TEST SERIES

CMA – FOUNDATION (RPT & SF(B) - FEB’2024

PAPER 2 : FUNDAMENTALS OF FINANCIAL AND COST ACCOUNTING
TEST SERIES – 4
SUGGESTED ANSWERS
Date: 12th April 2024 Marks : 50 Duration : 30 Min.
Syllabus: Rectification of Errors, Depreciation, Bank Reconciliation Statement

Choose the correct options: 25Q*2M = 50M

1. The payments side of the cash book is under cast by Rs.200. When overdraft as per pass book is the
starting point, to get the overdraft as per cash book.
(d) Rs.200 will be deducted (b) Rs.200 will be added
(c) Rs.400 will be added (d) Rs.400 will be deducted
2. A Company, which closes its books each year on 31st March December, bought on 1st Jan., 2000, a
second hand machine for Rs.23,000 and spent Rs 2,000 on its overhaul. The expected life is 5 years
of 2,000 hours each. During 2000 and 2001 it worked for 1,500 and 1,000 hours respectively.
Calculate the total amount of depreciation for the two years under SLM:
(d) 10,000 (b) 6,250 (c) 2,250 (d) 12,500
3. The total of sales book has been under cast by Rs. 200. For rectifying this error:
(d) Purchase book should be debited by the Rs. 200
(b) Sales a/c should be credited by Rs. 200
(c) Sales book should be debited by Rs. 200
(d) Sales book should be credited by Rs. 400
4. The bank pass book shows Rs.3,260 but the Cash book gives a different figure. The differences are
found to be a cheque for Rs.34 sent to a creditor but wrongly entered in the cash book as Rs.142; an
error by the bank, Rs.324 paid in has not been credited by them to the customer. The cash book
showed:
(d) Rs.2,828 (b) Rs.3,044 (c) Rs.3,476 (d) Rs.3,692
5. Original cost of asset Rs.5,00,000 ; Discount offered Rs.20,000; Life time of asset 5 years;
Estimated scrap value Rs.40,000; Depreciation method is Sinking fund method; Sinking fund table
reference; 0.180975. The annual Depreciation is Rs. :
(d) 90,487.5 (b) 86,868 (c) 79,629 (d) 83,248.5
6. What is the rectified entry when sales book is cast short?
(d) Dr. Bank a/c & Cr. Sales a/c (b) Dr. Sales a/c & Cr. Bank a/c
(c) Dr. Suspense a/c & Cr. Sales a/c (d) Dr. Sales a/c & Cr. Suspense a/c
7. When Overdraft Balance as per cash book is 20,000. Interest on Overdraft by Bank is Rs. 2,000 is not
recorded in cash book then the Overdraft Balance as per Pass Book will be _________
(d) 22,000 (b) 24,000 (c) 18,000 (d) 21,000
8. What is the rectified entry when the cash received from A has been credited to B a/c?
(d) Dr. Bank a/c & Cr. B a/c (b) Dr. A a/c & Cr. B a/c
(c) Dr. Bank a/c & Cr. A a/c (d) Dr. B a/c & Cr. A a/c
9. A credit purchase of Rs.30,000 was recorded in the sales book posted to the credit of supplier. The
difference in the Trial Balance will be

