VPM’s R. Z.

Shah College of Arts, Science and Commerce

Class: - FYBCOM (SEM -II) Question Bank SUB: - AFM-II
MULTIPLE CHOICE QUESTIONS (FROM ALL UNITS)
1) Usually, in a single-entry system _________
a) only manual accounts are maintained b) only cash & personal accounts maintained
b) only real accounts-maintained d) only nominal accounts are maintained
2) Cash Purchases during the year are ascertained by preparing ___________
a) Debtors A/C c) Creditors A/c
b) Profit & Loss A/c d) Cash/Bank A/c
3) If books are kept under single entry system, credit sales are ascertained by preparing ____
a) Total Debtors A/c c) Total Creditors A/c
b) Trading A/c d) Credit Sales a/c
4) Opening Capital is ascertained by preparing _________
a) Cash Account c) Total Debtors A/c
b) Total Creditors A/c d) Last year Statement of Affairs
5) An estimate of assets & liabilities as on a date is called _________
a) Statement of Capital c) Statement of Affairs
b) Trial Balance d) Balancing Sheet
6) Cash from insolvent customer is a gain which is credited to ________
a) Cash A/c c) Debtors A/c
b) Profit & Loss A/c d) Trading A/c
7) Single Entry System is adopted by a ________
a) Limited Company c) Larger trader
b) Merchant Banker d) Small sole trader
8) Bills Payable A/c is prepared to ascertain Bills Accepted by _________
a) Debtors c) Creditors
b) Customers d) Depositors
9) The trial balance must _______
a) debit side greater than credit side c) tally
b) credit side greater than debit side d) not be equal
10) If goods are sold on credit to customers, then only _______ account is debited but sales
account is not credited.
a) Vendor b) Credit c) Customers d) Supplier
11) All __________ accounts of customers and suppliers have to be maintained under single
entry system.
a) Impersonal b) Nominal c) Real d) Personal
12) A statement of affairs is just like a _________.
 a) Balance Sheet c) Profit & Loss A/c
b) Cash Account d) Trading A/c
13) Which one of the following is true?
a) Capital = Assets + Liabilities c) Capital + Assets = Liabilities
b) Capital = Assets – Liabilities d) Capital - Liabilities = Assets
14) Cost of goods Sold = ___________
a) Opening Stock + Purchases - Closing Stock
b) Opening Stock + Purchases + Closing Stock
c) Opening Stock - Purchases + Closing Stock
d) Opening Stock - Purchases - Closing Stock
15) Net Credit Sales = __________
a) Total Sales + Cash Sales - Sales Returns
b) Total Sales - Cash Sales - Sales Returns
c) Total Sales - Cash Sales + Sales Returns
d) Total Sales + Cash Sales + Sales Returns
16) Capital on 1st April, 2021 Rs. 70,000. Capital on 31st March,2022
Rs. 1,00,000. Drawings Rs. 20,000. How much is the profit earned?
a) Rs. 80,000 b) Rs. 30,000 c) Rs. 50,000 d) Rs. 70,000
17) Machinery on 1st April, 2021 Rs. 85,983. Value of Machinery on 31st March, 2022 Rs.
69,425. How much depreciation is provided during the year?
a) Rs. 15,728 b) Rs. 15,892 c) Rs. 16862 d) Rs. 16558
18) Cost of goods sold Rs. 2,60,000; Opening Stock Rs. 16,000; Closing Stock Rs. 20,000.
Purchases will be _____________
a) Rs. 2,60,000 c) Rs. 2,96,000
b) Rs. 2,46,000 d) Rs. 2,64,000
19) Debtors as on 01-01-2021 Rs. 50,000; Debtors as on 31-12-2021 Rs. 60,000; Credit Sales Rs.
4,20,000; Sales Return Rs. 9,000. Payment Received will be _____________
a) Rs. 4,21,000 c) Rs. 4,01,000
b) Rs. 3,90,000 d) Rs. 4,10,000
20) Total Sales are Rs. 12,00,000. Cash sales are 20% of Credit Sales. How much is the amount
of Cash Sales?
a) Rs. 2,00,000 c) Rs. 2,20,000
b) Rs. 2,40,000 d) Rs. 3,00,000
21) The relationship between the consignor and consignee is that of ______
a) Principal and Principle c) Agent and Principal
b) Principal and Agent d) Agent and sub-agent
22) Any stock remaining unsold with the consignee _______
 a) belongs to the consignee
b) belongs to the consignor or the consignee
c) shared by the consignor or the consignee equally
d) belongs to the consignor
23) If the consignee gets del credere commission, ___________
a) the consignor will bear the bad debts
b) the consignee will bear the bad debts
