HYACCSET1AK1115 22/11/15

Half yearly Examination. (2015-2016)

ANSWER KEY
Subject: Accountancy Max. Marks : 90
Grade: XI Time: 3 Hrs 15 min
General Instructions:
 Attempt all the questions
 Show all the calculation neatly and clearly.
1. Which qualitative characteristic of accounting information requires the use of common unit and 1
common format of reporting?

Ans: Comparability
2. Name the category of account that is not balanced. 1
Ans: Nominal account (Expenses and revenue account)

3. If the total of the debit side of cash book exceeds the total on the credit side what does it 1
indicate?
Cash in hand at the end of the period.
4. Differentiate between Revenue Reserve and Capital Reserve on the basis of Purpose. 1
Revenue reserve is created to strengthen the financial position and Capital reserve is created to
write off capital losses
5. State any two reasons when the Cash Book is higher than the Pass Book. 1
Cheque deposited but not credited, bank chares debited by bank etc.
6. Which method of depreciation assumes that an assets should be depreciated more in the earlier years 1
and less in the later years of use?
Ans Diminishing or written down value method.

7. Net sales during the year 2014 is Rs. 2,85,000. Gross profit is 25% on sales. Find out Cost of goods 1
sold. Which method of depreciation assumes that an assets should be depreciated more in the earlier
years and less in the later years of use?
Ans: G/p 71,250 .

8. Mr. Amar made a mistake in debit and credit side of a transaction in profit and loss account. However, 1
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 he did not correct the mistake fearing that his boss will shout at him on hearing this. Which value is
not followed by Mr. Amar?

Ans: Value of Trust and Honesty

9. Prepare Shyam's Account from the following details. Balance the account. 3
2014 (Rs.)
May 1 Opening Balance (Dr.) 17200
May 12 Sold goods to him 80,000
May 14 Goods returned by him 2,000
May 16 Received cash from him 20,000
May 20 Received a cheque from him 30,000
Discount allowed to him 600

Shyam’s Account
Particulars Amount Particulars Amount
Balance b/d 17,200 Sales returns 2,000
Sales 80,000 Cash 20,000
Bank 30,000
Discount allowed 600
Balance c/d 44,600
Total 97,200 Total 97,200
10. What is petty cash book? How it is prepared? 3
Ans) Businesses generally keep small amounts of cash to meet small miscellaneous payments
such as entertainment expenses and stationery costs. Such payments are generally recorded in
the book called as petty cash. It is prepared by imprest system whereby an amount is paid in
advance called as 'Float' & it is a fixed amount. This is the maximum amount of cash that can
be held at any time. Each time cash level runs low, the petty cash imprest is injected with cash
by drawing a cheque. The amount of reimbursement is equal to the expenses paid through
petty cash since the time of last reimbursement. Petty cash balance after reimbursement reverts
to back to the level of the float.
11. Explain the advantages for drawing up the special purpose books. 3
Advantages:
a) Division of work
b) Specialization and efficiency
c) Saving of time
d) Availability of information
e) Facility of checking
f) Responsibility

12. From the following information, calculate cost of goods sold : 3

Stock of materials on 1.1.2014 Rs.35,000
Stock of materials on 31.12.2014 Rs.5,000
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 Purchases of materials Rs.62,000
Purchase Returns Rs.2,000
Wages Rs.10,000
Factory expenses Rs.3,500
Freight and Carriage Rs.4,000

Cost of goods sold= Rs.107500

13. From the following information, draw up a Trial Balance in the books of Shri Subhash Chand 3
st
as on 31 March,2015:
Capital 5,00,000 : Leasehold premises 6,70,000 : Loose tools 1,20,000 : Prepaid Rent 30,000
Bank Overdraft 55,000 : Stores consumed 11,20,000 : Sales 17,40,000 :
Bills payable 2,50,000 :Bills Receivable 5,10,000 : Loan to Abid (employee) 93,000.
Ans: 25,45,000
14. The following balance appear in the books of Sameer Ltd. 3
Machinery Account on 1st April 2011 8,00,000
Provision for depreciation Account as on 1st April 2011 3,10,000
On 1st July 2011 a machinery which was purchase on 1st April 2009 for Rs. 1, 20,000 was sold
for Rs. 50,000 and on the same date another machine was purchased for Rs. 3,20,000. The firm
has been charging deprecation @15% p.a. on original cost method, closes its book on 31st
March every year. Prepare Provision for depreciation Accounts for the year ending 31st March
2012.
Ans: 3, 94, 000

