Model Paper 2 Account - Model Paper 2

Creation of provision is:

In the Purchases Book, transactions recorded are

Consider the following items:
i. Prepaid Salary
ii. Accrued Interest (Receivable)
iii. Loan (Short term)
iv. Bank Overdraft
Current Liability would include:

Which of the following will be treated as drawings:
A. Withdrawing money for payment of salary to employees
B. Withdrawing money for payment to creditors
C. Withdrawing money from the business for private expenses
D. Withdrawing money for the purchase of an asset

Sumit owns a company and purchase goods on credit from his personal funds and used the same for business purpose. What is the effect on assets

Distinguish between Capital Expenditure and Revenue Expenditure.

Explain the need for IFRS.

Cash Basis of Accounting is not a better basis for depicting the correct financial position of an enterprise. Do you agree? Give reasons in support of your answer.

Journalise the following transactions:
i. Goods destroyed by fire for Rs 4,500
ii. Paid Rs 1,500 in cash as wages on the installation of machinery
iii. Issue a cheque in favour of M/s. Parmatma Saran & Sons on accounts of purchase of goods Rs 7,500
iv. Goods sold costing Rs 6,000 of M/s. Kalu sons at an invoice price of 10% above cost less 5% Trade Discount.

What do you understand by balancing of account?

On 31st March, 2023, Bank Statement of Gopal shows credit balance of ₹ 33,570
whereas Cash Book showed debit balance of ₹ 53,000.
It was observed that the differences were because of the following:
i. Cheques and drafts sent to the bank but not collected and credited, amounted to ₹ 7,900 while cheque for ₹ 2,000 was received unpaid.
ii. Three cheques drawn for ₹ 3,000; ₹ 1,500 and ₹ 2,000 respectively were not presented for payment till 30th April, 2023.
iii. Bank has paid a cheque of ₹ 10,000 but it has not been entered in the Cash Book and a cheque of ₹ 5,000 which was discounted with the bank was dishonoured by the drawee on the due date.
iv. Bank has charged ₹ 130 as its commission for collecting outstation cheques and had credited an interest of ₹ 100 in the account.
v. A wrong debit of ₹ 5,000 was made by the bank, which was reversed on 4th April, 2023. Prepare Bank Reconciliation Statement as on 31st March, 2023.

Malhotra and Sons find that the bank balance shown by their Cash Book on December 31, 2023 is ₹ 40,500 (credit) but the Pass Book shows a difference due to the following reasons:
i. A cheque for ₹ 5,000 drawn in favour of Manoj has not yet been presented for payment.
ii. A post-dated cheque for ₹ 900 has been debited in the bank column of the Cash Book but it could not have been presented in any case.
iii. Cheques totaling ₹ 10,200 deposited with the Bank have not yet been collected and an another cheque for ₹ 4,000 deposited in the account has been dishonoured.
iv. A bill payable for ₹ 10,000 was retired by the Bank under a rebate of ₹ 150 but the full amount of the bill was credited in the bank column of the Cash Book.
Prepare a Bank Reconciliation Statement and find out the balance as per Pass Book.

Enter the following transactions in a single column Cash Book:

2023		₹
Mar-01	Commenced business with Cash	20,000
Mar-02	Bought goods for Cash	5,000
Mar-05	Sold goods for Cash	4,000
Mar-10	Goods purchased from Rajesh on Credit	10,000
Mar-13	Paid to Rajesh	7,000
Mar-15	Cash Sales	8,000
Mar-18	Purchased furniture for Cash	6,000
Mar-20	Paid Wages	380
Mar-24	Paid Rent	400
Mar-26	Received Commission	600
Mar-28	Withdrew for personal expenses	1,000
Mar-31	Paid Salary	900

Pass Journal Entries to rectify the following errors:
These errors are located after the preparation of Trial Balance.
i. ₹ 17,000 paid in cash for purchase of a Typewriter was charged to office expenses account.
ii. Credit sale to Abhishek ₹ 5,000 were posted to the Credit of his account.
iii. Cash sales ₹ 20,000 were posted to commission received Account ₹ 200 .
iv. Wages Paid for the construction of office ₹ 9,090 were debited to building Account.
v. Salary payable to Amar ₹ 12,000 was not recorded in the books.

Unearned income means

Insurance paid Rs. 4000 (including premium of Rs. 3000 per annum) paid up to 30 th June by what amount insurance prepaid amount should be debited

Carriage Outward is shown in:

Generally, incomplete records are maintained by:

Extracts of Trial Balance as on 31st March, 2013
Name of Accounts	Debit Balance(Rs)	Credit Balance(Rs)
Commission Received		9,000

Additional Information
Commission earned but not received Rs 1,800 .
Pass an adjusting entry and show how will this appear in final accounts.

From the following balances of the year ended 31st December, 2013 and additional information, prepare the trading and profit and loss account and the balance sheet M/s Ram Lai Sons.

Name of Accounts	Amt(Rs)	Name of Accounts	Amt(Rs)
Capital	80,000	Insurance	600
Purchases	82,000	Salaries	12,500
Sales	1,10,000	Bad Debts	200
Return Outwards	1,000	Carriage on purchases	200
Building	45,000	Commission (credit)	1,500
Opening Stock	15,000	Cash in hand	5,000
Debtors	20,100	Cash at Bank	25,000
Creditors	28,000	Sales tax paid	5,000
Furniture	7,000	Sales tax collected	3,500
Wages	1,800	Interest on investment	500
Rent	5,100

Additional Information
i. Closing stock was valued at Rs 20,000.
ii. Provide depreciation on building @ 5% and on furniture @10%.
iii. Outstanding salaries Rs 1,000.
iv. Unexpired insurance Rs 50.
v. Accrued commission Rs 300.
vi. Provide for manager's commission at 5% on net profit after charging such commission.

From the following information supplied by Ms. Sudha, calculate the amount of 'Net Sales'

	₹
Debtors on April 01, 2016	65,000
Debtors on March 31, 2017	50,000
Opening balance of bills receivable as on April 01, 2016	23,000
Closing balance of bills receivable as on March 31, 2017	29,000
Cash received from debtors	3,02,000
Discount allowed	8,000
Cash received against bills receivable	21,000
Bad debts	14,000
Bill receivables (dishonoured)	20,000
Cash sales	2,25,000
Sales return	17,000