[Accountancy Solved Question Papers, AHSEC, Class 11, 2019]
ACCOUNTANCY SOLVED QUESTION PAPERS
AHSEC CLASS 11 ACCOUNTANCY' 2019
ACCOUNTANCY
Full Marks: 100
Time: 3 hours
The figures in the margin indicate full marks for the questions.
1. (a) Fill in the blanks: 1x4=4
1) Assets – Capital = Liabilities.
2) Recognize all losses, anticipate no gain
3) Credit purchases of goods are recorded in purchase day book.
4) The Full form of CPU is Central processing unit
(b) State whether the following statements are true or false: 1x4=4
1) Accounting is both a Science and an Art. True
2) Assets account always show credit balance. False, Debit balance
3) Accounting software is an integral part of the Computerized Accounting system. True
4) Salary outstanding account show debit balance. False, Credit
2. Mention two causes of depreciation. 2
Ans: Objectives or causes for providing depreciation
a) To find out correct cost of goods manufactured.
b) To find out correct profit for the year.
3. Give two functions of Trial Balance. 2
Ans: Functions of trial balance
a) It provides a check on the accuracy of the ledger account balances, ensuring that entries have been made correctly.
b) It proves the arithmetical accuracy of accounts.
c) It makes preparation of the final accounts easier.
4. Write two types of source documents. 2
Ans: A source document is a written document that provides details of a transaction and the evidence that the transaction has taken place.
5. Write the name of four parties who are interested in accounting information. 2
Ans: Owners, management, creditors, Government, Employees etc.
6. What is bill of exchange? 2
Ans: Bills of Exchange: A bill of exchange as, "an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a sum of money only to or to the order of a certain person or to the bearer of the instrument." A bill of exchange is also called a draft.
7. Mention three features of Petty Cash Book. 3
Ans: Features of Petty Cash Book:
1. The amount of cash received from head cashier is recorded on the left hand side column.
2. Payment of petty cash expenses are recorded on the right hand side in the respective columns.
3. It never shows credit balance because the cash payment can never exceed the cash receipts.
4. Its balance represents unspent petty cash in hand.
Or
What is Journalizing? 3
Ans: Journalising: The process of recording the transaction in the Journal or making entry in the journal is called Journalizing. Since transactions are first of all recorded in this book, Journal is also called "The Book of Original Entry'. Entries in the Journal are recorded on the basis of source Documents like Cash Memos, Vouchers etc which serve as an evidence of a transaction. Entries in the Journal are made on the basis of ' Rules of Journalizing'.
8. Distinguish between Bills of Exchange and Promissory Note. 3
Ans: Difference between bill of exchange and Promissory Note
Basis
|
Bill of Exchange
|
Promissory Note
|
Drawer
|
It is drawn by the creditor
|
It is drawn by the debtor.
|
Parties
|
There can be three parties to it, viz. the drawer, the Drawee and the payee.
|
There are only two parties to it, viz. the drawer and the payee.
|
Order or Promise
|
It contains an unconditional order to pay.
|
It contains an unconditional promise to pay.
|
Or
What is dishonour of a bill? 3
Ans: When drawee fail to pay the payee on due date, this situation is called dishonour of a bills of exchange.
Reasons of dishonour of a bill:
a) When the drawee has died.
b) Where the drawee has become insolvent or an order of adjudication has been passed against him.
c) When a drawee becomes a lunatic and the banker has got notice of his insanity.
d) Where the drawee countermands payment.
9. What is Capital Expenditure? 3
Ans: Ans: Capital Expenditure: The transactions of capital expenditure give benefits for more than one accounting period, such as acquisition and improvement of assets, acquisition of special rights, increasing of earning capacity, restoration of operating efficiency. It is non-recurring in nature. Therefore, they are shown on the assets side of the Balance Sheet.
Or
Write three objectives of preparing Trading Account. 3
Ans: Objectives or Need for Trading Account: The trading account may be prepared with the following objectives:
1) To ascertain gross profit or gross loss.
2) To know the direct expenses.