15. What do you mean by Accounting? Explain any three limitation of accounting. 4
Ans: Any definition ( one mark)
a) Not fully exact
b) Ignore qualitative elements
c) Ignore price level changes E t c……( any three … one mark each)
16. How will you deal with the following items in Accounting Equation? 4
a) Rent due to landlord
b) Commission yet to be received
c) Payment to creditors in full settlement
d) Charge interest on Loan

Ans:
a) + in Liabilities and – in capital
b) + in assets and – in capital
c) – cash – creditors( full amount) and + capital
d) – cash and - capital
17 Maroof is selling the following items at recommended retail prices: 4
Aluminum sheet Rs.50 per meter
Rolled copper wire Rs.100 per meter

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 He makes the following sales;

2012
July 1 To Ahmad: 12 meters aluminum and 2 meters copper wire. Less 25% trade
discount
July 8 To Carol: 5 meters aluminum and 5 meters copper wire. Less 20 % trade discount.

You are required to:

(a) Enter them up in the Sales Book

(b) Transfer the total to the sales account.
SALES BOOK
Date Particulars Details Amount
2012 Ahmad
July 1 12 mtr aluminum X 50 600
2 mtr wire X 100 200
800
Less: 25% TD 200 600

July 8 Carol
5 mtr aluminum X 50 250
5 mtr wire X 100 500
750
Less:20% TD 150 600

July 31 sales a/c…………………cr. 1200

Sales account
Particulars Amount Particulars Amount
2012
July 31 By sundries as per
Sales Book 1200
th
18. On 28 March, 2013, stocks worth Rs.50,000 were damaged due to fire. The stock was insured 4
and the insurance company admitted a claim of Rs.30,000 only. Give the journal entries and
show it will be treated in the Final accounts.

March 31 Loss by fire a/c………….Dr. 50,000

To Trading a/c 50,000
March 31 Insurance Co. …………..Dr. 30,000

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 Profit & Loss a/c…………Dr. 20,000
To Loss by fire a/c 50,000
Trading account
Particulars Amount Particulars Amount
By loss by fire 50,000
Profit & Loss account
Particulars Amount Particulars Amount
To loss by fire 20,000
Balance Sheet
Liabilities Amount Assets Amount
Current assets
Insurance company claim 30,000

19. Prepare Bank reconciliation statement form the following transactions. 4

The payment of a cheque for Rs. 550 was recorded twice in the passbook. Withdrawal column
of the passbook under cast by Rs. 200. Cheque of Rs. 200 has been debited in the bank column
of the Cash Book but it was not sent to bank at all. A cheque of Rs. 300 debited to Bank
column of the pass book was not sent to the bank Rs.500 in respect of dishonoured cheque
were entered in the passbook but not in the cash book. Debit balance as per passbook is Rs.
20,000.
Ans: Over draft as per cash book 18,650.

20. Define Provision. What is the importance of creating provision? ( any three points) 4
Provision is a charge on profit to meet known liability e.g. provision for depreciation etc.
Importance:
1. Amount set aside out of current earnings
2. To retain future operating performance undisturbed by losses
3. Prudence concept
4. To maintain the capital of the business intact

21. Journalize the following transactions: 6

2015

March 1 Ganesh invested Rs. 2,00,000 in business of general stores.

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March 2 Paid into Current Account Rs. 1,20,000.

March 6 Purchased goods for Rs. 1,00,000 on credit from Raghunath Brothers, paid Rs. 1,200
for carriage on these goods.

March 10 Goods damaged by fire Rs.3,000 and insurance company accepted claim of Rs.2,800

March 12 Received an order of goods for Rs.1,25,000 from Sunil.

March 13 Payment made to Raghunath Brothers by cheque after getting 10% discount for
prompt payment.

