SAMPLE QUESTION PAPER - 4

Accountancy (055)
Class XI (2024-25)

Time Allowed: 3 hours Maximum Marks: 80

General Instructions:
1. This question paper contains 34 questions. All questions are compulsory.
2. This question paper is divided into two parts, Part A and B.
3. Question 1 to 17 and 27 to 29 carries 1 mark each.
4. Questions 18 to 20 and 30 to 32 carries 3 marks each.
5. Questions from 21 to 23 carries 4 marks each.
6. Questions from 24 to 26, 33 and 34 carries 6 marks each.
Part A
1. Each cheque has a counterfoil in which the same details as entered in the cheque [1]
are filled. The counterfoil remains with the ________ for future purposes.

a) cashier b) bank

c) account holder d) Both cashier and account

holder

2. Assertion (A): If Cash = ₹20,000, Machinery = ₹30,000, Stock = ₹10,000, [1]

Creditors = ₹40,000, then the net worth of the firm is ₹20,000.
Reason (R): Capital = Liabilities - Assets.

a) Both A and R are true and R is b) Both A and R are true but R is
the correct explanation of A. not the correct explanation of
A.

c) A is true but R is false. d) A is false but R is true.

3. Which of the following accounts has a credit balance? [1]

a) Discount Allowed b) Discount Received

c) Carriage Inward d) Carriage Outward

4. Following are the steps involved in developing an accounting equation (in [1]
particular order). Arrange the steps in correct sequence.
 i. Find out the effect (in terms of increase or decrease) of a transaction on assets,
capitals or liabilities.
ii. Show the effect on appropriate side of an equation and ensure that the total of
right hand side is equal to the total of left hand side.
iii. Ascertain the variables (i.e. assets, liabilities or capital) involved in a transaction.

a) (iii), (i), (ii) b) (iii), (ii), (i)

c) (ii), (iii), (i) d) (i), (ii). (iii)

OR
Which equation is incorrect out of the following:

a) Liabilities = Assets - Capital b) Assets = Liabilities - Capital

c) Assets = Liabilities + Capital d) Capital = Assets - Liabilities

5. When a trader sells goods on credit, he prepares a sale ________ which contains [1]
the name of the party to whom goods are sold, the rate, quantity and the total
amount of sale.

a) both bill and invoice b) bill

c) memo d) invoice

6. Cost of Goods Manufactured is determined by: [1]

a) Cost Accounting b) Human Resource Accounting

c) Financial Accounting d) Management Accounting

OR
Book Keeping and Accounting:
i. means the same and are used interchangeably.
ii. does not mean the same and are not used interchangeably.
iii. means both (i) and (ii).
iv. None of these.

a) Statement (i) is correct b) Statement (iv) is correct

 c) Both statement (i) and (ii) is d) Statement (ii) is correct
correct

7. Profit on sale of fixed asset is used to create: [1]

a) Capital Reserve b) Specific Reserve

c) Reserve Capital d) General Reserve

8. Debit mean [1]

a) a decrease in asset b) an increase in the proprietor’s

equity

c) an increase in asset d) an increase in liability

OR
Withdrawal of cash from the business by the proprietor is credited to:

a) Drawing A/c b) Profit and Loss A/c

c) Capital A/c d) Cash A/c

9. Income is measured on the basis of: [1]

a) Consistency Concept b) Cost Concept

c) revenue recognition d) Matching Concept

10. Recognition of cost in the same period as associated revenues is called ________. [1]

a) Dual aspect principle b) Cost principle

c) Matching principle d) Full disclosure principle

11. Reserves are important because they help in: [1]

A. meeting the future contingencies
B. strengthening the financial position of the business
C. redemption of liabilities like debenture

a) (A) b) All of these

c) (B) d) (C)
12. Current Liabilities do not include [1]

a) Bills Payable b) Prepaid Insurance

c) Outstanding Salaries d) Sundry Creditors

13. In which book credit sales of goods are recorded [1]

a) Purchase Book b) Purchase Return Book

c) Sales Return book d) Sales Book

14. If the total liabilities of a business decrease by Rs.5000 what will be the effect on [1]
total asset? (assuming the amount of capital remain same)

a) Increase by Rs.5000 b) Increase by Rs.10000

c) Decrease by Rs.5000 d) Remain constant

15. The nature of accrued income is: [1]

a) asset b) revenue

c) expenses d) liability

OR
The nature of capital is

a) an income b) a liability

c) an expense d) an asset

16. The source document for recording entries in the sales return book is generally the [1]
________.

a) debit note b) credit note

c) Transfer voucher d) trial balance

17. ________ is a reserve which does not appear in the balance sheet. [1]

a) Specific reserve b) Secret reserve

c) Capital reserve d) General reserve

18. What do you mean by posting? [3]

OR
Exe Co. has purchased 50 computers from HCL and is allowed a discount of ₹10,000
for purchase thereof. Is the discount allowed Trade Discount or a Cash Discount? How
will you record it in the books of account?

19. Explain any three points highlighting the utility of accounting standards. [3]

OR
Give two advantages of GST.

