Second Weekly Test
Paper 1 - Accounting
Section: BBB
Batch: CAP I June 2025 Date: Falgun 11, 2081
Full Marks: 50 Time: 1.5 Hours
Objective Questions [25 Marks]
From Question number 1 to 15 carries 1 mark each and from 16 to 20 carries 2 marks each.
1) If repair cost is Rs. 25,000, whitewash expenses are Rs. 5,000, (both these expenses relate to presently used
building) cost of extension of building is Rs. 2,50,000 and cost of improvement in electrical wiring system is Rs.
19,000; the amount to be expensed is:
(a) Rs. 2,99,000. (b) Rs. 44,000. (c) Rs. 30,000. (d) None
2) Goods destroyed by fire Rs. 50,000 and Insurance company admitted 60% claim. This adjustment will be
entered in:
(a) Trading Account (b) Profit & Loss Account (c) Balance Sheet (d) All the three
3) Rs. 1,000 paid as rent to Kinjan, the landlord, was debited to Kinjan’s personal account. This error will
(a) Affect the trial balance (b) Not affect the trial balance
(c) Affect the suspense account (d) None of the three
4) Kajal & Company employs a team of ten workers who were paid Rs. 1,000 each in the year ending 31st
December, 2010. At the start of year 2011, the company raised salaries by 10%. The amount of salaries for the
year ended 31st December, 2011 will be _____.
(a) Rs. 10,000 (b) Rs. 15,000 (c) Rs. 11,000 (d) None of the above.
5) In the books of D Ltd., the machinery account shows a debit balance of Rs. 60,000 as on April 1, 2009. The
machinery was sold on September 30, 2010 for Rs. 30,000. The company charges depreciation @ 20% p.a. on
diminishing balance method. Profit / Loss on sale of the machinery will be ____.
(a) Rs. 13,200 profit (b) Rs. 13,200 loss (c) Rs. 6,800 profit (d) Rs. 6,800 loss
6) If bank balance as per cash book differs from that appearing in the current account statement, then
the balance considered for finalizing the accounts is of
(a) Adjusted cash book (c) Cash book before any adjustments
(b) Pass book (d) Not taken to final accounts in case of difference in the balance
7) No journal entry is required to be passed when there is
(a) Normal loss (b) Abnormal Loss (c) Loss of bad debts (d) Loss by theft
8) Capital introduced in the beginning by Ram Rs. 20,000; Further capital introduced during the year Rs. 2,000;
Drawings Rs. 250 per month and closing capital is Rs. 12,750. Amount of Profit or Loss for the year will be:
(a) Loss Rs. 6,250 (b) Loss Rs. 6,000
(c) Profit Rs. 2,000 (d) Information is insufficient for any comment
9) M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of
depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method,
since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would
qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of
depreciation. The objection of the auditor is justified because
(a) Change in the method of depreciation should be done only with the consent of the auditor
(b) Depreciation method can be changed only from WDV to SLM and not vice versa
(c) Change in the method of depreciation should be done only if it is required by some statute or change
would result in more appropriate presentation of financial statement or for compliance with the
accounting standard
(d) Method of depreciation cannot be changed under any circumstances
10) A cheque of Rs. 1,000 received from Ramesh was dishonored and had been posted to the debit of sales
returns account.
The rectifying journal entry will be
(a) Sales Returns A/c Dr.1,000 (b) Ramesh Dr. 1,000
To Ramesh 1,000 To Sales Return A/c 1,000
(c) Ramesh Dr.1,000 (d) None of the above
Sales Returns A/c Dr.1,000
To Suspense A/c 2,000
11) Mr. Basanta commenced a business on 01/04/2078 with Rs. 5,00,000. During the year, he purchased goods
of Rs. 1,00,000 on credit and sold 80% of the goods at a profit of 20% on cost. At the end of the year 2078-79,
the opening stock to be shown in the trial balance is:
(a) 24,000 (b) 20,000 (c) Nil (d) None
12) In the case of downward revaluation of an asset, which is for the first time revalued, ___ account is debited.
