon Sudha as agreed. The new bill was payable after one month. The new bill was duly met by Sudha on maturity. Record the necessary journal entries in the books of Vibha.

Give rectifying journal entries for the following errors:

1. Sale of goods to Madan ₹ 6,000 were entered in the sales book as ₹ 600.
2. A credit purchase of ₹ 1,500 from Ajay has been wrongly passed through the sales book.
3. Repairs to building ₹ 300 were debited to building account.
4. ₹ 2,050 paid to Rohit is posted to the debit of Mohit's account as ₹ 5,020.
5. Purchase return book is overcast by ₹ 400.

Rectify the following errors which were detected before preparing the Trial Balance:

1. The total of Sales Book carried forward ₹ 5,000 less.
2. A credit sale to Sita ₹ 6,300 posted as ₹ 3,600.
3. A credit sale to Radha ₹ 2,400 posted as ₹ 4,200.
4. A credit sale to Parbati ₹ 3,000 credited to her account.
5. A credit sale to Laxmi ₹ 5,600 credited as ₹ 6,500.

On 1st April, 2016, B accepts a bill drawn by A at three months for ₹ 8,000 in payment of debt. On the due date the acceptance is dishonoured and A gets the bill noted paying ₹ 100. On 4th July, 2016 A draws a new bill payable after 73 days provided interest is paid in cash @ 15% p.a. To this B is agreeable. The bill is met on maturity.
Record these transactions in the Journal of both the parties.

On 1st Jan., 2016, Satish drew on Harish three bills of exchange in full settlement of claims, the first for ₹ 14,000 at one month; the second for ₹ 16,000 at two months and the third for ₹ 18,000 at three months. The bills were duly accepted by Harish. The first bill was endorsed by Satish to his creditor Rajnish on 3rd Jan., 2016. The second bill was discounted on 15th Jan. for ₹ 15,900 and the third bill was sent to bank for collection on 4th Feb. All the bills were met on maturity except the second bill which was dishonoured, noting charges being paid ₹ 240. Satish charged ₹ 300 for interest from Harish and drew on him a fourth bill for two months for ₹ 16,540. The fourth bill was duly met on maturity. Give Journal entries in the books of Satish and Harish.

Enter the following transactions in a petty cash book in analytical form. The book is kept on imprest system, amount of imprest being ₹ 5,000.

2016
April 3	Petty Cash in hand ₹ 420. Received cash to make-up the imprest
	Bought stamps for ₹ 300
April 5	Paid for office cleaning ₹ 200 and repairs to furniture ₹ 250
April 7	Paid bus fare ₹ 440, railway fare ₹ 330, wages ₹ 200
April 8	Paid for charity ₹ 350
April 9	Bought shorthand note book for office ₹ 250, Carriage on parcels ₹ 280
April 10	Bought envelopes ₹ 450, served refreshment to customers ₹ 150
April 12	Paid for conveyance ₹ 300. Wages ₹ 200. Stapler pins ₹ 280
April 15	Gave tips to office peon ₹ 250

Journalise the following transactions is the journal of M/s. Goel Brothers and post them to the ledger.

2017		₹
Jan. 01	Started business with cash	1,65,000
Jan. 02	Opened bank account in PNB	80,000
Jan. 04	Goods purchased from Tara	22,000
Jan.05	Goods purchased for cash	30,000
Jan.08	Goods sold to Naman	12,000
Jan.10	Cash paid to Tara	22,000
Jan.15	Cash received from Naman	11,700
	Discount allowed	300
Jan. 16	Paid wages	200
Jan. 18	Furniture purchased for office use	5,000
Jan. 20	Withdrawn from bank for personal use	4,000
Jan. 22	Issued cheque for rent	3,000
Jan. 23	Goods issued for house hold purpose	2,000
Jan. 24	Drawn cash from bank for office use	6,000
Jan. 26	Commission received	1,000
Jan. 27	Bank charges	200
Jan. 28	Cheque given for insurance premium	3,000
Jan. 29	Paid salary	7,000
Jan. 30	Cash sales	10,000