3) To make comparison of stock.
4) To fix up selling price of goods.
5) To know the limit of indirect expenses.
10. What is incomplete record? Give two reasons for incomplete record. 1+2=3
It is defined as the method of accounting which does not follow the principle of double entry system .Under this method only one account is given debit or credit for each transaction. Under this method, only personal accounts are maintained and impersonal account may not be maintained in the books.
Reasons for incomplete record:
a. This system is suitable for small business.
b. It is less costly and less time consuming.
c. Under this system the profit or loss can be easily calculated.
Or
Mention three disadvantages of single entry system. 3
Ans: Demerits of Single Entry System:
a. It is not a scientific method of accounting because it does not record the two-fold aspect of each transaction.
b. No trial balance can be prepared under Single Entry System.
c. The arithmetical accuracy of the books cannot be checked in the absence of trial balance.
d. In the absence of various checks, Fraud is more easily committed and it is very difficult to detect.
e. In the absence of Real and nominal accounts the true financial position of the business cannot be ascertained.
11. Mention three limitations of computer. 3
Ans: Disadvantages of computers:
1) They may distract students from their studies.
2) Too much time in front of monitor may adversely affect our eyesight.
3) They can have negative effects on our social life and interactions with other people if you do not maintain the balance between time online and offline.
Or
What do you mean by Database Management system? 3
Ans: Database & Database Management System: Database is data bank storing voluminous information about the entities within an organization and also the entities interacting with the organization. Database Management System is the electronic data processing of information stored in the database. DBMS is “a set of programs that controls and manages creation, utilization and maintenance of database of a business organization.”
Components of Database System:
a) Data
b) Hardware
c) Software
d) Users of database
12. Explain briefly the qualitative characteristics of Accounting Information. 5
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Also Read:
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Ans: Accounting Information is a set of financial data indicating an organization's resources, revenues, debts or expenses. Accounting information must possess the following qualitative characteristics:
a) Reliability: Reliability means the users must be able to depend on the information.
b) Relevance: To be relevant, information must be available in time, must help in prediction and feedback.
c) Understandability: Understandability means decision-makers must interpret accounting information in the same sense as it is prepared and conveyed to them.
d) Comparability: The users of the accounting information must be able to compare various aspects of an entity over different time period and with other entities.
e) Timeliness: Timeliness is how quickly information is available to users of accounting information. The less timely (thus resulting in older information), the less useful information is for decision-making. Timeliness matters for accounting information because it competes with other information.
Or
What is Accounting? What are the objectives of Accounting? 5
Ans: Accounting is the analysis and interpretation of book-keeping records. It includes not only maintains of accounting records but also the preparation of financial and economic information which involves the measurement of transaction and other events pertaining to a business.
According to the American institute of certified public accounts” The arts of recordings, classifying and summarizing in a significant manner and in terms of money transaction and events which in parts, at least of a financial charter and interpreting the result there of”.
The mean objectives of accounting are as follow:
a) To keep systematic and authentic records of all the financial transaction of a business.
b) To ascertain the net profit or loss suffered on account of carrying the business.
c) To ascertain the financial position of business on a particular date.
d) To determine tax liability.
13. What is Accounting Standards? State its importance. 2+3=5
Ans: ACCOUNTING STANDARDS: Accounting Standards are the policy documents or written statements issued, from time to time, by an apex expert accounting body in relation to various aspects of measurement, treatment and disclosure of accounting transactions for ensuring uniformity in accounting practices and reporting. These standards are prepared by Accounting Standard Board (ASB).
Objectives or Purposes of Accounting Standards:
a. To provide information to the users as to the basis on which the accounts have been prepared and the financial statements have been presented.
b. To harmonize the diverse accounting policies & practices which are in use the preparation & presentation of financial statements.
c. To make the financial statements more meaningful and comparable and to make people place more reliance on financial statements prepared in conformity with the accounting standards.
d. To guide the judgment of professional accountants in dealing with those items, which are to be followed consistently from year to year.
e. To provide a set of standard accounting policies, valuation norms and disclosure requirements.
