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ACCOUNTS QUESTION PAPER WITH SOLUTIONS FOR HSC

OMTEX CLASSES
I ST PRELIMINARY EXAMINATION
BOOK KEEPING & ACCOUNTANCY
GROUP: A
TIME: - 3 HRS
DATE: - 16.11.2010
DAY -  TUESDAY
MARKS: -100


Q1. Answer Any four of the following.                                           (20 marks)

A. Answer the following.      (5)

  1. What is Balance Sheet?
Ans. A balance sheet is a statement showing the financial position of the business in the form of its assets and liabilities on a particular date.


  1. Who is co – venture?
Ans. A co – venture is a temporary partner of joint – venture business only.


  1. What is Super Profit?
Ans. Super profit is the profit earned over and above the normal return on the capital employed by the business firm.


  1. What is Endorsement of Bill?
Ans. Endorsement of a bill is the holder’s signing on its back with the intention of transferring its title or ownership to another.


  1. What is Good will of the firm?
Ans. Goodwill is the monetary value of the reputation of a firm as measured in terms of its expected future profits. 

B. Write word/term/phrase which can substitute each of the followings:         (5)

  1. Reputation of a firm expressed in terms of money. 
Ans. Goodwill.

  1. Payment of expenses before they have become due.
Ans. Prepaid Expenses.

  1. Payment of bill of exchange before its due date at rebate.
Ans. Retirement of Bill of Exchange.

  1. The person on whom the bill of exchange is drawn.
Ans. Drawee.

  1. The account that is credited when depreciation is charged.
Ans. Respective Assets Account.


C. Match the pairs.    (5)

A

B (Answers)
1.
2.
3.
4.
5.
Depreciation
Dishonour of bill
Joint Venture
Goodwill
Co – Ventures
1.
2.
3.
4.
5.
Wear and tear
Notary Public
Temporary partnership
Intangible Asset
Temporary Partners



D. Select the most appropriate alternative from those given below:     (5)


  1. Debit Balance in Profit and Loss Account shows _______________
    1. Net profit
    2. Gross profit
    3. Net loss
    4. Gross loss
  2. A bill of exchange must be accepted by ___________________
    1. A drawer
    2. A payee
    3. An endorsee
    4. A drawee
  1. At the end of the financial year balance of Depreciation account is transferred to _______________
    1. Depreciation account
    2. Asset account
    3. Trading account
    4. Profit and loss account.
  1. In the absence of partnership deed the partners share the profit and loss of the firm _____________
    1. In the ratio of capital
    2. Equally
    3. As per rights in management
    4. On the basis of experience.

  1. ____________ has to ultimately bear the noting charges.
    1. Drawer
    2. Drawee
    3. Endorser
    4. Bank


E. State True / False with reasons. (Any Two)        (5)
  1. Under fixed capital method for each partner two accounts are maintained.
Ans. The given statement is true because of the following reasons.
i.                    Under fixed capital method each and every transactions of partners are transferred to their current account and not in their capital account.
ii.                  It becomes compulsory for the partners to maintain two accounts for their transactions. Once is capital account to record additional capital introduced and current account as well.
  1. Under fixed instalment method depreciation is charged on the diminishing value of the asset.
Ans. The above statement is false because of the following reasons.
i.                    Under fixed instalment method depreciation is charged on the original value of the assets and the amount of depreciation will remain constant for each year.
ii.                  Under Diminishing balance method only the depreciation on fixed asset is charged on the written down value of fixed asset every year.
  1. Interest on partner’s drawings is debited to Profit and loss appropriation account.
Ans. The above statement is false because of the following reasons.
i.                    Profit and loss appropriation account is another profit and loss account prepared especially to record the transactions pertaining to the partners.
ii.                  Thus Interest on Partner’s drawings is credited to the profit and loss account (or) profit and loss appropriation account and it will be debited to Partners capital account in the case of fluctuating capital method and to Partners  current account in the case of fixed capital method.


F. Prepare a bill of exchange from the following information:
Drawer: Vilas Patil, 21. M.G. Road, Pune
Drawee: Vikas Pawar, 31. S.V. Road, Nasik.
Payee: Viraj Potade, 41, A.B. Road, Sholapur,
Period: 2 months
Amount: Rs. 7,500/-
Date of Bill: 1st January, 2007.
                        Date of acceptance: 3rd January, 2007. 
ANS. 


