Basic Accounting Terms — Account STD 11 Commerce — Question

Following errors are discovered in the books of Sh. Ram Lal. Make the necessary entries to rectify them:

1. Purchases Journal was undercasted by ₹ 2,150.
2. ₹ 500 received from K. Krishna was debited to his account.
3. An amount of ₹ 3,000 withdrawn by the proprietor of the firm for his personal use was posted to the Travelling Expenses Account.
4. An amount of ₹ 175 for a credit sale to R. Gopalan correctly entered in the Sales Book, has been debited to his account as ₹ 157.

Darshan sold goods for ₹ 40,000 to Varun on 8.1.2017 and drew upon him a bill of exchange payable after two months. Varun accepted the bill and returned the same to Darshan. On the due date the bill was met by Varun. Record the necessary Journal entries in the books of Darshan and Varun in the following circumstances:
When the bill was retained by Darshan till the date of its maturity.
When Darshan immediately discounted the bill @6% p.a. with his bank.
When the bill was endorsed immediately by Darshan in favour of his creditor Suresh.
When three days before its maturity, the bill was sent by Darshan to his bank for collection.

Explain the meaning of any three of the following terms:

1. Assets.
2. Capital.
3. Goods.
4. Drawings.
5. Trade Receivables.

Write a note on the following:

1. Dishonour of Bill.
2. Endorsement of Bill.

The balance of cash at bank as shown by the Cash Book of Pan & Co. on 31st December, 2016, was ₹ 7,500. On checking the entries in the Cash Book with the Pass Book, it was ascertained that cheques of ₹ 500 and ₹ 700 respectively paid in on 30th December, were not credited until the 2nd January following and three cheques of ₹ 600, ₹ 800 and ₹ 1,200 issued on the 28th December were not presented until the 3rd of January. There was a credit of ₹ 125 in the Pass Book in respect of interest under date 31st December, which was not entered in the Cash Book. There were also Bank Charges debited in the Pass Book amounting in all to ₹ 10 which were not entered in the Cash Book. Prepare a Bank Reconciliation Statement as at 31st December, 2016.

On 1st July, 2019, A drew a bill for ₹ 5,000 on B payable after 3 months. A discounted it with the Bank for ₹ 4,850. On maturity, B failed to pay the amount of his acceptance and the bank had to pay ₹ 50 as noting charges.
Pass the necessary Journal entries in the books of A and B.

Rectify the following errors:

1. Credit sales to Mridula ₹ 5,000 were not recorded.
2. Credit purchases from Nayna ₹ 8,000 were not recorded.
3. Goods returned to Priya ₹ 12,000 were not recorded.
4. Goods returned from Rashi ₹ 10,000 were not recorded.

State the three fundamental steps in the accounting process.

“Accounting Standards ensure the consistency and comparability of Financial Statements.” Explain.

What is a Source Document?