Sample QuestionsModel Paper 1 questions
One sample from each question group in this chapter. Select any group above to see the full set with answer keys.
Reserve created by undervaluation of closing stock is called:
Answer: A.
View full solution →The advantages of Sales Book are:
- ✓
- B
Easiness in preparing Trading Account
- C
Price of goods sold to each
- D
Knowledge of total price of party goods sold on credit
Answer: A.
View full solution →In a business Purchases refers to the:
- A
- ✓
Purchase of goods for resale.
- C
Purchase of an assets to be used
- D
Purchase of an article to be in factory. used in office.
Answer: B.
View full solution →Out of the following assets which one is not an intangible asset?
Answer: A.
View full solution →Main elements of accounting equation are:
- A
Bank balance, Investments and
- B
Capital, Creditors and Bills Bills Receivable Payable
- ✓
Assets, Liabilities and Capital
- D
Answer: C.
View full solution →What is the difference between trade discounts and cash discounts?
R & Co. paid professional fee to Ram, an advocate. If applicable rate of CGST and SGST is $6 \%$ each, pass the Journal entry for payment of CGST and SGST.
View full solution →Anish of Gurugram, Haryana sold goods of ₹ 20,000 to Prakash of Noida, Uttar Pradesh. Rates of CGST and SGST are $6\%$ each while that of IGST is $12 \%$. Pass the Journal entry in the books of Prakash.
View full solution →Ramesh purchased on credit goods for ₹ $5,00,000$ Less $20 \%$ Trade Discount. As per the terms, he can deduct $4\%$ Cash Discount if he pays the full amount within 15 days. What amount he will have to pay to avail the Cash Discount?
View full solution →When an account is said to have a debit balance and credit balance?
On checking Ram's Cash Book with the Bank Statement of his overdraft current account for the month of November, 2013, you find the following :
i. Cash Book showed an overdraft of ₹ 45,000 .
ii. The payment side of the Cash Book had been undercast by ₹ 1,500 .
iii. A cheque for ₹ 7,500 drawn on his saving account has been shown as drawn on current account.
iv. Cheques amounting to ₹ 70,000 drawn and entered in the Cash Book had not yet been presented.
v. Cheques amounting to $₹ 60,000$ sent to the bank for collection, though entered in the Cash Book, had not been credited by the bank.
vi. Bank charges of $₹ 750$ as per Bank Statement had not been taken into the Cash Book.
vii. Dividends of the amount of $₹ 25,000$ had been paid directly into the bank and not entered in the Cash Book.
You are required to prepare a Bank Reconciliation Statement on 30th November, 2013.
View full solution →On 30th June, 2023, the bank Column of Anuj's Cash Book showed a balance of $₹ 8,250$. On examination of the Cash Book and bank statement you find that:
i. Out of total cheques amounting to $₹ 8,000$ issued, cheques amounting to $₹ 5,800$ have been presented for payment upto 30th June, 2023.
ii. Out of total cheques amounting to $₹ 6,000$ sent to bank for collection, cheques of $₹ 4,100$ were credited in Pass Book upto 30th June, 2023.
iii. On 28th June a customer deposited $₹ 3,500$ direct in the bank account but it was entered only in the Pass Book.
iv. Debit side of Anuj's Cash Book (Bank Column) has been overcast by ₹ 100 .
v. No entry has been made in the Cash Book for the Rent of ₹ 800 paid by bankers according to Anuj's standing instructions.
vi. The Pass Book showed a credit of ₹ 320 for interest and a debit of ₹ 40 for bank charges, but these have not been entered in the Cash Book.
Prepare a Bank Reconciliation Statement as on 30th June, 2023.
