Introduction to Accounting — Account STD 11 Commerce — Question

There was a difference in the Trial Balance of M/s. Jain & Sons, prepared for the year ended 31st March, 2009. The accountant put the difference in Suspense Account.
The following errors were found:

1. Purchases Return Book total ₹ 400 has not been posted to Ledger Account.
2. ₹ 5,100 spent on legal expense for the newly acquired Building was debited to the Building Account as ₹ 1,500.
3. A sale of ₹ 6,540 to Rajat has been credited to his account.
4. Rectify the errors and show the Suspense Account with Nil closing balance.

On 31st March, 2015 the Pass Book of Mr. Janaki Dass showed a credit balance of ₹ 20,600. Prepare a Bank Reconciliation Statement from the following information:

1. Cheques amounting to ₹ 15,000 were drawn in March 2015, out of which cheques for ₹ 5,500 were presented for payment on 3rd April.
2. A cheque for ₹ 5,475 was deposited into the bank, but wrongly entered in the Cash Book as ₹ 5,745.
3. A cheque of ₹ 5,000 which was received from a customer was entered in the cash column of the Cash Book in March 2015 but was omitted to be banked in the month of March.
4. A B/P of ₹ 10,000 was retired by the bank under a rebate of ₹ 100 but the full amount of the bill was credited in the Cash Book.
5. Bank charges entered in the Cash Book twice ₹ 200.

Explain the meaning of any three of the following terms:

1. Liability.
2. Stock.
3. Business Transaction.
4. Drawings.

Journalise the following in the books of Hari.
Sohan informs Hari that Mohan's acceptance for ₹ 13,000, endorsed in favour of Sohan by Hari, has been dishonoured. Sohan agrees to accept ₹ 3,000 in cash and an acceptance at 3 months together with interest @ 12% per annum.

What is petty cash book? How it is prepared?

Enter the following transactions in a simple cash book for December 2016:

		₹
01	Cash in hand	12,000
05	Cash received from Bhanu	4,000
07	Rent Paid	2,000
10	Purchased goods Murari for cash	6,000
15	Sold goods for cash	9,000
18	Purchase stationery	300
22	Cash paid to Rahul on account	2,000
28	Paid salary	1,000
30	Paid rent	500

Rectify the following errors:

1. Credit sales to Mohan ₹ 7,000 were recorded as ₹ 7,200.
2. Credit purchases from Rohan ₹ 9,000 were recorded as ₹ 9,900.
3. Goods returned to Rakesh ₹ 4,000 were recorded as ₹ 4,040.
4. Goods returned from Mahesh ₹ 1,000 were recorded as ₹ 1,600.

Give the rectifying entries of the following:

1. Sales of ₹ 20,000 to Manoj were recorded as ₹ 2,000 in the Sales Book.
2. An amount of ₹ 25,000 spent for the extension of machinery has been debited to the Wages Account.
3. Discount received from Ram & Co. ₹ 350, has not been entered in the discount column of the Cash Book.
4. Goods of ₹ 3,000 sold to Mahesh were recorded in the Purchases Book.

Journalise the following transactions:

1. Goods destroyed by Fire for ₹ 5,000.
2. Paid by cheque ₹ 25,000 as wages on installation of a Machinery.
3. Issued a cheque in favour of M/s Parmatma Saran & Sons on account of purchase of goods ₹ 75,000.
4. Goods sold costing ₹ 60,000 to M/s Kalu Sons at an invoice price 10% above cost less 5% Trade discount.

On Jan. 1, 2017, Tarun purchased goods from Arun for ₹ 20,000 and immediately drew a promissory note in favour of Arun payable after 1 month. Date of maturity of the promissory note was declared emergency holiday by the Government of India under the Negotiable Instrument Act 1881. Tarun met the promissory note according to the provisions of law.
Pass the necessary Journal entries in the books of Arun and Tarun.