c) the consignee will bear the bad debts on consignee will pay the price immediately on
receipt of consignment
d) the consignee will bear all the expenses
24) The balance of Consignment Account indicates ___________
a) Profit and loss A/c c) Goods Sent to consignor
b) Balance of goods with consignee d) Purchases
25) When the Consignor sends goods to consignee he prepares __________
a) Account sale c) Cash memo
b) Proforma invoice d) Credit memo
26) Consignment A/C is prepared in the books of___________
a) Consignor b) Consignee c) Transporter d) Insurer
27) Goods sent on Consignment Account is prepared in the books of ______
a) Consignor b) freight c) Transporter d) Insurer
28) Which of the following item is NOT credited to Consignment Account?
a) Cash sales made by consignee b)Consignment stock
c) Stock Reserve on clocking stock d)Credit sales made by consignee
29) The owner of the consignment stock is ________
a) Consignor c) Consignee
b) Debtors d) Creditor
30) The consignment accounting is made on ________ basis.
a) Accrual basis c) Realisation basis
b) Cash basis d) Matching basis
31) Goods costing Rs. 4,00,000 sent out to consignee at cost + 25%. Invoice value of the goods
will be _________
a) Rs. 5,00,000 c) Rs. 4,80,000
b) Rs. 6,00,000 d) Rs. 4,00,000
32) Branch account basically classified into two types Dependent Branch and ______
a) Indian Branch c) Foreign Branch
b) Independent Branch d) External Branch
33) When the dependent branch is of small size, the accounting is done under the _____ method.
 a) Debtors c) Stock Debtor
b) Foreign Branch d) Independent Branch
34) When Head Office does not want to disclose about the cost of goods sent to the branch, then
goods will be sent to the branch at ______ price.
a) Invoice b) Market c) Cost d) Fake
35) Payments to Branch Debtors are not recorded in the branch Account kept under the
_____method.
a) Debtors b) Stock c) Creditor d) Sales
36) Branch Account under Debtors System is ________
a) Personal account c) Real account
b) Nominal account d) Asset account
37) Stock reserve in relation to closing stock is shown on ________
a) Debit side of Branch a/c b)Credit side of Branch Debtors a/c
c) Debit side of Profit & Loss a/c d)Credit side of Profit Loss a/c
38) Under Stock and Debtors method, _________ A/c is opened in order to ascertain gross profit
/ Loss of Branch.
a) Independent c) Debtor
b) Stock Reserve d) Branch Stock
39) Under Stock and Debtors Method, Expenses of branch met by Head Office are Debited to
___________ A/c.
a) Stock Reserve c) Branch Expenses
b) Branch Stock d) Branch adjustment
40) When goods are sent at invoice price, Branch stock A/C is __________ under stock and
Debtor method, for any shortage in stock.
a) Credited b) Debited c) Added d) Deducted
41) Value of Loss of stock is Rs.70,000, Goods saved Rs.20,000, Insurance policy amount
Rs.90,000 then claim = ________
a) Rs.70,000 b) Rs.90,000 c) Rs.50,000 d) Rs.40,000
42) If stock on the date of fire is Rs.59,000 and salvage value is Rs.9,000. Then loss by fire =
_________ a)Rs.59,000 b) Rs.9,000 c) Rs.50,000 d) Rs.68,000
43) Whenever there is loss due to fire, _________ company reimburses the loss to the concerned
businessman. a)Insurance b) Client c) Government d) Private
44) Gross Profit Ratio = _______
a) Gross Profit / Closing Stock x 100 b)Gross Profit / Sales x 100
c) Gross Profit /Opening stock x 100 d)Gross Profit/ Purchases x 100
45) If the insurance policy is less than the value of stock, it is______
a) Co-Insurance c) Re-Insurance
 b) Under insurance d) Over insurance
46) Net Claim on under insurance = Loss of Stock x ________ / Value of closing stock on the
date of fire.
a) Policy Value c) Total Value
b) Total Sales d) Gross profit
47) The stock which is rescued from fire is ______.
a) Scrap b) defectives c) Salvage d) Claim
48) In memorandum trading account, the balancing figure is______
a) Sales b) Gross Loss c) Gross Profit d) Closing Stock
49) Fire Insurance covers________
a) Risk of loss c) Reduction of loss
b) Increase in loss d) Prevent loss
