1. The vouchers which are prepared for transactions not involving cash, i.e.

non-cash transactions, are known as ________ vouchers.

a) Token
b) Credit
c) Transfer
d) Unilateral
2. Assertion (A): Statements prepared through management account are
helpful in decision making process.
Reason (R): The information provided by management accounts is
financial and non-financial as well.
a) Both A and R are true and R is the correct explanation of A.
b) Both A and R are true but R is not the correct explanation of A.
c) A is true but R is false.
d) A is false but R is true.
3. Goodwill account is a:
a) Nominal Account
b) Real Account
c) None of these
d) Personal Account
4. What shall be the amount of Capital if Cash is ₹ 5,000; Furniture ₹ 12,000;
Stock ₹ 30,000 and Creditors ₹ 6,000?
a) ₹ 41,000
b) 43,000
c) ₹ 53,000
d) ₹ 47,000

OR

Purchase of machine by cash means:

a) increase in asset and decrease in the asset

b) none of these
c) the decrease in asset and increase in capital
d) increase in asset and decrease in liability
5. Source of documents are
a) Cash Memo
 b) Both Cash Memo and Invoice
c) Neither Cash Memo Nor Invoice
d) Invoice
6. Income statement include
a) Profit and loss account only
b) Trial Balance only
c) Balance sheet only
d) Statement of profit and loss

OR

Which of the following is not a limitation of accounting?

a) Evidence in Legal Matters

b) Based on accounting conventions
c) Incomplete Information
d) Omission of Qualitative Informations
7. Which of the following correctly differentiates between provision and
reserves?
1. A provision is a charge against profit whereas reserve is an
appropriation of profit.
2. Provision is made for a known liability or expense the amount of
which is not certain whereas reserve is created for strengthening
the financial position of the business.
3. Provision is deducted before calculating taxable profits whereas
a reserve is created from profit after tax and therefore it has no
effect on taxable profit.
4. All of these
a) Option (ii)
b) Option (i)
c) Option (iii)
d) Option (iv)

8 Rule of Debit and Credit for Impersonal account is

a) Dr. the receiver and Cr the giver
b) Dr. what goes out and Cr what comes in
c) Dr. all expenses and Cr all gains & Dr. what goes out and
Cr what comes in
 d) Dr. all expenses and Cr all gains

OR

When a total of the debit side of an account exceeds the

total of its credit side, the account is said to have
________.

a) Debit Balance
b) None of these
c) Debit as well as credit balance
d) Credit Balance
Question No. 9 to 10 are based on the given text. Read the text
carefully and answer the questions:A business purchased goods
for ₹ 2,00,000 and sold 75% of such goods during accounting year
ended 31st March 2020. The market value of remaining goods was ₹
43,000. Accountant valued closing stod at cost. According to him,
i. Owner of the business is treated as creditor to the extent of
his capital;
ii. All expenses incurred to earn revenue or a particular period
should be charged against that revenue to determine the net
income:
Financial statements are prepared on 31st March every year.
1-A business purchased goods for ₹ 200,000 and sold 75% of such
goods during the accounting year ended 31st March, 2020. The
market value of the remaining goody was ₹ 43,000 Accountant
valued closing stock it cost: Identify the concept violated in the
above situation.
a) Matching
b) Conservatism
c) Business entity
d) Accounting period
2. Under which concept owner of the business is treated as creditor to
the extent of his capital.
a) Conservatism
b) Business entity
c) Matching
d) Accounting period
3 Match the following. Options are
a. General reserve i. reserve are created for specific purpose
 b. Specific reserve ii. reserve may or may not involve any receipts of cash

c. Capital reserve iii. created in business for rainy day

a) a – (ii), b – (iii), c – (ii)

b) a – (iii), b – (i), c – (ii)
c) a – (iii), b – (ii), c – (i)
d) a – (ii), b – (i), c – (iii)
4- Which of the following is not a fixed asset?
a) Computers
b) Furniture
c) Building
d) Cash in hand
5 Return of goods purchased on credit to the suppliers will be entered in
____ Book.
a) Purchase
b) Sales
c) Sales Return
d) Purchase Return
6. When goods are returned to supplier assets and ________ are ________ by same
amount.
A) liabilities, increased
b) assets, decreased
c) liabilities, decreased
d) assets, increased
7. Which of the following is not a fixed asset?
Balance with bank
Plant and Machinery
Building
Goodwill
a) B only
b) C only
 c) A only
d) D only
OR

Out of the following assets, which one is not an intangible asset?

