THE MADURA COLLEGE (AUTONOMOUS), MADURAI - 625 011 POST GRATUATE DEPARTMENT OF COMMERCE Question bank Course Title; FINANCIAL ACCOUNTING-IL Course Code: 20U2KMC3 Class: I-B.COM Aided, A2, (A, B, B&L, PA, CM) Section — A. Answer ALL Questions. Q.No. | CLO[K Level Questions 1 [COLI | KI [lmaccounting consignment means a) Goods forwarded from one place to another b) Goods forwarded by a person to another ©) Goods sent by its owner to his agent 4) Goods sent by its owner to his agent for the purpose by sale. 2 [COLT | K2_ | Goods sent on consignment should be debited by consignor to. a) Consignment A/e b) Goods sent on consignment A/c ©) Consignees A/e 4) _Consignors A/c 3 [COLT | K1_| nthe books of consignor the balance of the consignment stock account would be shown, a) Asan asset in the balance sheet. b) As liability in the balance shet ©) On the credit side of trading account. 4d) On the debit side of consignment account 4 [COLT | K2_| Onthe dispatch of goods, the entry in the books of consignee would be. a) Consignment A/c will be debited and goods sent on consignment A/c will be credited. b) Consignment A/c debit and consignee A/c credit ©) Noentry )_None the above 3 [COLT | KI_| The consignors, a) Principal b) Agent ©) Debtor 4) None of the above 6 [COLT |~ K2 | Account sales is submitted by a) Consignor b) Consignee ©) Principal to his agent d)Debtor to creditor [COLT | KI [in the books of consignor, the expenses incurred by consignor shouldbe debited to_ a) Consignees A/C b) Consignment A/c ©) expensesA/e )_Consignor’s A/c 8%. [COLI | K2 s of consignor the normal loss should be credited to a) Profit&loss Ale b) consignment/c ©) trading A/e )_consignee Ae 9. [corr | KI commission, the liability for bad debt is on, a) Consignor b) Consignee ©) Customer None of the above 10. [COLT | K2 [inthe books of consignor, the balance in the goods sent on consignment account is shown. . a) On the asset side of balance sheet. b) On the liability side of balance sheet. ©) On the credit side of trading A/c d)_On the credit side of consignment/e 11, [COLT | K1_| Overtidding commission is meant for__. a) Additional efforts to sell. b) Prompt payment, ©) Minimising expenses. d)_Increasing sales. 12. [COLT [~ K2_ | No joumal entry is required to be passed when there is, a) Normal loss b) Abnormal loss in transit, ©) Abnormal loss in consignee’s godown )_Adgitional sales 13. [COLT |~_KT_| The abnormal loss on consignment is credited to a) P&IAIC b) Consignee A/c ©) consignment A/e d)_consignor A/C 14, [COLT | K2 [inthe books of consignor the acceptance of bills of exchange by the consignee will be credited to__ a) Consignee Ale b) Consignment A/c ©) Income d)_ Consignor 's AleSection - B Answer ALL Questions, CLO] K Level ‘Ques 1 |CoLi KI What is consignment? What is its main purpose? 2 | COoLt KI Distinguish consignment from sale. 3 [COLt KI How do you value unsold stock on consignment when goods are sent at cost? 4 |CoLt KI What is the effect of normal loss on valuation of unsold goods? 3 [Cou KI ‘On Aprill, 2019, A radio limited Chennai consigned to R radio dealer at Coimbatore, 200 radio sets, involved at Rs 300 per set. The cost of each set was Rs250 and freight of Rs 600 was paid by the consignor other expenses being paid by the consignee, On I* July 2019. R remitted an account sales showing that 160 sets have been sold at the price of Rs 300 per set. They deducted unloading charges of Rs 30; establishment expenses Rs 120 and commission at 5% on sales, remitting the draft for the balance. Make out an ACCOUNT SALES. 6. [COLT KI On Ist Fanuary,2020 R sends 150 machine costing Rs 30,000 to Ato be sold on behalf of the former at 5% commission on sales. R paid Rs 1,500 as freight and carriage for sending the machines. A sent the account sales on 31% march, 2020 stating that (i) 120 machines were sold for Rs 27,000 (ii) expenses incurred on inward consignment were: octroi Rs 250;carriage Rs 50, godown rent Rs 2,100 and advertisement and other selling expenses Rs 1,500.calculate the value of consignment stock on 31% march ,2020 Section — C Answer ALL Questions, Either choosing (a) or (b). Q] CLO} Nol K Level ‘Questions 1] cout KI Balan of Bangalore consigned 190 bags of sugar to raghu of Chennai invoicing goods at Rs 180 per bag. Balan paid Rs 1,200 as cartage and other expenses. The consignor drew a bill of exchange for Rs 12,000 which was later discounted at 11,800. The consignee rendered an account sales showing following details: 100 bags sold at Rs 240 cach on credit 90 bags sold at Rs 230 each for cash , Freight and carriage Rs 2000,Transit insurance Rs 600,Storage and insurance Rs 1,000, Commission at 5% The consignee sent a sight draft for the amount due. You are required to prepare ledger account in the books of both the parties assuming that the consignee incurred a bad debt of Rs 400. COLI KI S sends goods on 1/1/2020 to ¥ on consignment basis to be sold at 10% commission on sales. Y accepted a bill of Rs 1,00,000 drawn by S for 4 months on the same date. $ discounted the bill with his banker @ 15% p.a on 4/2/2020 $ incurred Rs 30,000 by way of freight and other expenses whereas expenses of Y were Rs20,000 out of which 60% were non- recurring. Y sent the final balance of Rs 2, 85,000 to $ on 31/3/2020 along with an account sale, The gross profit margin is 25% and 10% of goods remained unsold with Y, you are required to prepare the necessary ledger accounts in the books of both the parties. ‘Shankar sends 20,000 units @ Rs 50 to Sunil on 1/1/2020 to be sold at a commission of 7.5%. 