(Q1) Fill in the blanks:

1. Surplus of Income over expenses is Profit .

(Loss / Profit / Deficit / none of these)
2. Which of the following is Non Current liability ? Debentures .
(Overdue expenses / Short term loans / Debentures / Advance income)
3. A person whose assets are equal or exceeds their liability is Solvent .
(Solvent / Insolvent / Debtor / Creditor)
4. A Profit and Loss account is an Income Statement .
(Position statement / Income Statement / Both (a) and (b) / None of the above)
5. Amount which is not recoverable from customers is known as Bad debts .
(Bad Debts / Debtors / Creditors / Doubtful Debts)

(Q2) State whether the following statements are True of False:

1. Trial balance is an account. Ans: False.

2. Purchase account is always shown on the debit balance. Ans: False.
3. Interest credited in Passbook is an income to the customer. Ans: True.
4. Cheque book facility is available only for fixed deposit account holders. Ans: False.
5. Loan is a personal account. Ans: True.

(Q3) Match the pairs:

Group A Group B

1.Business - a.Accounting.
software.
2.Cost Accounting - b.Deal between two people involving exchange of goods and services on
cash or credit.
3.Liabilities. - c.Ascertainment and control of costs.
4.Tally ERP. - d.Borrowed Funds.
5.Transaction. - e.Undertaking of activities to earn profits.

Ans:

Group A Group B

1.Business - e.Undertaking of activities to earn profits.

software
2.Cost Accounting - c.Ascertainment and control of costs.
3.Liabilities. - d.Borrowed Funds.
4.Tally ERP. - a.Accounting.
5.Transaction. - b.Deal between two people involving exchange of goods and services on
cash or credit.
(Q3) Write Short Notes on:

1. Subsidiary Books.
Ans: Subsidiary books are specialized journals used to record specific types of transactions in
accounting. Common subsidiary books include the cash book, sales day book, purchases day
book, sales return book, purchases return book, and journal proper. These books help in
systematic recording and summarizing of transactions, making the accounting process more
efficient and organized.

2. Voucher System.
Ans: The voucher system is a method of documenting and controlling business transactions. It
involves the use of vouchers, which are documents that provide evidence of the transaction.
Each voucher typically includes details such as the date, amount, description of the transaction,
and authorization signatures. The voucher system helps ensure accuracy and accountability in
financial transactions by providing a paper trail for auditing and verification purposes.

3. What is a Profit and Loss Account ? Draw the proforma of Profit and Loss account.
Ans: A Profit and Loss Account, also known as an Income Statement, is a financial statement
that summarizes the revenues, expenses, and resulting net profit or loss of a business over a
specific period, usually a fiscal quarter or year.

• Here's a proforma:

Profit and Loss Account for the Year Ended [Date]

| Particulars | Amount (₹) |

|---------------------------------|-----------------|
| Revenue | |
| - Sales | |
| - Interest Income | |
| - Other Incomes | |
| Total Revenue | [X] |
| | |
| Expenses | |
| - Cost of Goods Sold | |
| - Operating Expenses | |
| - Interest Expense | |
| - Taxes | |
| - Other Expenses | |
| Total Expenses | [Y] |
| | |
| Net Profit (Loss). | [X - Y] |
4. Need for preparing Bank Reconciliation Statement.
Ans: Bank reconciliation statement is prepared to reconcile the balance as per the company's
books with the balance as per the bank statement. It helps in identifying discrepancies such as
outstanding checks, deposits in transit, bank charges, and errors. This reconciliation ensures
accuracy in financial records and prevents any potential fraud or discrepancies.

5. Computerised Accounting System.

Ans: Computerized accounting systems use computers and specialized software to record,
store, and analyze financial transactions. These systems automate various accounting
processes, including journal entries, ledgers, payroll, invoicing, and financial reporting.
Computerized accounting systems offer advantages such as increased accuracy, efficiency,
accessibility of data, and easier auditing compared to manual accounting methods.
——————————————————————————————————————————
(Q1) Fill in the blanks:

i) Bookkeeping is an art of recording in the books of accounts in the monetary term.

(Cost Accounting / Bookkeeping / Auditing / Taxation)
ii) The owner of a business is called a Proprietor .
(Creditors / Employee / Debtors / Proprietor)
iii) An account of a person which may be a natural person, artificial person or representative
group of persons is referred to as Personal .
(Real account / Personal / Nominal account / Debtors)
iv) The amount contributed by the partners in the firm is known as Capital .
(Loan / Reserve / Surplus / Capital)
v) Balance Sheet is Statement .
(An account / Statement / A report / draft)

(Q2) State whether the following statements are True or False.

i) Voucher is created by an accountant. Ans: True.

ii) Goods given as free samples should be debited to an advertising account. Ans: False.
iii) The debts which are to be paid in a short period of time are called as a current liabilities.
Ans: True.
iv) Debit what comes in and credit what goes out is a rule of nominal account. Ans: False.
v) Cash is an example of a fixed asset. Ans: False.

