ACCOUNTS QUESTION PAPER WITH SOLUTIONS FOR HSC

Omtex classes	i st PRELIMINARY EXAMINATION	BOOK KEEPING & ACCOUNTANCY	GROUP: a
TIME: - 3 HRS	DATE: - 16.11.2010	DAY -  tuesday	MARKS: -100

Q1. Answer Any four of the following.                                           (20 marks)

A. Answer the following.      (5)

1. What is Balance Sheet?

Ans. A balance sheet is a statement showing the financial position of the business in the form of its assets and liabilities on a particular date.

2. Who is co – venture?

Ans. A co – venture is a temporary partner of joint – venture business only.

3. What is Super Profit?

Ans. Super profit is the profit earned over and above the normal return on the capital employed by the business firm.

4. What is Endorsement of Bill?

Ans. Endorsement of a bill is the holder’s signing on its back with the intention of transferring its title or ownership to another.

5. What is Good will of the firm?

Ans. Goodwill is the monetary value of the reputation of a firm as measured in terms of its expected future profits. 

B. Write word/term/phrase which can substitute each of the followings:         (5)

1. Reputation of a firm expressed in terms of money. 

Ans. Goodwill.

2. Payment of expenses before they have become due.

Ans. Prepaid Expenses.

3. Payment of bill of exchange before its due date at rebate.

Ans. Retirement of Bill of Exchange.

4. The person on whom the bill of exchange is drawn.

Ans. Drawee.

5. The account that is credited when depreciation is charged.

Ans. Respective Assets Account.

C. Match the pairs.    (5)

	A		B (Answers)
1. 2. 3. 4. 5.	Depreciation Dishonour of bill Joint Venture Goodwill Co – Ventures	1. 2. 3. 4. 5.	Wear and tear Notary Public Temporary partnership Intangible Asset Temporary Partners

D. Select the most appropriate alternative from those given below:     (5)

1. Debit Balance in Profit and Loss Account shows _______________
1. Net profit
2. Gross profit
3. Net loss
4. Gross loss
2. A bill of exchange must be accepted by ___________________
1. A drawer
2. A payee
3. An endorsee
4. A drawee

3. At the end of the financial year balance of Depreciation account is transferred to _______________
1. Depreciation account
2. Asset account
3. Trading account
4. Profit and loss account.

4. In the absence of partnership deed the partners share the profit and loss of the firm _____________
1. In the ratio of capital
2. Equally
3. As per rights in management
4. On the basis of experience.

5. ____________ has to ultimately bear the noting charges.
1. Drawer
2. Drawee
3. Endorser
4. Bank

E. State True / False with reasons. (Any Two)        (5)

1. Under fixed capital method for each partner two accounts are maintained.

Ans. The given statement is true because of the following reasons.

i.                    Under fixed capital method each and every transactions of partners are transferred to their current account and not in their capital account.

ii.                  It becomes compulsory for the partners to maintain two accounts for their transactions. Once is capital account to record additional capital introduced and current account as well.

2. Under fixed instalment method depreciation is charged on the diminishing value of the asset.

Ans. The above statement is false because of the following reasons.

i.                    Under fixed instalment method depreciation is charged on the original value of the assets and the amount of depreciation will remain constant for each year.

ii.                  Under Diminishing balance method only the depreciation on fixed asset is charged on the written down value of fixed asset every year.

3. Interest on partner’s drawings is debited to Profit and loss appropriation account.

Ans. The above statement is false because of the following reasons.

i.                    Profit and loss appropriation account is another profit and loss account prepared especially to record the transactions pertaining to the partners.

ii.                  Thus Interest on Partner’s drawings is credited to the profit and loss account (or) profit and loss appropriation account and it will be debited to Partners capital account in the case of fluctuating capital method and to Partners  current account in the case of fixed capital method.

F. Prepare a bill of exchange from the following information:

Drawer: Vilas Patil, 21. M.G. Road, Pune

Drawee: Vikas Pawar, 31. S.V. Road, Nasik.

Payee: Viraj Potade, 41, A.B. Road, Sholapur,

Period: 2 months

Amount: Rs. 7,500/-

Date of Bill: 1^st January, 2007.