5% goods were lost in transit and it is considered normal. The consignor spent the following expenses: packaging expenses@ Rs 2 per case (cash), freight Rs 10,000 (due), insurances 6,000 (bank). The consignee received the balance consignment and sent a cheque 3, COLI] K1_ | of Rs 2, 00,000 as advance. He incurred Rs 8,000 as unloading charges and Rs 36,000 as selling and distribution expenses. He submitted an account sale on 31/3.2020 disclosing that 14,000 units were sold @ Rs 80 per unit. Assuming the consignee sent draft for balance you are required to prepare, the necessary ledger accounts in the books of both the parties ‘Ajay consigned to baby 100 cases of tea costing Rs 100 per case, He paid Rs 1,000 as freight and cartage. Baby could take delivery of only 90 cases since 10 cases were lost in transit. He paid Rs 2, 000 as unloading and carriage charges. At the end of the year, he reported that he has sold away 4] COLI] KI | 80 cases at Rs 150 per case, You ate required to calculate: (i) the value of abnormal loss and (ii) the value of closing stock. If the abnormal loss of 10 cases happens at the godownof the consignee in place of transit from Ajay to baby. What will be the (iii) value of abnormal loss and ( iv) value of closing stock. ‘Arun_ consigned 2,000 tonnes of coal @ Rs 50 per tonne to balu of Delhi He paid Rs 20,000 as freight, Due to normal wastage only 1,950 tonnes 5] COLI] K1_| were received by balu. He also paid Rs 5,000 as unloading and cartage charges. The goods unsold amount to 650 tonnes. You are required to calculate the value of closing stock. M sent 10 cars to N on consignment. The cost of each car was Rs 12,000. The expenses of M are: freight Rs 7,000, insurance Rs 3,000. During transit, one car was destroyed and the insurance company paid Rs 9,000 towards that claim, N sold 7 cars At Rs 15,000 each. And he paid for unloading and insurance Rs 3,300, Ie sent Rs 90,000 by drafts. It was agreed that N is to get 5% commission 6| Col} KI Section —D Answer ANY TWO Questions QNo.] CO [KLevel ‘Questions 1. [Clot K2_ | ShriMetha of Bombay consigns 1,000 cases of goods costing Rs 100 each to the sundram of madras. Shrimetha pays the following expenses in connection with the consignment ; freight Rs 3,000 , Carriage Rs 1,000, loading charges Rs 1,000, Sundram sells 700 cases at Rs 140 per case and incurs the followings expenses:clearing charges Rs 850, warehousing and storage Rs 1,700; packaging and selling expenses Rs 600; it is found that 50 cases have been lost in transit_and 100 cases are still_in transit . sundram is entitled to acommission of 10% on gross sales. Draw up the consignment account and sundram,s account in the books of shri metha CLO K2 ‘On 1* jan 2015 B of Bombay consigned 100 cases(cost price Rs 7,500)at a proforma invoice at 25% profit on sale to his agent C at Chandigarh. On the same date B paid Rs. 600 as expenses.On 30 th jan, C took delivery and paid Rs 1,200 for octori and other duties and remitted Rs 4,000 as a advance. On 31 st jan he sold 80 cases for Rs 10,500: C is entitled to 5% commission on gross sales and 10% of the slaes price in excess of invoice price. Show Consignment A/e and C’s account in the books of B. C is required to maintain proporationate security with the consignor for unsold stock KR ‘Arun sends goods consignment to seemu, The terms are that seemu will receive 10% commission on the price( which is cost plus25%) of any price realised above the invoice price. Seemu will meet his, expenses himself, goods to be sent freight paid. Arun sent goods whose cost was Rs 16,000 and spent Rs 1,500 on freight, forwarding etc, Seemu accepted a bill for Rs 16,000 immediately on receiving the consignment. His expenses were Rs 200 as rent and Rs 100 as insurance. Seemu sold % of the goods for Rs 19,500. Part of the sales were on credit and one customer failed to pay Rs 400. Give consignment account and seemu,s account in the books of Arun and Arun,s account in the books of seemu.Unit—1 Joint Venture Part-A CLO K Level Questions: clo KI ‘A Joint Venture is a, Sending Goods by one person to another b. A particular partnership ©. A general partnership 4d. Forall ventures 02 KI Toint venture afe is in the nature ofa a. Nominal a/e b. Real ale ©. Personal ale . None of the above cLo2z Ki Memorandum joint venture isa a. Personal ale b. Realale ¢. Nominal ale dd. None of the above cLo2z KI The relationship between the e a, Buyer and seller b. Principal and agent Partners d. Debtors and creditors KI Profit or Loss on Joint venture is shared by the co- ventures, a. Equally b. Inthe capital ratio ©. As per the agreement d. Three-fourths cLo2z KI ‘A complete separate set of account is kept, when the size of the ventures is, a. Large b. Small©. Not Known d. Medium ‘Capital accounts of the co-ventures are of the nature of a, Personal ale 7 | cLo2)] KL b. Real ale ©. Nominal a/e 4. None of the above When goods are purchased for the joint venture, the account to be debited is