20. Distinguish between expenses and expenditure. [3]

21. The following are the balances extracted from the books of Amit. Prepare a Trial [4]
Balance as on 31st March, 2023:
₹ ₹
Cash 2,000 Sundry Creditors 40,000
Capital 80,000 Investment 8,000
Purchases 85,000 Plant and Machinery 15,000
Sales 1,08,400 Building 20,000
Purchases Return 6,000 Furniture 6,000
Sales Return 4,000 Electricity 700
Transportation 1,800 Postage 400
Discount Allowed 500 Drawings 8,000
Printing 5,000 Salaries 6,000
Sundry Debtors 70,000 Travelling Expenses 2,000
Input CGST A/c 2,500 Output CGST A/c 1,500
Input SGST A/c 2,500 Output SGST A/c 1,500
Input IGST A/c 4,000 Output IGST A/c 6,000

22. Enter the following transaction in a two column cash book [4]
2013 Amt (Rs.)
Feb 1 Cash in hand 75,000
Feb 5 Paid to Kartik 15,000
 Discount allowed by Kartik 500
Feb 8 Goods purchased 20,000
Feb 10 Received from Parth 49,000
Discount allowed to Parth 1,000
Feb 16 Goods sold 20,000
Feb 21 Paid to Aroha 14,750
Discount allowed by him 250
Feb 28 Paid wages for the month 25,000
Paid in full settlement of Rs. 20,000 to Amit 19,500

23. The cash book shows a bank balance of ₹ 7,800. On comparing the cash book with [4]
the passbook the following discrepancies were noted:
i. Cheque deposited in bank but not credited ₹ 3,000
ii. Cheque issued but not yet present for payment ₹ 1,500
iii. An insurance premium paid by the bank ₹ 2,000
iv. Bank interest credit by the bank ₹ 400
v. Bank charges ₹ 100
vi. Directly deposited by a customer ₹ 4,000

OR
Govind maintains his Current Account with HDFC Bank. On 31st March, 2023, the
bank column of Cash Book showed an overdraft of ₹ 42,000 in his Current Account.
From the following particulars, prepare Bank Reconciliation Statement as on 31st
March, 2023:
i. A cheque of ₹ 1,040 deposited was dishonoured and bank charges debited in the Pass
Book were ₹ 110. It was not recorded in the Cash Book.
ii. Out of the total cheques of ₹ 1,00,000 issued, cheques aggregating ₹ 30,000 were
debited in March, cheques aggregating ₹ 40,000 were debited in April, and the rest
have not yet been debited.
iii. Payments side of the Cash Book is undercast by ₹ 3,000.
iv. A cheque of ₹ 4,000 received from Om on 20th March, 2023 was recorded in the
discount column of the Cash Book and was not banked.
 v. ₹ 80 for bank charges were recorded two times in the Cash Book whereas bank
levied annual charges of ₹ 70, which were not recorded in the Cash Book.

24. Enter the following transactions in the Journal of Govind: [6]

2023 ₹
June 1 Govind invested capital in cash 1,00,000
June 3 Purchased goods from Harsh 10,000
June 5 Purchased goods for cash 8,000
June 8 Purchased goods from Manoj for cash 7,000
June 10 Sold goods to Kunal on credit. 2,000
June 12 Sold goods to Neeraj for cash 1,500
June 14 Goods returned by Kunal 500
June 16 Goods returned to Harsh 360
June 18 Machinery purchased from Sonu 8,000
June 19 Paid to Harsh on account 5,000
June 25 Cash withdrawn for Personal use 5,000
June 30 Old newspapers sold 200
June 30 Received loan from Manish and deposited in bank 50,000

OR
Following transactions of Ramesh for April, 2018 are given below. Journalise them.
2018 Rs.
Apr 1 Ramesh started business with cash 1,00,000
Apr 2 Paid into bank 20,000
Apr 3 Bought goods for cash 50,000
Apr 4 Drew cash from bank for office use 10,000
Apr 13 Sold goods in Krishna on credit 15,000
Apr 20 Bought goods from Shyan on credit 22,500
Apr 24 Received from Krishna 12,500
Allowed him discount 500
Apr 28 Paid cash to Shyam 21,500
 Discount received 1,000
Apr 28 Krishna returned goods 2,000
Apr 30 Cash sales for the month 80,000
Apr 30 Paid rent 5,000
Apr 30 Paid salary 10,000

25. Rectify the following errors identified in the books of Goel. The Trial Balance did [6]
not match, ₹ 14,930 being excess credit. The difference was placed in Suspense
Account:
i. An amount of ₹ 100 was received from Das on 31st March, 2023 but was
entered in the Cash Book on 4th April, 2023.
ii. Returns Inward Book for March was short casted by ₹ 1,000.
iii. Purchase of an office table for ₹ 3,000 was passed through the Purchases Book.
iv. ₹ 3,750 paid for wages to workmen for making showcases was charged to the
Wages Account.
v. Purchase of ₹ 670 was posted to Creditor’s Account as ₹ 600.
vi. A cheque for ₹ 200 received from Kuldeep was dishonoured and was debited to
the ‘Printing and Stationery Account’.
vii. ₹ 10,000 paid for purchase of a motorcycle was debited to ‘Miscellaneous
Expenses Account’.
viii. An amount of ₹ 10,000 owed by Danish was omitted from Sundry Debtors.
ix. Daman paid ₹ 6,700 but her account was wrongly credited with ₹ 10,700.

OR
A Book-keeper finds that the totals of his trial balance disagree by ₹ 2,800. He
temporarily debits a Suspense Account with this amount and closes the books. On an
examination of the books, the following errors are discovered:
i. The total of Purchase Return Book ₹ 710 was posted Twice.
ii. Goods costing ₹ 800 were distributed as free samples but no entry was passed in the
books.
iii. Purchase of Machinery for ₹ 5,600 on credit was recorded in Purchase Book as ₹
6,500.
iv. Cash Sales to Roshan Gupta for ₹ 1,200 were recorded in Cash Book as well as in
Sales Book and were posted from both.
 v. Closing Stock has been overvalued by ₹ 1,500.
vi. Sales Return Book was untotalled, though personal accounts were posted ₹ 1,580.
vii. No entries have been made in the Cash Book for the Insurance Premium directly paid
by bank ₹ 700 and interest charged on overdraft ₹ 320.
viii. A sum of ₹ 200 for Drawings on the Credit Side of Cash Book was not posted to the
Drawings account.
Pass entries to rectify the above errors. Close the Suspense Account already opened.