Q2.               Ravindra Trading company. Ambajogai Purchased machinery for Rs. 55,000/- on 1st April, 1996 and spent Rs. 5,000/- on its fixation and erection. In the same year on 1st October, additional machinery costing Rs. 40,000/- was purchased. On 1st October, 1998 the machinery purchased on 1st April, 1996 became obsolete and was sold for Rs. 43,000/- On 1st January, 1999, a new machinery was also purchased for Rs. 20,000.
                    Depreciation was provided annually on 31st March at the rate of 10% per annum on Fixed Instalment Method. Prepare Machinery A/c and Depreciation A/c for the years 1996 – 97, 1997-98, 1998-99. (March 2005 Board exam Question).
Ans.

M/s Ravindra Trading Co.
Machinery Account.

Date
Particulars
J
F
Amount 
Date
Particulars
J
F
Amount
1.4.1996
To cash / bank a/c
[machinery purchased]

55000
31.3.1997
By Depreciation a/c

8000
1.4.1996
To cash / bank a/c
[fixation and erection]

5000




1.10.1996
To cash / bank a/c
[marhinery purchased]

40000
31.3.1997
By Balance c/d

92000



100000



100000
1.4.1997
To balance b/d

92000
31.3.1998
By depreciation a/c

10000




31.3.1998
By balance c/d

82000



92000



92000
1.4.1998
To balance b/d

82000
1.10.1998
By depreciation a/c

3000




1.10.1998
By cash/ bank a/c
[Machinery sold]

43000




1.10.1998
By profit / loss a/c
[ loss on machinery sold]

2000




31.3.1999
By depreciation a/c

4500




31.3.1999
By balance c/d

49500



102000



102000
1.4.1999
To balance b/d

49500







Depreciation account


Date
Particulars
J
F
Amount 
Date
Particulars
J
F
Amount
31.3.1997
To machinery a/c

8000
31.3.1997
By profit & loss a/c

8000



8000



8000








31.3.1998
To Machinery a/c

10000
31.3.1998
By profit & loss a/c

10000



10000



10000
1.10.1998
To Machinery a/c

3000




31.3.1999
To Machinery a/c 

4500
31.3.1999
By profit & loss a/c
(balancing figure)

7500



7500



7500
OR
Q2. (A) The books of a business showed that the capital employed on 31st December, 1992 was Rs.1, 00,000/-. Profits for the last five years are_1988, 1989, 1990, 1991 & 1992 were Rs, 60,000, Rs, 55,000, Rs, 75,000, Rs, 85,000 & Rs, 65,000 respectively. Goodwill is valued at 2 years purchase of the Super profit of the business. NRR is 10%.


Q2. (B) Importance of computer in accounting.  
Ans.

The role of computer in accounting is explained as follows.  

1.       For various reasons, every business organization is required to prepare and maintain various books of account. The computer is used by many business organizations to carry out accounting operations at a greater speed and accuracy.
2.      The computer is useful for classifying, processing, analyzing, tabulating, recording and interpreting the accounting data for various purposes.
3.      It is useful for improving the financial system of the organization.
4.      With the help of the computer, accountants can easily, accurately and speedily prepare the different source documents like voucher, invoice, quotation, receipt, etc.
5.      The computer is useful for recording accounting entries in the journal and posting such entries in the ledger. It is also used to prepare trial balance, final account, accounting statements like Balance sheet, etc. 


Q3. Anil sold goods to Ravindra for Rs. 6000. Ravindra accepted Anil’s bill for Rs. 6000 payable after 3 months. After a month, Anil discounted the bill with his bank at 10% p.a. On the due date, Ravindra dishonoured his acceptance. Ravindra paid Rs. 3000 to Anil and accepted a fresh bill for 3 months for the balance including interest @ 8% p.a. Anil sent the bill to bank for collection. On due date, Ravindra honoured the bill. Pass the journal entries in the books of Anil. (October 2002 board exam questions).