50) Average Clause of insurance policy is not applicable to______
a) Fire Insurance c) General Insurance
b) Motor Insurance d) Life Insurance
51) Cash sales Rs.50000, Cash collected from debtors Rs.130000, Bad debts during the year
Rs.5000, debtors at the beginning Rs.100000. Then Total sales will be Rs.___________
A]85000 B]170000 C]180000 D]178000
52) Furniture Costing Rs 120000. calculate Depreciation @ 8 % ____________
A]4800 B]6000 C]7200 D]9600
53) Rent paid for 10 months is 15000 then Outstanding Rent as at year ended amounted
to__________ A]1500 B]3000 C]4500 D]6000
54) Opening Creditors 50000 and Credit sale and credit purchase 80000 and 40000 Respectively
then Closing creditors is __________ A]130000 B]120000 C]90000 D]80000
55) Debtors amounted 16000; Bad debts 1000 and 8 % RDD will be _________
A]600 B]800 C]1200 D]1280
56) Bills payable drawn by Creditors can be ascertained by preparing
A] Bills receivable A/c B] Debtors A/c C] Fixed Asset A/c D] Total Creditors A/c
57) If the proprietor brings cash into business, it will be recorded on Debit side of
A] Trading A/c B] Profit & Loss A/c C] Cash book D] Balance sheet
58) ____________ is being prepared to verify arithmetical accuracy
A] Trial Balance B] Balance sheet C] Trading A/c D] Profit & Loss A/c.
59) Purchase returns is shown on Debit side of _______
A] Total Creditors A/c B] Total Debtors Ac C] Bills Receivable A/c D] Bills Payable A/c.
60) Payment for Printing and Stationery expenses is credited to ______
A] Cash A/c B] Sales A/c C] Debtors A/c D] Trading A/c
61) Goods sent on consignment Rs. 500000 and Goods returned worth Rs 50000 then
 Consignment account debited to __________ A]450000 B]500000 C]550000 D]50000
62) Pooja sent 1200 pen drive costing each 100 to Kritika on consignment basis sold for 120 each
for normal commission of 5 % then Calculate commission ___________
A]6000 B]7200 C]7800 D]12000
63) Goods cost price is Rs. 60000 and invoiced at profit of 25 % on cost then invoice price will
be ___________ A]65000 B]70000 C]72000 D]75000
64) Commission will be shared by ___________
A] consignor and consignee B]only consignee C]only consignor D]consumer
65) The person to whom the goods are sent for sale is called
A]Consignor B]Consignee C]Seller D]Dealer
66) The person who sends the goods to the agent for sale is called
A]Consignor B]Consignee C]Seller D]Dealer
67) Goods sent to an agent for sale is called as _____
A]Consignment B]Sale C]Sale or return basis D]Online sale
68) If del-credere commission is not allowed by consignor to consignee, the bad debts
(in the books of consignor)
A]will not be recorded in consignor's books B]will be debited in consignment A/c
C]will be charged to general P/L A/c D]will be debited to the consignee A/c
69) if del-credere commission is not allowed for bad debts, consignee will debit the bad debts
amount to_________
A]commission earner A/c B]consignor A/c C]Debtors A/c D]General profit & loss A/c
70) The owner of the consignment stock is
A]Consignor B]Consignee C]Debtors D]Consignor and Consignee
71) Goods sent on Consignment Account is prepared in the books of
A]Consignor B]Consignee C]Transporter D]Customer
72) Del. Credere commission is calculated on
A]Total sales B]cash sales C]credit sales D]Net sales
73) The relationship between consignor and consignee is of ______
A] Debtors and Creditors B]Purchases and seller
B] C]Principal and Agent D]Owner and servant
74) In Consignment Accounting consignment is______
A]Real A/c. B]Personal A/c. C]Nominal A/c. D]Suspense A/c
75) In Consignment Accounting, consignor is
A]Principal B]Agent C]Debtors of the consignee D]Consignment
76) Girish has H.O. at Belapur and branch at Kharghar. Goods are sent to the branch at cost plus
25%. Goods worth Rs. 10000 were lost at branch. Amount of load will be ______.
A]Rs. 4,000 B]Rs. 2,000 C]Rs. 1,500 D]Rs. 3,000
77) Under Debtors method, cash received from debtors are credited to ----------- a/c
A]Branch B]Debtors C]Cash / Bank D]Head Office
78) Under debtor method, Credit sales are not recorded in _______ account