(Q3) Match the following pairs:

Group A Group B
1) Fixed Assets. - a) Branch of Accounting.
2) Accounting Software. - b) Secondary Book.
3) Cost Accounting. - c) Tally ERP 9.0.
4) Ledger. - d) Goodwill.
5) Intangible Asset. - e) Plant and Machinery.
Ans:

Group A Group B
1) Fixed Assets. - e) Plant and Machinery.
2) Accounting Software. - c) Tally ERP 9.0.
3) Cost Accounting. - a) Branch of Accounting.
4) Ledger - b) Secondary Book.
5) Intangible Asset - d) Goodwill.

(Q4) Write a short note.

a) Subsidiary books.
Ans: Subsidiary books are specialized journals used in accounting to record specific types of
transactions, such as sales, purchases, cash receipts, and cash disbursements. They help
streamline the recording process by categorizing transactions and facilitating efficient
record-keeping.

b) Accounting Software Packages.

Ans: Accounting software packages are computer programs designed to streamline and
automate accounting tasks such as bookkeeping, invoicing, payroll, and financial reporting.
These software packages offer various features to help businesses maintain accurate financial
records and make informed decisions.

c) Role of computers and Financial application.

Ans: Computers and financial applications play a crucial role in modern accounting by
automating repetitive tasks, improving accuracy, and providing real-time access to financial
data. They enable businesses to streamline processes, enhance efficiency, and make
data-driven decisions to optimize financial performance.

d) Accounting Process.
Ans: The accounting process involves systematically recording, classifying, summarizing, and
interpreting financial transactions to provide stakeholders with accurate and timely financial
information. It typically includes steps such as journalizing, posting, preparing trial balances,
adjusting entries, and generating financial statements.

e) Importance of Bank Reconciliation Statement.

Ans: Bank reconciliation statement is a vital tool in accounting that compares the bank's records
of a company's cash transactions with the company's own records. It helps identify
discrepancies such as outstanding checks, bank errors, or unauthorized transactions, ensuring
the accuracy of the company's financial records and maintaining financial integrity.

——————————————————————————————————————————
(Q1) Fill in the blanks.

1) Accounting is a language of business.

(Accounting / Bookkeeping / Auditing / Taxation)
2) Tally ERP 9 is an example of Computerized Accounting .
(Manual Accounting / Computerized Accounting / Automated Accounting / Non-Automated)
3) Bad debts are deducted from Debtors .
(Creditors / Debtors / Capital / Loans)
4) Trading Account shows Gross Profit .
(Gross Profit / Net Loss / Net Profit / Capital)
5) Interest earned is Nominal Account .
(Real account / Nominal account / Personal account / Trading Account)

(Q2) State whether the following statements are True or False.

a) The money withdrawn from the business or goods taken for personal use by the proprietor is
referred to as drawings. Ans: True.
b) Goodwill, Patents, Trademark are the examples of nominal accounts. Ans: False.
c) According to the business entity concept owner and business organization are two different
entities. Ans: True.
d) A journal is called a book of secondary entry. Ans: False.
e) Balance sheet is an account. Ans: False.

(Q3) Match the following pairs.

Group A Group B

a) Current Asset. - i) Branch of Accounting.

b) Tally ERP 9.0. - ii) Primary Book.
c) Management Accounting. - iii) Accounting software.
d) Journal. - iv) Intangible Asset.
e) Goodwill. - v) Cash and Stock.

Ans:

Group A Group B

a) Current Asset. - v) Cash and Stock.

b) Tally ERP 9.0. - iii) Accounting software.
c) Management Accounting. - i) Branch of Accounting.
d) Journal. - ii) Primary Book.
e) Goodwill. - iv) Intangible Asset.
(Q4) Write short notes.

a) Scope of financial accounting.

Ans:
• Financial accounting involves recording, summarizing, and reporting financial transactions of
an organization.
• It encompasses preparing financial statements like balance sheets, income statements, and
cash flow statements.
• The scope extends to ensuring compliance with accounting standards and regulations to
provide transparency and accountability.

b) Accounting Process.
Ans:
• The accounting process starts with identifying and recording financial transactions.
• Transactions are then classified, summarized, and posted to the general ledger.
• Adjusting entries are made to ensure accuracy, followed by preparing financial statements.
• Finally, the process includes analyzing financial data to provide insights for decision-making.

c) Importance of Bank Reconciliation Statement.

Ans:
• Bank reconciliation statements ensure the accuracy of financial records by comparing
company records with bank statements.
• They help detect errors, discrepancies, and fraudulent activities in cash transactions.
• Ensures the reported cash balance in financial statements is correct, providing confidence to
stakeholders about financial health.

d) Accounting Software Packages.

Ans:
• Accounting software packages automate accounting tasks such as recording transactions,
generating financial reports, and managing accounts.
• Examples include QuickBooks, Xero, and FreshBooks, offering features tailored to different
business needs.
• They improve efficiency, accuracy, and compliance with accounting standards, reducing
manual errors and saving time.

e) Role of computers and Financial application.

Ans:
• Computers and financial applications streamline data processing, analysis, and reporting in
accounting.
• They enable real-time access to financial data, enhance collaboration, and integrate with other
business processes.
• Support decision-making by providing timely and accurate financial information, improving
overall efficiency and effectiveness of accounting processes.