                        Date of acceptance: 3^rd January, 2007. 

ANS. 

Q2.               Ravindra Trading company. Ambajogai Purchased machinery for Rs. 55,000/- on 1^st April, 1996 and spent Rs. 5,000/- on its fixation and erection. In the same year on 1^st October, additional machinery costing Rs. 40,000/- was purchased. On 1^st October, 1998 the machinery purchased on 1^st April, 1996 became obsolete and was sold for Rs. 43,000/- On 1^st January, 1999, a new machinery was also purchased for Rs. 20,000.

                    Depreciation was provided annually on 31^st March at the rate of 10% per annum on Fixed Instalment Method. Prepare Machinery A/c and Depreciation A/c for the years 1996 – 97, 1997-98, 1998-99. (March 2005 Board exam Question).

Ans.

M/s Ravindra Trading Co.

Machinery Account.

Date	Particulars	J F	Amount	Date	Particulars	J F	Amount
1.4.1996	To cash / bank a/c [machinery purchased]		55000	31.3.1997	By Depreciation a/c		8000
1.4.1996	To cash / bank a/c [fixation and erection]		5000
1.10.1996	To cash / bank a/c [marhinery purchased]		40000	31.3.1997	By Balance c/d		92000
			100000				100000
1.4.1997	To balance b/d		92000	31.3.1998	By depreciation a/c		10000
				31.3.1998	By balance c/d		82000
			92000				92000
1.4.1998	To balance b/d		82000	1.10.1998	By depreciation a/c		3000
				1.10.1998	By cash/ bank a/c [Machinery sold]		43000
				1.10.1998	By profit / loss a/c [ loss on machinery sold]		2000
				31.3.1999	By depreciation a/c		4500
				31.3.1999	By balance c/d		49500
			102000				102000
1.4.1999	To balance b/d		49500

Depreciation account

Date	Particulars	J F	Amount	Date	Particulars	J F	Amount
31.3.1997	To machinery a/c		8000	31.3.1997	By profit & loss a/c		8000
			8000				8000
31.3.1998	To Machinery a/c		10000	31.3.1998	By profit & loss a/c		10000
			10000				10000
1.10.1998	To Machinery a/c		3000
31.3.1999	To Machinery a/c		4500	31.3.1999	By profit & loss a/c (balancing figure)		7500
			7500				7500

OR

Q2. (A) The books of a business showed that the capital employed on 31^st December, 1992 was Rs.1, 00,000/-. Profits for the last five years are_1988, 1989, 1990, 1991 & 1992 were Rs, 60,000, Rs, 55,000, Rs, 75,000, Rs, 85,000 & Rs, 65,000 respectively. Goodwill is valued at 2 years purchase of the Super profit of the business. NRR is 10%.

Q2. (B) Importance of computer in accounting.  

Ans.

The role of computer in accounting is explained as follows.  

1.       For various reasons, every business organization is required to prepare and maintain various books of account. The computer is used by many business organizations to carry out accounting operations at a greater speed and accuracy.

2.      The computer is useful for classifying, processing, analyzing, tabulating, recording and interpreting the accounting data for various purposes.

3.      It is useful for improving the financial system of the organization.

4.      With the help of the computer, accountants can easily, accurately and speedily prepare the different source documents like voucher, invoice, quotation, receipt, etc.

5.      The computer is useful for recording accounting entries in the journal and posting such entries in the ledger. It is also used to prepare trial balance, final account, accounting statements like Balance sheet, etc. 

Q3. Anil sold goods to Ravindra for Rs. 6000. Ravindra accepted Anil’s bill for Rs. 6000 payable after 3 months. After a month, Anil discounted the bill with his bank at 10% p.a. On the due date, Ravindra dishonoured his acceptance. Ravindra paid Rs. 3000 to Anil and accepted a fresh bill for 3 months for the balance including interest @ 8% p.a. Anil sent the bill to bank for collection. On due date, Ravindra honoured the bill. Pass the journal entries in the books of Anil. (October 2002 board exam questions).

Ans.