Ans.
Journal of Anil
Date
Particulars
L
F
Debit
Credit
? 1
Ravindra’s A/c………Dr.
  To Sales A/c
(Being the goods are sold)

6000

6000
2
Bills Receivable A/c ……… Dr.
    To Ravindra’s A/c
(Being the bill is drawn)

6000

6000
3
Cash/ Bank A/c ……… Dr.
Discount A/c ………… Dr.
  To Bills Receivable A/c
(being the bill is discounted)

5900
100


6000
4
Ravindra’s A/c ……… Dr
  To Cash/Bank A/c
(being the bill is dishonored)

6000

6000
5
Cash/ bank a/c………… Dr
 To Ravindra’s A/c
(being the part payment is made)

3000

3000
6
Ravindra’s A/c ……… Dr.
  To Interest a/c
(being the interest is charged on balance amount)

60

60
7
Bills Receivable A/c ………… Dr.
  To Ravindra’s A/c
(being the new bill is drawn along with interest)

3060

3060
8
Bank for collection A/c ……… Dr.
  To Bills Receivable a/c
(being the bill is send to bank for collection)

3060

3060
9
Cash/ bank a/c ……… Dr.
 To Bank for collection a/c
(being the sent to bank for collection bill is honored) 

3060

3060

OR

Q3. Journalize the following transactions in the books of Motilal:
a.        Bhavna informed Motila that Jyoti’s acceptance for Rs. 3600 endorsed to Bhavna has been dishonoured and noting charges have been Rs. 150.
b.       Anil renews his acceptance to Motilal for Rs. 3400 by paying Rs. 900 in cash and accepting a new bill for the balance plus interest at 8% p.a. for 3 months.
c.        Prabhakar retired his acceptance to Motilal for Rs. 4000 by paying Rs. 3850 in cash.
d.       Bank informed Motilal that Arun’s acceptance of Rs. 7000 which was discounted with bank has been dishonoured with noting charges Rs. 100. (March 2008 board exam questions)

Ans. 




Date
Particulars
L
F
Debit
Credit
a
Jyoti’s A/c ……… Dr.
  To Bhavna’s
(being the endorsed bill is dishonored along with noting charges)

3750

3750
b  i. 
Anil’s A/c ……… Dr.
  To Bills Receivable a/c
(being the bill is dishonored)

3400

3400
ii.
Cash / bank a/c ……… Dr.
 To Anil’s a/c
(being the part payment is made)

900


900
iii.
Anil’s A/c ……… Dr.
To Interest A/c
(being the interest is charged on balance amount)

50

50
iv.
Bills receivable a/c ……… Dr.
To Anil’s A/c
(being the new bill is drawn along with interest)

2550

2550
c
Cash/ bank a/c ……… Dr.
Rebate’s A/c ……… Dr.
  To Bill’s Receivable A/c
(being the bill is retired)

3850
150


4000
d
Arun’s A/c ………… Dr.
 To Cash/ bank A/c
(bein the discounted bill is dishonored along with noting charges)

7100

7100


Q4. Ajay and Abhijeet were partners in a Joint Venture sharing profits and losses in the proportion of 4/5 and 1/5 respectively. Ajay supplied goods to the value of Rs. 25000 and incurred expenses amounting to Rs. 2700. Abhijeet also supplied goods to the value of Rs. 7000 and his expenses amounted to Rs. 400. Abhijeet sold all the goods for Rs. 46000. Abhijeet is entitled to a commission at 5% on sales. Abhijeet settled Ajay’s account by bank draft. Prepare Joint venture account and Abhijeet account in the books of Ajay. (March 2006 board exam questions.)  
In the books of Ajay
Joint venture account
Particulars
Amount
Amount
Particulars
Amount
Amount
To Goods a/c
To cash/bank a/c
To Abhijeet’s a/c
To Abhijeet’s a/c
To Abhijeet’s a/c
To profit on joint venture transferred to 
 Profit / loss A/c
Abhijeet’s A/c






6880
1720
25000
2700
7000
400
2300


8600
By Abhijeet’s A/c 

46000


46000


46000

Abhijeet’s Account
Particulars
Amount
Amount
Particulars
Amount
Amount
To Joint venture a/c

46000
By Joint venture a/c
By Joint venture a/c
By Joint venture a/c
By Joint venture a/c
(profit)
By cash/ bank a/c
(balancing figure)