A]Branch B]Debtor C]Branch Stock D]Customer
79) Under Stock and Debtor system, Expenses paid by branch for salaries, conveyances, postage
etc are recorded in the _____ account.
A]Branch Memorandum B]Branch Expenses C]Cash / Bank D]Branch
80) Under debtors method, opening balance of debtors is __________
A] Debited to Branch a/c B]Credited to Branch a/c
C]Debited to HO a/c D]Credited to HO a/c
81) Under Stock & Debtor method, Credit sales are credited to _____
A]Branch a/c B]Branch Stock a/c C]Branch Debtors a/c D]Branch Cash a/c
82) Under Stock & Debtor method, Cash received from Branch debtors are credited to ___
A]Branch a/c B]Branch Stock a/c C]Branch Debtors a/c D]Branch Cash a/c
83) Under Stock & Debtors methods, difference in Branch Cash account is transferred to___
A]General Profit & Loss a/c B]Branch Cash a/c C]Head Office a/c D]Branch a/c
84) Opening balance of Prepaid Expenses is debited to _____, under debtors method.
A]Branch a/c B]Branch Stock a/c C]Stock Adjustment a/c D]Branch Expenses a/c
85) Opening balance of Petty Cash is shown on debit side of _______
A]Petty Cash a/c B]Branch A/c C]Branch Stock a/c D]Branch Adjustment a/c
86) Under Debtors method, when goods are sent at invoice price, load on opening stock brought
down from last year is adjusted by debit to _______account.
A]Stock Reserve B]Branch C]Opening Stock D]Stock Adjustment
87) Stock on the date of fire Rs. 2,32,000; Value of salvaged stock Rs. 23,200. Calculate the
amount of claim if the sum assured to cover loss of stock by fire is Rs. 2,40,000.
A]Rs. 2,08,800 B]Rs. 1,80,000 C]Rs. 2,32,000 D]Rs. 2,00,000
88) Stock on the date of fire Rs. 75,840; Value of salvaged stock Rs. 25,000. Calculate the
amount of claim if the sum assured to cover loss of stock by fire is Rs. 50,000.
A]Rs. 50,840 B]Rs. 33,518 C]Rs. 50,000 D]Rs. 55,000
89) Purchases Rs. 1,00,000; Sales Rs. 1,30,000; Wages Rs. 10,000; Opening Stock was Rs.
10,000 more than the Closing Stock. What is Gross Profit?
A]Rs. 12,500 B]Rs. 12,000 C]Rs. 7,500 D]Rs. 10,000
90) Opening Stock Rs. 1,20,000; Purchases Rs. 2,80,000; Closing Stock Rs. 80,000; Sales Rs.
4,00,000. The % of Gross Profit on Cost is______. A]20% B]25% C]30% D]35%
91) The insurance policy if it is more than the value of stock
A]Double insurance B]re –insurance C]under insurance D]over insurance
92) ____is the amount payable to the insured on the happening of event.
 A]Premium B]Annuity C]Claim D]Policy
93) Goods which are slow moving are called as ______
A]abnormal goods B]normal goods C]salvage D]claim
94) The claim lodged by the business to insurance company on happening of the event
A]Claim B]Loss of claim C]discharge D]insurance claim
95) Fire insurance policies contain an “_____” to discharge under insurance
A]Total clause B]net clause C]Gross clause D]average clause
96) Fire insurance provides cover for _______________
A]Tangible assets B]Intangible assets C]Fictitious assets D]Business employees
97) The period for which insurance policy is taken against the risk of fire is __________.
A]accounting period B]calendar period C]indemnity period D]standard period
98) If the rate of gross profit is 25 % on cost it will be equal to _________.
A]20 % on sales B]20% on Cost C]1/3 on sales D]1/5 on Cost
99) Total Creditors Account is prepared to find out ________.
A]Credit Sales B]Cash Purchases C]Cash Sales D]Credit Purchase
100) Salvage refer to ________.
A]Stock destroyed by fire B]Stock saved from fire
C]stock moving fast D]abnormal loss incurred
ACCOUNTING OF INCOMPLETE RECORD
1) From the following particulars extracted from the books of the Mr. Shivaji, who keeps his
books on single entry system, Prepare Trading and P&L Account and Balance Sheet as on
31st March, 2022. Receipt and Payment Account
For the year ended 31st March, 2022
Particulars Dr. Rs. Particulars Cr. Rs.
To Balance b/d 6000 By Creditors A/C 81000
To Sales A/C 34,000 By Salary A/C 4500
To Debtors A/C 125000 By Rent A/C 2000
By Wages A/C 14000
By Trade Exp A/C 8000
By Purchases A/c 6000
By Drawings 15000
By Balance c/d 34500
165000 165000

