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    Paper 1: Principles and Practice of Accounting

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    raj
    This document contains 6 questions regarding principles and practice of accounting. It asks the student to state whether accounting statements are true or false, prepare journal entries for bills receivable and consignment transactions, prepare accounting records for goods sold on approval, write short notes on depreciation methods and types of bills, and provide journal entries to rectify accounting errors through a profit and loss adjustment account. The questions cover a range of foundational accounting topics and require students to apply their knowledge to practical scenarios involving common accounting transactions.

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    Paper 1: Principles and Practice of Accounting

    Uploaded by

    raj
    35 views2 pages
    This document contains 6 questions regarding principles and practice of accounting. It asks the student to state whether accounting statements are true or false, prepare journal entries for bills receivable and consignment transactions, prepare accounting records for goods sold on approval, write short notes on depreciation methods and types of bills, and provide journal entries to rectify accounting errors through a profit and loss adjustment account. The questions cover a range of foundational accounting topics and require students to apply their knowledge to practical scenarios involving common accounting transactions.

    Original Description:

    Accounts Paper

    Original Title

    Accounts Test 15.06.2018

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    This document contains 6 questions regarding principles and practice of accounting. It asks the student to state whether accounting statements are true or false, prepare journal entries for bills receivable and consignment transactions, prepare accounting records for goods sold on approval, write short notes on depreciation methods and types of bills, and provide journal entries to rectify accounting errors through a profit and loss adjustment account. The questions cover a range of foundational accounting topics and require students to apply their knowledge to practical scenarios involving common accounting transactions.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    35 views2 pages

    Paper 1: Principles and Practice of Accounting

    Uploaded by

    raj
    This document contains 6 questions regarding principles and practice of accounting. It asks the student to state whether accounting statements are true or false, prepare journal entries for bills receivable and consignment transactions, prepare accounting records for goods sold on approval, write short notes on depreciation methods and types of bills, and provide journal entries to rectify accounting errors through a profit and loss adjustment account. The questions cover a range of foundational accounting topics and require students to apply their knowledge to practical scenarios involving common accounting transactions.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Paper 1: PRINCIPLES AND PRACTICE OF ACCOUNTING

    All Questions are compulsory.


    (Time Allowed: 1.5hours) (50 Marks)
    1) State with reasons, whether the following statements are true or false:
    a) Finished goods are normally valued at cost or market price whichever is higher.
    b) Reducing balance method of depreciation is followed to have a uniform charge for
    depreciation and repairs and maintenance together.
    c) Discount at the time of retirement of a bill is a gain for the drawee.
    d) A withdrawal of cash from the business by the proprietor should be charged to profit
    and loss account as an expense.
    (8 Marks)

    2) Mr. B accepted a bill for Rs 10,000 drawn on him by Mr. A on 1st August, 2017 for 3
    months. This was for the amount which B owed to A. On the same date Mr. A got the
    bill discounted at his bank for Rs 9,800.
    On the due date, B approached A for renewal of the bill. Mr. A agreed on condition that
    Rs 2,000 be paid immediately along with interest on the remaining amount at 12% p.a.
    for 3 months and that for the remaining balance B should accept a new bill for 3
    months.These arrangements were carried through. On 31st December, 2017, B
    became insolvent and his estate paid 40%.
    Prepare Journal Entries in the books of Mr. A and Mr. B

    (12 Marks)

    3) Mr. A of Assam sent on 18th February, 2017 a consignment of 1,000 DVD players to
    B of Bengal costing Rs 100 each. Expenses of Rs 1,500 were met by the consignor.
    B spent Rs 3,000 for clearance and selling expenses were Rs 20 per DVD player.
    B sold on 15th March, 2017, 600 DVD players @ Rs 160 per DVD player and again
    on 20th May, 2017, 300 DVD players @ Rs 170 each.
    B is entitled to a commission of Rs 25 per DVD player sold plus ¼ of the amount by
    which the gross sale proceeds less total commission thereon exceeded a sum calculated
    @ Rs 125 per DVD player sold. B sent the amount due to A on 30th June, 2017.
    You are required to prepare the consignment account and B’s account in the books of A.
    (10 Marks)
    4) X supplied goods on sale or return basis to customers, the particulars of which are as
    under:

    Date of dispatch Party’s name Amount Remarks


    10.12.2017 M/s ABC Co. 10,000 No information till 31.12.2017
    12.12.2017 M/s DEF Co 15,000 Returned on 16.12.2017
    15.12.2017 M/s GHI Co 12,000 Goods worth Rs 2,000 returned on
    20.12.2017
    20.12.2017 M/s DEF Co 16,000 Goods Retained on 24.12.2017
    25.12.2017 M/s ABC Co 11,000 Good Retained on 28.12.2017
    30.12.2017 M/s GHI Co 13,000 No information till 31.12.2017

    Goods are to be returned within 15 days from the dispatch, failing which it will be treated as

    sales. The books of ‘X’ are closed on the 31st December, 2017.

    Prepare the following account in the books of ‘X’.


    1. Goods on “sales or return, sold and returned day books”.

    2. Goods on sales or return total account.


    (6 Marks)
    5) Write short notes on the following:

    1. Machine Hour Rate method of calculating depreciation.


    2. Trade bill vs. Accommodation bill.
    (8Marks)

    6) Give journal entries to rectify the errors through Profit & Loss Adjustment A/c.

    a) The total of the Sales Book of one page Rs 6,531 was carried forward to the next page
    as Rs 6351.
    b) Goods returned by a customer for Rs 1,200 but entered in Purchase Return Book.
    c) Personal Car expenses amounting to Rs 250 were debited to Trade Expenses.
    d) Sales Return Book was undercast by Rs 2,750.
    e) Rs 50 discount allowed by a supplier was wrongly posted to debit side of Discount A/c.
    f) An item of Purchases of Rs 151 was entered in Purchase Book as Rs 15 and posted to
    Supplier’s A/c as Rs 51.
    (6 Marks)

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