A) Patents
b) Trade Mark
c) Machinery
d) Goodwill
8. Goods sold for Cash Rs 25,000 plus 12% IGST. Sales A/c will be credited by:
a) Rs 28,000
b) Rs 22,000
c) Rs 25,000
d) None of these
9. How secret reserve can be created
a) All of these
b) By charging capital expenditure to revenue
c) Under valuating stock
d) By making excessive provisions
10 When an account is said to have a debit balance and credit balance?
OR

Pass Journal entry for purchase of goods by Amrit, Delhi from

Add Gel Pens, Delhi for ₹ 15,000 less Trade Discount 10% and
Cash Discount 3%. CGST and SGST is levied @ 6% each. Assume
payment is made at the time of purchase.

11-Why is the consistency principle important?

OR

What is meant by Accounting Standard? State any two benefits

of it.
 12- Distinguish between debtors and creditors.
13- Following balances were extracted from the books of Ravinder
Associates as at 31st March, 2017:
1. (₹) (₹)

Sundry Debtors 4,10,000 Stock (April 1, 2016) 2,30,000

Sundry
80,000 Premises 12,00,000
Creditors

Rent and Taxes 48,000 Fixtures & Fittings 3,10,000

Purchases 34,00,000 Bad Debts written off 8,000

Rent received from sub-let of part

Sales 56,00,000 30,000
of premises

Trade Expenses 12,000 Loan from Mukul 1,50,000

Returns
80,000 Interest on Mukul’s Loan 15,000
Outwards

Returns
1,20,000 Drawings 40,000
Inwards

Expenses 4,000 Cash in hand 75,000

Motor Vehicles 6,50,000 Stock on 31st March, 2017

Electricity 25,000 (not adjusted) 3,80,000

You are required to prepare the trial balance treating the difference as
his capital.

14-Record the following transactions in a cash book with cash and bank columns:
2017 ₹

Jan. 1 Bank overdraft 12,000

 Cash in hand 2,300

Cheque received from Ram ₹ 4,000 and discount allowed ₹

Jan. 7
200

Jan. 8 Deposited the above cheque into Bank 4,000

Jan. 12 Banked 200

Jan. 15 Received a money order from Gopal 500

Jan. 16 Money is withdrawn from Bank for office use 300

Jan. 18 Bank Charges 20

Jan. 20 Interest on bank overdraft 1,000

15-From the following particulars ascertain the balance that would

appear in the Bank Pass Book of A at 31st December 2013:
b. The bank overdraft as per Cash Book on 31st December 2013
₹ 63,400.
c. Interest on overdraft for 6 months ending 31st December
2013, ₹ 1,600 is entered in the Pass Book.
d. Bank charges of ₹ 300 for the above period are debited in the
Pass Book.
e. Cheques issued but not cashed prior to 31st December 2013
amounted to ₹ 11,680.
f. Cheques paid into bank but not cleared before 31st
December 2013 were for ₹ 21,700.
g. Interest on investments collected by the bank is credited in
the Pass Book ₹ 12,000.
OR

On 31st March 2018, the Bank Pass Book of Naresh & Co. showed an
overdraft of Rs.10,700. From the following particulars prepare Bank
Reconciliation Statement

i. Cheques issued before 31-03-2018 but presented for payment after that
date amounted to Rs.900.
 ii. Cheques paid into the Bank but not collected and credited until 31-03-
2018 amounted to Rs.2,200.
iii. Interest on overdraft amounting to Rs.1,200 did not appear in the Cash
Book.
iv. Rs.5,000 being interest on investments collected by the Bank and credited
in the Pass Book were not shown in the Cash Book.
v. Bank charges of Rs.50 were not entered in the Cash Book.
vi. Rs.800 in respect of dishonoured cheque were entered in the Pass Book
but not in the Cash Book.

16-On the basis of the narrations, fill in the missing values:

Journal Entries
Amount Amount
Date Particulars L.F.
(Rs) Cr. (Rs)

________ Dr. ________

________ ________

(i) To ________ ________

(Being the bank draft of Rs

10,000 issued to Suman, bank
charges Rs 100)

________ Dr. 10,000

To ________ 10,000
(ii)

(Being the cheque of Ranjan

dishonoured)

(iii) ________ Dr. ________

To ________ ________

To ________ ________

(Being the purchase of goods of

 Rs 30,000; received cash
discount @ 2%)

________ Dr. ________

________ ________

(iv) To ________ ________

(Being the sale of goods of Rs

30,000 allowed cash discount @
3% )