ASSETS AND LIABILITIES: -

 Particulars 1.4.2021 31.3.2022
1) Capital 97000 ?
2) Stock 25000 36000
3) Creditors 13000 14000
4) Debtors 27000 32000
5) Furniture 12000 12000
6) Machinery 40000 40000
7) Cash (R &P) 6000 34500
Depreciation on machinery is 10% and Furniture is 5%, Doubtful debt is 5%, Credit Sales: -
Rs. 1,32,000, Credit Purchases: - Rs. 82,000.
2) Mr. Perfect a retailer in Mumbai adds 20% to cost of goods sold to arrive at sales price.
His financial position as on 31st March, 2021 was as under: -
Particulars Rs.
1) Plant and Machinery 500000
2) Stock at Cost 382500
3) Debtors 717500
4) Cash at Bank 220000
5) Creditors 300000
6) Loan from Vivek 200000
During the year ended 31st March, 2022, Mr. Perfect: -
Particulars
1) Paid Rs. 1167500 to creditors for goods.
2) Repaid Rs. 50,000 of Vivek's Loan
3) Purchased A typewriter Rs. 70,000
4) Withdrew RS. 8,000 p.m. from Bank for domestic use.
5) Paid into bank Personal Lottery Prize of Rs. 30,000
6) Paid Income tax Rs. 60,000
7) Sold goods on credit of Rs. 14,40,000
8) Spent business expenses Rs. 90,000
On 31st March, 2022 Stock a cost was Rs. 4,00,000, Debtors Rs. 7,00,000 and creditors were
Rs. 3,50,000. On that date Bank balance was Rs. 1,95,000. Depreciate Plant and typewriter
by 20% p.a. Prepare Prefect's Final Accounts
3) Mr. Sam does not maintain his books of account on Double Entry keeping system. He
supplies you the following information: -
Particulars 1/4/2021 31/3/2022
Plant 72,000 72,000
Motor Vehicles 1,00,000 ?
Debtors 67,000 49,000
Creditors 74,000 59,000
Stock 76,000 1,00,000
Cash and Bank Balance 3,000 24,000
Cash Transactions during the year are as under: -
Particulars Rs.
Purchase of Motor Vehicle (1/4/2021) 30,000
Capital Introduced 30,000
Cash Sales ?
Paid for Rent 20,000
Paid for Salaries 23,000
Received from Debtors 2,00,000
Payment made to Creditors 1,00,000
Paid for General Expenses 17,000
Drawings 36,000
Carriage Inwards 49,000
1) Depreciation is to be provided on Plant @10% p.a. and Motor Vehicle @20% p.a.
2) Rent outstanding is Rs. 2,000
3) Discount allowed was Rs. 3,000 and discount received Rs. 2,000
You are required to prepare: -
1) Trading and Profit and Loss Account for the year ended 31st March, 2022.
2) Balance Sheet as on 31st March, 2022
4) You are given: (I) A Balance Sheet of X as on 1st January 2013. (II) A Summary of Cash
Transactions for 2013 (III) A List of remaining transactions for that year.
Liabilities Assets
Loans 12,000 Debtors 40,000
Creditors 27,000 Less: Provision ___ 750 39,250
Bills Payable 1,500 Bills Receivable 10,000
Capital 1,40,000 Stock 45,000
Plant 30,000
Building 55,000
Cash 1,250
1,80,500 1,80,500
 (II)
Receipts Payments
To Balance on (1-1-2013) 1,250 By Payment to Creditors 1,10,000
To Amount received from By Cash Purchases 25,000
debtors 1,72,000 By Bills Payable 45,000
To Bills Receivable 35,000 By Loans Paid 12,000
To Cash Sales 24,500 By Salaries 9,000
By Rent 6,000
By Interest 450
By General Charges 750
By Drawings 15,500
By Balance on 31-12-2013 9,050
2,32,750 2,32,750

(III)
Total Purchases 2,15,000
Total Sales 2,35,000
Discount allowed to customers 1,250
Discount allowed to creditors 1,850
Bills Receivable received during the year 60,000
Bills Payable granted during the year 50,000
Stock on 31st December, 2013 90,000
Owing for outstanding expenses 1,500
Commission earned by the firm but not received 1,200
Provide 5% reserve for doubtful debts and 2 ½ % for discount on debtors, and Depreciate
buildings by 2 ½ % and plant by 5% p.a. YOU ARE REQUIRED TO PREPARE TRADING
AND PROFIT AND LOSS ACCOUNT AND BALANCE SHEET FROM THE ABOVE.
5) Mr. Simpleton, a retailer, does not keep any books of accounts, but does operate a business
bank account. A summary of the bank statements for the year ended 31-3-2013 is given
below:
Receipts Rs. Payments Rs.
Opening Balance 2,640 Cash paid to Creditors 37,250
Cash received from Debtors 48,500 Salaries 5,500
Closing Balance 2,210 Rent 1,800
General Expenses 3,500
Advertisement 300
Drawings 5,000
 53,350 53,350