(a) Fixed Asset (b) Revaluation Reserve (c) Profit & Loss account (d) General Reserve
13) The cost of a small calculator is accounted as an expense and not shown as an asset in a financial statement
of a business entity due to _______.
(a) Materiality concept. (b) Matching concept. (c) Periodicity concept. (d) Conservatism concept.
14) Which of the following error is an error of omission?
(a) Sale of Rs. 5,000 was written in the purchases journal.
(b) Wages paid to Shyam has been debited to his account.
(c) The total of the sales journal has not been posted to the sales account.
(d) None of the above
15) Included in the sales were sale of goods of Rs. 5,000 on “Sale on approval” basis for which consent of the
customer was not received up to Dec. 31st. Goods sent on approval included profits at 25% on cost. Inventory on
approval will be
(a) Rs. 4,500 (b) Rs. 5,000 (c) Rs. 4,000 (d) None of the three
16) Monika Ltd. maintains the inventory records under perpetual system of inventory. Consider the following
data pertaining to inventory held for the month of March, 2010:
Date Particulars Quantity Cost Per unit (Rs.)
Mar. 1 Opening Inventory 15 400
Mar. 4 Purchases 20 450
Mar. 6 Purchases 10 460
If the company sold 32 units on March 24, 2010, closing inventory under FIFO method is
(a) Rs. 5,200 (b) Rs. 5,681 (c) Rs. 5,800 (d) Rs. 5,950
17) The cost of inventory as per physical verification of Kaisang Ltd. on 10th April, 2012 was Rs. 1,20,000. The
following transactions took place between 1st April, 2012 to 10th April, 2012:
Cost of goods sold Rs. 10,000
Cost of goods purchased Rs. 10,000
Purchase returns Rs. 1,000
The value of inventory as per books on 31st March, 2012 will be
(a) Rs. 1,19,000 (b) Rs. 1,11,000 (c) Rs. 1,21,000 (d) Rs. 1,20,000
18) Following balances have been taken from the books of Miss Supriya.
Rs. Rs.
General expenses 800 Discount allowed 200
Rent paid 3,710 Opening inventory 16,500
Electric charges 190 Sales 63,500
Carriage inward 850 Purchases 46,850
Return outwards 110 Wages 2,500
Salaries 1110 Sales Return 450
Closing inventory 18,210
Net profit of the business will be ___.
(a) Rs. 8,660 (b) Rs. 8,600 (c) Rs. 8,500 (d) Rs. 9,000
19) The following particulars relate to the business of Mr. Mohit on March 31, 2010.
Balance as shown by the cash book Rs. 10,000
Cheques issued but not presented for payment Rs. 4,000
Cheque deposited but not yet collected Rs. 3,000
Balance as shown by the Bank pass book will be
(a) Rs. 9,000 (b) Rs. 10,000 (c) Rs. 14,000 (d) None of the above
20) As per trial balance Rs.
Jan 1, 2009 Provision for doubtful debts A/c 990
Dec. 31, 2009 Bad Debts 1,850
Dec. 31, 2009 Trade receivables 30,000
Information
i. Make a provision for bad debts 5% on Trade receivables.
ii. Make a provision for discount on Trade receivables 2%.
Provision for discount on Trade receivables will be
(a) Rs. 570 (b) Rs. 500 (c) Rs. 750 (d) None of the three
Subjective Questions [ 25 Marks]
1) Give the rectification entries for the following journal entries made by Miss Sinchal:
Date Particulars L.F. Rs. Rs.
(a) Pawan Raj Pandey A/c Dr. 500
To Cash A/c 500
(Being payment of salary, by a crossed cheque to Pawan Raj Pandey)
(b) Miscellaneous A/c Dr. 60
To Stationery A/c 60
(Being stationery picked up from office for home consumption by the
owner)
(c) Mr. Aman Mehta A/c Dr. 500
To Sales A/c 500
(Being goods sold by Mr. Aman Mehta to Miss Sinchal for Rs. 5,000)
[3 Marks]
2) From the following balances and information, prepare Trading and Profit and Loss account of Mr. Aashish for
the year ended 31st March, 2018 and a Balance Sheet as on that date:
Particulars Dr. Rs. Cr. Rs.