Or
What do you mean by the basic assumption of Accounting? Explain the money measurement concept. 3+2=5
Ans: Accounting concepts: The term ‘concept’ is used to denote accounting postulates, i.e., basic assumptions or conditions upon which the accounting structure is based. The following are the common accounting concepts adopted by many business concerns.
Money Measurement Concept: According to this concept, only those events and transactions are recorded in accounts which can be expressed in terms of money. Facts, events and transactions which cannot be expressed in monetary terms are not recorded in accounting. Hence, the accounting does not give a complete picture of all the transactions of a business unit.
14. Define Ledger. Explain the importance of ledger in recording of business. 2+3=5
Ans: Ledger: A Ledger account may be defined as a summary statement of all the transactions relating to a person, asset, expense or income, which have taken place during a given period of time and show their net effect. So every entry recorded in the journal must be posted into the Ledger.
A ledger account is a statement shaped liked an English alphabet 'T' that systematically contains all financial transactions relating to either a particular person or thing for a certain period of time. It is the principal book of accounts.
Importance of Ledger / Advantages of ledgers: Ledger is an important book of Account. It contains all the accounts in which all the business transactions of a business enterprise are classified. At the end of the accounting period, each account will contain the entire information of all the transactions relating to it. Following are the advantages of ledger.
a) Knowledge of Business results: Ledger provides detailed information about revenues and expenses at one place. While finding out business results the revenue and expenses are matched with each other.
b) Knowledge of book value of assets: Ledger records every asset separately. Hence, we can get the information about the Book value of any asset whenever we need.
c) Useful for management: It also helps the management in keeping the check on the performance of business it is managing.
d) Knowledge of Financial Position: Ledger provides information about assets and liabilities of the business. From this we can judge the financial position and health of the business.
e) Instant Information: The ledger accounts provide this information at a glance through the account receivables and payables.
Or
Record the following transactions in a Sale Journal: 5
Jan 1
Jan 10
Jan 30
|
Sold on credit to Mr. Ram, Guwahati 40 chairs @ Rs. 100 each.
Sold on credit to Mr. Amrit, Jorhat 10 tables @ Rs. 500 each.
Sold in cash to Mr. Joy, Tinsukia 10 tables @ Rs. 400 each.
|
Sales journal
Date
|
Particulars
|
L/F
|
Amount
|
Jan-1
Jan-10
|
Mr. Ram Guwahati
(40 chairs @ Rs. 100 each)
|
4,000
5,000
| |
Mr. Amrit Jorhat
(10 tables @ Rs. 500 each)
| |||
Total of Sales Journal
|
9,000
|
15. Pass Journal entries to rectify the errors: 2+2+1=5
1) Goods worth Rs. 500 taken by the proprietor for his personal use but not recorded in the books of accounts.
2) Cash sales to Ram of Rs. 209 was recorded as Rs. 909.
3) Sales Return for Rs. 600 not recorded in the books.
Journal Entries
Date
|
Particulars
|
L/F
|
Amount
|
Amount
|
1.
2.
3.
|
Drawings A/c Dr.
To Purchases A/c
(Being the goods withdrawn for personal use not recorded in the books not rectified.)
|
500
700
600
|
500
700
600
| |
Sales A/c Dr.
To Cash A/c
(Being the cash sales to Ram of Rs. 209 recorded as Rs. 909 now rectified.)
| ||||
Sales return A/c Dr.
To Debtors A/c
(Being the sales return not recorded in the books, now rectified.)
|
Or
Explain five errors which are not disclosed by a Trial Balance? 5
Ans: Errors not disclosed by the Trial Balance
i) Error of principle
ii) Error of omission
iii) Errors of Commission
iv) Recording wrong amount in the books of original entry
v) Compensating errors
Error of principle: Accounting entries are recorded as per the generally accepted accounting principles. If any of these principles are violated or ignored, errors resulting from such violation are known as errors of principle. An error of principle may occur due to incorrect classification of expenditure or receipt between capital and revenue.