Journal of Anil

Date	Particulars	L F	Debit	Credit
? 1	Ravindra’s A/c………Dr.   To Sales A/c (Being the goods are sold)		6000	6000
2	Bills Receivable A/c ……… Dr.     To Ravindra’s A/c (Being the bill is drawn)		6000	6000
3	Cash/ Bank A/c ……… Dr. Discount A/c ………… Dr.   To Bills Receivable A/c (being the bill is discounted)		5900 100	6000
4	Ravindra’s A/c ……… Dr   To Cash/Bank A/c (being the bill is dishonored)		6000	6000
5	Cash/ bank a/c………… Dr  To Ravindra’s A/c (being the part payment is made)		3000	3000
6	Ravindra’s A/c ……… Dr.   To Interest a/c (being the interest is charged on balance amount)		60	60
7	Bills Receivable A/c ………… Dr.   To Ravindra’s A/c (being the new bill is drawn along with interest)		3060	3060
8	Bank for collection A/c ……… Dr.   To Bills Receivable a/c (being the bill is send to bank for collection)		3060	3060
9	Cash/ bank a/c ……… Dr.  To Bank for collection a/c (being the sent to bank for collection bill is honored)		3060	3060

OR

Q3. Journalize the following transactions in the books of Motilal:

a.        Bhavna informed Motila that Jyoti’s acceptance for Rs. 3600 endorsed to Bhavna has been dishonoured and noting charges have been Rs. 150.

b.       Anil renews his acceptance to Motilal for Rs. 3400 by paying Rs. 900 in cash and accepting a new bill for the balance plus interest at 8% p.a. for 3 months.

c.        Prabhakar retired his acceptance to Motilal for Rs. 4000 by paying Rs. 3850 in cash.

d.       Bank informed Motilal that Arun’s acceptance of Rs. 7000 which was discounted with bank has been dishonoured with noting charges Rs. 100. (March 2008 board exam questions)

Ans. 

Date	Particulars	L F	Debit	Credit
a	Jyoti’s A/c ……… Dr.   To Bhavna’s (being the endorsed bill is dishonored along with noting charges)		3750	3750
b  i.	Anil’s A/c ……… Dr.   To Bills Receivable a/c (being the bill is dishonored)		3400	3400
ii.	Cash / bank a/c ……… Dr.  To Anil’s a/c (being the part payment is made)		900	900
iii.	Anil’s A/c ……… Dr. To Interest A/c (being the interest is charged on balance amount)		50	50
iv.	Bills receivable a/c ……… Dr. To Anil’s A/c (being the new bill is drawn along with interest)		2550	2550
c	Cash/ bank a/c ……… Dr. Rebate’s A/c ……… Dr.   To Bill’s Receivable A/c (being the bill is retired)		3850 150	4000
d	Arun’s A/c ………… Dr.  To Cash/ bank A/c (bein the discounted bill is dishonored along with noting charges)		7100	7100

Q4. Ajay and Abhijeet were partners in a Joint Venture sharing profits and losses in the proportion of 4/5 and 1/5 respectively. Ajay supplied goods to the value of Rs. 25000 and incurred expenses amounting to Rs. 2700. Abhijeet also supplied goods to the value of Rs. 7000 and his expenses amounted to Rs. 400. Abhijeet sold all the goods for Rs. 46000. Abhijeet is entitled to a commission at 5% on sales. Abhijeet settled Ajay’s account by bank draft. Prepare Joint venture account and Abhijeet account in the books of Ajay. (March 2006 board exam questions.)  

In the books of Ajay

Joint venture account

Particulars	Amount	Amount	Particulars	Amount	Amount
To Goods a/c To cash/bank a/c To Abhijeet’s a/c To Abhijeet’s a/c To Abhijeet’s a/c To profit on joint venture transferred to  Profit / loss A/c Abhijeet’s A/c	6880 1720	25000 2700 7000 400 2300 8600	By Abhijeet’s A/c		46000
		46000			46000

Abhijeet’s Account

Particulars	Amount	Amount	Particulars	Amount	Amount
To Joint venture a/c		46000	By Joint venture a/c By Joint venture a/c By Joint venture a/c By Joint venture a/c (profit) By cash/ bank a/c (balancing figure)		7000 400 2300 1720 34580
		46000			46000