26. On 1st July, 2020, X Ltd. purchased a machinery for ₹ 15,00,000. Depreciation is [6]
provided @ 20% p.a. on the original cost of the machinery and books are closed on
31st March each year. On 31st May, 2022, a part of this machine purchased on 1st
July 2020 for ₹ 3,60,000 was sold for ₹ 2,40,000 and on the same date new
machinery was purchased for ₹ 4,20,000. You are required to prepare:
a. Machinery Account,
b. Provision for Depreciation Account, and
c. Machinery Disposal Account

OR
On 1st October 2014, Bansal Pvt. Ltd. purchased machinery for Rs 12,00,000. On 31st
May, 2016, a part of the machinery purchased on 1st October 2014 for Rs 1,60,000 was
sold for Rs 60,000. On the same date, fresh machinery was purchased for Rs 3,00,000.
Depreciation is provided at 20% per annum on the written down value method and the
books are closed on 31st March each year. You are required to prepare (a) Machinery
Account, (b) Provision for Depreciation Account, and (c) Machinery Disposal Account.

Part B
27. Single Entry System of book keeping is: [1]

a) Inaccurate b) Unscientific

c) Unsystematic d) All of these

OR
Commission received in advance is to be shown in statement of affairs on

a) Liabilities side b) Total assets

c) Total liabilities d) Cash balance

28. Drawings account is a: [1]

a) Personal Account b) Company drawing account

c) Nominal Account d) Real Account

29. In the Trial Balance are shown Debtors ₹ 2,400, Bad Debts ₹ 221, Bad Debts [1]
Provision ₹ 324. For creating a Provision for Doubtful debts @ 10% on debtors, the
P & L A/c will be debited by:

a) 240 b) 9

c) 137 d) 343

OR
Balance of Provision for Doubtful Debts (As on 1st April, 2023); ₹ 1,250; Bad Debts
during the year were: ₹ 300. Provision for Doubtful Debts is required @ 5% on debtors
of ₹ 10,000. Provision for Doubtful Debts credited to Profit & Loss Account will be

a) ₹ 400 b) ₹ 600

c) ₹ 500 d) ₹ 450

30. In a burglary at the godown of Sunshine Traders on the night of 14th July, 2023, [3]
part of the stock was stolen.
From the following particulars, find out the estimated value of loss of stock by
theft:
₹
Stock on 1st April, 2023 60,000
Purchases from 1st April to 14th July, 2023 4,10,000
Sales from 1st April to 14th July, 2023 6,00,000
Stock remaining after a burglary 12,000
The normal rate of gross profit for his business is 30% of the selling price.

31. Calculate the amount of Gross Profit when the net loss is ₹ 75,000, Operating [3]
Expenses are ₹ 1,20,000 and Sales are ₹ 3,00,000.

32. Give the adjustment entry and accounting treatment of the following items while [3]
preparing financial statements:
i. Outstanding Salaries
 ii. Accrued Interest

33. Mr. Muneesh maintains his books of accounts from incomplete records. His books [6]
provide the information:
April. 01, 2016 (₹) March. 31, 2017 (₹)
Cash 1,200 1,600
Bills receivable - 2,400
Debtors 16,800 27,200
Stock 22,400 24,400
Investment - 8,000
Furniture 7,500 8,000
Creditors 14,000 15,200
He withdrew ₹ 300 per month for personal expenses. He sold his investment of ₹
16,000 at 2% premium and introduced that amount into business.

OR
What is meant by single entry system of accounts and give any three salient features.

34. The following Trial Balance has been extracted from the books of Shri Sanjay [6]
Kumar as at 31st March, 2023:
Dr. ₹ Cr. ₹
Plant and Machinery 1,00,000
Furniture 12,000
Capital Account 1,91,000
Household Expenses 16,000
Sales 4,68,000
Loose Tools 20,000
Goodwill 10,000
Opening Stock (1-4-2022) 20,000
Returns Outward 4,000
Discount 6,000
Purchases 2,12,000
 Returns Inwards 8,000
Wages 1,00,000
Salaries 60,000
Outstanding Salaries 5,000
Investments at 10% p.a. 6,000
Interest on Investments 300
Sundry Creditors 24,000
Miscellaneous Receipts 2,000
Carriage Inwards 12,000
General Expenses and Insurance 39,000
Advertisement Expenses 15,000
Postage 4,000
Sundry Debtors 56,000
B. Bhuwan 2,000
Cash Balance 14,000
Bank 3,200
Suspense Account 2,500
7,06,000 7,06,000
The following additional information is available:-
st
i. Stock on 31 March, 2023 was ₹ 30,800.
ii. Depreciation is to be charged on Plant and Machinery at 5% and Furniture at
6%. Loose Tools are revalued at ₹ 16,000.
iii. Create a provision of 2% for Discount on Debtors.
iv. Salary of ₹ 2,000 paid to Shri B. Bhuwan, a temporary employee, stands debited
to his personal account and it is to be corrected.
v. Write off th of advertisement expenses.
1

You are to prepare Trading and Profit & Loss Account for the year ended 31st
March, 2023 and a Balance Sheet as at that date.

