SET 3

Candidates are required to give answers in their own words as far as practicable. Figures in
the margin indicate full marks.
Attempt all the questions.
Group "A"
Answer the very short questions. [11 × 1 = 11]
1. Define book keeping.
2. Mention any two functions of accounting.
3. Write the meaning of going concern concept.
4. Write the meaning of financial statement.
5. What are the parties involved in cheque.
6. Write any two objective of preparing trial balance.
7. Prepare the adjustment entries of prepaid insurance expired of Rs.5, 000.
8. Define current assets.
9. Write the meaning of capital expenditure with example.
10. Mention any two differences between cash discount and trade discount.
11. Define secret reserve.
Group "B"
Give short answer to the following questions: [8 × 5 = 40]
12. a) Explain briefly about scope of accounting. [3]
b) The following transaction is given:
i. Started business with cash Rs. 50,000 and machinery of Rs. 40,000.
ii. Purchase furniture Rs. 20,000 on cash and Rs. 10,000 on credit.
iii. Outstanding wages of Rs. 2,000
iv. Rent paid Rs.5,000 including advance rent Rs.2,000.
Required: Accounting equation. [2]
13. a) Following purchased transactions are provided to you:
January 2: purchased from Asmita stationery:
150 pencil boxes @ Rs. 30 per box
40 erasers @ Rs. 30 per erasers.
Less: 10% trade discount
January 15 : purchased from Buddha stationery :
200 piece of math's books @Rs 300 each .
100 piece of accountancy books @ Rs 500 each.
Required: Purchase books [2]
 b) Following Cash and Banking Transactions are given below:
Baishak-1: Opening balance of cash Rs.60,000 and Bank balance Rs.40,000.
Baishak- 8: Issued chequeRs. 7,500 to Ram for settle his account of Rs. 8,000.
Baishak-15: Cash deposited in to Bank Rs. 15,000.
Baishak-20: Cash received from Sabina Rs. 7,500 after deducting discount
of Rs. 500.
Required: Triple column cash book [3]
14. The following Transaction is given below.
a. Balance as per cash book Rs. 30,000.
b. Out of cheque issued for Rs. 4,000 but only cheque of Rs.3,000 has been
presented for payment.
c . Cheque sent for deposited into bank Rs. 6,000 but not collected by bank..
d. Bank charges debited in pass book Rs. 100
e. A customer directly deposited in to bank Rs. 5,000 but not entered in cash
book.
f. A cheque of Rs 2,000 was debited in cash book but not sent to the bank for
collection.
Required : Bank Reconciliation statement [5]
15. The trial balance of ABC trading concern is given below:
particulars Debit Rs particulars Credit Rs
General expenses 20,000 Capital 1,50,000
Salary 5,000 Creditors 10,000
Printing and stationery 6,000 Commission received 40,000
purchased 50,000 Gross profit 1,00,000
Prepaid insurance 5,000 Bills payable 30,000
Office expenses 2,000 Bank Loan 80,000
Cash at bank 42,000
Debtors 30,000
Machinery 1,50,000
Investment 1,00,000
Total 4,10,000 Total 4,10,000
Additional information:
a. Depreciation on machinery @10% p.a.
b. Outstanding salary Rs 1,000
c. Prepaid insurance expired to the extent of Rs 3,000.
Required : a. Profit and Loss account b. Balance sheet. [5]
16. ABC company purchased machinery for Rs. 2,00,000 on 1st Jan 2020 and
incurred Rs. 50,000 on its installation. On July 1st 2021 it also purchased another
machinery for Rs. 1,50,000. On 30th December 2022, the machine purchased in
2020 was sold for Rs. 1,30,000 and on the same day another new machine was
purchased for Rs. 50,000. The depreciation Charge @10% p.a. on straight line
Methods. The accounts are close 31 st December each year.
Required: Machinery account for three years. [5]
17. The following unadjusted trial balance is given below:
Particulars Debit (Rs.) Credit (Rs.)
Equipment 1,20,000
Wages 2,600
Prepaid rent 4,800
Bills receivable 4,000
Cash at bank 17,800
Creditors 80,000
Capital 64,800
Sales 15,200
General expenses 2,000
Salaries 6,400
Sundry expenses 2,400
Total 1,60,000 1,60,000
Adjustment:
 Prepaid rent expired to the extent of Rs. 1,800.
 Outstanding salaries Rs. 600.
 Depreciation on equipment @10% p.a.
Required: Adjusted trial balance. [5]
18. The following balance sheet of last year and receipts and payments accounts of
Sport club are given below:
Balance Sheet
As on 31st chaitra 2075
Liabilities Amount Assets Amount
Capital fund 10,000 Machinery 15,000
Loan 13,000 Subscription due 3,000
Advance subscription 3,000 Cash at bank 2,000
Investment 6,000