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TEST SERIES

(d) Debit side higher by Rs.30,000 (b) Credit side higher by Rs.30,000
(c) Debit side higher by Rs.60,000 (d) Credit side higher by Rs.60,000
10. The cash book showed an overdraft of Rs. 1,500 as cash at bank, but the pass book made up to
the same date showed that cheques of Rs. 100, Rs. 50 and Rs. 125 respectively had not been
presented for payments; and the cheque of Rs. 400 paid into account had not been cleared. “The
balance as per pass book will be”
(d) Rs. 1,100. (b) Rs. 2,175. (c) Rs. 1,625. (d) Rs. 1,375.
11. Amit Ltd. purchased a machine on 01.01.2003 for Rs.1,20,000. Installation expenses were
Rs.10,000. Residual value after 5 years Rs.5,000. On 01.07.2003, expenses for repairs were
incurred to the extent of Rs.2,000. Depreciation is provided under straight line method. Annual
Depreciation will be.
(d) Rs.13,000 (b) Rs.17,000 (c) Rs.21,000 (d) Rs.25,000
12. Furniture which stood in the books of Rs.500 was sold for Rs.275 in part exchange of new furniture
costing Rs.875 and the net invoice of Rs.600 was passed through the purchases book. The
rectification of this error would result in:
(d) increase in the profit by Rs.375 (b) decrease in the profit by Rs.375
(c) decrease in the profit by Rs.225 (d) increase in the profit by Rs.600
13. Historical cost Rs.8,00,000 ; Estimated Scrap value Rs.50,000; Depreciation method applied is WDV
method @ 10% per annum. What is written down value at the end of 4th year?
(d) 5,42,880 (b) 5,24,880 (c) 5,82,480 (d) 5,48,280
14. Goods sold under credit terms Rs.16,900 to Mohan were recorded properly in the Sales Book but
were debited to his account as Rs.19,600 and carriage outward freight paid Rs.700 chargeable
from him were posted to Sales Expenses Account. To rectify this,
(d) credit Mohan a/c with Rs.2,700 (b) credit Mohan a/c with Rs.2,000
(c) debit Mohan a/c with Rs.700 (d) debit Mohan a/c with Rs.2,700
15. What is the rectified entry when drawings made by proprietor is debited to expense a/c?
(d) Dr. Expense a/c & Cr. Drawings (b) Dr. Drawings a/c & Cr. Expense a/c
(c) Dr. Expense a/c & Cr. Bank (d) Dr. Drawings a/c & Cr. Bank a/c
16. Balance in Bank column of the cash book of X & Co. on 31.03.2007 is Rs.5,500. Cheques issued
but not presented for payment till 31.03.2007 are Rs.250 and cheques deposited but not cleared
are Rs.350. Balance as per Bank pass book is
(d) Rs.5,400 (b) Rs.6,100 (c) Rs.4,900 (d) Rs.5,850
17. What is the rectified entry when a cheque received from A is dishonoured and posted to sales
return a/c?
(d) Dr. A a/c & Cr. Sales a/c (b) Dr. Sales a/c & Cr. A a/c
(c) Dr. Sale a/c & Cr. Sales return a/c (d) Dr. A a/c & Cr. Sales return a/c
18. What entry would the customer pass when he rejects the goods purchased on approval basis?
(d) Dr. Supplier a/c & Cr.Purchase a/c
(b) Dr. Supplier a/c & Cr.Purchase on approval basis a/c
(c) Dr. Supplier a/c & Cr. Suspense a/c
(d) No entry
19. Sale of old machinery of Rs.5,000 has been treated as sale of goods. To rectify this error give the
journal entry, after preparing the trial balance.

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TEST SERIES

(d) Machinery account Dr. 5,000

To Sales account 5,000
(b) Purchases account Dr. 5,000
To Machinery account 5000
(c) Sales account Dr. 5,000
To Machinery account 5,000
(d) Sales account Dr. 5,000
To Purchases account 5,000
20. Debit balance in plant account on 1.1.04 is Rs.80,000; Scrap value Rs.20,000 Depreciation method
applied up to 31.12.2003 is SLM method @ 15% per annum. Find out the original cost of the plant
if it was purchased on 1.1.2000 :
(d) 2,00,000 (b) 2,40,000 (c) 4,20,000 (d) 2,04,000
21. A Company, which closes its books each year on 31st December, bought on 1st Jan, 2000, a
second hand machine for Rs.23,000 and spent Rs.2,000 on its overhaul. The expected life is
5 years of 2,000 hours each. During 2000 and 2001 it worked for 1,500 and 1,000 hours respectively.
Calculate the total amount of depreciation for the two years :
(d) 10,000 (b) 6,250 (c) 2,650 (d) 12,500
22. A mine estimated to contain 1,00,000 tonnes of minerals is leased at a cost of Rs.15,00,000 and was
expected to be worked for 10 years. During the first year, production was 6,000 tonnes. State the
amount of the depreciation :
(d) 1,50,000 (b) 51,000 (c) 19,000 (d) 90,000
23. What is the rate of depreciation, as per SLM when cost of machine is Rs.1,05,000,residual value
Rs.5,000 & useful life is 10 years?
(d) 9% (b) 9.5% (c) 10% (d) 10.5%
24. Ram Ltd. purchased a machine on 01.01.2003 for Rs.1,20,000. Installation expenses were
Rs.10,000. Residual value after 5 years Rs.5,000. On 01.07.2003, expenses for repairs were
incurred to the extent of Rs.2,000. Depreciation is provided under straight line method.
Depreciation rate is 10%. Annual Depreciation will be.
(d) Rs.13,000 (b) Rs.17,000 (c) Rs.21,000 (d) Rs.25,000
25. H Ltd. purchased a machinery on April 01, 2000 for Rs. 3,00,000. It is estimated that the machinery
will have a useful life of 5 years after which it will have no salvage value. If the company follows
sum-of-the-years-digits method of depreciation, the amount of depreciation charged during the
year 2004-05 was
(d) Rs. 1,00,000 (b) Rs. 80,000 (c) Rs. 60,000 (d) Rs. 20,000.

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