a. Purchases ale 8) coz) ka b. Joint venture aie ©. Venture’s capital a/e 4. Goods ale Toini venture is a temporary partnership without a. Aname 9 | coz} K2 b. A seal ©. An agreement 4. Time Tn joint venture transaction joint bank account is a. Not like a cash book 10] cLo2] Kz b. Opened specifically for the venture ©. Opened by one of the ventures 4. Opened Tm case of joint venture, the lability of co-ventures are a. Joint liability b, Joint and several liability u K2 ©. Certain may be joint and certain others may be individuals d Several Liability Toint venture business follows the basis a. Cash 2 a b, Accrual ©. P&L Basis© Credit The doctrine of implied authority isto the eo-ventures a. Not applicable 13) cLo2] x2 b. Applicable ©. Applicable to some extent d. Applicable to various areas When @ co-venture takes away goods for personal use under ‘memorandum joint venture methods, then the account to be debited will be 14] cLoo] Ka a. Personal a/e b. Purchases ale ©. Joint venture ale d. Bank ale Part -B 1 | clo2 | xi | Whatis Joint venture? 2 | cco2 | Ki _ | Write few features of joint venture? ‘What are all the accounts are commonly maintained in the 3 CLO2 | KL J goer? 4 | cro2 | xi | Whatis co-venture’s ake? 3 | cco2 | x1 _ | Whatisjointbank are 6 | cLo2 | xi _ | Whatis memorandum joint venture method? PART-C 1] cLo2] x3 | Explain the difference between Consignment and Joint Venture? Me and You entered into joint venture contributing Rs43,000, cach into the joint bank account with an understanding to share the profit and loss equally, It was also agreed to pay commission @ % on the sale made by the venturers’. With the following details 2 | cLo2|] 3 | prepare 1, Joint ventures aie Joint Bank ae 3. Venture’s capital a/e Goods worth Rs.52,000 were purchased and 50% of the same weresold for RS.35,000 by “Me™. RS.4,500 was spent on transportation, 25% of goods bought were sold by “You” for Rs.17,500. Unsold goods were taken over at cost price by both the ventures in the profit sharing ratio and balance due to the ventures was paid from Joint bank al. cLo2z Das and Krishnan entered into a Joint venture sharing profits and losses as 3:2. They opened a bank ale by depositing Rs.40,000 each, Das purchased 800 kg, of an item @ Rs.60 per kg and his expenses were Rs.13,000.Krishnan purchased a second item of 10,000 kg @ Rs.2.10 per kg and his expenses were Rs.11,000. Expenses were met from private sources and purchases were paid from bank account. Krishnan sold 600 kg of the first item @ Rs.100 per kg and his selling expenses were Rs.5,500, Das sold 8,000 kg of the second item @ Rs.5 per kg and his selling expenses were Rs.6,000. All the sale proceeds were deposited in Bank Account and expenses were met from private sources. Write up necessary accounts in the books of the venture, Also prepare a balance sheet of the venture. 02 K3 Sand P entered into a joint venture and agreed to divide the profit as to $ 60% and P 40%. $ and P contributed Rs.1,80,000 and Rs.1,20,000 respectively for carrying on transaction relating to the venture, They opened a joint bank account with the above contributions. They purchased three old state buses for Rs.2,40,000. $ and P personally paid Rs.45,000 and Rs.30,000 respectively for repairs and renewals. They purchased a few tyres and tubes costing Rs.54,000. Two buses were sold for Rs.2,70,000 and the third one was taken by P at cost price. Prepare joint venture a/c, joint bank ae, and close the accounts of the venture, cLo2z Seth of Polur purchased 2,000 meters of Kanchi sik@ Rs6 per meters and sent to Seenu of Ami to be sold on joint venture. Sethu spent Rs.400 on packing etc.,Seenu spent Rs.1,000 on clearing ete., Seti drew a bill for Rs.10,000 which was accepted by Seenu. Sethu discounted the bill for Rs.9,700 with bank. Scenu sold 1,800 meters of cloth@ Rs.9 per meter and spent1RS.504 in this respect. Remaining cloth was taken over by Sethu at cost plus 10%, Seenu had to receive commission @ 5% on sale, the profit and loss was to be divided in the ratio of 3/5 and 2/5 between Sethu and Seenu respectively. Seenu sent cheque to Sethu for balance due. Open necessary ledger accounts in the books of both patties. 6 | cLo2z K3 Senthil and Saravanan entered into a joint-venture, the former contributing Rs.80,000 and the later Rs.50,000. They opened a joint bank account and agreed to share profits 1/3 and 2/3" respectively. They purchased goods for cash Rs.80,000 and Saravanan supplied goods to the value of Rs.40,000. The entire goods were sold for Rs.1,70,000 paying Rs.4,100 towards the expenses. Senthil was entitled to a commission of 3% on sales, ‘Show joint venture account and joint bank account. Part -D cLo2 A and B doing a business separately as building contractors, undertaking jointly to construct a building for a newly started Joint Stock Company for a contract period of Rs.1,00,000 payable as to Rs.80,000 by installment in cash and Rs.20,000 in fully paid shares of the company, A Banking Account is opened in their joint names, A paying in Rs.25,000 and B Rs.15,000. They are to share the profits and losses in the proportions of 2/3 and 1/3 respectively, Their transactions were as follows Rs Paid wages 30,000 Bought material 70,000 Material supplied by A 5,000 Material