Q5. Mrs. Archana keeps her books on single entry system and gives the following information: (March 2008 board exam question)

Particulars	31.3.2006	31.3.2007
Cash at bank Sundry debtors Stock in trade Furniture Machinery Bills payable Sundry creditors	5000 25000 30000 20000 50000 5000 15000	32000 40000 50000 20000 50000 5000 20000

Further information:

1.      Mrs. Archana withdrew from business Rs. 15000 for personal use.

2.      She further introduced fresh capital of Rs. 25000.

3.      Depreciation is to be charged @ 10% p.a. on Furniture and Machinery.

Prepare : (1) statement of affairs as on 31.3.2006. (2) statement of affairs as on 31.3.2007. (3) statement of profit and loss for the year ended on 31.3.2007.

ANS.

In the books of Mrs. Archana

Statement of affairs as on 31^st March, 2006

Liabilities	Amount	Assets	Amount
Bills payable Sundry creditors Capital at the beginning of the year	5000 15000 110000	Machinery Furniture Stock in trade Sundry debtors Cash at bank	50000 20000 30000 25000 5000
	130000		130000

Statement of affairs as on 31^st March, 2007

Liabilities	Amount	Assets	Amount
Bills payable Sundry creditors Capital at the end of the year	5000 20000 167000	Machinery Furniture Stock in trade Sundry debtors Cash at bank	50000 20000 50000 40000 32000
	192000		192000

Statement of profit or loss for the year ended 31^st March, 2007

Particulars	Amount
Capital at the end of the year	167000
Add: Drawings	15000
Less: Additional capital introduced	182000 25000
Less: Capital at the beginning of the year	157000 110000
Gross profit Less: Depreciation On Machinery = (50000)(10/100)(12/12) = 5000 On Furniture  = (20000)(10/100)(12/12)=2000	47000 7000
Net Profit	40000

Q6. Sanjay, Ajay and Vijay undertook the construction of building at a contract price of Rs. 6,00,000 payable in cash Rs. 4,00,000 and in the form of debentures of company Rs. 2,00,000. They shared profits and losses in the ration of 3:2:1 respectively. They opened a Joint Bank account wherein they deposited the following amounts. Sanjay Rs. 3,00,000, Ajay Rs. 2,00,000 and Vijay Rs. 1,00,000.

The following payments are made out through Joint bank account.

1.      Purchase of materials Rs. 2,50,000.

2.      Payment of wages Rs. 77,000.

3.      Purchase of plant Rs. 45,000 and

4.      Other charges Rs. 11,000.

Sanjay bring the truck of Rs. 40,000. Ajay brings in the material of Rs. 55,000. Vijay brings mixer worth Rs. 10,000. At the close of venture the unused materials were taken by Sanjay for Rs. 5,000. Ajay took over the mixer and plant for Rs. 27,000. The truck was sold in the market for Rs. 22,000. The contract price was received as per ther agreement and Vijay agreed to take over the debentures at Rs. 1,90,000.

Prepare : Joint venture account, Joint Bank account and Co – ventureres account. (March 2008 board exam questions)

In the books of Joint venture

Joint venture account

Particulars	Amount	Amount	Particulars	Amount	Amount
To Join bank a/c Materials Wages Plant Other charges To Sanjay’s A/c (Truck) To Ajay’s A/c (materials) To Vijay’s A/c (mixture) To Debentures A/c (discount on debenture) To profit on joint venture transferred to Sanjay Ajay Vijay	250000 77000 45000 11000 78000 52000 26000	383000 40000 55000 10000 10000 156000	By Joint Bank a/c (contract price) By Debentures a/c (contract price) By joint bank a/c (truck sold) By Sanjay’s A/c (Materials taken over) By Ajay’s A/c (Mixer and plant)		400000 200000 22000 5000 27000
		654000			654000