OR
From the following trial balance, prepare the trading and profit and loss account for the
year ended 31st March, 2013 and the balance sheet as at that date.
Name of Accounts Amt(Rs) Name of Accounts Amt(Rs)
Salaries 20,446 Sales 1,32,840
Bills receivable 12,754 Capital 1,00,000
Investments 80,000 Provision for doubtful debts 5,000
Furniture 24,000 10% Loan (1st October, 2012) 20,000
Opening stock 9,000 Discount received 800
Purchases 60,000 Sundry creditors 18,600
Sundry debtors 40,000 Bills payable 10,000
Interest on loan 800 Outstanding salaries 1,000
Insurance premium 1,800 Bad debts recovered 400
Wages 9,200 Interest on investments 4,000
Rent 3,040 Trading commission 14,000
Bad debts 2,400
Carriage Outwards 1,200
Cash at Bank 20,000
Depreciation of furniture 5,000
Accrued commission 2,000
Advertisement 15,000
3,06,640 3,06,640
Additional Information
i. Closing stock Rs 12,000.
ii. Goods costing Rs 2,000 were distributed as free samples while goods costing Rs
1,000 were taken by the proprietor for personal use.
iii. A credit sale of Rs 4,000 was not recorded in the sales book.
iv. Closing stock included goods costing Rs 2,000 which were sold and recorded as
sales but not delivered to the customer.
v. Maintain provision for doubtful debts @ 5%.
 Solution
SAMPLE QUESTION PAPER - 4
Accountancy (055)
Class XI (2024-25)
Part A
1.
(c) account holder
Explanation:
account holder
2.
(c) A is true but R is false.
Explanation:
Capital = Assets - Liabilities
∴ Net Worth (Capital) = (20,000 + 30,000 + 10,000) - 40,000
= ₹20,000
3.
(b) Discount Received
Explanation:
As per the Nominal accounting rules discount received is profit and has a credit balance.
4. (a) (iii), (i), (ii)
Explanation:
(iii), (i), (ii)
OR

(b) Assets = Liabilities - Capital

Explanation:
Assets = Liabilities - Capital
5. (a) both bill and invoice
Explanation:
both bill and invoice
6. (a) Cost Accounting
Explanation:
Cost of Goods Manufactured is determined by Cost Accounting. The cost of goods
manufactured total is also a component of the cost of goods sold calculation.
OR

(d) Statement (ii) is correct

 Explanation:
Book Keeping and Accounting does not mean the same and are not used interchangeably.
At the same time, both these processes are inherently different and have their own sets of
advantages.
7. (a) Capital Reserve
Explanation:
Profit on sale of fixed assets is Capital Reserve.
8.
(c) an increase in asset
Explanation:
A debit is an accounting entry that results in either an increase in assets or a decrease in
liabilities.
OR

(d) Cash A/c

Explanation:
Withdrawal of cash from the business by the proprietor for his personal use is credited to
Cash A/c.
9.
(d) Matching Concept
Explanation:
Income is measured on the basis of Matching Concept. The purpose of the matching
concept is to avoid misstating earnings for a period.
10.
(c) Matching principle
Explanation:
Matching principle
11.
(b) All of these
Explanation:
Reserve:- Reserves out of profits are required for various purposes. Reserve are
appropriation against profit. They help in meeting the unforeseen contingencies that may
arise in the future, help in the expansion of the business. They may also be used to
distribute dividends and pay off the liabilities like debentures.
12.
(b) Prepaid Insurance
 Explanation:
Prepaid Insurance
13.
(d) Sales Book
Explanation:
Sale Book is prepared for recording credit sale transaction.
14.
(c) Decrease by Rs.5000
Explanation:
If liability decrease by 5000 this means there is a payment for any liability which means
cash outflow . Cash is an assets which get decreases when we pay liability which means
assets also decreases with same amount.
15. (a) asset
Explanation:
The nature of accrued income is an asset. It is a current asset.
OR