supplied by B 4,000 Architect's Fee paid by A 2,000 ‘The contract was completed and the price (cash and shares) duly received. The Joint venture was closed by A taking up all the shares of the company at an agreed valuation of Rs.16,000 and B taking up the stock of materials at an agreed valuation of Rs.3,000. Show the necessary ledger accounts. cLo2 ‘Amu and Chand enter into a Joint Venture to share K3__| the results as to 2:1, The joint venture transactions are as under:Particulars Ramu Chand Rs Rs Goods supplied 60,000 30,000 Expenses paid 8,000 2,000 Sales proceeds ‘80000 56000 received Show the joumal entries and ledger accounts in the books of both the parties. cLo2 “D" of Delhi and ‘B’ of Bombay entered into a joint venture for the purpose of buying and selling second hand typewriters. B to make purchases and D to effect sales. The profit and loss was to be shared equally by D and B. A sum of Rs.15,000 was remitted by D to B towards the venture. B purchased 20 old typewriters for Rs. 15,000 and paid Rs.9,000 for their reconditioning and sent them to Delhi. His other expenses were buying commission Rs.1,000; Cartage Rs.200 and other miscellaneous expenses Rs.100. D took delivery of the typewriter and paid Rs.270 for octroi and Rs.100 for cartage. He sold 12 typewriter at Rs.2,200 each, 4 typewriters at Rs.2,100 each and 3 typewriters at Rs.2,000 cach, He retained the remaining typewriter for his personal use at an agreed value of Rs.1,500. His other expenses were — insurance Rs.250, Rent - Rs. 400, brokerage - Rs. 1,200 and miscellaneous expenses = Rs.200. Each party's ledger contains a record of his own transactions on joint account. Prepare a statement showing the result of the venture and the account of the venture in D's Ledger as it will finally appear, assuming that the matter was finally settled between the parties.UNIT - III SELF BALANCING LEDG! RS AND ROYALTY ACCOUNTS. nA K level Questions, KI Self balancing entry is not required when a transaction affects A) the same ledger B) general ledger C)debtors ledger —_D) creditors ledger CLO3 Ki No self balancing entry is required for A) bad debts recovered B) sales return ) interest debited on overdue accounts D) the dishonor of the bills of exchange CLO3 Ki Self balancing entry is not needed for provision for bad debts because A) itis a provision B) it does not affect two ledgers it does not affect debtors) none of the above CLO3 Ki ‘General ledger adjustment accounts are opened in A) debtors ledger B) creditors ledger ©) in both D) general ledger CLO3 Ki “The main advantage of selt-balancing system is that it facilitates the quick preparation of __ ‘A) debtors ledger B) final accounts C) creditors ledger D) none of these CLO3 Ki "The monthly total of purchase day book is posted fo the debit side of the purchases account in the A) debtors ledger B) creditors ledger C) general ledger D) same ledger CLO3 Ki Self balancing is a system of, B) preparing trial balance ) preparing final accounts D)preparing tax returns CLOs KD TRoyaliy is the agreement between the following persons A)seller and buyer _B) banker and customer C)landlord and tenant D) trustee and beneficiaries. COR KE Royalies are connected with the following type of business A) manufacturing industry B) mining industry C) construction industry __D)service industry 10. COR KZ Royalty isa payment A) periodical B)monthly C) annual‘) weekly Kz Royally account is in the nature of A)Real afc B) Nominal a/eCj personal ale D) None of the above 12. Short workings means A) excess of minimum rent over royalty —__B) excess of royalty over ‘minimum rent C) excess of royalty over short workings D) none of the above COs Kz When short workings are recovered, the account to be debited is A) landlord a/eB) short workings a/c C)P&L ale D) royaltyTé. | CO3 | K2 _ | The lessee's right to recoup short workings is related to A) first three years B) subsequent two years C)terms and agreement —_D) five years Section -B @No. | CLO_| K Level Questions 1. | CLO3 | K2 | Whatare the features of self balancing ledgers? 2 | Los | __K2_ | Whatis sectional balancing? 3. | CLO |__K2 _ | Cistout various transactions which can increase and decrease the balance in debtors account. 4 | CLO | __K2__ | Whatis Royalty? 3) kos | K2 | Whatis Minimum rent? 6. | CLO3 |__K2_ | What do you understand by sub-lease? Section—C QNq_CLO[K Level ‘Questions From the following information prepare sales ledger adjustment account 1159 Balance of debtors 20,000 31-199 Sales 50,000 Cash received from 15,000 ‘Los debtors 1) CLO3) KS Bills received fom 3,000 debtors Sales returns 1,000 Discount allowed 500 fransfer to bought 100 ledger ‘A business firm which keeps its books on self balancing system gives you the following details. Prepare necessary adjustment account in cencral ledger as on 31-1-94 Balance of Sundry Creditors on 1.1.94 26,070 Transactions during the months were Credit purchases 7,000 2. | CLO3) KS | | Payment to creditors 5,430 Discount allowed by them 180 ‘Accepted bills payable 3,960 Returns to creditors 400) Allowances from creditors 10 Bills payable dishonoured 10From the following information relating to Selvam stores for the year ending 31-3-2002, you are required to prepare a total debtors account for the year. Debtors