________ Dr. ________

To ________ ________
(v)

(Being the goods costing Rs

15,000 lost in the fire)

________ Dr. ________

________ ________

(vi) To ________ 10,000

(Being the rent paid, 1414th of

the premises used for
residence)

(vii) ________ Dr. ________

To ________ ________

To ________ ________
 To ________ ________

(Being the machinery (cost Rs

2,00,000) recorded, adjusting
advance (Rs 20,000), old
machine (Rs 10,000 cost) and
balance by payment by cheque)

________ Dr. 20,000

To ________ 20,000
(viii)

(Being a computer out of stock

used for office purposes)

________ Dr. ________

To ________ ________
(ix)
(Being the computer (stock)
costing Rs 15,000 taken for
domestic use)

________ Dr. ________

________ ________

To ________ ________
(x)
To ________ ________

(Being the salaries (Rs

40,000) and rent (Rs
15,000) outstanding)

OR

Journalise the following transactions:

 2017 Amount (₹)

Dec.01 Hema started business with cash 1,00,000

Dec.02 Open a bank account with SBI 30,000

Dec.04 Purchased goods from Ashu 20,000

Dec.06 Sold goods to Rahul for cash 15,000

Dec.10 Bought goods from Tara for cash 40,000

Dec.13 Sold goods to Suman 20,000

Dec.16 Received cheque from Suman 19,500

Discount allowed 500

Dec.20 Cheque given to Ashu on account 10,000

Dec.22 Rent paid by cheque 2,000

Dec.23 Deposited into bank 16,000

Dec.25 Machine purchased from Parigya 10,000

Dec.26 Trade expenses 2,000

Dec.28 Cheque issued to Parigya 10,000

Dec.29 Paid telephone expenses by cheque 1,200

Dec.31 Paid salary 4,500

17-Trial Balance of Rahul did not agree. Rahul put the difference to Suspense
Account. Subsequently, he located the following errors:
 i. Wages paid for the installation of Machinery Rs 600 was posted to Wages
A/c.
ii. Repairs to Machinery Rs 400 debited to Machinery A/c.
iii. Repairs paid for the overhauling of second-hand machinery purchased Rs
1,000 was debited to Repairs A/c.
iv. Own business material 8,000 and wages Rs 2,000 were used for the
construction of the building. No adjustment was made in the books.
v. Furniture purchased for Rs 5,000 was posted to Purchases A/c as Rs 500.
vi. Old machinery sold to Karim at its Book value of Rs 2,000 was recorded
through sales book.
vii. Total of Sales Returns Book Rs 3,000 was not posted to the ledger.
Rectify the above errors and prepare Suspense Account to ascertain the
original difference in Trial Balance.
OR

There was a difference of Rs. 8,595 in a trial balance. It has been transferred
to debit side of suspense account. Later on following errors were discovered.
Pass the rectifying entries and prepare the suspense account.

i. Rs 283 discount received from a creditor had been duly entered in his
account but not posted to discount account.
ii. Goods bought from a merchant for Rs 770 had been posted to the credit
of his account as Rs. 7,700.
iii. Rs 6,000 owing by a customer had been omitted from the schedule of
sundry debtors.
iv. An item of Rs 2,026 entered in the sales return book had been posted to
the debit of the customer who returned the goods
18. -On 1st April, 2016 a firm purchased machinery for ₹ 3,00,000. On 1st October,
2016, additional machinery costing ₹ 1,50,000 was purchased On 1st October,
2017, the machinery purchased on 1st April, 2016 having become obsolete, was
sold for ₹ 1,35,000. On 1st October, 2018, new machinery was purchased for
₹ 3,75,000 while the machinery purchased on 1st October, 2016 was sold for
₹ 1,27,500 on the same day. The firm provides depreciation on its machinery @ 10%
per annum on original cost on 31st March every year.
Show Machinery Account, Provision for Depreciation Account and Depreciation
Account for the period of three accounting years ending 31st March, 2019.
OR

You are given following balances as on 1st April 2014:

Plant & Machinery A/c Rs 25,00,000
Provision for Depreciation A/c Rs 5,80,000
Depreciation is charged on the plant at 20% p.a. by the
diminishing balance method. A piece of machinery purchased on
1st April 2012 for Rs 5,00,000 was sold on 1st October 2014 for
Rs 3,00,000.
Prepare the Plant & Machinery Account and Provision for
Depreciation Account for the Year ended 31st March 2015.
Also, prepare Machinery Disposal Account.
19- The time between the acquisition of an asset for processing and its
conversion into cash and cash equivalent is called
a) Production cycle
b) Operating cycle
c) None of these
d) Time gap