View full solution →Mr. Goel maintains two bank accounts. Prepare his columnar cash book from the following particulars:2023 | | ₹ |
May 1 | Cash in hand | 34,000 |
| Balance with PNB Bank | 75,200 |
| Balance with SBI Bank | 1,20,000 |
May 3 | Cash drawn from SBI for office use | 25,000 |
May 8 | Sold goods to Pradhan for ₹ 80,000 and received from him ₹ 20,000 in cash and a cheque for the balance. The cheque is deposited in PNB on the $9^{\text {th }}$ and the bank credited the amount on the $15^{\text {th }}$ and debited ₹ 25 as its collection charges. | |
May 12 | Purchased goods for ₹ 40,000 at 20% trade discount. 25% of the amount is paid in cash and issued a cheque on SBI for the balance amount. | |
May 20 | Paid Wages ₹ 36,000 and Salary ₹ 4,000 . | |
May 22 | A cheque for ₹ 50,000 is drawn on SBI and it is deposited in PNB. | |
May 23 | Purchased land for ₹ 3,20,000 and a cheque is issued on PNB. | |
May 24 | A cheque for ₹ 10,000 which was received from Mukesh and was deposited in SBI on $25^{\text {th }}$ April is dishonoured and the bank debited ₹ 100 as bank charges on this cheque. The amount of dishonoured cheque and bank charges is received from Mukesh in cash on the $25^{\text {th }}$. | |
May 26 | Deposited cash ₹ 30,000 in PNB. | |
May 28 | Sold old typewriter for ₹ 2,000 and old newspapers for ₹ 200 in cash. | |
May 30 | Interest charged by PNB Bank ₹ 400 . | |
May 31 | Bank charges by SBI Bank ₹ 180 and PNB Bank ₹ 340 . | |
View full solution →What is the difference between trade discounts and cash discounts?
Following balance appear in the books of $M / s$ Anandi as on $1^{\text {st }}$ April 2022: | ₹ |
Machinery Account | 60,000 |
Provision for depreciation A/c | 36,000 |
On $1^{\text {st }}$ April 2022 , they decided to dispose off machinery for ₹ 8,400 , which was purchased on $1^{\text {st }}$ April 2018 for ₹ $16,000$.
You are required to prepare Machinery Account, Provision for Depreciation Account and Machinery Disposal A/c for the 2022-23. Depreciation was charged at $10 \%$ p.a. on original cost method.
View full solution →The following balances appear in the books of Y Ltd.:| | ₹ |
Machinery A/c as on 1-4-2022 | 8,00,000 |
Provision for Depreciation A/c as on 1-4-2022 | 3,10,000 |
On 1-7-2022, a machinery which was purchased on 1-4-2019 for ₹ $1,20,000$ was sold for ₹ 50,000 and on the same date, another machinery was purchased for ₹ 3,20,000.
The firm has been charging depreciation at $15 \%$ p.a. on Original Cost Method and closes its books on $31^{\text {st }}$ March every year. Prepare the Machinery A/c and Provision for Depreciation $A / c$ for the year ending $31^{\text {st }}$ March 2023.
View full solution →An accountant, while balancing his books found that there was a difference of ₹ 270 in the trial balance. Being required to prepare the final accounts he placed the difference to a newly opened Suspense Account, which was carried forward to the next year when the following errors were discovered:
i. Salary for the month of March was posted twice, ₹ 155
ii. Interest on investments collected by the bankers, were posted directly in concerned accounts through the pass book, but no entry was made in the bank column of the cash book ₹ 75
iii. Goods worth ₹ 700 were distributed as free samples but this fact has not been taken into Books.
iv. Rent of ₹ 350 received from Abhi credited both to Rent Account and Abhi Account.
v. A purchase of a chair from Wallmart Furniture Mart for ₹ 65 has been entered in purchases book as ₹ 56
vi. Old Machinery sold to the proprietor Keshav for ₹ 400 was entered in Sales Book as sale to Krishna.
vii. Cash Purchases from Ajit ₹ 189 were recorded in Cash Book as well as in Purchases Book and posted from both.
viii. Closing Stock has been undervalued by ₹ 300
Give necessary rectifying entries and prepare the Suspense Account.
Correct the following errors: (1) without Suspense Account and (2) with Suspense Account:
i. Sales Book has been totalled ₹ 8,000 short.
ii. Goods of ₹ 1,500 returned by Shivam & Co., have not been recorded.
iii. Goods purchased of ₹ 2,500 was posted to debit of the supplier, Ram.
iv. Furniture purchased from Pink & Co., of ₹ 10,000 has been entered in Purchases Book.
v. Cash received from Aniket ₹ 3,500 has not been posted in his account. Also prepare Suspense Account.