March 16 Goods withdrawn for personal use ( Cost price Rs.500, Sale price Rs.700)

Date Particulars LF Debit Credit

2015 Cash a/c………………………..dr. 2,00,000

Mar 1
To Capital a/c 2,00,000

Mar 2 Bank a/c………………………..dr. 1,20,000

To cash a/c 1,20,000

Mar 6 Purchases a/c……………………dr. 1,00,000

To Raghunath brothers 1,00,000

Cartagea/c………………………dr. 1,200

To cash a/c 1,200

Mar 10 Loss by fire a/c……………….dr. 3,000

To Purchases a/c 3,000

Insurance Co…………………dr. 2,800

Profit & Loss a/c…………….dr. 200

To Loss by fire a/c 3,000

Mar 12 Cash a/c……………………..dr. 1,25,000

To advance from Sunil 1,25,000

Mar 13 Raghunath brothers…………dr. 1,00,000

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 To Cash a/c 90,000

To Discount received a/c 10,000

Mar 16 Drawings a/c……………….dr. 500

To Purchases a/c 500

( ½ + ½ + ½ + ½ + ½ +1 ½ + ½ +1+ ½ )

22. M/s Ruchi trader started their cash book with the following balances on Dec. 01 2014: cash in 6
hand Rs.1,354 and balance in bank current account Rs.7560. He had the following transaction
in the month of December, 2014: Rs.
03 Cash sales 6,300
05 Purchased goods, paid by cheque 6,000
12 Paid trade expenses 700
15 Sales goods, received cheque(deposited same day) 20,000
18 Purchased motor car paid by cheque 15,000
20 Cheque received from Manisha(deposited same day) 10,000
25 Manisha’s cheque returned dishonoured
29 Paid into bank 4,500
31 Cash withdrawn for personal use 2,000
Double column Cash Book
Date Particulars Cash Bank Date Particulars Cash Bank

2014 Balance b/d 1354 7560 Dec 5 Purchases a/c 6000

Dec 1

Dec 3 Sales a/c 6300 Dec 12 Trade expenses 700

Dec 15 Sales a/c 20000 Dec 18 Motor car 15000

Dec 20 Manisha 10000 Dec 25 Manisha 10000

Dec 29 Cash a/c 4500 Dec 29 Bank a/c 4500

Dec 31 Drawings a/c 2000

Dec 31 Balance c/d `2484 9060

total 7684 42060 Total 7684 42060

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23. From the following particulars, prepare the bank reconciliation statement of Shri Krishan as on 6
March 31, 2015.
(a) Balance as per passbook is Rs. 40,000.
(b) Bank collected a cheque of Rs. 5000 on behalf of Shri Krishan but wrongly credited it to
Shri Krishan’s account.
(c) Bank recorded a cash book deposit of Rs. 1,589 as Rs. 1,598.
(d) Withdrawal column of the passbook under cast by Rs. 1500.
(e) The credit balance of Rs. 1,500 as on the pass-book was recorded in the debit balance.
(f) The payment of a cheque of Rs. 350 was recorded twice in the passbook.
Bank Reconciliation statement
As on March 31, 2015
Particulars Plus Minus
Balance as per Pass Book 40000
Wrong credit by bank 5000
Excess credit by bank 9
Withdrawal of pass book under cast 1500
Credit balance recorded as debit balance 3000
Payment of cheque recorded twice 350
Balance as per cash book 36841
Total 43350 43350
24. Compute Fixed Assets, Noncurrent liabilities, Current Assets and Current Liabilities from the 6
following particulars:
Trade Debtors 40,000 Furniture and fittings 22,000
Capital 48,000 Interest accrued on 2,800
investments
Leasehold Premises 12,000 Trade creditors 3,600
Bills Payables 78,000 Long term loans 35,000
Dividend 62,000 Prepaid insurance 1,400
Equalization Reserve
Goodwill 15,000 Bank overdraft 5,100