OR

_____ is the arrangement of various assets and liabilities in a

particular order

a) Marshalling
b) Grouping
c) All of these
d) Balancing
20- Loss on sale of an old car is debited to:
a) Profit and Loss A/c
b) Depreciation A/c
c) None of these
d) Car A/c
21- Closing Stock, if given outside the Trial Balance is shown in:
a) Profit and Loss Account
b) Trading Account and Balance Sheet
c) Profit and Loss Account and Balance Sheet
d) Balance Sheet

OR

Calculate provision for doubtful debt. If debtor closing balance is

Rs.3,400 and provision for the reserve of doubtful debts at 10%
on sundry debtors

a) Rs.2,060
b) Rs.3,400
c) Rs.340
 d) Rs.3,060
22-Distinguish between Capital Receipts and Revenue Receipts.
23-From the following information, prepare the Trading Account for the
year ended 31st March, 2017:
Adjusted Purchases ₹ 15,00,000; Sales ₹ 21,40,000; Returns Inwards ₹
40,000; Freight and Packing ₹ 15,000; Packing Expenses on Sales ₹
20,000; Depreciation ₹ 36,000; Factory Expenses ₹ 60,000; Closing
Stock ₹ 1,20,000.
24-Why is it necessary to create a provision for doubtful debts at the time
of preparation of final accounts?
25-Following is the Trial Balance of Shamit on 31st March, 2019. Pass
closing entries and prepare Trading and Profit and Loss Account for the
year ended 31st March, 2019.
TRIAL BALANCE as on 31st March, 2019
Particulars Dr.(₹) Cr.(₹)

Capital A/c – 1,00,000

Stock A/c (1st April, 2018) 20,000 –

Cash at Bank 10,000 –

Cash In Hand 4,400 –

Machinery A/c 60,000 –

Furniture and Fittings A/c 13,600 –

Purchases A/c 1,50,000 –

Wages A/c 1,00,000 –

Power and Fuel A/c 30,000 –

Factory Lighting A/c 2,000 –

Salaries A/c 70,000 –

Discount Allowed A/c 5,000 –

 Discount Received A/c – 3,000

Advertising A/c 50,000 –

Sundry Office Expenses A/c 40,000 –

Sales A/c – 5,00,000

Sundry Debtors 85,000 –

Sundry Creditors – 37,000

Total 6,40,000 6,40,000

Value of Closing Stock as on 31st March, 2019 was ₹ 27,000

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

Debit Credit
Name of Account Amount Name of Account Amount
(Rs.) (Rs.)

Debit Balances Rent, Rates, and Taxes 800

Sundry Debtors 1,500 Salaries 2,000

Stock on 1 st April 2012 5,000 Drawings 2,000

Land and building 10,000 Purchases 10,000

Cash in hand 1,600 Office expenses 2,500

Cash at bank 400 Plant and machinery 5,700

 Debit Credit
Name of Account Amount Name of Account Amount
(Rs.) (Rs.)

Wages 3,000 Credit Balances

Bills Receivable 2,000 Capital 25,000

Interest 200 Interest 600

Bad debts 500 Sundry creditors 7,000

Repairs 300 Sales 17,000

Furniture and fixtures 1,500 Bills payable 400

Depreciation 1,000
 On 31st March 2013, the stock was valued at Rs. 10,000.

26-From the following Trial Balance of Mr. Alok, prepare Trading and Profit
& Loss Account for the year ending 31st March, 2019, and a Balance
Sheet as at that date:-
The following adjustments are to be made :

i-Stock in the shop on 31st March, 2019 was ₹ 64,480.

ii-Half the amount of X’s Bill is irrecoverable.

iii--Create a provision of 5% on other debtors.

iv-Wages include ₹ 600 for erection of new Machinery.

V-Depreciate Machinery by 5% and Furniture by 10%.

Vi-Commission includes ₹300 being Commission received in advance.

OR

From the following trial balance extracted from the books of MMN, prepare
the trading and profit and loss account for the year ended 31 st December,
2013 and the balance sheet as at that date.
Additional Adjustments

Charge depreciation on land and building at 212

%, on plant and machinery account at 10% and on furniture and fixtures at 10%. Make a provision of 5%
on debtors for doubtful debts. Carry forward the following unexpired amounts.

Fire insurance Rs 125

Rates and taxes Rs 240

Apprentice premium Rs 400

Closing stock Rs 29,390