Capital Account - 10,000
Plant and Machinery 3,600 -
Depreciation on plant and machinery 400 -
Repairs to Plant 520 -
Wages 5,400 -
Salaries 2,100 -
Income Tax of Mr. Aashish 100 -
Cash in Hand and at Bank 400 -
Land and Building 14,900 -
Depreciation on Building 500 -
Purchases 25,000 -
Purchases Return - 300
Sales - 49,800
Bank overdraft - 760
Accrued Income 300 -
Salaries Outstanding - 400
Bills Receivable 3,000 -
Provision for Bad Debts - 1,000
Bills Payable - 1,600
Bad Debts 200 -
Discount - 708
Debtors 7,000 -
Creditors - 6,252
Opening Stock 7,400 -
70,820 70,820
Information:
(a) Stock on 31st March was Rs. 6,000.
(b) Write off further Rs. 600 for Bad Debts and maintain a provision for bad Debts at 5% on Debtors.
(c) Goods costing Rs. 1,000 were sent to customer for Rs. 1,200 on 30th March, 2018 on sale or return basis for
which confirmation is pending.
(d) Rs. 240 paid as rent of the office were debited to Landlord account and were included in the list of debtors.
(e) General Manager is to be given commission at 10% of net profit after charging the commission of the work
manager and his own.
(f) Works Manager is to be given commission at 12% of net profit before charging the commission of General
Manager and his own. [10 Marks]
3) X and Y are partners. As per the terms of agreement, interest is allowed on capital at 8% p.a. and charged on
drawings at 10% p.a. X withdrew Rs. 40,000 p.m. at the end of each month and Y withdrew Rs. 1,20,000 at the
end of each quarter. Find the missing figures.
Profit and Loss Appropriation Account for the year ended 31.03.2023
Particulars Rs. Particulars Rs.
To…………………………………. ? By P/L A/c (Net profit) ?
To Interest on capital A/c By Interest on Drawings A/c
X 1,60,000 X ?
Y ? 2,88,000 Y ? ?
To Profit transferred to Capital A/c
X (2/3) ?
Y (1/3) 2,80,000 ?
? ?
Partner’s Capital Accounts
Particulars X Y Particulars X Y
To…………………… ? ? By……………………. ? ?
To…………………… ? ? By Salary to partner 3,60,000 -
To…………………… ? ? By……………………. ? ?
By……………………. ? ?
? ? ? ?
[6 Marks]
4) On 1st January, 2008 Gadgets Limited, patentees of a new type of electric razor, issued a license to Domestic
Utilities Limited for the manufacture and sale of the razors. On the same date, Domestic Utilities Limited issued
to Trimmers Limited a sub-license for the same purpose.
The license issued by Gadgets Limited provided for a royalty of Rs. 100 per razor sold, subject to a minimum
sum of Rs. 750,000 per annum, and the sub-license issued by Domestic Utilities Limited provided for a royalty
of Rs. 150 per finished razor manufactured, subject to a minimum sum of Rs. 300,000 per annum. Both the license
and sub-license provided that, should the royalties for any calendar year be less than the specified minimum, the
short workings could be recouped out of royalties, in excess of the minimum, for either of the two immediately
following calendar year.
You are given the following information:
Year Sales by Domestic Utilities Sales by Trimmers Stock held by Trimmers
Ltd. Ltd. Ltd.
2008 4,520 Razors 1,220 Razors 340 Razors
2009 6,180 Razors 2,790 Razors 60 Razors
2010 5,675 Razors 1,940 Razors 400 Razors
Prepare statements showing Royalty Payable (in the books of Domestic Utilities and Trimmers Limited). No
journal entries and ledgers are required. [6 Marks]