His assets and liabilities on 31st March, 2012 and 2013 31-3-2012 31-3-2013
were
Fixed Assets 10,400 10,400
Stock 5,240 6,300
Debtors 6,500 6,800
Rent Prepaid 300 600
Creditors 4,600 4,700
Outstanding Advertisement Bill 100 150
Fixed Assets should be depreciated at 10%

Required: Prepare the Trading A/c. and Profit and Loss Account of Mr. Simpleton for
the year ended 31/03/2013 and a Balance sheet as at that date.
6) WHAT DO YOU MEAN BY SINGLE ENTRY SYSTEM? ENUMERATE ITS DRAWBACKS.
7) ADVANTAGES AND DISADVANTAGES OF SINGLE-ENTRY SYSTEM
FIRE INSURANCE CLAIM
1) A fire occurred on 15th December, 2011 in the premises of D co. Ltd. From the following
figures calculate the amount of claim to be lodged with the insurance company for loss of
stock: -
Particulars Rs.
1) Stock at cost on 1st April, 2010 2,00,000
2) Stock at cost on 1st April, 2011 3,00,000
3) Purchases for the year ended 31st March, 2011 4,00,000
4) Purchases (1st April, 2011 to 15th December, 2011) 8,80,000
5) Sales for the year ended 31st March, 2011 6,00,000
6) Sales from 1st April, 2011 till 15th December, 2011 10,50,000
During the year 2011-12, cost of purchases rose by 10% above the previous year's level while
selling price went up by 5%. The value of stock salvaged was Rs. 20,000. The policy amount
is Rs. 5,00,000. Find out the amount of claim.
2) The premises of M/s Firewood and company caught fire on 30th June, 2021. The stock of
goods was totally destroyed by fire with an exception of Rs. 25,000, the books of accounts,
however, being saved. The following is the further information: -
Particulars 1/4/2020 to 31/3/2021 1/4/2021 to 30/6/2021

Opening Stock 1,20,120 1,30,200

Purchases 4,50,000 1,20,000
Sales 5,40,000 2,25,000
Wages 80,000 36,000
Purchases Return 50,000 20,000
Sales Return 40,000 25,000
 Goods withdrawn for personal use 10,000 ---
Opening stock is valued at 5% above cost. Prepare a statement for submission to the
insurance company against your policy of Rs. 50,000.

3) On 31st May, 2021 a fire occurred and partly damaged the stock of goods of Value Traders,
Stock having a cost of Rs. 1,00,000 being salvaged. The stocks were insured against fire to
the extent of Rs. 4,50,000. The following particulars could be obtained from the books and
records saved:
Particulars Rs.
Balance as per Balance Sheet as on 31/12/2020: -
Stock (as undervalued by 10%) 2,70,000
Debtors for Goods 75,000
Creditors for Goods 45,000
Transactions between 1/1/2021 to 31/5/2021: -
Cash received from Debtors 6,00,000
Cash Discount allowed to Debtors 15,000
Goods returned by Debtors 6,000
Cash patio creditors 11,10,000
Cash discount from creditors 12,000
Goods returned to creditors 3,000
Cash sales 6,36,000
Goods donated (At cost) 15,000
Debtors for goods as on 31/05/2021 1,74,000
Creditors for goods as on 31/05/2021 90,000
All Sales were made at a Gross Profit of 25% on Sale Price.
Draw a statement of claim for loss of stock.
4) Q.5.B. On 17th June, 2021 a fire occurred in the premises of Mr. Bookwork, a bookseller,
most of the stock was destroyed, the cost of the salvaged stock being 11,200. In Addition,
some stock was salvaged in damaged condition and its value was estimated at 10,400.
The following particulars were available from the books of accounts:
1. Stock at the close of accounts on 31st December 2020 was 83,500.
2. Purchases from 1.1.2021 to 17.6.2021 amounted to 1,12,000 and sales during that
period amounted to 1,54,000.
3. On the basis of the past three years it appears that on average the gross profit of 25%
is earned on sales. Stock Was Insured For 75,000.
Compute The Amount of Claim.
5) Bonafide Enterprisese close their accounts on 30th June, every year. On 30th September, 2013
a major fire destroyed most of their stock. Following information could be gathered from
 their books:
Particulars AMOUNT
Stock on 30th June, 2013 3,60,000
Purchases – 01st July, 2013 to 30th September,2013 6,00,000
Wages – 01st July, 2013 to 30th September, 2013 2,30,000
Sales – 01st July, 2013 to 30th September, 2013 10,00,000
Carriage Inward for the above Period 10,000
Carriage outward for the above period 15,000
Average Percentage of G.P. to cost 33 1/3. Stock of the value of Rs. 75,000 could be
salvaged. Policy was for Rs. 2,50,000. Claim was subject to Average Clause.
Following further information is available:
1. Stock in the beginning was calculated at 10% less than cost.
2. Purchases include purchase of furniture Rs. 25,000
3. Amount spent for bringing and setting up the furniture in the office was Rs. 5,000
which was included in carriage inward.
6) EXPLAIN IN BRIEF, FIRE INSURANCE CLAIM FOR LOSS OF STOCK
7) MEMORANDUM TRADING ACCOUNT
BRANCH ACCOUNTING
1) Following are the details of Mysore Branch of Majestic Trading Company for the financial
year 2021-22.
Particulars 01/04/2021 31/03/2022
Balance: -
Stock 62,000 42,000
Debtors 56,000 61,200
Cash 1,600 1,000

