1. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATION – OCTOBER 2014

B.COM T.T. – I SEMESTER

 FINANCIAL ACCOUNTING – I

Duration: 3 Hours                                                                                            Max. Marks: 100

SECTION – A

 

1. Answer ALL the questions. Each carries 2 marks.                                       (10 x2 =20)

 

1. What is revenue expenditure? Mention any two examples of Revenue Expenditure.
2. What is Business Entity Concept?
3. How is the discount column of the Cash Book posted?
4. Mention any two distinctions between Purchase Book and Purchase Journal.
5. Define Accounting.

 

6. How do you rectify the following errors:
7. Credit Sales to Anita Rs. 5,000 not recorded in books.
8. Credit Purchase of goods from Arun Rs. 10,000 was recorded as Rs. 1,000.

 

7. The position of a businessman on 31^st March, 2014 was as follows:

 

Particulars	Amount in Rs.	Particulars	Amount in Rs.
Cash	5,000	Stock	25,000
Debtors	20,000	Capital	1,75,000
Machinery	1,60,000	Furniture	50,000

 

Calculate his liabilities.

 

8. In which subsidiary books do you record the following transactions:
9. Purchase of goods for Cash.
10. Purchase of Fixed Assets on credit.
11. Sale of goods on credit.
12. Rectification Entries.

 

 

 

 

9. Find the amount of Gross profit given the following information.

 

Particulars	Amount in Rs.	Particulars	Amount in Rs.
Opening Stock	10,000	Wages	20,000
Purchases	1,20,000	Salaries	45,000
Sales	1,85,000	Closing Stock	45,000

 

10. Value of Closing Inventory of a Company was Rs. 24,59,600 at cost price and Rs. 24,45,800 at Net Realizable Value. As per AS 2, which value is to be considered in the preparation of Final Accounts?  Which accounting concept is followed here?

 

SECTION – B

1. Answer any FOUR Each carries 5 marks.                                  (4×5=20)

 

11. State True or False with reasons:

 

1. Payment of Rs. 6,000 as Wages to workmen for installation of a machine should be debited to Machinery Account.
2. Assets Accounts may have either debit or credit balance.
3. If the effect of one error is neutralized by the effect of another error, such errors are called Error of Principle.
4. Manufacturing Account is prepared by all trading and manufacturing concerns.
5. In Three Column Cash Book, Cash withdrawn by the Proprietor for personal use will be accounted as a Contra Entry.

 

12. Pass Journal Entries for the following transactions:

 

1. Salary paid to Mohan Rs. 15,000.
2. Paid rent of Proprietor’s residence Rs. 10,000.
3. Goods purchased of the list price of Rs. 10,000 at 10% trade discount.
4. Received Commission Rs. 2,000.
5. Bank charged Rs. 50 for bank charges.

 

13. The books of Vishnu Ltd. revealed the following information for the year ended 31^st March, 2014.

Particulars	Rs.
Opening Inventory	4,50,000
Purchases during the year 2013-14	37,00,000
Wages	2,25,000
Selling and Distribution Expenses	25,000
Carriage Outwards	5,500
Freight inwards	4,500
Sales during the year 2013-14	46,00,000
Return Inwards	25,000
Return Outwards	5,000
Closing Stock	10,32,450

 

You are required to Prepare Trading Account for the year ended 31^st March, 2014.

 

14. The following Trial Balance contains errors. You are required to prepare a correct Trial Balance.

 

Name of Accounts	Debit Balance  (Rs.)	Credit Balance  (Rs.)
Cost of goods sold	25,40,000
Closing Stock		5,30,000
Sales		33,00,000
Office Expenses	1,20,000
Selling Expenses	60,000
Fixed Assets	5,00,000
Debtors		3,60,000
Creditors		2,50,000
Capital	6,50,000
Bank Balance	90,000
Opening Stock	4,80,000
Total	44,40,000	44,40,000

 

 

 

 

 

15. Enter the following transactions in a single column Cash Book.

Date	Particulars	Rs.
March 1	Commenced business with cash	20,000
March 2	Bought goods for cash	5,000
March 5	Sold goods for cash	4,000
March 10	Goods purchased from Ravi on credit	10,000
March 13	Paid to Ravi	7,000
March 15	Cash Sales	8,000
March 18	Purchased furniture for office	6,000
March 20	Paid Wages	380
March 24	Paid Rent	400
March 26	Received Commission	600
March 28	Withdrew for personal expenses	1,000
March 31	Paid Salary	900

 

16. Prepare accounting equations:
17. Rahim started business with cash Rs. 20,000.
18. He purchased furniture for cash Rs. 2,000.
19. Rahim paid rent of Rs. 200.
20. He purchased goods on credit for Rs. 3,000.
21. He sold goods (costing Rs. 2,000) for cash Rs. 3,000.