Record necessary Journal entries assuming CGST @ $5 \%$ and SGST @ $5 \%$ and all transactions are occurred within Delhi)
i. Shobit bought goods $₹ 1,00,000$ on credit
ii. He sold them for $₹ 1,35,000$ in the same state on credit
iii. He paid for Railway transport ₹ 8,000
iv. He bought computer printer for $₹ 10,000$
v. Paid postal charges ₹ 2000
View full solution →Calculate provision for doubtful debt. If debtor closing balance is Rs.3,400 and provision for the reserve of doubtful debts at $10 \%$ on sundry debtors
Answer: C.
View full solution →A new firm commenced business on $1^{\text {st }}$ January 2022 and purchased goods costing ₹ 90,000 during the year. A sum of ₹ 6,000 was spent on freight inward. At the end of the year (on $31^{\text {st }}$ March, 2023) the cost of goods still unsold was ₹ 15,000 (Realisable value 12,000 ). Sales during the year was ₹ 1,20,000. What is the gross profit earned by the firm?
Answer: B.
View full solution →Revenue Expenditure means
- A
- B
- ✓
The expenditure which is incurred for the day to day running of the business
- D
The amount which is incurred incurred for the day to day running of the business in acquiring or improving the value of fixed assets
Answer: C.
View full solution →Single entry system is also known as
- A
Accounts for Real and Nominal
- B
Accounts from Auditors nature
- C
Accounts from complete records
- ✓
Accounts from incomplete records
Answer: D.
View full solution →If the Opening capital is ₹ 60,000, drawings ₹ 5,000, capital introduced during the period ₹ 10,000, closing capital ₹ 90,000. The value of profit earned during the period will be:
Answer: C.
View full solution →Ajay started business with capital of ₹ $5,00,000$ on $1^{\text {St }}$ April, 2022. He introduced additional capital of ₹ $3,00,000$ on $1^{\text {st }}$ October, 2022. He charged interest on capital @ $10 \%$ p.a. Calculate the amount of interest on capital and show it in the final accounts.
View full solution →State by giving reasons whether the following items of expenditure are Capital or Revenue:
i. Expenditure incurred for raising loans.
ii. Expenditure of registration of a trade mark.
iii. Carriage paid on goods purchased.
iv. Commission paid on net profit of the company to manager.
v. Travelling expenses of a director for trip abroad for purchasing capital goods.
vi. Damages on account of contract.
vii. Compensation paid to a retrenched employee.
The following Expenses relate to a motor lorry, purchased by a limited company for its business:
i. Bought an old lorry for ₹ 1,20,000 in an auction and paid ₹ 1,500 as freight and cartage.
ii. Its overhauling charges amounted to ₹ 30,000.
iii. Other Accessories were purchased for ₹ 18,000.
iv. Lorry was badly damaged in an accident and its repair cost was ₹ 42,600.
v. Compensation was paid to the person involved in accident ₹ 14,500.
vi. Lorry was sold for ₹ 1,25,000.
vii. Driver's Salary, Petrol Expenses etc. were ₹ 34,720.
Pass the necessary Journal Entries of the above and Prepare a Lorry A/c.
The following balances were extracted from the books of Garim Aggarwal on 31st March, 2013
Capital | 98,000 | Loan | 31,520 |
Drawings | 8,000 | Sales | 2,61,440 |
General expenses | 10,000 | Purchases | 1,88,000 |
Building | 44,000 | Motor car | 8,000 |
Machinery | 37,360 | Reserve fund | 3,600 |
Stock | 64,800 | Commission (Credit) | 5,280 |
Power | 8,960 | Car expenses | 7,200 |
Taxes and insurance | 5,260 | Bills payable | 15,400 |
Wages | 28,800 | Cash | 320 |
Debtors | 25,120 | Bank overdraft | 13,200 |
Creditors | 10,000 | Charity | 420 |
Bad debts | 2,200 | | |
Stock on 31st March 2013 was valued at Rs. 23,500. Prepare the final accounts for the year ended 31st March 2013
Prepare Trading and Profit and Loss Account for the year ended $31^{\text {st }}$ March, 2023 and Balance Sheet as at that date from the given Trial Balance after the following adjustments:
i. Stock on $31^{\text {st }}$ March, 2023 was valued at ₹ 14,000 . Closing Stock includes goods costing ₹ 10,000 which were sold and recorded as sales but not delivered to the customer.