Errors of Omission: The errors of omission may be committed at the time of recording the transaction in the books of original entry or while posting to the ledger. These can be of two types:
i) Errors of complete omission
ii) Errors of partial commission
When a transaction is completely omitted from recording in the books of original record, it is an error of complete omission. When a transaction is partially omitted from posting in ledger, it is an error of partial omission.
Errors of Commission: These are the errors which are committed due to the wrong posting of wrong transaction, wrong totaling or balancing of the accounts, wrong casting of the subsidiary books. Such errors are called Errors of Commission.
Compensating errors: When two or more errors are committed in such a way that the effect of these errors on the debits and credits of accounts is nil, such errors are called compensating errors. Such errors do not affect the tally of the trial balance.
16. On 1st May 2018, Akash drew a bill of Rs. 15,000 on Bikash for two months. On 10th June 2018, Akash endorsed the bill in favour of his creditor Prakash. On due date the bill was dishonoured. Pass Journal entries in the books of Akash. 5
Journal Entries
In the books of Akash (Drawer)
Date
|
Particulars
|
L/F
|
Amount
|
Amount
|
01-05-18
10-06-18
04-07-18
|
B/R A/c Dr.
To Bikash
(Being the B/R received from Bikash)
|
15,000
15,000
15,000
|
15,000
15,000
15,000
| |
Prakash Dr.
To B/R A/c
(Being the B/R endorsed to Prakash.)
| ||||
Bikash Dr.
To Prakash
(Being the B/R endorsed to Prakash dishonored.)
| ||||
Or
Explain five differences between Bills of Exchange and Cheque.
Ans: Difference between cheque and bill of exchange
Basis
|
Cheque
|
Bills of Exchange
|
Drawee
|
A cheque is always drawn on a bank or banker.
|
A bill of exchange can be drawn on any person including a banker.
|
Acceptance
|
A cheque does not require any acceptance.
|
It requires acceptance by the Drawee or someone else on his behalf.
|
Payment
|
A cheque is payable on demand without any days of grace.
|
A bill of exchange may or may not be payable on demand.
|
Stamp
|
A cheque does not require any stamp.
|
A bill of exchange must be stamped.
|
Payee
|
A cheque may be issued payable to the bearer.
|
A bill can never be issued payable to bearer.
|
Days of grace
|
No days of grace are allowed for a payment of a cheque.
|
3 days of grace are allowed for payment of a bill unless it is payable on demand.
|
Crossing
|
A cheque may be crossed.
|
A bill of exchange cannot be crossed.
|
17. Give five distinctions between Balance Sheet and Trial Balance. 5
Ans: Balance sheet is one of the financial statements prepared by the company to show the financial position of company at a particular time. Balance sheet is prepared to ascertain the position of assets and liabilities of the company at a particular date.
Trial Balance: After posting the accounts in the Ledger, a statement is prepared to show separately the debit and credit balances and to check the arithmetic accuracy of the accounts of a certain periods such a statement is known as the Trial Balance.
Basis
|
Balance sheet
|
Trail balance
|
1) Meaning
|
Balance sheet is one of the financial statements prepared by the company to show the financial position of company at a particular time.
|
Trial Balance is prepared with the help of balances of ledger accounts to check the arithmetic accuracy of the accounts of on a particular date.
|
2) Purpose
|
It shows the financial position.
|
It checks the arithmetical accuracy of books of accounts.
|
3) Types of accounts
|
Personal, real and nominal accounts are shown in trial balance.
|
Only personal and real accounts are shown in balance sheet.
|
4) Preparation
|
Balance sheet is prepared with the help of trial balance.
|
Trial balance is prepared before balance sheet.
|
5) Use
|
It is prepared for both internal and external users of financial statements.
|
It is prepared mainly for internal users.
|
Or
Give five distinctions between Statement of Affairs and Balance Sheet. 5
Ans: Difference between Balance Sheet and Statement of affairs
Balance Sheet
|
Statement of affairs
|
It is a Statement of assets, Liabilities and Capital extracted from ledgers balances maintained under the double entry system.