(b) a liability
Explanation:
The nature of capital is a liability. It is an internal liability.
16.
(b) credit note
Explanation:
As we have to inform the customer that his account has been credited.
17.
(b) Secret reserve
Explanation:
Secret reserve
18. Posting or posting the Entries means:
The process of transferring the information contained in a Journal to a Ledger is called
Posting. The following procedure is followed for posting the debit and credit aspects of
the transaction recorded in a Journal.
Posting of Account debited or credited in a Journal entry: The steps to be followed
are:
i. Identify in the Ledger the account to be debited or credited.
ii. Enter the date of the transaction in the 'Date' column on the debit or credit side of the
account.
 iii. Write the name of the account which has been credited or debited in the respective entry
in the 'Particulars' column on the debit or credit side of the amount as 'To or by (name
of account credited or debited)'.
iv. Record the page number of the Journal where the entry exists in the Journal folio (J.F)
column.
v. Enter the relevant amount in the 'Amount' column on the debit or credit side.
OR
Discount allowed by HCL is a Trade Discount. It is not recorded separately in the books of
account. Instead purchase is recorded at net value, i.e., Purchase Price less Trade Discount.
19. Accounting is often considered the language of business, as it communicates to others the
financial position of the company. And like every language has certain syntax and
grammar rules the same is true here. These rules in the case of accounting are the
Accounting Standards (AS). They are the framework of rules and regulations for
accounting and reporting in a country. Let us see the main objectives of forming these
standards.
i. The main aim is to improve the reliability of financial statements. Now because the
financial statements have to be made following the standards the users can rely on
them. They know that not conforming to these standards can have serious consequences
for the companies.
ii. Secondly it facilitates the comparability. Following these standards will allow for inter-
firm and intra-firm comparisons. This allows us to check the progress of the firm and its
position in the market.
iii. It also looks to provide one set of accounting policies that include the necessary
disclosure requirements and the valuation methods of various financial transactions.
OR
Two advantages of GST are: decrease the cost of goods and reduces tax invasion.
20. Expense is the cost incurred in producing and selling goods and services. Example: cost of
goods sold and the amount paid for salaries, rent, commission, etc. On the other hand,
expenditure is a wider term which includes expenses also. Expenditure is the amount spent
on acquiring assets, goods and services.
21. Trial Balance as on 31st March
Heads of Account L.F. Dr. (₹) Cr. (₹)
Cash 2,000
Capital 80,000
Purchases 85,000
Sales 1,08,400
 Heads of Account L.F. Dr. (₹) Cr. (₹)
Purchases Return 6,000
Sales Return 4,000
Transportation 1,800
Discount Allowed 500
Printing 5,000
Sundry Debtors 70,000
Input CGST A/c 2,500
Input SGST A/c 2,500
Input IGST A/c 4,000
Sundry Creditors 40,000
Investment 8,000
Plant & Machinery A/c 15,000
Building 20,000
Furniture 6,000
Electricity 700
Postage 400
Drawings 8,000
Salaries 6,000
Travelling Expenses 2,000
Output CGST A/c 1,500
Output SGST A/c 1,500
Output IGST A/c 6,000
2,43,400 2,43,400
22. Cash Book
Discount Discount
Cash Cash
Date Particulars L/F Allowed Date Particulars L/F Received
(Rs.) (Rs.)
(Rs.) (Rs.)
2013 2013
 Feb To Balance Feb By Kartik
75,000 500 15,000
1 b/d 5 A/c
By
Feb Feb
To Parth A/c 1,000 49,000 Purchases 20,000
10 8
A/c
Feb Feb By Aroha
To Sales A/c 20,000 250 14,750
16 21 A/c
Feb By Wages
25,000
28 A/c
Feb
By Amit A/c 500 19,500
28
Feb By Balance
49,750
28 c/d
1,000 1,44,000 1,250 1,44,000
===== ====== ===== ======
Mar To Balance
49,750
1 b/d
Discount column is used to record cash discounts: discount allowed column at the debit
side, discount received column at the credit side. The discount columns are not accounts.
23. Bank Reconciliation Statement
S. No. Particulars Plus ₹ Minus ₹
Balance as per the Cash Book 7,800
(a) Cheque deposited but not credited in the Pass Book 3,000
(b) Cheque issued but not yet presented for payment 1,500
(c) An insurance premium paid by bank 2,000
(d) Bank allowed interest 400
(e) Bank debited charges 100
(f) Amount directly deposited by the customer 4,000
Balance as per the Pass Book 8,600
13,700 13,700
OR
 BANK RECONCILIATION STATEMENT
as on 31st March, 2023
Amount Details Amount
Particulars
(₹) ₹
Overdraft Balance as per Cash Book (Cr.) 42,000
Add: Cheque deposited dishonoured 1,040
Bank charges for dishonoured cheque 110
Payments side of Cash Book is undercast (WN 1) 3,000
Annual charges not recorded in Cash Book 70 4,220
46,220
Less: Cheques issued but not presented for payment (₹
70,000
1,00,000 - ₹ 30,000)
Bank charges recorded twice in Cash Book 80 70,080
Balance as per Bank Pass Book (Cr.) 23,860
Working Notes:
1. Cash Book balance is undercast by ₹ 3,000, therefore to arrive at the Bank Pass Book
balance, this amount will be shown on the addition side.
2. Cheque received from Om was recorded in the discount column of Bank Column of the
Cash Book. Besides, this cheque was not recorded in the Bank Pass Book as it was not
banked. Since this cheque has not been recorded anywhere, it will not effect the Bank
Reconciliation Statement.
24. In the Books of Govind
Journal Entries
Debit Amount Credit Amount
Date Particulars L.F.
(₹) (₹)
2023
Cash A/c Dr. 1,00,000
June
To Capital A/c
01 1,00,000
(Commenced business with cash)

June
Purchases A/c Dr. 10,000
03
To Harsh's A/c
10,000
(goods purchases by Harsh)
June
Purchases A/c Dr. 8,000
05
To Cash A/c
8,000
(goods Purchased in cash)

Purchases A/c Dr. 7,000

June
To Cash A/c
08 7,000
(goods purchased by Manoj in cash)

Kunal's A/c Dr. 2,000

June
To Sales A/c
10 2,000
(goods sold to Kunal)

Cash A/c Dr. 1,500

June
To Sale A/c
12 1,500
(goods sold to Neeraj)

Sales Return A/c Dr. 500

June
To Kunal's A/c
14 500
(goods returned by Kunal)

Harsh's A/c Dr. 360

June
To Purchases Return A/c
16 360
(goods returned to Harsh)

Machinery A/c Dr. 8,000

June
To Sonu's A/c
18 8,000
(machinery purchased from Sonu)

Harsh's A/c Dr. 5,000

June
To Cash A/c
19 5,000
(amount paid to Harsh)

Drawings A/c Dr. 5,000

June
To Cash A/c
25 5,000
(cash withdrawn for personal use)

June Cash A/c Dr. 200

30
 To Newspaper A/c
200
(old newspaper sold)

Bank A/c Dr. 50,000

June To Manish loan's A/c
30 (Manish's Loan amount deposited into 50,000
bank)
OR
Journal Entries
Date Particulars L.F. Dr. Cr.
2018 Rs. Rs.
April
Cash Account Dr. 1,00,000
1
To Capital Account 1,00,000
(Being business started with cash Rs.1,00,000)
2 Bank Account Dr. 20,000
To Cash Account 20,000
(Being deposited into Bank Rs .20,000)
3 Purchases Account Dr. 50,000
To Cash Account 50,000
(Being purchased goods for cash)
4 Cash Account Dr. 10,000
To Bank Account 10,000
(Being Drew cash Rs.10,000 from bank for office
use)
13 Krishna Account Dr. 15,000
To Sales Account 15,000
(Being goods sold for Rs.15,000)
20 Purchases Account Dr. 22,500
To Shyam's Account 22,500
(Being goods purchased Rs.22,500)
24 Cash Account Dr. 12,500
 Discount A/c Dr. 500
To Krishna Account 13,000
(Being Cash Received from Krishna & Allowed
discount)
28 Shyam Account Dr. 22,500
To Cash Account 21,500
To Discount A/c 1,000
(Being Cash Paid Shyam in Cash and discount
Received)
28 Sales Return A/c Dr. 2,000
To Krishna's A/c 2,000
(Being goods returned by Krishna)
30 Cash Account Dr. 80,000
To Sales Account 80,000
(Being Cash sales recorded in the books)
30 Rent Account Dr. 5,000
Salary Account Dr. 10,000
To Cash Account 15,000
(Being rent of Rs.5000 and salary of Rs.10,000 paid)
25. Following entries should be passed on 31st March, 2023:
RECTIFYING JOURNAL ENTRIES
Date Particulars L.F. Dr.(₹) Cr.(₹)
(i) Bank A/c ...Dr. 100
To Das (Note) 100
(the amount received)