on 1-4-2001 64,000 Credit sales 1,80,000 Cash sales 40,000 CLO3} K3_| [Cash received from customers 7,60,000 Discount allowed 4,000 Bills Receivable received 20,000 Bills Receivable dishonoured 8,000 Bad debts written off 3,200 ‘Transfer to creditors ledger 12,000 The Bengali mines Co. Ltd. took from Mr-Dass a lease of a mine for a period of 25 years from 1-1-86, on a royalty of Rs. 5 per tonne of ‘mineral raised with a dead rent of Rs.20,000 and power to recoup shortworkings during the first five years of the lease.The annual ‘outputs were as follows: 1986 2,000 Tonnes ios} 3. | [1987 3,000 Tonnes 1988 4,000 Tonnes 1989 4,500 Tonnes 1990) 5,000 Tonnes Give journal entries in the books of the Bengal Mines Company and in the books of Dass. Teased a colliery. ‘The dead rent was RS.1,200 a year, merging into a royalty of 25 paise per tonne of Coal raised with the right of recouping shortworkings out of royalties during the first four years. The quantities raised were Tyear 2,000 cLo3) 3. | [year 3,600 Tl year 6,000 IV year 12,000 V year 25,000 Show the Tandlord Ave for the five years. ‘Owned certain patent rights, He granted @ license to Nto use such rights om royalty Following are the relevant particulars; Year Ist 2nd 34d ‘sth sth Actual royalty 5,000 10,000 8,000 8,000 14,000 Minimum Rent 8,000 9,000 10,000 12,000 13,000 cLoa The deficiency of any year is to be set off against royalty payable in CLO3] KS _| excess ofthe minimum rent nwo flowing yeas. In the event of strike and the minimum rent not being realized, it was provided that the actual royalties eamed for the year would be the full royalty obligation for the year. You are required to show Royalties Account, M's Account and short- ‘workings Account in the books of N.QNo] CLOT KLevel ‘Questions H K4 | From the following particulars extracted from the books of Mis. Krishnan & Company, who keeps a Sales ledger and Bought ledger on the self balancing system. Show how the various adjustment accounts will appear in each of the ledgers Debtors balance (1.1.76) 45,750 Creditors balance (1.1.76) 54,900 Transactions from the month of January: Credit purchases 20,500 Credit Sales 22,700 Retum inwards 400) Retum outwards 600 Cash received from customers 25,000 Discount allowed to customers 350 Cash paid to creditors 30,700 Discount received from creditors 670 Acceptance received from 8,500 debtors Creditors bills accepted 12,000 Bills Receivable returned 1,200 dishonoured. Bills payable returned 3,000 dishonoured Bad debts written off 2,500 Sundry charges debited to 345 customers ‘Allowances from creditors 275 2 K4__ | Mr-Senthil holds a patent for the manufacture of electronic blankets He allows the Everest Manufacturers Ltd the use of the patent for a royalty of Rs.10 per blanket produced subject to a minimum rent of Rs.10,000 in the first year Rs.12,000 in the second year and Rs.15,000thereafter. Any shortworkings is recoverable out of the royalties of the 3 years subsequent to the year in which the short workings arises. The output is as under: Tyear 300 blankets Tl year 400 blankets ll year 1,900 blankets IV year 2,000 blankets WV year 2,800 blankets Show the Shortworkings A7e in the books of the company for the various years. 3. | CLO3]_K4 _ | The Bihar Coal Company Ltd, Are lessee of @ mine on a royalty of 50 paise per ton of coal raised, with a dead rent of Rs.30, 000 per‘annum, and power to recoup shortworkings during the first five years of the lease. The output for the first three years was as follows: Ist year 15,000 tons; 2 year 50,000 tons; 3 year 75,000 tons. Draft the necessary Journal Entries in the books of the company giving effect to the above, You are also required to write up the Minimum Rent Account, Royalties Account, Shortworkings Account, Landlord's Account and Profit and Loss account,UNIT-IV ACCOUNTING FOR INCOMPLETE ECORI jon A clo Multiple Choice Questions ‘CLOs KI Single entry system is A. Not a systematic accounting B. Correct method of accounting C. Scientific method of accounting D, None of these. CLOs KI Single entry is usually adopted by ‘A. Small firms B, Joint stock company C. Registered cooperative societies D, Partnership firm ‘CLOs KI Cash paid to creditors can be calculated under single entry from A. Debtors ale B. Balance sheet C. PRL Ale D. None of the above ‘CLOs KI Which of the following is a defect of single entry system? ‘A. Does not record the two fold aspect of each transaction B. Itis very difficult to prepare trial balance C. Balance sheet cannot be prepared D. All the above CLOF Ki Single entry system changed into double entry system through ‘A. Balance sheet method B. Statement of affairs method C. Conyerstion method D. Net worth method ‘CLOS KI Generally incomplete records are maintained by— . Traders B. Society C. Company D. Government ‘CLOs KI Statement of affairs is prepared to ‘A. know about assets B. know about liabilities C. Calculate capital D. know the financial position CLOs Profit ascertained from incomplete records is A. Free from doubt B. Not free from doubt C, 75% accurate D. 100% accurateCLOs ‘Closing capital drawings-opening capital A. Profit or loss B. Additional capital C. Opening creditors D. Opening debtors 10 ‘CLOs Bills receivable endorsed are debited to: A.BIR AIC B. Debtors A/C C. Creditors A/C D. Cash account it CLOF K2 Tn single entry system -——-accounts are opened A, Personal accounts B. Real accounts CC. Nominal accounts D. Real and nominal accounts 12 CLOS Cost_of goods sold Rs. 8,00,000,opening stock RS; 1,00,000,closing stock Rs. 1,20,000 if purchase is A. Rs8,20,000 B. Rs. 7,80,000 C.Rs.8,30,000 DRs.7,60,000 1B CLOs K2 Sales RS.8,40,000-rate of G-P on cost 20% cost of goods sold will be A. RS.7,00,000 B, Rs.7,20,000 C. Rs. 6,72,000 DRs.8,00,000 14 ‘CLOs Under net worth method of single entry.the basis for ascertaining the profit is: A. The difference between capital on two dates. B, The difference between the fixed assets on two dates. C. The difference between the liabilities on two dates, D. None of the above.