|
It is a Statement of assets, Liabilities and Capital extracted from incomplete records.
|
In this system, Capital account is taken from the ledger.
|
In this system, Capital is the excess of assets over liabilities.
|
The basic purpose of Balance sheet is to show the financial position of the business on the last day of accounting period.
|
A statement of affairs is prepared to show the financial position as well as it helps in ascertaining trading profit or loss.
|
The financial position disclosed by a Balance Sheet is reliable.
|
The financial position as disclosed by a Statement of affairs is not as reliable as that disclosed by a Balance sheet.
|
Balance sheet is prepared in case of double entry system.
|
Statement of affairs is prepared in case of single entry system.
|
18. Give various advantages of computerized accounting system over the manual system. 5
Ans: Advantages of Computerized Accounting:
1. Better Quality Work: The accounts prepared with the use of computers are usually uniform, neat, accurate, and more legible than manual job.
2. Lower Operating Costs: Computer is a labour and time saving devise.
3. Improved Efficiency: Computer brings speed and accuracy in preparing the records and accounts and thus, increases the efficiency of employees.
4. Greater Accuracy: Computerized accounting ensures accuracy in accounting records and statements. It prevents clerical errors and omissions.
5. Minimizing Mathematical Errors which are frequent in manual accounting.
Or
What is the role of computers in Accounting? Discuss the advantages of using computers in accounting. 5
Ans: A computer is an electronic device or machine which performs various functions and helpful in accounting. A programmable machine that receipts input, stores and automatically manipulates data, and provide output in a useful format. Now a days, computer plays a significant role in maintaining accounts. Role of computer in Computerized Accounting System are stated below:
a) It leads to quick preparation of accounts.
b) It ensures control over accounting work and records.
c) Errors and mistakes would be at minimum in computerized accounting.
d) Maintenance of uniform accounting statements and records is possible.
e) Flexibility in maintaining accounts is possible.
Advantages of Computerized Accounting:
a) Better Quality Work: The accounts prepared with the use of computers are usually uniform, neat, accurate, and more legible than manual job.
b) Lower Operating Costs: Computer is a labour and time saving devise.
c) Improved Efficiency: Computer brings speed and accuracy in preparing the records and accounts and thus, increases the efficiency of employees.
d) Greater Accuracy: Computerized accounting ensures accuracy in accounting records and statements. It prevents clerical errors and omissions.
e) Minimizing Mathematical Errors.
19. What is Bank Reconciliation Statement? Explain the purpose of preparing such a statement. 2+6=8
Ans: Ans: The statement which is prepared for verifying and reconciling the bank balances, shown by the cash book and pass book on a certain date and incorporates the reasons of disagreement between them is called a bank reconciliation statement.
Utility of B.R.S
1) It gives an authentic proof of the accuracy of the cash and pass book balances.
2) Entries in both the book are automatically checked.
3) The cash book may be made up- to-date by recording some hitherto unknown entries.
4) It helps to detect any mistake in the cash book and pass book
Need of preparing: - The needs of B.R.S. can be summarized as follow:-
a) It reflects actual bank balances position.
b) It helps to direct any mistake in the cash book and pass book.
c) It prevents fraud in recording banking transactions
d) It explained any delay in the collection of cheque.
e) It identifies valued transaction recorded by one party but not by other.
Or
Prepare a Three Column Cash Book with the following transactions: 8
2018
April 1
April 2
April 3
April 4
April 12
April 20
April 25
April 30
|
Started business with cash Rs. 25,000
Deposited Cash into Bank Rs. 10,000
Bought goods by Cheque Rs. 150
Received cheque from Ram Rs. 500
Allowed him discount Rs. 25
Paid into Bank Cash Rs. 300
Paid into Bank Ram’s cheque Rs. 500
Paid Hari by cheque Rs. 545
Discount Received Rs. 5
Drew from Bank for office use Rs. 200
Paid wages in Cash Rs. 400.
|
Solution:
Triple Column Cash Book
Date
|
Particulars
|
LF
|
Cash
|
Bank
|
Dis.