7000
400
2300
1720

34580


46000


46000



Q5. Mrs. Archana keeps her books on single entry system and gives the following information: (March 2008 board exam question)
Particulars
31.3.2006
31.3.2007
Cash at bank
Sundry debtors
Stock in trade
Furniture
Machinery
Bills payable
Sundry creditors
5000
25000
30000
20000
50000
5000
15000
32000
40000
50000
20000
50000
5000
20000

Further information:
1.      Mrs. Archana withdrew from business Rs. 15000 for personal use.
2.      She further introduced fresh capital of Rs. 25000.
3.      Depreciation is to be charged @ 10% p.a. on Furniture and Machinery.
Prepare : (1) statement of affairs as on 31.3.2006. (2) statement of affairs as on 31.3.2007. (3) statement of profit and loss for the year ended on 31.3.2007.
ANS.
In the books of Mrs. Archana
Statement of affairs as on 31st March, 2006
Liabilities
Amount
Assets
Amount
Bills payable
Sundry creditors
Capital at the beginning of the year
5000
15000
110000
Machinery
Furniture
Stock in trade
Sundry debtors
Cash at bank
50000
20000
30000
25000
5000

130000

130000
Statement of affairs as on 31st March, 2007
Liabilities
Amount
Assets
Amount
Bills payable
Sundry creditors
Capital at the end of the year
5000
20000
167000
Machinery
Furniture
Stock in trade
Sundry debtors
Cash at bank
50000
20000
50000
40000
32000

192000

192000
Statement of profit or loss for the year ended 31st March, 2007
Particulars
Amount
Capital at the end of the year
167000
Add: Drawings
15000

Less: Additional capital introduced
182000
25000

Less: Capital at the beginning of the year
157000
110000
GROSS PROFIT

Less: Depreciation
On Machinery = (50000)(10/100)(12/12) = 5000
On Furniture  = (20000)(10/100)(12/12)=2000
47000



7000
NET PROFIT          
40000

Q6. Sanjay, Ajay and Vijay undertook the construction of building at a contract price of Rs. 6,00,000 payable in cash Rs. 4,00,000 and in the form of debentures of company Rs. 2,00,000. They shared profits and losses in the ration of 3:2:1 respectively. They opened a Joint Bank account wherein they deposited the following amounts. Sanjay Rs. 3,00,000, Ajay Rs. 2,00,000 and Vijay Rs. 1,00,000.
The following payments are made out through Joint bank account.
1.      Purchase of materials Rs. 2,50,000.
2.      Payment of wages Rs. 77,000.
3.      Purchase of plant Rs. 45,000 and
4.      Other charges Rs. 11,000.
Sanjay bring the truck of Rs. 40,000. Ajay brings in the material of Rs. 55,000. Vijay brings mixer worth Rs. 10,000. At the close of venture the unused materials were taken by Sanjay for Rs. 5,000. Ajay took over the mixer and plant for Rs. 27,000. The truck was sold in the market for Rs. 22,000. The contract price was received as per ther agreement and Vijay agreed to take over the debentures at Rs. 1,90,000.
Prepare : Joint venture account, Joint Bank account and Co – ventureres account. (March 2008 board exam questions)
In the books of Joint venture
Joint venture account
Particulars
Amount
Amount
Particulars
Amount
Amount
To Join bank a/c
Materials
Wages
Plant
Other charges
To Sanjay’s A/c
(Truck)
To Ajay’s A/c
(materials)
To Vijay’s A/c
(mixture)
To Debentures A/c
(discount on debenture)
To profit on joint venture transferred to
Sanjay
Ajay
Vijay

250000
77000
45000
11000










78000
52000
26000




383000
40000

55000

10000

10000





156000
By Joint Bank a/c
(contract price)
By Debentures a/c
(contract price)
By joint bank a/c
(truck sold)
By Sanjay’s A/c
(Materials taken over)
By Ajay’s A/c
(Mixer and plant)


400000

200000

22000

5000


27000

654000


654000




CO – VENTURERS’ ACCOUNT
Particulars
Sanjay
Ajay
Vijay
Particulars
Sanjay
Ajay
Vijay
To Joint venture a/c
To debenture a/c
To joint bank a/c
5000