Transactions during the year 2021-2022 are as under: -

Particulars Rs.
1) Goods Sent to Branch at cost 2,28,000
2) Sales on Credit ?
3) Sales on Cash 1,60,000
4) Goods returned by customers to branch 6,000
5) Goods returned to Head office by branch 7,000
6) Cash received from debtors 1,26,000
7) Expenses Paid at branch: -
a) Salaries 26,000
b) Commission 15,000
 c) Rent and Taxes 15,500

8) Discount to customers 2,000

9) Bad Debts 800
Prepare following ledger accounts in the books of Majestic Trading Company for the
financial year 2021-2022.
1) Brach Stock Account 2)Branch Debtors Account 3)Branch Expenses Account
4) Brach Cash and Bank Account 5) Brach P&L Account
2) Following information is given to you from the books of Shivam Law Agency for its branch
at Virat for the financial year 2021-2022. Prepare Virar Branch Account in the books of
Shivam Law Agency.
Particulars Rs.
Balance as on 01/04/2021: -
Branch Debtors 1,200
Stock 600
Cash 100
Balance as on 31/03/2022: -
Branch Debtors ?
Cash 600
Stock 1,000
Transactions during 2021-2022: -
1) Goods sent by H.O. 7,800
2) Cash sent by H.O. for petty cash 2,000
3) Goods lost at Branch 750
4) Credit Sales 3,600
5) Insurance claim received by branch 600
6) Cash received from debtors 2,400
7) Discount allowed 480
8) Bad Debts 520
9) Goods returned by debtors 100
10) Branch Exp. Paid by H.O.: -
a) Salary 320
b) Advertisement 780
11) Amount remitted by Branch to H.O. 8,460
3) Anil and Co. of Ajmer opens a branch at Bihar on 1st January, 2021. During the year ended
31st December, 2021, following transaction have taken place: -
 Particulars Rs. Rs.
Goods sent to Bihar 60,000
Cash sent to Bihar 5,000
Goods returned by Bihar 5,000
Cash received from Bihar 58,000
Rent for Branch paid by Had Office 3,000
Expenses paid by Branch: -
a) Salaries 3,000
b) Conveyance 600
c) Postage 300
d) Carriage 500 4,400
Discount allow dot customers Rs. 800. Sales on credit basis amount to Rs. 60,000 of which
goods worth Rs. 1,000 were returned to branch. Cash sales amounted to Rs. 6,000. One
customer paid at Ajmer Rs.1,200.
On 31st December, 2021 stock worth Rs. 3,000 was at Branch and Rs. 5,000 was due from
debtors. Cash on hand was Rs. 600.
Prepare Branch Account and Goods sent to Branch Account.
4) (Branch A/c for 6 months) From the following details prepare Mumbai Branch Account for
the six months ended 31st December; 2013 after depreciation branch furniture at 20% p.a.:
Particulars Particulars
Opening Balance at Branch : Branch expenses paid by the
– Branch stock 20,000 Head Office 34,000
– Branch Petty cash 6,000 Remittances received from the
– Branch Furniture 26,000 Branch 2,32,800
– Branch debtors 30,000 Closing Branch Assets :
Opening Branch Liabilities : – Branch stock 24,000
– Branch Outstanding Expenses 1,000 – Branch Petty cash 4,000
Goods sent to the Branch 1,80,000 – Branch debtors 34,000
Petty Cash sent to the Branch 16,000 Closing Branch Liabilities :
– Branch Outstanding Salaries 1,400

5) ‘X’ Ltd has branch at Nasik to which goods are invoiced at cost plus 25%. Following
information is supplied to you for 2013.
Particulars Particulars
 Stock on 1–1–2013 (invoice Price) 30,000 Cash received from Debtors 68,400
Debtors on 1–1–2013 20,000 Discount allowed to Debtors 1,600