|
Date
|
Particulars
|
LF
|
Cash
|
Bank
|
Dis.
|
2018
April.1
2
4
12
25
|
To Capital A/c
To Cash A/c
To Ram
To Cash A/c
To Banks A/c
|
25,000
500
200
|
10,000
800
|
25
|
2018
April.2
3
12
20
25
30
30
|
By Bank A/c
By Purchases A/c
By Bank A/c
By Hari
By Cash A/c
By Wages A/c
By Balance c/d
|
10,000
800
400
14,500
|
150
545
200
9,905
|
5
| ||
25,700
|
10,800
|
25
|
25,700
|
10,800
|
5
| ||||||
To Balance b/d
|
14,500
|
9,905
|
20. Distinguish between Provision and Reserve. 8
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Also Read:
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Ans: Provisions: The term ‘provision’ means an amount, which is: written off, or retained, by way of providing for depreciation, renewals, diminution in the value of assets; or retained by way of providing for any unknown future liability of which the amount cannot be determined with reasonable accuracy.
Examples of provisions are: Provision for depreciation; Provision for bad and doubtful debts; Provision for taxation; Provision for discount on debtors; and Provision for repairs and renewals.
Reserves: A part of the profit may be set aside and retained in the business to provide for certain future needs like growth and expansion or to meet future contingencies such as workmen compensation are called reserves. Unlike provisions, reserves are the appropriations of profit to strengthen the financial position of the business. Reserve is not a charge against profit as it is not meant to cover any known liability or expected loss in future.
Examples of reserves are: General reserve; Workmen compensation fund; Investment fluctuation fund; Capital reserve; Dividend equalization reserve; Reserve for redemption of debenture.
Difference between Provisions and Reserves: 2010, 2019
a) Provision is a charge on profits and reduces the amount of net profits. Whereas Reserves is an appropriation of profits and reflects undistributed profits.
b) Provision is to be made even if there are no profits. On the other hand, Reserve is created only when there are profits.
c) Provision creation is compulsory. But Reserves creation is at the discretion of Management.
d) Dividend cannot be paid out of provisions. But dividend can be paid out of reserves.
e) Provisions are utilised for specific purpose for which it has been created. But, reserves can be utilised for any purpose.
Or
Kamal Traders purchased a machinery on 1st April, 2015 for Rs. 23,000 and spent Rs. 2,000 on its installation. It was decided to depreciate the machinery at 20% every year according to diminishing balance method. Prepare the Machinery A/c from April, 2015 to March, 2018 and show profit or loss if the machinery is sold on 31st March, 2018 for Rs. 10,800. The accounts are closed on 31st March every year. 8
Solution:
Machinery Account
Date
|
Particulars
|
Amt.
|
Date
|
Particulars
|
Amt.
|
1-4-15
|
To Bank A/c (23,000+2,000)
|
25,000
|
31-03-16
31-03-16
|
By Depreciation A/c
(25,000*20%)
By Balance c/d
|
5,000
20,000
|
25,000
|
25,000
| ||||
1-4-16
|
To Balance B/d
|
20,000
|
31-3-17
31-3-17
|
By Depreciation A/c
(20,000*20%)
By Balance C/d
|
4,000
16,000
|
20,000
|
20,000
| ||||
1-4-17
|
To Balance B/d
|
16,000
|
31-3-18
31-3-18
31-3-18
|
By Depreciation A/c
(16,000*20%)
By Bank A/c
By Profit and Loss A/c
|
3,200
10,800
2,000
|
16,000
|
16,000
|
21. From the following, ascertain the amount of total sales: 8
Rs.
