MODEL PAPER

Semester (Ist Semester) Examination, 2024

Program: BBA
Subject: Basic Accounting
Subject Code: 11CC102

Course Learning Objective:

CLO 1: Understand the nature, scope, objectives, branches and principles of financial accounting.
And also enable learners to understand the journal transactions, ledger, trial balance and errors
disclosed by it.
CLO 2: It includes Bank reconciliation statement, its features, objectives and its preparation as per
both methods and also different types of errors and its rectifications.
CLO 3: Provide students with an understanding of the importance of bills of exchange, its
constituents and explain the concepts of depreciation, the methods of providing depreciation as
well as obsolescence, amortization depletion and fluctuations.
CLO 4: Understand the preparation of P/L statement and Balance sheet as well as its adjustment
for ascertaining the financial position of the business.

Course Outcome:

On completion of the Course, the students will be able to:

CO 1: Understand the objectives, scope, importance, branches and principles of financial
accounting and its applications in business organizations and record journal transactions, posting it
into leger and prepare trial balance as well as understand the methods to allocate errors in trial
balance.
CO 2: Understand the objectives and purpose of Bank reconciliation statement, preparation
according to balance and total method and apply the rectification of different types of errors in
subsidiary books to solve business problems.
CO 3: Evaluate the due date, days of grace in bills of exchange, analyze the difference between
bills of exchange and promissory notes. Understand depreciation, analyze the causes of
depreciation, factors affecting depreciation and fixed & reducing instalment method to solve
problems.
CO4: Analyzing a firm’s financial activities using financial statement analysis tools to know the
company’s overall performance.

SECTION A
Question for Five (5) marks:

1. Define the term Accounting. Describe its Scope. [CO1, Unit I, BTL – LOT, Remember]

2. Explain the branches of Accounting [CO1, Unit I, BTL – LOT, Understand]

3. Explain whether accounting is science or art or both. [CO1, Unit I, BTL – LOT, Understand]

4. State the advantages of Journal Entries. [CO1, Unit I, BTL – LOT, Remember]

5. State the Objective of Bank Reconciliation Statement. [CO2, Unit II, BTL – LOT, Remember]

6. How will the following items affect the balance of Cash book: [CO2, Unit II, BTL – LOT,
Interpret]

i) Cheque issued to the supplier but cheque is not presented for payment till date.
ii) Interest on investment collected by the bank.
iii) Direct payment by the debtor into our bank account.
iv)Interest debited by the bank.
v) Direct collection of dividend by the bank.
7. State the meaning of a trial balance? Describe its limitations. [CO1, Unit I, BTL – LOT,
Remember]

8. Describe the meaning of suspense account? When it is opened and how it is eliminated? [CO2,
Unit II, BTL – LOT, Understand]

9. Define BRS. Describe the steps for preparing BRS. [CO2, Unit II, BTL – LOT, Remember]

10. Describe the meaning of Bills of Exchange. State the three parties involved in a bill of
exchange. [CO3, Unit III, BTL – LOT, Remember]
11. Compare between Straight line method and written down value method for providing
depreciation. [CO3, Unit III, BTL – LOT, Understand]

12. Calculate the due date of the bill in following cases: [CO3, Unit III, BTL – LOT, Apply]
i) 27th November, 2023 Period: 3 months
ii) 30th June, 2023 Period: 2 months
iii) 1st July, 2023 Period: 60 days
iv) 30th June, 2023 Period: 30 days
v) 31st January, 2024 Period 1 month

13. State the following terms – [CO3, Unit III, BTL – LOT, Remember]
i) Provision ii) Reserve iii) Amortization iv) Endorsement of Bill
v) Discounting of Bill.
14. State briefly the need of providing depreciation. [CO3, Unit III, BTL – LOT, Remember]
15. Draw the format of trading and profit and loss account. [CO4, Unit IV, BTL – LOT,
Remember]
16. How do you deal with the following adjustments: [CO4, Unit IV, BTL – LOT, Apply]
i) Outstanding expenses
ii) Interest on Capital
iii) Prepaid expenses
iv) Accrued income
v) Interest on drawings
17. Explain the meaning of Trading and Profit & Loss account. State its Characteristics. [CO4,
Unit IV, BTL – LOT, Understand]
18. State whether the following statements are items of capital or revenue expenditure: [CO4, Unit
IV, BTL – LOT, Apply]
i) Expenditure incurred on repairs and whitewashing at the time of purchase of an old building
in order to make it usable.
ii) Registration fees paid at the time of purchase of a building
iii) Expenditure incurred in the maintenance of a tea garden which will produce tea after four
years.
iv)Depreciation charged on a plant.
v) The expenditure incurred in erecting a platform on which a machine will be fixed.
19. State the objective of financial statement. [CO4, Unit IV, BTL – LOT, Remember]