Total 26,000 Total 26,000

 Receipt and payment account
As on 31st chaitra 2076
Receipt Amount Payment Amount
To Balance b/d 2,000 By salary 7,000
To Subscription 17,000 By Rent 10,000
To Entrance fee 8,000 By Furniture 4,000
To Life membership fee 4,000 By Audit fee 5,000
To Legacy 7,000 By Loan paid 9,000
By Balance c/d 3,000

Total 38,000 Total 38,000

Additional information:
a. Subscription due for the year Rs.1,000
b. Outstanding salary Rs. 2,000.
c. Depreciation on machinery @10% p.a.
Required : a. Income & Expenditure Accounts.
b .Balance sheet as on 30 th chaitra 2076. [2+3]
19. Define double entry book keeping system? Explain any three importance. [5]
Group "C"
Give long answer to the following questions. [3 × 8 = 24]
20. The following transaction is given below:
1-1-2020: Started business with cash of Rs. 1,50,000.
2-1-2020: Deposited cash in to bank of Rs. 20,000.
5-1-2020: Purchased goods Ram for Rs. 30,000 and made partial payment of
Rs.20,000.
10-1-2020: Purchased machinery from Ram & Son's Co. of Rs. 10,000.
15-1-2020: Sold goods to Hari Rs. 50,000 and received a cheque of Rs.30,000.
20-1-2020 : Paid for rent of Rs. 5,000.
25-1-2020: Cash paid to Ram Rs. 9,500 in full settlement of his account.
Required: a. Journal entries b. Necessary ledger accounts
c. Trial balance [4+3+1]
21. The trial balance of XYZ co. ltd as on 31 st December 2020
Particulars Debit (Rs.) Credit (Rs.)
Capital 3,30,000
Wages 20,000
Furniture 4,00,000
Salary 20,000
Advertisement expenses 20,000
10% Bank loan 1,50,000
Sales 5,00,000
Opening stock 20,000
purchased 2,00,000
Cash at bank 1,00,000
Trade mark 40,000
Investment 1,50,000
Bills payable 30,000
Prepaid rent 10,000
Commission received 20,000
Interest on investment 20,000
Debtors 80,000
Creditors 20,000
General expenses 10,000
Total 10,70,000 10,70,000
Additional information :
a. Depreciation on furniture by 10%.p.a.
b. Income tax @ 20%
c. Prepaid rent expired to the extent of Rs. 7,000
d. Closing stock at the end valued at Rs. 60,000
Required:
a. Profit and loss statement under NFRS
b. Statement of financial position under NFRS
22. a) XYZ Ltd. company purchased a Plant for Rs. 1,00,000 on 1st Baishak, 2075.
On Kartik 1st 2076, it also purchased another Plant for Rs.80,000. On 30
Chaitra 2077, purchased Plant in 1st Baisakh, 2075 was sold for Rs. 65,000.
The Depreciation Charge @10% p.a. under diminishing balance Methods.
The Accounts are close 31 st Chaitra each year.
Required: Plant account for first three years [5]
b) A trader started a business with cash of Rs. 1,20,000 on January 1 st 2020. His
position on 30th December, 2020 was as follows:
Cash at bank Rs. 20,000 Stock Rs. 30,000.
Creditors Rs. 6,000. Debtors Rs. 80,000
Bank loan Rs. 30,000. Machinery Rs. 1,50,000.
He withdrew Rs. 15,000 during the year. He introduced additional capital
Rs. 25,000.
Additional information:
a. Depreciation on machinery @10% p.a.
b. Write off bad debt of Rs.5,000.
Required: i) Closing statement of affairs.
ii) Profit or loss statement. [3]

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