Roll No………

Time allowed : 3 hours Maximum marks : 100

Total number of questions : 8 Total number of printed pages : 7
Note: Answer SIX questions including Question No. 1 which is compulsory. All working
notes should be shown distinctly.
1. (a) Explain any two of the following:
(i) Classification of assets (0)

(ii) Principal book of accounts (0)

(iii) Dual aspect concept (0)

(iv) Del credere commission. (0)

(5 marks each)
(b) State, with reasons in brief, whether the following statements are true or false:
(i) The debit balance in the profit and loss account denotes a surplus. (0)

(ii) The purchases day book is a part of the ledger. (0)

(iii) Sale of old office furniture should be credited to sales account. (0)

(iv) Loss of goods sent on consignment is said to be an abnormal loss, if such a (0)

loss is due to the inherent characteristics of the goods consigned.

(v) The relationship between the consignor and the consignee is that of (0)

principal and agent.

(2 marks each)
2. (a) Re–write the following sentences after filling–in the blank spaces with
appropriate word(s)/figure(s)
(i) In the balance sheet, provision for bad debts is shown as a _________ (0)

from trade debtors.

(ii) ________ functions both as a part of ledger and a book of original entry. (0)

(iii) Contra entries are passed in _________ cash book. (0)

(iv) While preparing final accounts, all the ________ accounts are transferred (0)

to the trading and profit and loss account.

(v) Dissolution of a firm necessarily implies ________ of the partnership also. (0)

(vi) ________ account is prepared to ascertain the cost of goods (0)

manufactured.
(vii) When the debts earlier written off as bad are recovered at a later date, the (0)

amount so recovered is credited to _________ account.

(viii) Compensating errors______________the agreement of trial balance. (0)

(1 mark each)
(b) Distinguish between any two of the following :
(i) ‘Real account’ and ‘nominal account’. (0)

(ii) ‘Revenue expenditure’ and ‘deferred revenue expenditure’. (0)

 (iii) ‘Joint venture’ and ‘consignment’. (0)

(4 marks each)
3. (a) Write the most appropriate answer from the given options in respect of the
following:
(i) A motorbike is purchased for the owner’s son and firm’s vehicles account is (0)

debited with the amount paid by the firm. It is –

(a) An error of principle
(b) An error of omission
(c) An error of Commission
(d) A Compensating error.
(ii) The maximum number of partners, a non–banking partnership firm can (0)

have is –
(a) Ten
(b) Twenty
(c) Fifty
(d) Seven.
(iii) If partnership deed is silent on the point, interest allowed on partner’s (0)

capital accounts will be –

(a) @ 6% per annum
(b) @ 5% per annum
(c) @ 8% per annum
(d) Nil.
(iv) To provide funds to pay to the deceased partner’s heires in case of death of (0)

a partner. the partners generally –

(a) Create a sinking fund
(b) Take a joint life policy
(c) Create a reserve fund
(d) Open a separate bank account.
(v) Goodwill brought in by an incoming partner in cash to join a partnership (0)

firm is shared by the old partners in their –

(a) Ratio of capitals
(b) New profit sharing ratio
(c) Ratio of sacrifice
(d) Old profit sharing ratio.
(vi) On 21st February, 2011, Akash draws a bill of exchange on Bhupesh for (0)

Rs.10.000 payable 30 days after date. Bhupesh immediately accepts the

bill. The due date or the bill will be –
(a) 24th March, 2011
(b) 22 ndMarch, 2011
(c) 26th March, 2011
 (d) 21st March, 2011.
(vii) If unsold goods costing Rs.20,000 are taken over by a co–venturer for (0)

Rs.15,000, the joint venture account will be credited with –

(a) Rs.20,000
(b) Rs.15,000
(c) Rs.5,000
(d) Rs.35,000.
(viii) Dinesh of Delhi consigns goods of the invoice price of Rs.1,00,000 to (0)