 

SECTION – C

• Answer any THREE questions. Each carries 15 marks.                      (3×15=45)

 

17. Enter the following particulars in the Cash Book with Cash and Bank Columns:

2014		Rs.
March 1	Cash in hand	5,000
	Bank Overdraft	1,000
March 2	Paid Wages	1,500
March 3	Deposited into bank	2,000
March 4	Cash Sales	17,500
March 5	Sold goods for cheque which was deposited in bank on the same day	5,000
March 6	Purchased goods from Hari on credit	4,000
March 7	Drew from Bank for personal use	1,000
March 8	Paid to Hari in full settlement	3,500
March 9	Received from Ram	12,000
March 10	Withdrew from Bank for Office Use	3,000
March 12	Sold goods for Cash	15,000
March 13	Cash deposited into Bank	12,000
March 15	Paid rent by cheque	4,000
March 16	Bank charges as per Pass Book	250

 

18. Prepare the following Trial Balance of Sh. Rama Nand Sagar, prepare Trading and Profit and Loss Account for the year ended 31^st March, 2014 and a Balance Sheet as on that date.

 

Debit Balance	Rs.	Credit Balances	Rs.
Opening Stock	20,000	Sales	2,70,000
Purchases	80,000	Purchase Return	4,000
Sales Returns	6,000	Discount	5,200
Carriage Inwards	3,600	Sundry Creditors	25,000
Carriage Outwards	800	Bills Payable	1,800
Wages	42,000	Capital	75,000
Salaries	27,500
Plant and Machinery	90,000
Furniture	8,000
Sundry Debtors	52,000
Bills Receivable	2,500
Cash in hand	6,300
Travelling Expenses	3,700
Lighting (Factory)	1,400
Rent and Taxes	7,200
General Expenses	10,500
Insurance	1,500
Drawings	18,000
Total	3,81,000	Total	3,81,000

 

Adjustments:

1. Stock on 31^st March, 2014 was valued at Rs. 24,000.
2. Wages outstanding Rs. 3,000.
3. Prepaid insurance Rs. 500.
4. Provide Depreciation of Plant and Machinery at 5% and on Furniture at 20%.

 

 

 

19. Pass Journal Entries to rectify the errors, if any:

 

1. Goods costing Rs. 1,000 have been purchased on credit from Sohan, but no entry has been made in the books, although the goods were taken into stock.
2. Goods amounting to Rs. 4,000 have been sold on credit, but no entry has been made in the books.
3. No entry has been made for purchases return of Rs. 200.
4. No entry has been made for sales returns of Rs. 450.
5. Goods purchased from Ramesh Chandra on credit for Rs. 5,000 was recorded in purchases book as Rs. 500.
6. Sales of Rs. 600 to Siya Ram were recorded as Rs. 60 in the Sales book.
7. Goods purchased on credit from Pawan for Rs. 400 were recorded as Rs. 4,000 in purchase book.
8. Arun was appointed as the Managing Director of the organization at a monthly salary of Rs. 1,00,000 per month.  No entry has been made in the books on the date of appointment.
9. 2,000 paid for furniture purchased has been debited to purchases account.
10. 3,000 paid to Mohan Lal for salary was debited to his personal account.

 

20. From the following balances taken from the books of a manufacturing concern, prepare Manufacturing Account and Trading and Profit and Loss Account.

Items	Rs.	Items	Rs.
Opening Stock:		Salaries	82,000
Raw Materials	43,000	Factory Insurance	8,400
Work in Progress	6,400	Depreciation on:
Finished Goods	80,500	Plant	71,200
Purchases:		Factory Building	20,400
Raw Materials	5,00,000	Furniture	3,000
Finished Goods	1,20,000	Manufacturing Expenses	62,200
Wages	3,98,480	Miscellaneous Expenses	15,800
Salary of Works Manager	72,000	Sales:
Factory rent and taxes	24,000	Raw Materials	4,000
Repairs to Machinery	7,000	Finished Goods	17,00,000
Carriage Inwards (on raw materials)	12,000	Closing Stock:
Carriage Outwards	4,300	Raw Materials	55,000
Fuel and Power	16,800	Work in Progress	16,500
Sale of scrap	2,000	Finished Goods	1,75,300

 

21. Explain the following terms:
22. Net Realisable Value
23. Contingency
24. Extraordinary Items
25. Accrual Concept
26. Convention of Conservatism

 

 

SECTION – D

 

1. Answer the following compulsory question.                            (1×15=15)
2. Following was the position of Abhishek as on 1^st March, 2014:

 

Particulars	Rs.	Particulars	Rs.
Cash in hand	10,000	Stock	50,000
Cash at Bank	16,800	Debtor – Ram	8,000
Furniture	8,000	Debtor – Shyam	12,000
Creditor – Anil	4,000	Creditor – Sunil	5,000

 

Following transactions took place during March 2014:

 

1. Received a cheque from Ram in full settlement of his account after deducting 5% cash discount. The cheque was banked the same day.
2. Cash deposited into bank Rs. 5,000.
3. Cash paid to Anil after deducting 2% cash discount.
4. Old furniture old for Rs. 800.
5. Sold goods to Shiv Prasad of the list price Rs. 10,000 at a discount of 15%.

 

You are asked to:

 

1. i) Pass the opening entry.                                                                        (2 Marks)
2. ii) Journalise the transactions that took place in March 2014.            (5 Marks)

iii) Prepare Ledger Accounts.                                                                  (5 Marks)

2014. iv) Prepare Trail Balance as at the end of March, 2014. (3 Marks)

 

 

 

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