| |
Balance of debtors on 1.1.2017
Cash received from debtors
Discount allowed to debtors
Bills receivable received
Bad debt written off
Bad debt recovered
Return inward
Bills receivable dishonoured
Bills receivable discounted
Cash sales
Balance of debtors on 31.12.2017
|
4,760
47,000
2,300
8,000
900
1,200
600
1,800
1,500
36,340
7,420
|
Total Debtors A/c
Particulars
|
Amount
|
Particulars
|
Amount
|
To Balance b/d
To B/R (Dishonored)
To Credit Sales
(Balancing figure)
|
4,760
1,800
59,660
|
By Cash
By Discount allowed
By B/R
By Bad debt
By Return Inward
By Balance c/d
|
4,700
2,300
8,000
900
600
7,420
|
66,220
|
66,220
|
Total Sales = Cash sales + Credit sales = 36,340 + 59,660 = 96,000
Or
What do you understand by single entry system? Mention six points of difference between single-entry system and double-entry system. 2+6=8
Ans: Single entry system: It is defined as the method of accounting which does not follow the principle of double entry system .Under this method only one account is given debit or credit for each transaction. Under this method, only personal accounts are maintained and impersonal account may not be maintained in the books.
Ans: Difference between Double Entry System and Single Entry System
S.N.
|
Double Entry System
|
Single Entry System
|
1.
|
Under this system, both aspect of each transaction are record.
|
Under this system, both aspect of each transaction are not recorded.
|
2.
|
In this system, Personal, Real and Nominal accounts are kept fully.
|
In this system, only Personal Accounts are kept and Real and Nominal Accounts are ignored.
|
3.
|
In this system, Cash book, General ledger, Debtors’ Ledger and Creditors’ Ledger are maintained.
|
In this system, only Debtors’ Ledger and creditors’ Ledger are kept. Cash book is also kept but personal transaction gets mixed up with business transaction.
|
4.
|
Under this system, arithmetical accuracy can be checked by preparing Trial Balance at any moment of time.
|
Under this system, arithmetical accuracy cannot be checked because to Trial Balance can be prepared.
|
5.
|
In this system, Trading, Profit and Loss Accounts and balance sheet can be prepared.
|
In this system, Trading, Profit And Loss Accounts and Balance sheet cannot be prepared.
|
6.
|
This system is scientific and follows certain rules.
|
This system is unscientific and does not follow any concrete rules.
|
22. The following Trial Balance is extracted from the books of Mr. Hazarika as on 31.3.2018.
Debit
|
Rs.
|
Credit
|
Rs.
|
Furniture
Motor-Vehicle
Building
Bad debts
Sundry Debtors
Stock
Purchases
Sales Return
Advertisement
Interest
Cash in hand
Taxes & Insurance
General Expenses
Salaries
|
640
6,250
7,500
125
3,800
3,460
5,475
200
450
118
650
1,250
782
3,300
|
Capital
Provision for Bad Debts
Sundry Creditors
Sales
Bank Loan
Purchase Return
Commission
|
12,500
200
2,500
15,450
2,850
125
375
|
34,000
|
34,000
|
Adjustment: Stock on 31.3.2018 was Rs. 5,750.
Prepare Trading A/c, Profit and Loss A/c and a Balance Sheet as on 31.3.2018. 8
Trading and P/L A/c of Mr. Hazarika
For the year ended on 31-03-2018
Particulars
|
Amount
|
Particulars
|
Amount
|
To opening stock
To Purchases 5,475
Less:-Return 125
To Gross profit c/d
To Advertisement
To Interest
To Taxes & Insurance
To General Exp.
To Salaries
To Net profit
|
3,460
5,350
12,190
|
By Sales 15,450
Less:- Sales return 200
By Closing Stock
By Gross profit b/d
By Provision for b/d 200
Less:-B/d 125
By Commission
|
15,250
5750
|
21,000
|
21,000
| ||
450
118
1250
782
3300
6740
|
12,190
75
375
| ||
12,640
|
12,640
|
Balance Sheet
As a 31-03-2008
Liabilities
|
Amount
|
Assets
|
Amount
|
S/Creditors
Bank loan
Capital 12,500
Add:- Net profit 6740
|
2,500
2,850
19,240
|
Furniture
Motor vehicle
Building
S/Debtors
Cash in hand
Closing Stock
|
640
6,250
7,500
3,800
650
5,750
|
24,590
|
24,590
|
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