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QUESTION PAPER

COMMERCE PAPER – II

MARCH 2006

Time: 3 Hours] [Max. Marks: 100

PART – A
(Marks : 50)

I. Answer any two of the following questions not exceeding 40 lines.

(a) What are the major functions of marketing? Explain

(b) What are the powers of District Forum?
(c) Describe the functions of Stock Exchange.

II. Answer any four of the following questions not exceeding 20 lines.

(a) Explain the differences between life insurance and marine insurance
(b) What are the objectives in levying customs and excise duty? Explain
(c) What are the advantages and disadvantages of outdoor media?
(d) Give an outline of the advantages of computers.
(e) Write the differences between speculator and investor.
(f) Write five functions of managers.

III. Answer any five of the following questions not exceeding 5 lines each.

(a) Average policy

(b) E – Commerce
(c) What are the two advantages and two disadvantages of T.V. advertising?
(d) State any three consumer rights.
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(e) Certificate of origin

(f) Bull
(g) Attitude
(h) C.P.U. (Central Processing Unit)

PART – B
(Marks : 50)

IV. Answer the following

X, Y, Z have been partners in a firm. On 31-3-2006 X proposed to retire, the

following was a statement of the position of the firm.

Liabilities Amount Assets Amount

Rs. Rs
Creditors 32,000 Bank Balance 20,000
Reserve Fund 40,000 Plant & Machinery 80,000
Capital Account Furniture 32,000
X 60,000 Debtors 1,00,000
Y 60,000 Less: 8,000
Z 60,000 1,80,000 Bad debts reserve 92,000
Goodwill 24,000
Patents 4,000
2,52,000 2,52,000

For the purpose of ‘X’ s retirement, the following adjustments were agreed upon

(a) The reserve for bad debts was considered unnecessary.

(b) Patents were worthless.
(c) An outstanding liability for Rs.1, 600 for expenses was to be brought in to the
books.

(d) Goodwill is to be taken at the value shown in the balance sheet.

(e) ‘X’ agreed to have the amount due to him as a loan to the firm carrying
interest at 5%p.a.

Show the necessary accounts and draft the balance sheet of the new firm.

V. Answer any one of the following:

(a) Krishna of Hyderabad and Rama of Guntur are in consignment business.

Rama sent goods to Krishna Rs.40, 000. Rama paid freight 2,000, Insurance
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6,000. Krishna met sales expenses of Rs.3, 600, Krishna sold entire stock for
Rs.80, 000 and is entitled to a commission of 5% on sales. Give accounts in
the books of Rama.

(b) From the following receipts and payments account for the year ending 31-3-
2006. Prepare an income and expenditure account for the period ending 31-
3-06.

Receipts Amount Payments Amount

Rs. Rs.
To Donations 7,000 By Salaries 7,500
To Subscriptions 23,000 By help to poor students 7,400
To Life Membership fee 10,000 By Expenses on free
dispensary 6,900
To Legacy 15,000 By Postage and stationery 700
To Interest received 800 By Furniture 10,000
By Investments 15,000
By Cash in hand 8,300
55,800 55,800

Additional Information:

(1) Subscriptions outstanding for the current year Rs.1, 000

(2) Salaries unpaid Rs.1, 000
(3) Help to poor students promised but unpaid Rs.3, 200
(4) Expenses of dispensary outstanding Rs.600
(5) Postage and Stationery expenses yet to be paid Rs.800

VI. Answer any five of the following

(a) Define “Draft”.

(b) How do you calculate the depreciation under fixed installment method?
(c) Red-Ink Interest
(d) Average due date
(e) Del Credere Commission
(f) Suspense Account
(g) Revenue expenditure
(h) C and D were partners sharing profits and losses in the ratio 3:2. They admit
E, giving him 1/5th share in the future profits. Calculate the new profit sharing
ratio.

VII. Answer any two of the following:

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(a) Explain the various kinds of errors.

(b) Sudheer purchased goods worth Rs.20, 000 from Vaheed on 1st April 2006.
Vaheed drafted a bill for the same amount on the same day for 4 months.
Sudheer accepted the bill and returned it to Vaheed. Vaheed discounted the
bill with his bank @ 6%p.a on the same day, On the due date the bill was
dishonoured.

Pass the necessary entries in the books of Vaheed.

(c) An asset was purchased for Rs.48, 000 on 1-5-2002 and was sold on 1-7-
2005 for Rs.36, 000. Calculate the profit or loss assuming depreciation is
charged @ 10%p.a. on straight-line method.

(d) Calculate the average due date of the following particulars.

Date of Bill Period Bill amount

11-1-2006 2 months 800
16-2-2006 1 month 400
19-3-2006 2 months 200
10-4-2006 1 month 400

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