(ii) Returns Inward A/c ...Dr. 1,000

To Suspense A/c 1,000
(mistake in totalling the Returns Inward Book corrected)

(iii) Furniture A/c ...Dr. 3,000

To Purchases A/c 3,000
 (rectification of mistake by which purchase of furniture
was entered in Purchases Book)

(iv) Furniture A/c ...Dr. 3,750

To Wages A/c 3,750
(wages paid to workmen for making showcases which
should be capitalised and not charged to the Wages
Account)

(v) Suspense A/c ...Dr. 70

To Creditor’s A/c 70
(mistake in crediting the Creditor’s Account less by ₹ 70,
now corrected)

(vi) Kuldeep ...Dr. 200

To Printing and Stationery A/c 200
(cheque of Kuldeep dishonoured previously debited to
the Printing and Stationery Account)

(vii) Drawings A/c 10,000

To miscellaneous Expenses A/c 10,000
(motorcycle purchased for Goel debited to his Drawings
Account instead of the Miscellaneous Expenses Account
as previously done by mistake)

(viii) Sundry Debtors A/c ...Dr. 10,000

To Suspense A/c 10,000
(rectification of Sundry Debtors list)

(ix) Daman ...Dr. 4,000

To Suspense A/c 4,000
(payment of ₹ 6,700 by Daman wrongly credited to her
account as ₹ 10,700, now rectified)
SUSPENSE ACCOUNT
Dr. Cr.
Date Particulars ₹ Date Particulars ₹
2023 2023
March To Difference in Trial March By Returns Inward
14,930 1,000
31 Balance 31 A/c
March By Sundry Debtors
(Given) 10,000
31 A/c
March March
To Creditor’s A/c 70 By Daman 4,000
31 31
15,000 15,000
OR
Rectifying Journal Entries
Debit Credit
S.No. Particulars L.F.
Amount (₹) Amount (₹)
(i) Purchases Return A/c Dr. 710
To Suspense A/c 710
(Total of purchases return book posted twice
now rectified)

Advertisement Expenses (free samples

(ii) Dr. 800
distribution) A/c
To Purchases A/c 800
(Goods distributed as free samples omitted to
be recorded now rectified)

(iii) Creditors A/c Dr. 900

Machinery A/c Dr. 5,600
To Purchases A/c 6,500
(Purchase of machinery for ₹ 5,600 recorded
in Purchases Account as ₹ 6,500 now rectified)

(iv) Sales A/c Dr. 1,200

To Roshan Gupta's A/c 1,200
(Cash sales wrongly entered in Sales Book
now rectified)

(v) Trading A/c Dr. 1,500

 To Closing Stock A/c 1,500
(Closing stock overvalued now rectified)

(vi) Sales Return A/c Dr. 1,580

To Suspense A/c 1,580
(Omitted totaling of Sales Return Book now
rectified)

(vii) Insurance Premium A/c Dr. 700

Interest on Overdraft A/c Dr. 320
To Bank A/c 1,020
(Recording is made for payment of insurance
premium and interest charged on overdraft
now rectified)

(viii) Drawings A/c Dr. 200

To Suspense A/c 200
(An amount of ₹ 200 omitted to be posted to
Drawings Account now rectified)
Suspense Account
Dr. Cr.
Particulars Amount (₹) Particulars Amount (₹)
To Difference as per Trial Balance 2,800 By Purchases Return A/c 710
By Sales Return A/c 1,580
By Drawings A/c 200
By Balance b/d 310
2,800 2,800
26. MACHINERY ACCOUNT
Dr. Cr.
Amount Amount
Date Particulars Date Particulars
(₹) (₹)
2020 2021
 To Bank A/c (11,40,000 + Mar.
July 1 15,00,000 By Balance c/d 15,00,000
3,60,000) 31
15,00,000 15,00,000
2021 2022
Mar.
Apr. 1 To Balance b/d 15,00,000 By Balance c/d 15,00,000
31
15,00,000 15,00,000
2022 2022
May By Depreciation
Apr. 1 To Balance b/d 15,00,000 3,60,000
31 Disposal A/c
May
To Bank A/c 4,20,000 2023
31
Mar.
By Balance c/d 15,60,000
31
19,20,000 19,20,000
MACHINERY DISPOSAL ACCOUNT
Dr. Cr.
Amount Amount
Date Particulars Date Particulars
(₹) (₹)
2022 2022
May May By Provision for
To Machinery A/c 3,60,000 1,38,000
31 31 Depreciation A/c
May To Profit and Loss A/c May
18,000 By Bank A/c (Sale) 2,40,000
31 (Profit on Sale) 31
3,78,000 3,78,000
PROVISION FOR DEPRECIATION ACCOUNT
Dr. Cr.
Amount Amount
Date Particulars Date Particulars
(₹) (₹)
2021 2021
By Balance b/d (for 9
Mar.31 To Balance c/d 2,25,000 Mar.31 2,25,000
months)
 2,25,000 2,25,000
2022 2021
Mar.31 To Balance c/d 5,25,000 Apr.1 By Balance b/d 2,25,000
2022
Mar.
By Depreciation A/c 3,00,000
31
5,25,000 5,25,000
2022 2022
To Machine Disposal A/c
May
(54,000 + 72,000 + 1,38,000 Apr.1 By Balance b/d 5,25,000
31
12,000)
May By Depreciation A/c
12,000
31 (3,60,000× 2

