VIDYA SAGAR

CAREER INSTITUTE LIMITED

Foundation Minor Test – 1 (Accounting & BLBCR)

Batch : 23
Time : 3 Hours Maximum Marks: 100
Date : 19.03.2020
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Section A
"Principles and Practice of Accounting"
Questions 1 is compulsory, attempt any 4 from the remaining
Marks 50
1(a) State with reasons whether the following statements are True or False: 2x3 =
6
(i) "Money spent to reduce working expense is revenue expenditure".
(ii) "A contingent Assets is usually disclosed as a foot note."
(iii) "Sales Book is also known as Journal"

(b) Distinguish between contingent liabilities and liabilities. 2

(c) Define : 2
(i) Historical Cost
(ii) Current Cost

2 Shri Ramaswamy maintains a Columnar Petty Cash Book on the Imprest System. The 10
imprest amount is ` 500. From the following information, show how his Petty Cash Book
would appear for the week ended 12th September, 2015:

7-9-2015 Balance in hand 134.90

Received Cash reimbursement to make up the imp rest 365.10
Stationery 49.80
8-9-2015 Miscellaneous Expenses 20.90
9-9-2015 Repairs 156.70
10-9-2015 Travelling 68.50
11-9-2015 Stationery 71.40
12-9-2015 Miscellaneous Expenses 6.30
Repairs 48.30

3 (a) A firm purchased on 1st January, 2015 certain machinery for ` 5,82,000 and spent 7
` 18,000 on its erection. On July 1, 2015 another machinery for ` 2,00,000 was acquired.
On 1st July, 2016 the machinery purchased on 1st January, 2015 having become obsolete
was auctioned for ` 3,86,000 and on the same date fresh machinery was purchased at a
cost of ` 4,00,000.
Depreciation was provided for annually on 31st December at the rate of 10 per cent p.a.
on written down value.
Required
Prepare machinery account.

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(b) A machine was purchased for ` 30,00,000 having an estimated total working of 3
24,000 hours. The scrap value is expected to be ` 2,00,000 and anticipated
pattern of distribution of effective hours is as follows :
Year
1 – 3 3,000 hours per year
4 - 6 2,600 hours per year
7 - 10 1,800 hours per year
Required
Determine Annual Depreciation under Machine Hour Rate Method.

4 (a) A merchant’s trial balance as on June 30, 2017 did not agree. The difference was put to a 7
Suspense Account. During the next trading period, the following errors were
discovered:
(i) The total of the Purchases Book of one page, `4,539 was carried forward to
the next page as `4,593.
(ii) A sale of `573 was entered in the Sales Book as `753 and posted to the
credit of the customer.
(iii) A return to a creditor, `510 was entered in the Returns Inward Book;
however, the creditor’s account was correctly posted.
(iv) Cash received from C. Dass, `620 was posted to the debit of G. Dass.
(v) Goods worth `840 were dispatched to a customer before the close of the
year but no invoice was made out.
(vi) Goods worth `1,000 were sent on sale or return basis to a customer and
entered in the Sales Book. At the close of the year, the customer still had the
option to return the goods. The sale price was 25% above cost.
You are required to give journal entries to rectify the errors in a way so as to
show the current year’s profit or loss correctly.

(b) From the following transactions, prepare the Purchases Returns Book of Alpha 3
& Co., a saree dealer and post them to ledger :

Date Debit Particulars

Note
No.
04.01.2016 101 Returned to Goyal Mills, Surat - 5 polyester sarees @ `1,000.

09.01.2016 Garg Mills, Kota- accepted the return of goods (which

were purchased for cash) from us - 5 Kota sarees @ `400.
16.01.2016 102 Returned to Mittal Mills, Bangalore - 5 silk sarees @ `2,600.
30.01.2016 Returned one computer (being defective) @ `35,000 to
B & Co.

5 An inexperienced bookkeeper has drawn up a Trial Balance for the year ended 30th 10
June, 2017.
Debit (`) Credit (`)
Provision For Doubtful Debts 200 –
Bank Overdraft 1,654 –
Capital – 4,591
Trade payables – 1,637
Trade receivables 2,983 –
Discount Received 252 –
Discount Allowed – 733
Drawings 1,200 –
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 Office Furniture 2,155 –
General Expenses – 829
Purchases 10,923 –
Returns Inward – 330
Rent & Rates 314 –
Salaries 2,520 –
Sales – 16,882
Inventory 2,418 –
Provision for Depreciation on Furniture 364 –
Total 24,983 25,002
Required:
Draw up a ‘Corrected ’Trial Balance, debiting or crediting any residual errors to a
Suspense Account.

6 The Cash Book of Mr. Gadbadwala shows ` 8,36,400 as the balance at Bank as on 31st 10
December, 2017, but you find that it does not agree with the balance as per the Bank
Pass Book. On scrutiny, you find the following discrepancies:
(1) On 15th December, 2017 the payment side of the Cash Book was under cast by
`10,000.
(2) A cheque for `1,31,000 issued on 25th December, 2017 was not taken in the bank
column.
(3) One deposit of `1,50,000 was recorded in the Cash Book as if there is no bank
column therein.
(4) On 18th December, 2017 the debit balance of `15,260 as on the previous day, was
brought forward as credit balance.
(5) Of the total cheques amounting to `11,514 drawn in the last week of December,
2017, cheques aggregating `7,815 were encashed in December.
(6) Dividends of `25,000 collected by the Bank and subscription of `1,000 paid by it
were not recorded in the Cash Book.
(7) One out-going Cheque of `3,50,000 was recorded twice in the Cash Book.
Prepare a Reconciliation Statement.