‘Questi Express the term Single entry system? Elaborate two reasons for keeping incomplete records? Discuss statement of affairs. 4 |exoa | K2__ | Give Outline in which statement is prepared under the single entry system to ascertain profit? Write any two limitations of keeping incomplete records, Explain which types of entry system? ;ccounts are normally not Kept under single Section —C @ | CLO] K Leva ‘Questions No. Discover a statement showing X profit for the year ended 31,3.1995 after writing off 10% depreciation on furniture and making a provision for bad debts of 10% on sundry debtors. X keeps his books on the single entry system and the following information is available. particulars 14.1994 (RS)_[ 313.1994 (RS) Fumiture 200 200 1 | cro Ka. | [stock 2,800 3,050 Sundry debtors 2,100 3.400 Cash 150 200 Sundry creditors 1,750 7,900) Bills payable - 300 Loan obtained = 500 Investments = 7,000 Hie had drawn out of the business Rs. 500 during the year.Tnspect from the following details,Prepare a statement of profit or loss for the year ended December 31 1989. Particulars 1.1.89 (RS) 31.12.89 (RS) Machinery 15,000 20,000 Fumiture 2,000) 2,000 Debtors 90,000 770,000 Cash 2.700 4,800 Prepaid expenses 500 - ‘Accrued income = 800 (Outstanding 3,000 3,300 expenses Provide 10% depreciation on machinery and furniture and 5% for bad debts on sundry debtors. Interest on capital to be provided at 6% P.A after 3 months from the beginning of the year the proprietor had to bring in RS.5000P.M by way of additional capital he drew salary at RS.500p.m. in addition he drew RS.3,000 in anticipation of profits RS.2,000 Income tax was paid. ‘A retail traders had not kept proper books of accounts but from the following details are required i) to analyze the profit or loss for the year ended 30 june 1990 and ii) statement of affairs as on the date. particulars 17.89 (RS) [30.689 (RS) Stock in trade 16,700 18,500 Sundry creditors 15,400 14,000 Sundry debtors 11,200 10,500 Cash in hand 250 1,200 Bank overdraft 20,200 19,400 3 | cLoa| Ka Bills receivable 15,050 14,200 Fumiture &fittings,ete 1500 1500 Motor van 7,900 7,900 Drawings during the year amounted to RS.2,600, Depreciate fixtures ete by 10% and write RS.300 off motor van.As regards the debtors it is ascertained that RS.500 are irrecoverable and further reserve 5% should be made.also reserve RS.700 in respect of bills receivable. 4 |eroa| Ka | Compare the Single Entry and Double Entry systemMIS Ice Ltd gives you the following information to examine a) total sales and b) total purchas particulars ‘Amt | Particulars ‘Amt (RS) (Rs) Debtors as on| 70,000 Discount 7,000 1.42014 allowed by suppli Greditorsas_on | 81,000 | Discount 9,000 1.42014 allowed to customers Endorsed BIR 3,000 47,000 | dishonoured s 53,000 | BIR discounted 8,000 the year cis | Ka Cash received | 1,56,000 | Sales retum 11,000 from customers Cash paid to | 1,72,000 Discounted BIR 2000 suppliers dishonoured Bad debts | 16,000 | Cash sales 1,68,500 recovered BIR endorsed to 27,000 | Cash purchases | _1,97,800 creditors BIR dishonoured 3000 | Debtors as on 82,000 by customers 31.3.2015 Creditors as on 93,000 31.3.2015 Tilustrate from the following information, give a statement showing the profit of the firm for the year ending 31 march 2015 as well as the balancesheet as on that date: X and Y carrying on business in partnership and sharing profits and losses in the proportion of 2:1,has the following balances to the credit of their accounts shown in the firm at april 2014 x 3 Y RS.18,000 ONn 31* march 2015 the position of the business was as follows: cio4| xq | Cashin hand RS.6,750; Cash at bank RS.5,000; Sundry debtors RS.25,000;Stock RS.33,000; furniture RS.4,200;sundry creditors for goods RS. 19,500 and creditors for expenses RS.3,900. During the year, X had drawn RS.9900 From the firm. He had also taken some goods worthRS. 