ii. Plant and Machinery includes a machine purchased for ₹ 20,000 on $1^{\text {st }}$ October, 2022.
iii. Outstanding liabilities for Wages ₹ 1,200 and Salaries ₹ 2,800 .
iv. Depreciation @ $5 \%$ p.a. on is to be provided on all fixed assets.
v. Write off bad debts ₹ 1,500 .
vi. Insurance premium paid in advance ₹ 400 .
vii. $80 \%$ of the commission earned was received and credited to Commission Account during the year.Debit Balances | ₹ | Credit Balances | ₹ |
Stock on $1^{s t}$ April, 2022 | 50,000 | Capital | 3,20,000 |
Furniture | 16,000 | Creditors | 80,000 |
Building | 1,60,000 | Purchases Return | 2,000 |
Debtors | 60,000 | Commission | 6,000 |
Drawings | 20,000 | Sales | 4,65,600 |
Plant and Machinery | 1,40,000 | Bad Debts Recovered | 1,400 |
Wages | 24,000 | | |
Salaries | 40,000 | | |
Bad Debts | 2,000 | | |
Purchases | 2,40,000 | | |
Electricity Charges | 12,000 | | |
Telephone Charges | 4,800 | | |
Sales Return | 1,800 | | |
Insurance Premium | 3,000 | | |
Cash in Hand | 6,400 | | |
Cash at Bank | 95,000 | | |
| 8,75,000 | | 8,75,000 |
View full solution →A retailer had not kept proper books of account. From the details given, you are required to ascertain the Profit or Loss for the year ended $31^{\text {st }}$ March, 2023 and also to prepare his Statement of Affairs as at that date: | $1^{\text {st }}$ April, 2022 (₹) | $31^{\text {st }}$ March, 2023 (₹) |
Stock-in-Trade | 16,700 | 18,100 |
Sundry Creditors | 15,400 | 19,200 |
Sundry Debtors | 27,200 | 15,600 |
Cash in Hand | 250 | 1,400 |
Bank Overdraft | 19,200 | Nil |
Fixtures and Fittings | 1,500 | 1,500 |
Motor Van | 1,900 | Nil |
Bank Balance | Nil | 2,900 |
Drawings during the year amounted to ₹ 2,400 . Depreciate Fixtures and Fittings by $10 \%$. ₹ 600 is irrecoverable from Debtors. Provide ₹ 700 for Doubtful Debts.
View full solution →X who keeps incomplete records gives you the following information:| ASSETS AND LIABILITIES |
| | 1st April, 2022 (₹) | 31st March, 2023 (₹) |
| Stock in hand | 18,700 | 20,400 |
| Debtors | 12,000 | 14,000 |
| Creditors | 9,000 | 1,500 |
| Bills Receivable | 4,000 | 5,000 |
| Bills Payable | 1,000 | 200 |
| Furniture | 600 | 600 |
| Building | 12,000 | 12,000 |
| Bank Balance | 4,350 | 3,350 (Overdraft) |
You are also given the following information:
i. A provision of ₹ 1,450 is required for bad and doubtful debts.
ii. Depreciation @ $5 \%$ is to be written off on Building and furniture.
iii. Wages outstanding ₹ 3,000 ; salaries outstanding ₹ 1,200 .
iv. Insurance has been prepaid to the extent of ₹ 250 .
v. Legal Expenses outstanding ₹ 700 .
vi. Drawings of Mr. X during the year were ₹ 7,520 .
Prepare a statement of Profit as on 31st March, 2023, and a final statement of affairs as at that date. View full solution →