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 Section B
Part "A"
"Business Laws"
Questions 1 is compulsory, attempt any 4 from the remaining
Marks 30

1(a) Point out with reason whether the following agreements are valid or void: 4
(i) Kamala promises Ramesh to lend ` 50,000 in lieu of consideration that Ramesh
gets Kamala’s marriage dissolved and he himself marries her.
(ii) Sohan agrees with Mohan to sell his black horse. Unknown to both the parties,
the horse was dead at the time of agreement.
(iii) Ram sells the goodwill of his shop to Shyam for ` 4,00,000 and promises not to
carry on such business forever and anywhere in India.
(iv) In an agreement between Prakash and Girish, there is a condition that they will
not institute legal proceedings against each other without consent.

(b) M promised to pay N for his services at his (M) sole discretion found to be fair and 2
reasonable. However, N dissatisfied with the payment made by M and wanted to sue
him. Decide whether N can sue M under the provisions of the Indian Contract Act,
1872?

2 What do you understand by “coercion” and “undue influence” under the provisions 6
of the Indian Contract Act, 1872? What are the differences between them?

3(a) M Ltd., contracts with Shanti Traders to make and deliver certain machinery to them 3
by 30.6.2004 for ` 11.50 lakhs. Due to labour strike, M Ltd. could not manufacture
and deliver the machinery to Shanti Traders. Later, Shanti Traders procured the
machinery from another manufacturer for ` 12.75 lakhs. Shanti Traders was also
prevented from performing a contract which it had made with Zenith Traders at the
time of their contract with M Ltd. and were compelled to pay compensation for
breach of contract. Advise Shanti Traders the amount of compensation which it can
claim from M Ltd., referring to the legal provisions of the Indian Contract Act, 1872.

(b) A by a misrepresentation leads B to believe erroneously that 750 tons of sugar is 3

produced per annum at the factory of A. B examines the accounts of the factory,
which should have disclosed, if ordinary diligence had been exercised by B, that only
500 tons had been produced. Thereafter B purchases the factory. State whether B
can repudiate the contract As per the provisions of Indian Contract Act, 1872?

4(a) Ramesh, aged 16 years, was studying in an engineering college. On 1 March, 2011 he 4
took a loan of ` 1 lakh from Suresh for the payment of his college fee and agreed to
pay by 30th May, 2012. Ramesh possesses assets worth ` 10 lakhs. On due date
Ramesh fails to pay back the loan to Suresh. Suresh now wants to recover the loan
from Ramesh out of his assets. Whether Suresh would succeed? Decide, referring to
the provisions of the Indian Contract Act, 1872.

(b) Distinguish between Succession and Assignment. 2

5(a) Ramaswami proposed to sell his house to Ramanathan. Ramanathan sent his 4
acceptance by post. Next day, Ramanathan sends a telegram withdrawing his
acceptance. Examine the validity of the acceptance in the light of the following:
(i) The telegram of revocation of acceptance was received by Ramaswami before
the letter of acceptance.
(ii) The telegram of revocation and letter of acceptance both reached together.

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(b) A coolie in uniform picks up the luggage of R to be carried out of the railway station 2
without being asked by R and R allows him to do so. Examine whether the coolie is
entitled to receive money from R under the Indian Contact Act, 1872.

6(a) What are the rules regarding appropriation of payments? 4

(b) Enumerate any 4 distinction between wagering agreement & contingent contract. 2

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 Part "B"
" Business Correspondence and Reporting"
Questions 7 is compulsory, attempt any 3 from the remaining
Marks 20

7(a) What is the importance of Para language? 2

(b) Rewrite the following sentences in the active voice : 3

(i) Food from road side vendors should not be eaten.
(ii) The man who saved the child from the burning house was being cheered by the
crowd of onlookers.
(iii) Software for head count is provided by SASTRA .

8(a) Explain Diagonal communication. 2

(b) Rewrite the following sentences in the passive voice : 3

(i) I ran the obstacle course in record time.
(ii) Tom painted the entire house.
(iii) FCS are only marketing their new dental equipment in Europe.

9(a) Explain star network of communication. 2

(b) Change the following sentences to indirect speech. : 3

(i) She said, “Nobody can solve the problem.”
(ii) The man said, “Is your father at home?”
(iii) She said to me, “How have you done this sum?

10(a) Explain Courtesy as characteristics of communication. 2

(b) State which of the following are compound and which are complex sentences. 3
In every sentence, identify the dependent and independent clauses.
(i) The flash floods wiped out the town but luckily there were no casualties.
(ii) The soldiers were asked to carry out the orders which their commander had
given them
(iii) He will come when it suits him.

11(a) Explain the Perception Barriers of communication 2

(b) Classify the following sentences as Simple, Compound, Complex, or Compound- 3

Complex.
(i) After the tornado hit, my house was completed destroyed
(ii) The earlier mobile phones were bulky; the latest models, which are sleek, have
many more features.
(iii) Mr. Jones has a lot of books, he is well informed about current events

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