1,200 for his personal use. He had sold some goods of the business for RS.2,700 andretained the proceeds himself he had personally paid to some of the employees of the firm RS. 4,950 towards their salaries, which he was entitled to be reimbursed. Y had withdrawn RS.3,750 in cash and also taken some goods worth RS.750 for his personal use. He has personally paid towards some expenses of the firm RS.2,400,which he was entitled to be reimbursed.QNo. [CLO [K Level ‘Questions Mr. Ashok Keeps his books in single entry system. From the following information, prepare Trading and profit and loss A/C for the year ended 31* march,2015 and B/S as on the date: 313.2014 (RS) | 31.3.2015 (RS) Sundry creditors 30,000 25,000 ‘Outstanding exps 1,000 500 Fixed assets 23,000 22,000 stock 16,000 2,500 Cash in hand and @ 14,000 16,000 bank Sundry debtors 7 36,000 Following further details are available for the current year: Total receipt from] RS. | Cash RS, debtors 1,30,000 | purchases 2,000 1 | ctoa] x3. | [Retums inward 3,000 | Fixed assets purchased and 1,000 paidby cheque Bad debis 7,000 [Drawings by 6,500 cheque Total sales 1,50,000 | Deposited in 10,000 to bank Discount received 1500 | Withdrawn 18,500 from bank Retums outwards 1,000 | Cash in hand 2,500 at the end Capital introduced [15,000 | Paid to 720,000 (paid into bank) creditors by cheques Cheques received | _1,25,000 [ Expenses paid 20,000 from debtors 2 [CLOs | K3 | Construct the features of single entry system The position of a businessman keeps his books on single entry was as under on 31.12.90 and 31.12.91 Particulars 1990 (RS) 1991 (RS) ‘Cash in hand 400 480 ‘Cash at bank 6000 2,500 3 | cos | x3 | [Stock 6,500 000 Debtors 4,000 5,200 Furniture 300 350 Sundry creditors 4,100) 3,100 He withdraws RS.7500 from business on 2.1.91 out of which he spent RS.5200 for purchase of motor truck for the business,Adjustments: a) depreciation on closing balance of furniture and truck at 10% b) write off RS.220 as bad debts. ©) 5% provision for bad and doubtful debts is nee: Find out the profit or loss for the year.UNIT-V FINANCIAL STATEMENTS FOR NOT- FOR-PROFIT ORGANISATION Section - A. clo. Multiple Choice Questions ‘CLOS KI ‘A Non-trading concems prepare ‘A. Trading a/c B.P&L AIC C. Trading P&L A/C D. Income &expenditure A/C ‘CLOS KI Receipts and payments account is a - ‘A. Nominal account B. Real account C. Personal account D. Cash account ‘CLOs KI Subscription received in advance is A. Anasset B. An income C. Areceipt D. A liability ‘CLOS KI All capital and revenue receipts are—— ‘A. Debited in income & expenditure ale B. Credited in income & expenditure ale C. Debited in receipts& payments a/c D. Credited in receipts and payments a/c ‘CLOS KI Sale of fixed assets ‘A. Capital receipt B, Revenue receipt C. Capital income D, Revenue income ‘CLOS KI Cost of goods purchased for resale is example of ‘A. Capital expenditure B. Revenue expenditure C. Deferred revenue expenditure D. Liability ‘CLOS Ki ‘An expenditure is revenue in nature, whi A. It benefits the current period B. It benefits the future period C. It belongs to the previous period D. It benefits for two or more years ‘CLOs KZ sale of furniture of a club will be taken to- A, Income &expenditure ale B. Cash ale C. P&L ale D. Balance sheet ‘Any profiton t9 [CLOS] K2 Legacies are generally- A. Capitalized and taken to B/S B. Treated as income C. Treated as expenditure D. Treated as income and taken to T&F ale 10 | CLOS | Kz Entrance fees are generally~ ‘A. Capitalized and taken to B/S B. Treated as income C. Treated as expenditure D, Treated as income and taken to 1&E ale 1 | CLos| K2 Sale of old materials shown in credit side of- A. Cash ale B. Income & expenditure a/c C. Bank ale D. Machinery a/c 12 | CLOS| K2 Capital expenditure is 0 A. Non-recurring nature B. Recurring nature C. Liability D. Deferred revenue expenditure 13 | CLO5| K2 White wash to new building is a- ‘A. Revenue expenditure B. Capital expenditure C. Deferred revenue expenditure D. Capital income 14 | CLOS| K2 Which of the following items should not be entered in rei we of a club? A Sale of old newspaper B. Loss on sale of old furniture C. Subscriptions received in advane D. Expenses paid for the previous year SECTION-B K Level ‘Questions K2_| Express the term Not-for profit organization? K2_| Elaborate thre atures of Not-for profit organizatio 3 K2_| Discuss the main objectives of Not- for profit organization. 4 K2_| Explain Income & Expenditure account 3 [CLOS | K2_| Write the characteristics of Not- for profit organization. © [CLOS | _K2_ | Explain Receipts and Payments accQn | co | Lev QUESTION: EL From the following details related to subscription of Coimbatore sports club, calculate the subscriptions for the year ending 31% December, 1990 Subscription received as per receipts and payments accounts for the 1. | CLos | 2 | year ending 31% -12- 1990 Rs.10,000 Subscription outstanding as on 31-12-1989 Rs.2000 Subscription outstanding as on 31-12-1990 Rs.4000 Subscription received in advance as on 31-12-1989 Rs.3000 ‘Subscription received in advance as on 31-12-1990 Rs.2000 From the following particulars prepare a receipts and payments ale cash in hand) Rs.100 Cash at bank Rs.500 Subscription received Rs.3300 Donation received Rs.260 2 | clos | K2 | [Investment purchased Rs.1000 Rent paid Rs.400 General expenses Rs.210 Postage and stationery Rs. 70 Rs.30 Rs. 20 From the following details, prepare receipts and payments a/e of the Chennai sports club for the year ended 31-12-1999 balance on 1-1-1999 Rs,6000 Entrance fees Rs.11000 Rent paid Rs.1,04,000 Stationery purchased Rs.61,360 Billiards table purchased Rs. 78,000 Wages paid Rs.1,06,600 3 CLOS | K2 | Repairs & renewals Rs.16,120 Subscription received for 1998) Rs.4,000 1999 Rs.3,38,000 2000 Rs.6,000 Interest paid Rs.30,000 Donations. Rss.10,000 Special subscription for annual day party | Rs.69,000 ‘The