Petty Cash on 1–1–2013 160 Cash remitted to Branch for Expenses 16,000

Goods sent to Branch (Cost) 80,000 Petty Cash at Branch on 31–12–2013 180
Sales – Cash Sales 52,000 Stock on 31–12–2013 (Invoice Price) 24,000
– Credit Sales 72,000 Liabilities for Expenses on 31–12–13 500
6) EXPLAIN IN BRIEF DIFFERENT TYPES OF BRANCHES
7) DEPENDENT BRANCH
8) BRANCH ACCOUNT UNDER DEBTORS METHOD
CONSIGNMENT ACCOUNTING
1) Calculate the value of stock with the consignee from the following particulars:
a) Goods sent on consignment 1,000 Units @ Rs. 200 per unit
b) Expenses of Consigner: -
1) Forwarding charges = Rs. 45,000, 2) Insurance = Rs. 5000
c) Goods in Transit: - 20 Units
d) Consignee took the delivery and incurred expenses to bring the goods to godown @ Rs.
10 per Unit
e) Goods sold by the consignee 730 units @ Rs. 300 per unit
2) M/s ABC of Mumbai consigned 100 tape recorders to National Co. of Hyderabad.
a) The cost of each unit was Rs. 500
b) The consignor paid insurance RS. 500, Freight Rs. 800
c) Account sale was received from company showing sale of 80 units at Rs. 600 each
d) The expenses paid by National Co. were as under: -
Carriage: - Rs. 20, Establishment: - Rs. 130, Commission: - Rs. 2,400
Find out the value of Closing Stock.
3) Hero Motors consigned on 1/7/2021, 100 bicycles to Vastu Motors of Kolhapur to be sold on
behalf of Hero Motors. The cost of each bicycle was Rs. 1,500. Hero Motors incurred Rs.
1,000 on freights and insurance.
Vastu Motors received the consignment on 14/07/2021 and accepted a three months bill
drawn upon by Hero Motors for Rs. 50,000. Vastu Motors paid Rs. 4,000 as rent and Rs.
2,500 as insurance and by 31/12/2021 had sold 80 bicycles at 2,500 each. Vastu Motors is
entitled to total commission of 5% on sales including a del-credere commission of 1%. Vastu
Motors sold 20 bicycles on credit and was not able to recover sales proceeds of 5 bicycles
because of insolvency of the debtor.
Prepare Consignment Account and Consignee's Account in the books of Hero Motors.
4) M/S Indian Traders consigned to Satara Cycles on 31st January, 2021, 200 Cycles costing
 Rs. 1,000 per cycle. Freight charges incurred on the consignment were Rs. 15,000. Indian
Trader's drew a bill on Satara Cycles for Rs. 50,000 payables on 31st March, 2021. The bill
was discounted by Indian Traders with its bankers on 31st January, 2021 at 12% p.a. Satara
Cycles rendered account to Indian Traders on 31st March, 2021. Sales of 180 Cycles for Rs.
2,70,000 and expenses of Rs. 5,000 of Consignee.
Satara Cycle's commission was 10%. On this date Satara Cycles remitted to Indian traders the
amount due to them.
You are required to prepare necessary ledger accounts in the books of Consignor.
5) Give Journal entries in the books of Sen & Co. of Calcutta. Sen & Co. of Calcutta consign
goods costing Rs. 25,000 to their agent, Mustak of Mysore, on which they pay freight,
insurance & charges Rs. 1,500, drawing on him a bill of exchange at 90 days for Rs. 20,000.
They discount the bill at Mercantile Bank being charged Rs. 200 therefore. After two months
they received from their agent an Account Sales informing that the entire consignment has
been sold for Rs. 35,000, that expenses amounting to Rs. 700 have been incurred and
showing as a deduction the agreed commission of 2 per cent on the amount realized. A draft
on the Syndicate Bank was enclosed for the balance due. Show important ledger accounts in
the books of Sen & Co. of Calcutta
6) From the above particulars pass necessary journal entries in the books of Ramdas & also
show Ledger Accounts in the books of the Consignor.
Ramdas & Company of Mumbai consigned 50 bundles of cutpiece cloth @ Rs. 700 each to
Mukherjee & Co. of Kolkata to be sold on commission basis. An advance of Rs. 16,000 was
received from Mukherjee & Co. Mukherjee & Co. sent an account sale which states that total
goods were sold for Rs. 56,000 & Rs. 1,800 were paid for carriage, godown rent and port
expenses. Their commission was Rs. 2,000. They sent a bank draft for the balance amount to
Ramdas & Co.
7) ENUMERATE THE FEATURES OF CONSIGNMENT
8) CONSIGNMENT ACCOUNT
9) DEL-CREDERE COMMISSION

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