SECTION -B

Question for Ten (10) marks:

20. Prepare a trial balance as on 31st March 2018 from the books of Pranay. [CO1, Unit I, BTL –
HOT, Analyse]
 Particulars Amount Particulars Amount
(`) (`)
Capital 75,00,000 Building 7,50,000
Plant 15,00,000 Stock on 1st April 2017 12,50,000
Cash in hand 2,500 Cash in Bank 5,75,000
Commission Received 1,75,000 Rates, Taxes & 30,000
Discount(Dr) 55,000 Insurance
Purchases Return 50,000 Discount (Cr.) 45,000
Interest Received 30,000 Sundry Creditors 2,50,000
Repairing Charges 1,25,000 Sales 62,50,000
General Expenses 3,00,000 Book Debts 15,00,000
Wages 5,00,000 Rent 62,500
Furniture 1,20,000 Purchases 48,00,000
Sales Return 90,000 Carriage & Freight 75,000
Loan Advanced 6,00,000 Delivery Van 5,00,000
Office Salaries 6,25,000 Traveling Expenses 50,000
Drawings 6,00,000

21. Describe accounting standard. Explain the branches of Accounting. [CO1, Unit I, BTL – LOT,
Understand]
22. Define trial balance. Why is it prepared? Is the trial balance a conclusive proof of arithmetical
accuracy in the books of accounts? Explain. [CO1, Unit I, BTL – LOT, Remember]
23. Analyze and Pass the following transactions in journal of Kumar Swami for the month of
January 2014. [CO1, Unit I, BTL – HOT, Analyze]
Date Particulars Amount (`)
1. Jan. 1
Capital paid into Bank 3,00,000
2. Jan. 1
Bought Stationery for cash 400
3. Jan. 2
Bought Goods for cash 25,000
4. Jan. 3
Bought Postage Stamps 600
5. Jan. 5
Sold Goods for Cash 10,000
6. Jan. 6
Bought Office Furniture from Mahendra Bros. 40,000
7. Jan.11
Sold goods to Jacob 12,000
8. Jan.12
Received cheque from Jacob 12,000
9. Jan.14
Paid Mahendra Bros. by cheque 40,000
10. Jan.16
Sold goods to Ramesh & Co 5,000
11. Jan.20
Bought from S. Seth & Bros 15,000
12. Jan.23
Bought Goods for cash from S.Narain & Co 22,000
13. Jan.24
Sold Goods to P.Prakash 17,000
14. Jan. 26
Ramesh & Co. Paid on account 2,500
15. Jan.28
Paid S.Seth & Bros. by cheque in full settlement
14,800
16. Jan.31 Paid Salaries 2,800
17. Jan.31 Rent is due to S. Sharma but not yet paid 2,000
24. Analyze and Rectify the following Errors: [CO2, Unit II, BTL – HOT, Analyze]
i. Rs. 5,000 Paid for furniture purchased has been debited to purchases account.
ii. Wages paid Rs. 7,000 for installation of new machinery were recorded in wages account.
 iii. Goods sold to Hari Rs. 10,000 not recorded.
iv. Rs. 2,500 received from Monu has been credited to Sonu A/c.
v. Rent paid Rs. 1,000 wrongly debited to Landlord Account.
vi. Credit Purchase from Raman Rs. 15,000 were wrongly recorded in sales book.
vii. Credit sales to Geeta Rs. 8,.800 were recorded as Rs, 8,800
viii. Goods Rs. 5,000 withdrawn by proprietor has not been recorded
ix. Sales Book was overcast by Rs. 2,000
x. Sales Return Book undercast by Rs. 4,000
25. Describe the various types of errors? How would you rectify various errors in accounting?
[CO2, Unit II, BTL – LOT, Remember]
26. Explain all the possible reasons for the difference between bank column of pass book and
customer’s cash book. [CO2, Unit II, BTL – LOT, Understand]
27. From the following particulars, prepare Bank Reconciliation Statement as on 31st December,
2008:
i. Debit balance as per Cash Book Rs. 10,000.
ii. A cheque for Rs. 500 issued in favour of Karan has not been presented for payment.
iii. A bill for Rs. 700 retired by bank under a rebate of Rs 20, the full amount of the bill was
credited in the Cash Book.
iv. A cheque for Rs. 295 deposited in the bank has been dishonored.
v. A sum of Rs. 800 deposited in the bank has been credited as Rs. 80 in the Pass Book.
vi. Payment side of the Cash Book has been under-cast by Rs. 200.
vii. A bill receivable for Rs 1,000 (discounted with the bank in November 2008) dishonored on
31st December, 2008. [CO2, Unit II, BTL – HOT,
Analyze]
28. Bring out the difference between capital expenditure and revenue expenditure. Also explain
deferred revenue expenditure with examples. [CO3, Unit III, BTL – HOT, Analyze]
29. Distinguish between a bill of exchange and promissory note. [CO3, Unit III, BTL – HOT,
Analyze]
30. A Ltd. purchased on 1st April, 2019 a machinery for Rs. 2,91,000 and incurred Rs. 9,000 for
installation. On 1st October another machinery for Rs. 1,00,000 was purchased. On 1st October
2020 the machinery purchased on 01/04/2019 having become useless was sold for Rs. 1,93,000
and on that day a new machinery was purchased for Rs. 2,00,000.
Depreciation was provided on 31st March each year @ 10 percent p.a on written Down Value.
You are required to prepare machinery account. [CO3, Unit III, BTL – HOT, Evaluate]
31. Amit sold goods for ` 20,000 to Sumit on credit on Jan 01, 2017. Amit drew a bill of exchange
upon Sumit for the same amount for three months. Sumit accepted the bill and returned it to
Amit. Sumit met his acceptance on maturity. Record the necessary journal entries under the
following circumstances:
(i) Amit retained the bill till the date of its maturity and collected directly
(ii) Amit discounted the bill @ 12% p.a from his bank
(iii) Amit endorsed the bill to his creditor Ankit
 (iv) Amit retained the bill and on March 31, 2017 Amit sent the bill for collection to its bank.
On April 05, 2017 bank advice was received. [CO3, Unit III, BTL – HOT,
Evaluate]

