Case Study

Question 14 Marks

Following are the transactions of Mr. Saurav, Delhi:

He started his business with Cash Rs.10,000; Bank Rs.5,000; Machinery Rs.50,000 and Stock Rs.5,000.
Stock of Rs.500 lost by fire.
Cash Sales Rs. 2,000
Purchase of Furniture by cheque Rs.2,000

Mr. Saurav maintains Principal as well as subsidiaries books of accounts including Cash Book, Purchase Book, Sales Book, Purchase Return Book, Sales Return Book and Journal Proper.
Answer the following questions from the above case:
1. Mr. Sourav started business with Machinery, where the transaction of machinery recorded.
(A) Cash Book
(B) Journal Proper
(C) Purchase Book
(D) Sales Book
2. He Purchase furniture by cheque, where it will be recorded in:
(A) Journal Proper
(B) cheque Book
(C) Purchase Book
(D) Cash Book
3. Mr. Saurav has no need to prepare two accounts if he maintains double column Cash Book. Which two accounts he has no need to prepare _______.
(A) Cash, Bank
(B) Bank, Cheque in hand
(C) Bank Overdraft, Bank
(D) Machinery
4. In which side of Cash Book does Cash Sales recorded:
(A) Credit
(B) Debit
(C) Not recorded in Cash Book
(D) None of these

Answer

(i) B (ii) D (iii) A (iv) B

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Question 24 Marks

Virat is a businessman of Garments. He purchases raw material of Rs. 10,000 per week from his supplier Rohit. He has a team of 10 workers. Workers work in his business on basis of daily wages of Rs. 400 per day for each worker. During the month of April Virat withdrew finished goods of Rs. 1,000 (Market Value Rs.5,000) for his personal use. Virat paid Rs. 500 for electricity charges during the month. He sales goods of Rs. 40,000 at 20% Trade Discount during the month.
He wants to expand his business. So, he purchased an old machinery from his friend for Rs. 10,000 and spent Rs. 1,000 for its repair and maintenance. Virat’s business is increasing day by day. He pays all the taxes on time. Answer the following questions from the above case:
1. Which account will be credited for withdrawal of goods by Virat for personal use?
(A) Purchase
(B) Drawings
(C) Capital
(D) Sales
2. Where amount of Trade discount given on sale will be recorded?
(A) Journal Book
(B) Cash Book
(C) Sales Book
(D) None of these
3. Which account will be debited for Repair of old machinery?
(A) Repair Account
(B) Purchase Account
(C) Machinery Account
(D) Both a & b
4. At what value Goods will be shown in the books of account?
(A) Market Value
(B) Cost Value
(C) Difference of a & b
(D) None of these

Answer

(i) A (ii) D (iii) C (iv) B

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