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 Rent due 2400 Stock 6,000

Fixed assets = Rs. 12,000+15000+22000 = Rs.49000

Fixed liabilities = Rs.48000+62000+35000 = Rs.145000
Current assets = Rs.2800+40000+1400+6000 = Rs.50200
Current liabilities = Rs.2400+5100+3600+78000 = Rs.89100
(1 ½ each )
25. M/s Sahani Enterprises acquired a printing machine for Rs. 40,000 on July 01, 2011 and spent 8
Rs. 5,000 on its transport and installation. Another machine for Rs. 33,000 was purchased on
January 01, 2013. On October 1, 2013, 1/3rd of the machine purchased on July 1, 2011 was
sold for Rs.5,000. Depreciation is charged at the rate of 20% on written down value. Prepare
Printing Machine account for the years ended on March, 31, 2012, 2013, 2014.
Machine Account
Date Particulars Amount Date Particulars Amount
2011 To bank a/c I 45000 2012 By Depreciation 6750
July 1 Mar 31 By balance c/d 38250
45000 45000

2012 2013
Apr 1 To Balance b/d Mar 31 By Depreciation I
38250 7650
2013 By Depreciation II 2200
Jan 1 To Bank a/c II By Balance c/d
33000 61400
71250 71250

2013 2013
61400 5000
Apr 1 To Balance b/d Oct 1 By Bank 1/3 of I
340
By Depreciation 1/3 of I
4860
By P&L a/c
2014
4080
Mar 31 By Depreciation 2/3 of I
6160
By Depreciation II
40960
By Balance c/d
61400 61400
40960

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 2014 To Balance b/d
Apr 1

Working notes:
2011-2012 Depreciation= 6750
2012-2013 Depreciation=7650
WDV= 45000-6750-7650 = 30600
1/3rd of 30600 = 10200
Depreciation 2013-2014( till October 2013)= 340( 10200X20/100X6/12)
Loss =10200-5000-340= 4860
26. The Trial Balance as on 31st March, 2015 is given below. You are required to prepare Trading 8
st
and Profit and Loss Account for the year ended 31 March, 2015 and Balance Sheet as on that
date after taking into account the given adjustments.

Particulars Amt. Particulars Amt.

(Rs.) (Rs.)
Purchases 98,000 Capital: 70,000
Patents Right 4,000
Building 1,00,000
Stock (1.04.2014) 15,000 Provident Fund 7,000
Printing and Stationery 1,750 Creditors 45,000
Sundry Debtors 35,000 10% Bank Loan taken on 12,000
Wages and Salaries 11,000 1st April 2014
Audit Fees 700 Sales 1,58,000
Sundry Expenses 3,500 Reserve for Doubtful Debts 250
Furniture 8,000 Purchase Returns 3,500
Investment 10,000
Cash 4,800

Carriage Inwards 1,300

Travelling Expenses 2,700
2,95,750 2,95,750
Adjustments:
(1) Closing stock is valued at the cost of Rs. 15,000 while its market price isRs.18,000.
(2) Write off bad debts Rs.1,000
(3) Provide reserve for bad and doubtful debts at 5% on debtors.
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(4) Depreciate building at 5% and patent rights at 10%.

TRADING AND PROFIT & LOSS ACCOUNT

FOR THE YEAR ENDED MAR 31, 2015
Particulars Amount Particulars Amount
To opening stock 15000 By sales 158000
To Purchases 98000 By closing stock 15000
Less p/returns 3500 94500
To wages & salaries 11000
To carriage inwards 1300
To Gross profit 51200
Total 173000 173000
By Gross profit 51200
To printing & stationery 1750
To audit fees 700
To sundry expenses 3500
To travelling expenses 2700
To outstanding int. 1200
To Bad debts 1000
Add:new prov 1700
Less:old prov 250
______ 2450

To Depreciation
Building 5000
Patents 400
To net profit 33500
Total 51200 51200

BALANCE SHEET
AS AT MAR 31, 2015
Liabilities Amount Assets Amount
Capital 70000 Building 100000
Add: net profit 33500 103500 Less: depreciation5000 95000
10% bank loan 12000 Furniture 8000
Add: O/s Int. 1200 13200
Provident fund 7000 Patents rights 4000
Less: depreciation 400 3600
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Creditors 45000 Investment 10000
Sundry Debtors 35000
Less: FBD 1000
Less: New Prov 1700 32300
Closing stock 15000
Cash 4800
Total 168700 Total 168700
( 6+2=8 marks)

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