32. Explain the meaning of balance sheet? How it is prepared? Differentiate between trial balance
and balance sheet. [CO4, Unit IV, BTL – LOT, Understand]
33. Following balance is extracted from the books of a trader prepare trading and Profit & Loss
account for the year ended March 31, 2017. [CO4, Unit IV, BTL – HOT, Evaluate]

Particulars Amount Particulars Amount

Sales 75,250 Advertisement 1,800
Purchases 32,250 Commission paid 150
Opening stock 7,600 Office expenses 1,600
Sales return 1,250 Wages 2,600
Purchases return 250 Profit on sale of investment 500
Rent 300 Depreciation 800
Stationery and printing 250 Dividend on investment 2,500
Salaries 3,000 Loss on sale of old furniture 300
Misc. expenses 200 Closing stock 8,000
Travelling expenses 500 (March 31, 2017 `

34. Explain the meaning of final account? Explain the main objectives of financial statements.
Also explain direct expenses and indirect expenses with examples. [CO4, Unit IV, BTL –
LOT, Understand]
35. Following balances appear in the books of Hari Bros:
Date Transection Amount
1st April, 2020 Machinery A/c 80,000
Provision for depreciation A/c 36,000

On 1st April, 2020, they decided to sell a machine for Rs. 8,700. This machine was purchased
for Rs. 16,000 in April, 2016. Prepare the Provision for Depreciation Account and Machinery
Account on 31st March, 2021, assuming the firm has been charging Depreciation at 10% p.a.
on Straight Line Method. [CO3, Unit III, BTL – HOT, Evaluate]

SECTION -C

Question for Ten (20) marks:

36. Record the following transactions in journal. Post them into ledger account and prepare a trial
balance: [CO1, Unit I, BTL – HOT, Analyze]
May 2 Sold goods to Govind Cash Rupees 10,000 and credit Rupees 2,000
 May 3 Sold to Sharma Rupees 11,000
May 5 Bought from Ram Lal Rupees 1200
May 8 Sold to Zahir Rupees 500
May 15 Received from Govind Rs.1500
May 18 Received from Sharma : Rupees 2,000
Allowed him discount : Rupees 50
May 20 Accepted Ram Lal draft at three months Rs.1500
May 21 Sold goods to Sharma : Rs.800
May 22 Paid rent Rupees 150
May 24 Sold to Zahir Rupees 1000
May 30 Paid salaries in cash Rs.300

