Model Paper of Annual Exam

Gulf Indian High School, Dubai MODEL PAPER OF ANNUAL EXAM ACCOUNTANCY GRADE: XI MARKS: 90 DATE: TIME: 3HRS

Attempt all the questions.

1. When information about two different enterprises have been prepared presented in a similar manner the information exhibits the characteristic of: (1) [i] Verifiability [ii] Relevance [iii]Reliability [iv]None of the above 2. When a Bills payable is dishonored it is (1) [a] Debited to Drawee and credited to Bills payable Account [b] Debited to Bills Receivable Account and credited to Drawee Account [c] Debited Bills Payable Account and credited to Drawer Account. [d] Debited to Bills Payable Account and credited to Bank Account

3. Which of the following is not a business transaction? (1) [i] Bought furniture of Rs. 10,000 for business [ii]Paid for salaries of employees Rs.5, 000 [iii]Paid sons fees from her personal bank account Rs. 20,000 [iv]Paid sons fees from the business Rs. 2,000

4. Trial balance is; (1) [i] An account [ii] A statement [iii] A subsidiary book [iv] A principle book 5. Donations received for a special purpose are a (1) [a] asset [b] Capital receipt [c] Revenue receipt [d] Income 6. If the opening capital is Rs. 50,000 as on April 01, 2005 and additional capital introduced Rs.10, 000 on January 01, 2006. Interest charged on capital 10% p.a. The amount of interest on capital shown in profit and loss account as on March 31, 2005 will be: [i] Rs. 5,250 (1)

[ii] Rs.6, 000 [iii]Rs.4,000 [iv]Rs.3,000

7. Following is the information given in respect of certain items of a sports club. You are required to show them in income and expenditure account Balance Sheet of the club as at 31st March, 2013. (3)

Rs. Sports Fund as at 1st April, 2012 ………………………………………… 1, 00,000 Sports Fund investments …………………………………………………. 1, 00,000 Interest on Sports Fund Investments ……………………………………. 10,000 Donation for Sports Fund ………………………………………………… 40,000 Sports Prizes awarded …………………………………………………...... 30,000 Expenses on Sports Events ……………………………………………….. 10,000 General Fund ………………………………………………………………2, 00,000 General Fund Investments …………………………………………………2, 00,000 Interest on General Fund Investments …………………………………….. 20,000

8. [a] Reserve is not a liability in the real sense. Do you agree with this statement? [b] A Provision can be specific or general. Do you agree? (3)

9. What is a suspense account? When is it opened and how is it closed? (3)

10.[a] If “Adjusted Purchases” and “closing stock” are given in the Trial balance, will you transfer “closing stock”, to Trading Account? Give reason. (1.5+1.5=3)

[b] Production at a factory had to stop for a week due to a labour strike.The owner estimated the loss of production and the likely loss of profit arising out of the situation. He directed the accountant to record the loss in the books of accounts. Is the owner correct in recording the likely loss? Give reasons.

11.[a] Is it possible to prepare a Trial Balance and check the arithmetical accuracy of the books of accounts under Single Entry System? (1.5+1.5=3)

[b] Which Generally Accepted Accounting Principle [GAAP] is followed and which one is ignored while preparing the accounts under Single Entry System?

12. What are the two bases of accounting and explain briefly. (3) 13. What do you understand by Off-the-Shelf Software? Write its advantages and limitations? (4)

14. What are the attributes of accounting? (4) 15.Enter the following transactions in the cash book with cash and bank column of M/S Mahendra general stores: (4) Rs. 2014 Jan.1 cash in hand 1002.50 Cash at bank 5000 5. Deposited into bank 1000 8. Rent paid by cheque 250 10. Withdrew money from bank for business use. 400 12. Drawings 100 13. Received a cheque from Pawan and deposited into bank 700 14. Pawan’s cheque returned dishonoured by the bank - 20. Deposited into bank balance of cash in excess of 250

16. [a] ‘Closing stock is valued at lower of cost or market price.’ Which concept of Accounting is applied here? (4) [b] Rent for the month of March, 2011 is not paid. Under which accounting concept it should be recorded as expenses for the year ended 31st March, 2011? [c]If one aspect of a transaction is not recorded ,which accounting concept is not followed.? [d] A company lost vital machinery in an accident on 2nd March, 2013 which will have adverse impact on its production capacity. As a result, it is likely to loose business to its competitors. The company has not disclosed this fact in its annual report for the year ended 31st March, 2013. Do you think it is complying with the convention of Full Disclosure?