following is the receipts and payments account of the Bombay sports club for the year ending 31+ march, 1990 sLos Rs. Payments RS 4 | CLOS | Ke 300 | By rent 5200 Entrance fees 350 | Stationery exp 3068 Subscription 200 [Wages 53301988-89 Subscription 16,900 | Billiards table 3900 1989-90 Subscription 300 | Repairs and 806 1990-91 renewals Locker rent 300 | Interest 1500 Special 3450 | Bal o/d 2396 subscription for governor's party Locker rents, Rs.60 referred to 1988-89 and Rs.90 js still owing; rent Rs.1300 pertained t 1988-89 and Rs.1300 is still due; stationery expenses etc. Rs. 312, related to 1988-89, still owing Rs.364; subscription unpaid for 1989-90, Rs, 468; special subscription for governor's party outstanding Rs.550 From the above information you are required to make out an income and expenditure account of club for the year ending 31% -3-1990From the following receipts and payments account prepare income and expenditure account for year ended 31-12-1995 of atul club, The following adjustment are required to be posted, Subscription include Rs.1200 due for 1994 and Rs.1400 advance subscription for 1996. subscription due for 1995 was Rs. 1600. interest accrued was Rs. 200. insurance prepaid was Rs. 300. printing dues not paid Rs.100 Depreciation on furniture @10% Receipts Rs | Payments RS 11-95 000 | 31-12-95 000 To bal b/d By furniture 31-12-95 Building 36000 To entrance fees 400 Subscriptions 716000 | Ground rent 1000 s | cos] x Interest received 2600 | Electricity 4800 Sundry reesipts 600" Municipal taxes 560 Receipts from annual] — 6400 | Cost oFannual dinner | 5000 dinner party Tasurance Tao Printing 400 Ground up keep 3800 Bal eid 4000 $2000 €2000 From the following particulars, prepare income and expenditure ae Fees collected, including R3.80,000 on account off _ Rs previous year 380,000 Fees for the year outstanding 10.000 salary paid, including Rs.3,000 on ale of the previous | 28,000 Meeting expenses 78,000 Travelling expenses 6000 6 CLOS | K2 | Purchase of books and periodicals 29000 (including Rs.19,000 for purchase of books) Rent 10,000 Salary outstanding atthe end of the year 1000 Entertainment expenses 3000 Tournament expenses 72,000 Postage 15,000 Printing and stationery 4000Donations received 2,000]] Section -D K QNo | CLO | LEVE QUESTIONS L From the following particulars relating to rama krishna mission charitable hospital, prepare income and expenditure account for the year ended 31° march,2015 and balance sheet as on that date: Receipts and payments account (for the year ended 31" march, 2015) Receipts Rs payments Rs To: eash in hand on | 7,130 | By: medicines 30,590 Subscriptions 47,996 | Doctor's 9,000 honorarium Donations 14,500 | Salaries 27,500 Interest on 7,000 | Petty expenses 461 investment(@ full year) Proceeds from 10,450 | Equipment 15,000 charity show Expenses on 750 charity show hin hand on| 3778 1 CLOS | K3 31-3-2015, 87,076 87,076 Additional information: Balance on 1-4-| Balance on 31-3 2014 2015 subscription due | Rs.240 Rs.280 Subscription Rs.64 Rs. 100 received in advance Stock of medicines [RS8,810 RS 9.740 Estimated value of | Rs.21,200 RS.31,600 equipment Building (Gost less | Rs.40,000 538,000 depreciation) Creditors or [ Rs.10,000 RS.8,000 medicinesFrom the following receipts and payments account of a club and from the information supplied, prepare income and expenditure account for the year ended 31* march 2015, and the balance sheet as on that date: Receipts and payments account ‘To: bal b/d Rs.7,000 Donations: 8,000 | By-toummament [1,100 Legacies 6000 [Furniture 2,000 Sale of old 75 | Crockery 1,200 furniture(book value RS.80) Endowment fund [10,000 | Sports 1,200 receipts materials Sale of newspaper 420 | Salaries 3,900 Sale of sports materials 80 | Charities 8,000 ‘Advertisement in the 400 | Advertisement 250 fear book Proceeds of concerts 2,700 [Rent and taxes [2,100 ‘Toumament fund 1,500 | Library books 800 CLOS | KS | FSubseription 7% investment | _ 14,600 Arrears 600 Current 14,000 Advance 800 15,400 Cost of[ 5,000 construction of building Bal cid 11,425 31,575 51,575 Additional information: Balance on [Balance_on 31-3- 313-2014 | 2015 Sports materials, 1000) 300 Subscription 600 700 outstanding Salaries outstanding 230 120 Furniture 1080) 2400 Library books 900 1700cLos K3 The following is the receipts and payments accounts of the Bombay club for the year ending 31.dec.1999 Receipts RS Payments Rs Tobal b/d (600 [ By rent 10,400 Entrance fees 1,100 | Stationery exp 6,136 To subscriptions wages 10,660 1998 RS. 400 1999 RS.33,800 2000 RS. 600 34,800 Lockers rent 1,000 | Billiards table 7,800 To:special subscriptions Repairs 1,612 for governor's party renewals 6,900 interest 3,000 Bal cid 4,792 44,400 44,400 Lockers rent Rs.120 refers to 1998 and Rs.180 is still owing; rent Rs.2600 pertaining to1998 and Rs,2,600 is still owing; stationery exp etc. Rs.624 related to 1998; Still owing Rs.728 ; subscription unpaid for 1999 Rs.1,736; special subscriptions for governor's party outstanding Rs.1,100 The club owned sports materials of the value Rs.32,000 on I-1- 1999. this was valued at Rs.27,000 on 31-12-1999. the club took a loan of Rs,40,000 in 1998. Prepare the income and expenditure A/c for 1999 and balance sheet as at 31", December ,1999