12
×
20

100
)
2023 2023
By Depreciation A/c
I. (15,00,000-3,60,000)
Mar.
Balance c/d 6,97,000 Mar.31 ×
20
= 2,28,000 + 2,98,000
31 100

II. (4,20,000
×
20

100
×
10

12
= 70,000)
8,35,000 8,35,000
Working Note:-
Calculation of Profit and Loss on Sale of Machinery:-
Particular Amount (₹)
Value of Machinery on July 1, 2020 3,60,000
Less: Depreciation for 9 months 54,000
Value of Machinery on Apr.1, 2021 3,06,000
Less: Depreciation 72,000
Value of Machinery on Apr.1, 2022 2,34,000
Less: Depreciation for 2 months 12,000
Value of Machinery on May 31,2022 2,22,000
Less: Sale Value 2,40,000
Profit on Sale 18,000
OR
Machinery Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
1-10- To Bank 31-03-
12,00,000 By Balance c/d 12,00,000
14 Account 15
12,00,000 12,00,000
1-04- 31-03-
To Balance b/d 12,00,000 By Balance c/d 12,00,000
15 16
12,00,000 12,00,000
1-04- 31-05- By Mach. Disposal
To Balance b/d 12,00,000 1,60,000
16 16 Account
31-05- To Bank 31-03-
3,00,000 By Balance c/d 13,40,000
16 Account 17
15,00,000 15,00,000
Provision for Depreciation Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
31-3- 31-3- By Depreciation
To Balance c/d 1,20,000 1,20,000
2015 2015 Account
1,20,000 1,20,000
31-3- 1-4-
To Balance c/d 3,36,000 By Balance b/d 1,20,000
2016 2015
31-3- By Depreciation
2,16,000
2016 Account
3,36,000 3,36,000
31-5- To Machinery 1-4-
48,640 By Balance b/d 3,36,000
2016 Disposal Account 2016
 31-5- By Depreciation
3,840
2016 Account
31-3- By Depreciation
2017 Account
Old
1,49,760
Machine
31-3- New
To Balance c/d 4,90,960 50,000 1,99,760
2017 Machine
5,39,600 5,39,600
Machinery Disposal Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2016 To Machinery 2016 By Provision for
1,60,000 48,640
May 31 Account May 31 Depreciation Account
2016
By Bank Account 60,000
May 31
2016 By Profit & Loss
51,360
May 31 Account
1,60,000 1,60,000
Part B
27.
(d) All of these
Explanation:
All of these
OR
(a) Liabilities side
Explanation:
The Commission received in advance is a liability for business hence it will be shown on
the liability side of the statement of affairs during the year.
28. (a) Personal Account
Explanation:
drawing account is owner's account.so it is personal account.
29.
(c) 137
Explanation:
137
OR

(d) ₹ 450
Explanation:
Provision for Doubtful Debts credited to Profit & Loss Account will be = 1,250 - 300 -
(10,000 × 5%)
= ₹ 450
30. TRADING ACCOUNT
for the period 1st April to 14th July, 2023
Dr. Cr.
Particulars ₹ Particulars ₹
To Opening Stock 60,000 By Sales 6,00,000
By Closing Stock
To Purchases 4,10,000 50,000
(Balancing Figure)
To Gross Profit
1,80,000
@ 30% on sales
6,50,000 6,50,000
₹
Stock on 14th July, 2023, as calculated above 50,000
Less: Stock remaining after a burglary 12,000
Value of Stock stolen 38,000
31. PROFIT & LOSS A/C
Particulars ₹ Particulars ₹
To Operating
1,20,000 By Gross Profit (B/f) 45,000
Expenses
By Net Loss 75,000
1,20,000 1,20,000
32. Accounting treatment of items are as follows:-
 Adjustment Treatment in
Treatment in P &L A/c
Entry Balance Sheet
Added in Salaries on the Debit Shown on the
Salary A/c Dr.
Outstanding side of Profit & Loss A/c Liabilities side.
Salaries To Outstanding
Salary
Accrued Interest Added to Interest Received on the Shown on the
Accrued A/c Dr. Credit side of Profit & Loss A/c Assets side.
Interest To Interest
Received A/c
33. Statement of Affairs as on April 01, 2016
Liabilities ₹ Assets ₹
Creditors 14,000 Cash 1,200
Debtors 16,800
Stock 22,400
Furniture 7,500
Capital (Balancing figure) 33,900
47,900 47,900
Statement of Affairs as on March 31, 2017
Liabilities ₹ Assets ₹
Creditors 15,200 Cash 1,600
Bills Receivable 2,400
Debtors 27,200
Stock 24,400
Capital (Balancing figure) 56,400 Investment 8,000
Furniture 8,000
71,600 71,600
Statement of Profit and Loss as on March 31, 2017
Particulars ₹
Capital on March 31, 2017 56,400
Add: Drawing made during the year (₹ 300 × 12) 3,600
 Less: Capital on April 01, 2016 (33,900)
Less: Additional Capital Introduced (16,320)
Profit earned during the year 2017 9,780
Working Note:
Additional Capital = 16,000 × 102