37. On Jan 15, 2015, Kartar Sold goods for ₹ 30,000 to Bhagwan and drew upon him three bills of
exchanges of ₹ 10,000 each payable after one month, two months and three months
respectively. The first bill was retained by Kartar till its maturity. The second bill was endorsed
by him in favour of his creditor Ratna and the third bill was discounted by him immediately @
6% p.a. All the bills were met by Bhagwan. Journalise the above transactions in the books of
Kartar, Bhagwan and Ratna. [CO3, Unit III,
BTL – HOT, Analyze]
38. Ashoka & Co. whose books are closed on 31st March, purchased a machinery for Rs 1,50,000
on 1st April, 2018, Additional machinery was acquired for Rs 50,000 on 1st October, 2018.
Certain machinery which was purchased for Rs 50,000 on 1st October, 2018 was sold for Rs
40,000 on 30th September, 2020.
Prepare the Machinery Account and Accumulated Depreciation Account for all the years up to
the year ended 31st March, 2021. Depreciation is charged @ 10% p.a. on Straight Line Method.
Also, show the Machinery Disposal Account. [CO3, Unit III, BTL – HOT, Analyze]

39. Prepare trading and profit and loss account of M/s Sports Equipments for the year ended March
31, 2017 and balance sheet as on that date : [CO4, Unit IV, BTL – HOT, Analyze]
Debit Credit
Account Title Amount Amount
Opening stock 50,000
Purchases and sales 3,50,000 4,21,000
Sales returns 5,000
Capital 3,00,000
Commission 4,000
Creditors 1,00,000
Bank overdraft 28,000
 Cash in hand 32,000
Furniture 1,28,000
Debtors 1,40,000
Plants 60,000
Carriage on purchases 12,000
Wages 8,000
Rent 15,000
Bad debts 7,000
Drawings 24,000
Stationery 6,000
Travelling expenses 2,000
Insurance 7,000
Discount 5,000
Office expenses 2,000

Closing stock as on March 31, 2017 `2,500

40. From the following balances, prepare the trading and profit and loss account and balance sheet
as on March 31, 2014. [CO4, Unit IV, BTL – HOT, Analyze]

Debit Balances Amount Credit Balances Amount

Rs. Rs.
Drawings 6,300 Capital 1,50,000
Cash at bank 13,870 Discount received 2,980
Bills receivable 1,860 Loans 15,000
Loan and Building 42,580 Purchases return 1,450
Furniture 5,130 Sales 2,81,500
Discount allowed 3,960 Reserve for bad debts 4,650
Bank charges 100 Creditors 18,670
Salaries 6,420
Purchases 1,99,080
Stock (opening) 60,220
Sales return 1,870
Carriage 5,170
Rent and Taxes 7,680
General expenses 3,630
Plant and Machinery 31,640
Book debts 82,740
Bad debts 1,250
Insurance 750
4,74,250 4,74,250

Adjustments
1. Closing stock Rs. 70,000
2. Create a reserve for bad and doubtful debts @ 10% on book debts
3. Insurance prepaid Rs. 50
 4. Rent outstanding Rs. 150
5. Interest on loan is due @ 6% p.a.

Summary:

CO Wise:

CO Ques. No Marks

CO1 1,2,3,4,7,20,21,22,23,36 85

CO2 5,6,8,9,24,25,26,27 60

10,11,12,13,14,28,29,30,31,35,37,3
CO3 115
8
CO4 15,16,17,18,19,32,33,34,39,40 95

Unit Wise:

Unit Ques No Marks

I 1,2,3,4,7,20,21,22,23,36 85
II 5,6,8,9,24,25,26,27 60
10,11,12,13,14,28,29,30,31,35,37,3
III 115
8
IV 15,16,17,18,19,32,33,34,39,40 95

Blooms Taxonomy Level (BTL) Wise

BTL Ques No Marks

LOT 1,2,3,4,5,6,7,8,9,10,11,12,13,14,15,16,17,18,19,21,22,25,26,32,34 155

HOT 20,23,24,27,28,29,30,31,33,35,36,37,38,39,40 200
 Prepared By: Neeraj Kumar Poddar Reviewed By:

Disclaimer: - This is a Model Paper. The Question in End term examination will differ from the
Model Paper. This Model paper is meant for practice only