17. [a] What is the rule for Revenue or Income Account? (4) [b](i) A starts a business and invests Rs. 50,000 on 1st April, 2008. On 31st March 2009 his assets are Rs. 65,000 and liabilities are Rs. 6,000. Find out the amount of capital on 31st March, 2009 and his profit. [ii] In the above case, if the proprietor had invested Rs. 5,000 as additional capital and withdrawn Rs. 2,000, what will be your answer? [iii] If A had withdrawn from his business Rs. 3,000 for personal use, find out the profit in this case.

18. Journalize the following transactions in the books of a trader: (6) 1st April, 2013 Debit Balance: Cash in Hand-Rs. 18,000; Cash at Bank- Rs.25, 600: Stock of Goods-Rs 50,000: Furniture- Rs. 10,000: and building – Rs 4, 51,400. Debtors; Vijay- Rs 2,700; Anil-Rs 1,500: Ashwani-Rs 2,000; Anupam-Rs 1,800; and Madhu-Rs-Rs 5,000. Creditors: Anand-Rs 5,400; Arya & Co.-Rs 77,000 and balwant Rai-Rs 52,000: Mrs.Anitha’s Loan- Rs 1,00,000. 2013 April, 2. Purchased goods worth Rs 50,000 less 20% trade discount and 5% cash discount. April, 3. Rs 2,646 received from Vijay and allowed him discount Rs 54. April, 5. Bought 100 shares in Bharat Ltd. @ Rs 15 per share, brokerage paid Rs 30. April, 8. Goods worth Rs 500 were damaged in transit; a claim was made on the railway authorities for the same. April, 20. Cash Rs 5,292 paid to Anand and discount allowed by him Rs.108. April, 30. One month’s interest on Mrs.Anitha’s Loan @ 12% p.a. became due but could not be paid.

19. From the following particulars make out a Bank Reconciliation Statement and ascertain the balance as per Cash Book on 31st December in the books of D.K. (6) [i] Pass book showed an overdraft of Rs. 15,000 on 31.12.90. [ii] A Cheque of Rs. 200 was deposited in bank but not recorded in cash book. [iii] cheques of Rs. 17,000 were issued but cheques worth only Rs. 10,000 were presented for payment up to 31.12.90. [iv] Cheques of Rs.10,000 were sent to bank for collection. Out of these cheques of Rs. 2,000 and of Rs. 1,000 were credited respectively on 7th Jan. and 9th,Jan. and remaining cheques were credited before 31.12.90. [v] Bank paid Rs. 300 fee of Chamber of Commerce on behalf of D.K. which was not recorded in Cash Book. [vi] Bank Charged interest on overdraft Rs. 800. [vii] Rs. 40 for bank charges were recorded two times in Cash Book and bank expenses of Rs.35 were not at all recorded in cash book. [viii] Payment side of Cash Book was Rs. 1,000 short. [ix] Bank received Rs. 200 an interest on debentures on behalf of D.K.

20. A company whose accounting year is the calendar year purchased on 1st April, 1991 machinery costing Rs. 30,000. It further purchased machinery on 1st Oct., 1991 costing Rs.20, 000 and on 1st July, 1992 costing Rs.10, 000. On 1st Jan, 1993 one third of the machinery installed on 1st April, 1991 became obsolete and was sold for Rs.3, 000. (6) Show how the machinery account would appear in the books of company if depreciation is charged at 10% p.a. on written down value method.