CO – VENTURERS’ ACCOUNT

Particulars	Sanjay	Ajay	Vijay	Particulars	Sanjay	Ajay	Vijay
To Joint venture a/c To debenture a/c To joint bank a/c	5000 413000	27000 280000	190000	By joint bank a/c By joint venture A/c By joint venture A/c By joint Bank A/c	300000 40000 78000	200000 55000 52000	100000 10000 26000 54000
	418000	307000	190000		418000	307000	190000

Joint Bank A/c

Particulars	Amount	Particulars	Amount
To Sanjay’s A/c To Ajay’s A/c To Vijay’s A/c To joint venture A/c To Joint Venture A/c To Vijay’s A/c	300000 200000 100000 400000 22000 54000	By joint venture a/c By Sanjay’s A/c By Ajay’s A/c	383000 413000 280000
	1076000		1076000

Debentures A/c

Particulars	Amount	Particulars	Amount
To Joint venture A/c	200000	By Vijay’s A/c By Joint Venture A/c (balancing figure)	190000 10000
	200000		200000

Q7.  Following is the Trial Balance of Premlal and Sundarlal as on 31^st March 2006.

Trial balance as on 31^st March, 2006.

Particulars	Amount	Particulars	Amount
Stock on 1-4-2005 Purchases Drawings: Premlal Sundarlal Sales return Wages : productive Unproductive Salaries Rent, rates and insurance Bad debts Discount allowed Machinery Building Sundry debtors Cash Government bonds	90000 225000 33000 30000 7200 10500 1800 18600 10200 1200 3900 45000 108600 153000 1000 2000	Sales Purchase returns Discount received Sundry creditors Capital : Premlal Sundarlal Bank overdraft	375000 3000 3000 90000 105000 135000 30000
	741000		741000

1.      Closing stock was valued on 31.3.2006 at market price Rs. 60,000 which was 20% above its cost price.

2.      Outstanding productive wages Rs. 600

3.      Rent, Rates and insurance include insurance Rs. 1600 paid for one year ending on 30^th June 2006.

4.      Maintain Reserve for doubtful debts at 5% on debtors.

5.      Depreciate buildings by 5% and machinery at 10% p.a.

6.      Goods costing Rs. 2500 were distributed as free samples for which no record has been made in the books.

7.      Six months interest is due on Bank Overdraft at 10% p.a.

Prepare trading and profit and loss account for the year ended 31^st March 2006 and Balance Sheet as on that date. (September 2008 board exam questions)

In the books of Premlal and Sunderlal

Trading account for the year ended 31^st March, 2006.

Particulars	Amount	Amount	Particulars	Amount	Amount
To opening stock To purchases (-)return To productive wages (+) outstanding To Gross profit c/d	225000 (3000) 10500 600	90000 222000 11100 97200	By sales (-) return By goods distributed as free samples By closing stock	375000 (7200)	367800 2500 50000
		420300			420300

Profit and loss account for the year ended 31^st March, 2006

Particulars	Amount	Amount	Particulars	Amount	Amount
To Salaries To unproductive wages To rent, rates and insurance (-) prepaid insurance To bad debts (+) FBD (+)NRDD (-) ORDD To discount allowed To advertisement To depreciation: Buildings Machinery To interest on bank over draft To net profit c/d Premlal Sundarlal	10200 (400) 1200 NIL 7650 NIL 5430 4500 21660 21660	18600 1800 9800 8850 3900 2500 9930 1500 43320	By gross profit b/d By discount received		97200 3000
		100200			100200

Partners’ capital accounts

Particulars	Premlal	Sunderlal	Particulars	Premlal	Sunderlal
To drawings To balance c/d	33000 93660	30000 126660	By balance b/d By Net profit b/d	105000 21660	135000 21660
	126660	156660		126660	156660

Balance sheet as on 31^st March, 2006

Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Capital account Premlal Sunderlal Sundry creditors Bank overdraft Add: interest Outstanding productive wages	93660 126660 30000 1500	220320 90000 31500 600	Buildings (-) Deprn@5% Machinery (-) Deprn@10% Sundry Debtors (-) N.R.D.D. @5% Closing stock Cash Prepaid insurance Government Bonds	108600 5430 45000 4500 153000 7650	103170 40500 145350 50000 1000 400 2000
		342420			342420