413000
27000

280000

190000
By joint bank a/c
By joint venture A/c
By joint venture A/c
By joint Bank A/c
300000
40000
78000

200000
55000
52000
100000
10000
26000
54000
418000
307000
190000
418000
307000
190000

Joint Bank A/c
Particulars
Amount
Particulars
Amount
To Sanjay’s A/c
To Ajay’s A/c
To Vijay’s A/c
To joint venture A/c
To Joint Venture A/c
To Vijay’s A/c
300000
200000
100000
400000
22000
54000
By joint venture a/c
By Sanjay’s A/c
By Ajay’s A/c
383000
413000
280000
1076000
1076000
Debentures A/c
Particulars
Amount
Particulars
Amount
To Joint venture A/c
200000
By Vijay’s A/c
By Joint Venture A/c
(balancing figure)
190000
10000
200000
200000



Q7.  Following is the Trial Balance of Premlal and Sundarlal as on 31st March 2006.
Trial balance as on 31st March, 2006.
Particulars
Amount
Particulars
Amount
Stock on 1-4-2005
Purchases
Drawings: Premlal
Sundarlal
Sales return
Wages : productive
Unproductive
Salaries
Rent, rates and insurance
Bad debts
Discount allowed
Machinery
Building
Sundry debtors
Cash
Government bonds
90000
225000
33000
30000
7200
10500
1800
18600
10200
1200
3900
45000
108600
153000
1000
2000
Sales
Purchase returns
Discount received
Sundry creditors
Capital : Premlal
Sundarlal
Bank overdraft
375000
3000
3000
90000
105000
135000
30000

741000

741000
1.      Closing stock was valued on 31.3.2006 at market price Rs. 60,000 which was 20% above its cost price.
2.      Outstanding productive wages Rs. 600
3.      Rent, Rates and insurance include insurance Rs. 1600 paid for one year ending on 30th June 2006.
4.      Maintain Reserve for doubtful debts at 5% on debtors.
5.      Depreciate buildings by 5% and machinery at 10% p.a.
6.      Goods costing Rs. 2500 were distributed as free samples for which no record has been made in the books.
7.      Six months interest is due on Bank Overdraft at 10% p.a.
Prepare trading and profit and loss account for the year ended 31st March 2006 and Balance Sheet as on that date. (September 2008 board exam questions)
In the books of Premlal and Sunderlal
Trading account for the year ended 31st March, 2006.
Particulars
Amount 
Amount
Particulars
Amount
Amount
To opening stock
To purchases
(-)return
To productive wages
(+) outstanding
To Gross profit c/d

225000
(3000)
10500
600

90000

222000

11100
97200
By sales
(-) return
By goods distributed as free samples
By closing stock
375000
(7200)

367800
2500
50000


420300


420300
Profit and loss account for the year ended 31st March, 2006
Particulars
Amount 
Amount
Particulars
Amount
Amount
To Salaries
To unproductive wages
To rent, rates and insurance
(-) prepaid insurance
To bad debts
(+) FBD
(+)NRDD
(-) ORDD
To discount allowed
To advertisement
To depreciation:
Buildings
Machinery
To interest on bank over draft
To net profit c/d
Premlal
Sundarlal


10200
(400)
1200
NIL
7650
NIL



5430
4500


21660
21660
18600
1800

9800



8850
3900
2500


9930
1500


43320
By gross profit b/d
By discount received

97200
3000


100200


100200

Partners’ capital accounts
Particulars
Premlal
Sunderlal
Particulars
Premlal
Sunderlal
To drawings
To balance c/d
33000
93660
30000
126660
By balance b/d
By Net profit b/d
105000
21660

135000
21660
126660
156660
126660
156660

Balance sheet as on 31st March, 2006
Liabilities
Rs.
Rs.
Assets
Rs.
Rs.
Capital account
Premlal
Sunderlal
Sundry creditors
Bank overdraft
Add: interest
Outstanding productive wages

93660
126660

30000
1500



220320
90000

31500
600
Buildings
(-) Deprn@5%
Machinery
(-) Deprn@10%
Sundry Debtors
(-) N.R.D.D. @5%
Closing stock
Cash
Prepaid insurance
Government Bonds
108600
5430
45000
4500
153000
7650

103170

40500

145350
50000
1000
400
2000

342420

342420