No.

of Printed Pages : 7 ECO-2

BACHELOR'S DEGREE PROGRAMME

Term-End Examination
GO December, 2011
ELECTIVE COURSE : COMMERCE
ECO-2 : ACCOUNTANCY-I

- Time : 2 hours Maximum Marks : 50

Note : Attempt any four questions, including question no. 1
which is compulsory.

1. Answer any two questions from the following : 7+7

(a) What is significance of debit and credit

balance in different types of accounts ?
Explain with examples.

(b) What is Trial Balance ? State the type of

errors that do not affect the trial balance.

(c) Why is journal sub-divided ? Name the

special Journals generally maintained by
business and state the type of transactions
entered in each of them.

(d) Explain briefly the utility of Debit note and

credit note and give the format of any one
of these.

ECO 2
- 1 P.T.O.
2. {a) State the transactions recorded in Bill 6+6
Receivable and Bill payable journals.
(b) Distinguish between cash Basis and accrual
basis of accounting. Why do you consider
accrual basis more rational ?

3. (a) State the salient features of Joint venture. 6+6

Distinguish it from consignment.
(b) What is a single Entry System ? Distinguish
it from Double Entry System.

4. The following information is extracted from the 12

books of businessman.
Rs.
Debtors as on 31.12.09 25000
Bad debts during 2009 1,000
Provision for Bad debts is to be
maintained at 5% of debtors
A provision for discount on debtors is
also to be made at 2% you are required
to calculate the amount to be set aside
in respect of provision for bad debts and provision
for discount on debtors respectively, and give the
journal entries there of.

5. How would you rectify the following errors in 12

books of K and CO ?
(a) The sales returns book has been undercast
by Rs. 500.

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 (b) The total of the Bill Receivable Book
amounting Rs. 4500 has been posted to the
credit of Bill Receivable Account.
(c) While posting purchases book to be ledger
the personal Account of Kumar has been
credited with Rs. 221 instead of Rs. 212.
(d) Rs. 10,000 paid for the purchases of a T.V.
set for the proprietors is debited to General
exp. A/c
(e) An amount of Rs. 1000 paid by Pran has
been credited to the account of Praneet.
(f) Goods sold to Inder for Rs. 1,200 has been
entered in the Purchases Book.

6. On July 1, 2006 a company purchased a plant for 12

Rs. 2,00,000. Depreciation was provided at 10%
per annum on straight line method on December
31, every year. With effect from Jan. 2008, the
company decided to change the method of
depreciation to diminishing balance method @
15% per annum. On 1 St July 2009, the plant was
sold for Rs. 1,20,000. Prepare Plant Account from
2006 to 2009.

ECO - 2 3 P.T.O.
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ECO-2 6
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ECO-2 7