21. Journalize the following transactions in the books of J.Jaggi: (6) [a] Our acceptance to M.Madan for Rs.3000 retired before due date, rebate allowed Rs.45. [b] K.Kaku’s acceptance for Rs. 4,000 renewed for a further period of 3 months, interest charged at 15%. [c] Our acceptance to P.Swamy for Rs. 8,000 renewed for 3 months on the condition that Rs.2, 000 is paid in cash immediately and the remaining balance to carry out interest at 18%. [d] D.Dutt’s promissory note for Rs. 7,000 which we had endorsed in favour of P.Mukerjee dishonored. P.Mukerjee paid Rs. 10 as noting charges. We pay P. Mukerjee by cheque and accept from D.Dutt another bill for the amount due plus interest, Rs.315. [e] Our promissory note in favour of A.Alam for Rs.2,150 which we pay by cheque. [f] Our promissory note for Rs. 5,000 in favour of Patel settled by sending him Tanna’s acceptance for Rs. 5,000. 22. Following is the Receipts and Payments Account of Excellent Recreation Club for the year ended 31st, March, 2010: (6) RECEIPTS AND PAYMENTS ACCOUNT For the year ended 31st, March, 2010 Dr. Cr. Receipts Rs Payments Rs. To Cash in Hand By Salaries 24,000 To Cash at Bank 500 By Rent 7,20 To Subscriptions 5,5 By postage 0 [including Rs 1,000 for 2008- 60 By printing and stationery 3 09 and Rs 1,500 for 2010-11] 45,50 By Electricity Charges 00 To Interest on Investments 0 By Meeting Expenses 2,55 To Bank Interest By Purchase of library Books 0 To Sale of Furniture By Investments on Bonds 3,00 By Cash in Hand 20,00 0 By Cash at Bank 0 1,50 0 250 10,000 3,0 10,000 00 1,55 0 14,000

74,900 74,900

Following additional information is also supplied to you: [i] On 1st, April, 2009, the club had the following assets and liabilities- [a]Investments Rs 4, 00,000; [b] Furniture Rs 30,000; [c] Library Books Rs 50,000 and [d] Liability for Rent Rs.600 and for Salaries Rs 2,000 [ii] On 31st March, 2010, rent of Rs 800 and salaries of Rs 2,500 were in arrears. [iii] The book value of furniture sold was Rs 2,500. Prepare the Income and Expenditure Account of the Club for the year ended 31st, March, 2010. 23. Pass the entries to rectify the following errors. (8) [i]A credit sale of goods of Rs.120 to Ramesh has been wrongly passed through the purchase book. [ii] Rs.700, the total of Sales returns book has been passed to the debit of the purchase Return A/c. [iii] A discount of Rs.58.12 allowed to a customer has been credited to him as Rs. 56.21. [iv] Unexpired Insurance Rs. 500 has not been taken into accounts while preparing Profit and Loss A/c. [v] Wages paid for the construction of office furniture was debited to wages Account Rs. 200. [vi] Cash received from Gokul Rs. 500 was posted in the credit side of the cash book. [vii] Discount amounting to Rs. 2 from a creditor had been duly entered in his account but not posted to discount A/c. [viii] Rs.500 received from Anand against a Debt previously written off as Bad debt has been credited to his personal account.

24. From the following figures extracted from the books of Rakesh you are required to prepare a Trading and Profit and Loss Account for the year ended 31st March, 2002 and a Balance Sheet as on that date after making the necessary adjustments:

Ledger Accounts Amount Ledger Accounts Amount Mr.Rakesh’s Capital 2,2 Stock 01.04.2001 38,500 Mr.Rakesh’s Drawings 8,800 Wages 35,200 Plant and Machinery Sundry Creditors 44,000 Freehold property 13,200 Postage & Telegrams 1,540 Purchases Insurance 1,760 Returns Outwards 99,000 Gas and Fuel 2,970 Salaries Bad Debts 660

Office expenses Office Rent 2,860 66,000 Office Furniture Freight 9,900 1,1 Discounts A/c [Dr.] Loose Tools 2,200 0,000 Sundry Debtors Factory Lighting 1,100 Loan to Mr.Suresh @ Provision for Doubtful Debts 880 10% p.a. balance on 1,100 Interest on Loan to Mr.Suresh 1,100 01.04.2001 Cash in Hand 2,640 Cash at Bank 13,200 Bills Payable Sales 2,750

29,260

44,000

29,260

5,500 2,3 1,440

Adjustments: [i] Stock on 31st March,2002 was valued at Rs.72,600. [ii] A new machine was installed during the year costing Rs.15,400 but it was not recorded in the books as no payment was made for it. Wages Rs. 1,100 paid for its erection have been debited to wages account. [iii] Depreciate Plant & Machinery by 33 1/3 %: Furniture by 10%; and Freehold by 5% [iv] Loose tools were valued at Rs.1, 760 on 31.03.2002. [v] Of the Sundry Debtors Rs.660 are bad and should be written off. [vi] Maintain a provision of 5% on Sundry Debtors for doubtful debts. [vii] The manager is entitled to a commission of 10% of the net profit after charging such commission. (8)