100

= 16,320.
OR
Meaning of Single Entry System: A single entry system records a transaction with a
single entry and only maintains one side of every transaction. It is the oldest method of
recording financial transactions and is less popular than the double entry system and is
mainly used for entries recorded in the income statement. This term is used to describe the
problems associated with the accounts from an incomplete transaction and is popularly
called as ‘Preparation of accounts from incomplete records’
Three Salient features of Single Entry System :
Under this method, only one Cash Book is maintained which mixes up both the
private and business transaction.
Under this system, Profit or Loss can be ascertained but not the financial position as a
whole.
Arithmetical accuracy of the account is not possible since Trial Balance can't be
prepared.
34. Trading Account of Shri Sanjay Kumar
for the year ended March 31, 2023
Dr. Cr.
Amount Amount
Particulars Particulars
(₹) (₹)
To Opening Stock 20,000 By Sales 4,68,000
Less: Return
To Purchases 2,12,000 (8,000) 4,60,000
Inwards
Less: Return Outwards (4,000) 2,08,000 By Closing Stock 30,800
To Carriage Inwards 12,000
To Wages 1,00,000
To Gross Profit (balancing
1,50,800
Figure)
4,90,800 4,90,800
 Profit and Loss Account of Shri Sanjay Kumar
for the year ended March 31, 2023
Dr. Cr.
Amount Amount
Particulars Particulars
(₹) (₹)
To Depreciation: By Gross Profit 1,50,800
Plant & Machinery 5,000 By Discount 6,000
By Miscellaneous
Furniture 720 2,000
Receipts
By Interest on
Loose Tools 4,000 9,720 300
Investment
To Salaries 60,000 Add: Accrued 300 600
Add: Salary to B. Bhuwan 2,000 62,000
To Advertisement Expenses
3,000
written-off
To Provision for Discount on
1,120
Debtors
To General Expenses &
39,000
Insurance
To Postage & Telegram 4,000
To Net Profit (Balancing Figure) 40,560
1,59,400 1,59,400
Balance Sheet of Shri Sanjay Kumar
as at March 31, 2023
Amount Amount
Liabilities Assets
(₹) (₹)
Capital 1,91,000 Fixed Assets
Add: Net Profit 40,560 Plant & Machinery 1,00,000
Less: Drawings (16,000) 2,15,560 Less: Depreciation (5,000) 95,000
Current
Furniture 12,000
Liabilities
Creditors 24,000 Less: Depreciation (720) 11,280
Bank Overdraft 3,200 Loose tools 20,000
Outstanding
5,000 Less: Depreciation (4,000) 16,000
Salaries
Suspense Account 2,500 10% Investment 6,000
Current Assets
Goodwill 10,000
Closing Stock 30,800
Advertisement Expenditure 12,000
Accrued Interest on
300
Investments
Cash in Hand 14,000
Debtors 56,000
Less: Prov. for Discount on
(1,120) 54,880
Debtors
2,50,260 2,50,260
Working Note:-
Calculation of Depreciation:-
Depreciation of Machinery = ₹ 1,00,000 × 5% = ₹ 5,000
Depreciation of Furniture =₹ 12,000 × 6% = ₹ 720
Depreciation of Loose tool = ₹ 20,000 - ₹ 16,000 = ₹ 4,000
Calculation of Provision for Discount on Debtors:-
Provision for doubtful debts = Sundry Debtors × Rate
Provision for doubtful debts = ₹ 56,000 × 2%
Provision for doubtful debts = ₹ 1,120
When adjustments are given in trial balance all the adjustments will be taken in the
balance sheet only. Adjustments that are given after trial balance will be shown both in
trading and profit and loss account and balance sheet.
OR
Trading and Profit and loss Account
for the year ended 31st March, 2013
Dr Cr
Particulars Amt(₹) Particulars Amt(₹)
To Opening Stock 9,000 By Sales 1,32,840
To purchases 60,000 Add: Credit sales 4,000 1,36,840
Less: Goods given as Free
(2,000) By Closing Stock 12,000
Samples
Less: Cost of Goods
58,000 (2,000) 10,000
Sold but not delivered
Less: Drawings of Goods (1,000) 57,000
To Wages 9,200
To Gross Profit transferred
71,640
to Profit & Loss A/c
1,46,840 1,46,840
To Rent 3040
By Gross Profit
To Salaries 20,446 transferred from 71,640
Trading A/c
By Old Provision for
To Interest on Loan 800 5,000
Doubtful Debts
Add: Outstanding Interest
200 1000 Less: Bad Debts (2,400)
on loan(note 1)
To Insurance premium 1800 2,600
To Carriage Outwards 1,200 Less: New Provision (2,200) 400
To Depreciation on
5,000 By Discount Received 800
Furniture
To Advertisement 15,000 By Bad Debts recovered 400
By Interest on
To Free Samples 2,000 4,000
Investment
To Net Profit Transferred
41,754 By Trading Commission 14,000
to Capital A/c
91,240 91,240
Balance Sheet
as at 31st March,2013
Liabilities Amt(₹) Assets Amt(Rs)
Capital 1,00,000 Bills Receivable 12,754
 Add: Net Profit transferred
41,754 Investments 80,000
from Profit & Loss A/c
1,41,754 Furniture 24,000
Less:Drawings ( 1,000) 1,40,754 Debtors 40,000
Add: Credit Sales
10% Loan 20,000 4,000
not Recorded
Outstanding Interest on Loan 200 44,000
Less:New Provision
Creditors 18,600 (2,200) 41,800
@5%
Accrued
Bills Payable 10,000 2,000
Commission
Closing
Outstanding Salaries 1,000 Stock(12,000 - 10,000
2,000)
Bank 20,000
1,90,554 1,90,554
Note:
i. Loan was taken on 1st October, 2012 @ 10% p.a. Hence, total interest due for this year
will be ₹1,000 (i.e. On 20,000 for 6 months @ 10%) . Out of it, ₹ 800 has been paid.
Therefore, outstanding interest will 1,000-800 = ₹200 ,
ii. Closing Stock will Exclude stock of Rs.2000 not Sent to Customer. Because it is
included in stock.
iii. Provision for Doubtful Debt will be calculated on ( 40000+4000) × 5% = 2200