Bharat of Ballabhgarh at cost plus 25%. The amount of loading is –

(a) Rs.25,000
(b) Rs. 20,000
(c) Rs. 15,000
(d) Rs. 32,500.
(1 mark each)
(b) Explain any two of the following statements:
(i) Non–monetary events are not recorded in the books of account. (0)

(ii) Trial balance is a link between ledger and final accounts. (0)

(iii) Joint venture is in the nature of a partnership but without a firm name. (0)

(4 marks each)
4. (a) The following errors were located in the books of Suresh after his books of (0)

account had been closed for the accounting year ended 31st March, 2011 and
the difference in trial balance had been transferred to a newly opened suspense
account:
(i) Sales book for the month of January, 2011 was overcast by Rs.100.
A sum of Rs.4,000 received from Chandan was debited to his account as
(ii)
Rs.400.
(iii) Credit purchase of goods from Sonu for Rs.12,000 was debited to Monu.
Purchase of office furniture for Rs.6,000 was entered in the purchases
(iv)
book.
Credit purchase of goods for Rs.15,000 from Mahesh was recorded as
(v)
credit sale of goods to Mahesh.
Pass necessary journal entries to rectify the abovementioned errors. Also
prepare suspense account and profit and loss adjustment account to nullify the
effect of errors on the profit for the year ended 31st March, 2011.
(10 marks)
(b) On the basis of following details, prepare the bank reconciliation statement and (0)

ascertain the balance as per pass book on 28th February, 2011:

(i) Bank balance as per cash book on 28th February, 2011 : Rs.1,700.
(ii) Cheques deposited with bank but not yet cleared : Rs.12,000.
(iii) Cheques in hand of the cashier not yet deposited with bank : Rs.3,000.
Amount charged by bank for certain services but not yet recorded in cash
(iv)
book : Rs.100.
 Dividend collected by bank and appearing in pass book, but not yet
(v)
recorded in cash book : Rs.1,500.
(vi) Cheques issued on 28th February, 2011 to suppliers, but presented to bank
for payment on 3rd March. 2011 : Rs.14,000.
(6 marks)
5. (a) On 1st April, 2007, Arrow Ltd. purchased machinery costing Rs. 1,00,000 and (0)

decided to provide depreciation on it @ 10 % per annum by using straight line

method. The company closes its books every year on 31st March.
On 31st March, 2011, before providing depreciation, the company decided to
change the method of depreciation from straight line method to written down
value method retrospectively w.e.f. 1st April, 2007, the rate of depreciation
remaining the same.
Prepare machinery account for the year ended 31st March, 2011.
(8 marks)
(b) On 1stseptember, 2010, Pankaj draws on Rakshit a bill of exchange for (0)

Rs.10,000 at 3 months which is immediately accepted by the drawee as he has

purchased goods for the amount. On 4th September, 2010, Pankaj gets the bill
discounted with his bankers at 8% per annum. On the date of maturity, Rakshit,
not being able to meet the bill, offers Rs.4.000 to Pankaj and requests him to
draw another bill at three months for the balance amount plus Rs.120 for
interest. Pankaj agrees to the arrangement. But before the due date of the
second bill. Rakshit becomes insolvent. Rakshit’s estate pays fifty paise in a
rupee.
Pass journal entries for all the Tansactions in the books of Pankaj.
(8 marks)
6. Following is the receipts and payments account of Dhanvantri Medical Help Society (0)

for the year ended 31st March, 2011:

Receipts Rs. Payments Rs.
To Cash at bank and 37,000 By Payment to suppliers 3,00,000
in hand By of medicines 1,00,000
To on 1st April, 2010 7,20,000 By Honoraium to 2,75,000
To Subscriptions 50,000 By doctors 5,000
To Donations 45,000 By Salaries 1,50,000
Interest on By Sundry expenses 10,000
To investments 33,000 By Equipments
@ 9 % per annum purchased 45,000
Charity show Charity show
proceeds expenses
Cash at bank and in
hand
On 31st March, 2011
8,85,000 8,85,000
Donations are mostly made by patients and are treated as income.
The following additional information is provided to you:
Particulars On 31st March, On 31st March,
2010 2011
Rs. Rs.
 Subscriptions in arrear 3,500 2,500
Subscriptions received in 1,000 500
advance 1,00,000 90,000
Stock of medicines 80,000 60,000
Amount due to suppliers of 2,10,000 3,00,000
medicines 4,00,000 3,80,000
Estimated value of
equipments
Estimated value of building
You are required to prepare income and expenditure account for the year ended
31st March, 2011 and balance sheet as on that date.
(16 marks)
7. (a) On 4 th September, 2009, Wintex Ltd. took a loss, of profit policy for Rs.5.00,000 (0)

with an indemnity period of six months. A fire broke out on 1st January, 2010
because of which there was dislocation upto 31st May, 2010. Ascertain the
amount of claim for loss of profit taking into account the following additional
information:
Rs.
Sales for accounting year. ended 31 st March. 2009
Net profit for accounting year ended 31st March, 2009 24,00.000
Standing charges (all covered) for. the year ended 2,60,000
3,40,000
31st March, 2009
26,00,000
Saks from lst January. 2009 to 31st December, 2009 3,10,000
Sales from 1st January, 2010 to 31st May, 2010 11,00,000
Sales from 1st January, 2009 to 31st May, 2009 –
There was a 10% upward trend in business. The policy had an average clause .
(8 marks)
(b) Mohit keeps his books of account by single entry system. On 31st March, 2010, (0)

his statement of affairs was as follows:

Liabilities Rs. Assets Rs.
Bills payable 6,460 Cash in hand 2,470
Sundry Creditors 20,290 Bills receivable 4,070
Mohit's capital 1,46,800 Sundry debtors 48,680
Stock 32,850
Furniture 5,300
Plant 80,180
1,73,550 1,73,550
Mohit provided you the following information also regarding his assets and
liabilities as on 31st March, 2011:
Rs.
 Cash in hand 5,530
Bills receivable 6,840
Sundry debtors 57,000
Stock 36,730
Furniture 5,300
Plant 80,180
Bills payable 5,950
Sundry creditors 21,470
Mohit considered it desirable to depreciate plant@ 10% and furniture @ 5%: and
to create a provision for bad debts on sundry debtors @ 5%
During the year. Mohit withdrew Rs.3,000 every month to meet his household
expenses. On 1st October, 2010, he introduced Rs. 10,000 as fresh capital.
Ascertain the profit earned by Mohit during the year ended 31st March, 2011 and
prepare his statement of affairs as on 31st March 2011.
(8 marks)
8. Atul, Biju, Chandan and Deepak were partners in a partnership firm sharing profits (0)

and losses in the ratio of 4:3:2:1 respectively. The firm was dissolved on 31st March,
2011. The firm’s balance sheet on that date was as follows:
Balance Sheet as on 31st March, 2011
Liabilities Rs. Assets Rs.
Bills payable 40,000 Cash at bank 16,000
Creditors 2,40,000 Bills receivable 80,000
capital accounts: Debtors 2,80,000
Atul 1,60,000 Stock 1,84,000
Chandan 2,40,000 capital accounts:
Biju 80,000
Deepak 40,000
6,80,000 6,80,000
Bills receivable and debtors realised 90% of their book values, Stock was sold for
Rs.1,56,000. Outstanding salary of Rs.4,000 which was not shown in the above
balance sheet was also paid. The relisation expenses amounted to Rs. 12,000 and
were paid by Deepak, Biju was insolvent an only Rs.64,000 could be recovered from
his estate. Garner vs. Murray rule was applied. Prepare realisation account and
partners' capital accounts.
(16 marks)