Grade XI Accountancy (Mock Test) #GrowWithGreen
Q.1 What is GST? [1 mark] Q.2 Write any one limitation of Single Entry System. [1 mark] Q.3 Which of the following alternatives is an example of profit for a firm? [1 mark] a. Compensation received from winning a court case b. Excess of receipts over the book value of fixed asset c. Excess of revenue over its related expenses during an accounting year d. All of the above Q.4 Which account is prepared to ascertain credit sales? [1 mark] Q.5 What do you understand by Customised Accounting Software? [1 mark] Q.6 On 1st March 2018, Aman sold goods To Rohit for Rs.10,000 plus 12% intra-state GST. Rohit promised To pay the amount after 1 month but paid GST amount in cash. Pass necessary journal entry in the books of Aman.. [1 mark] Q.7 State whether the following statements are true or false? [3 marks] a) According to the Revenue Recognition Concept, cash received from debtors is considered as revenue. b) An asset is recorded at the price paid to acquire it. c) According to the Full Disclosure Convention, business has indefinite life. Q.8 Differentiate between Accounting and Accountancy on the following basis. [3 marks] a) Purpose b) Dependence c) Scope Q.9 As per the Matching Concept, which of the following transactions will be considered as revenue expenditure? [3 marks] (a) Wages due but not paid Rs 200 (b) Wages paid in advance for the next year Rs 100 (c) Depreciation charged on machinery Rs 400 (d) Purchase of plant for Rs 1,00,000 (e) Payment to creditors Rs 2,000 (f) Cash withdrawn Rs 1,000 for personal use (g) Cash withdrawn from bank Rs 500 (h) Interest Rs 300 paid on loan for the current year Q.10 Prepare Profit and Loss Account for the year 2017. [3 marks] Gross Profit 32,000 Loss on Exchange 150 Salaries and Wages 5,000 Safe of Old Newspaper 200
Rent 2,000 Sale of Machinery 5,000 Rent from Tenant 3,000 Stationery 200 Interest on Investment 500 Depreciation on Machinery 500 Interest on Loan 800 Provision for Doubtful Debt 600 Interest on Capital 400 Manager s Commission 50 Interest on Drawing 200 Commission Paid 500 Commission Payable 100 Q.11 List any three advantages of readymade software. [3 marks] Q.12 Trial Balance is a conclusive proof of the accuracy of the books of accounts. Comment [3 marks] Q.13 Name any four external users of accounting information and briefly explain their interest. [4 marks] Q.14 Prepare Two Column Cash Book of Mr. Deewan for April, 2017. [4 marks] Apr.01 Cash in hand 500 Apr.01 Bank overdraft 1,200 Apr.02 Additional capital introduced 5,000 Apr.05 Cash sales 2,000 Apr.07 Cash purchases 3,000 Apr.10 Sold goods to Amrita 2,000 Apr.12 Received cheque from Amrita 1950 Discount allowed 50 Apr.15 Amrita s cheque deposited into bank Apr.18 With drawn from bank 300 Apr.20 Paid wages 800 Apr.22 Paid to Mr. B 1,500 Q.15 On December 31, 2017, Shyam Babu s Pass Book showed an overdraft balance of Rs 7,200. On comparing with the Bank Column of the Cash Book, the following differences were found. a) Out of the two cheques of Rs 2,000 and Rs 1,200 deposited into the bank, the first cheque got cleared in January 2018 but the second cheque was yet not cleared. b) Out of the three cheques (totaling Rs 12,000), a cheque of Rs 5,000 was presented for payment in the month of January 2018. c) Bank debited interest of Rs 300, which was not recorded in the Cash Book. d) A cheque of Rs 200 debited in the Cash Column of the Cash Book and credited in the Pass Book in the month of December 2017. Prepare a Bank Reconciliation Statement. [4 marks] Q.16 Ram Kapur keeps his books on Single Entry System on April 01, 2017 his capital balance is Rs 1,75,000. On March 31, 2018, accounts are showing the following balances.
Machinery Rs 20,000 Sundry Debtors Rs 45,000, Stock of Goods Rs 41,000, Cash in Hand Rs 15,000, Bills Receivable Rs 42,000, Bank (Cr.) Rs 4,500 and Creditors Rs 15,000. Mr. Kapur deposited Rs 10,000 in National Savings Certificate in the name of his wife and purchased an Office Furniture for Rs 2,500. Interest on Capital is to be provided at 10% on opening Capital Balance. Provide 2% as Provision for bad and doubtful debts. You are required to prepare Statement of Profit and Loss for Mar 31, 2018 by following the Alternative Method. [4 marks] Q.17 Prepare Debtors and Creditors Account to ascertain their closing balances.[4 marks] Debit Credit Debtors and Creditors at the beginning 20,000 12,000 Sales and Purchases 25,000 16,000 Returns 2,000 1,800 Cash/Bank from debtors 28,000 Cash/Bank to creditors 14,000 Bad Debts 200 Discount 300 250 Q.18 What is meant by errors in accounting? Explain any three types of clerical errors. [6 marks] Q.19 On May 01, 2017, A sold goods to B for 5,000 and on the same date A drew a three months bill for the same amount on B. B accepted the bill and returned it to A. On May 04, 2017, A discounted the bill with the bank at 12% p.a. On the due date, the bill dishonoured and bank paid Rs 150 for noting charges. B paid immediately Rs 2,000 plus noting charges and got another bill drawn together with interest 200 for another three months. On the due date B became insolvent and nothing was recovered from his official receiver. Pass the necessary Journal entries in the books of A and B. [6 marks] Q.20 On January 01, 2009, a machinery was purchased for Rs 1,20,000 and another machine was purchased on October 01, 2009 for Rs 50,000. On January 01, 2011, 1/3rd of the machine purchased on January 01, 2009 was sold for Rs 25,000 and on the same date another machine was purchased for Rs 1,00,000. Depreciation is charged at 10% p.a. on the original cost of the machinery. Prepare a Machinery Account for three years. Accounts are closed on December 31, every year. [6 marks] Q.21 Pass the necessary rectification entries for the errors given below. [6 marks] (1) Purchase of Rs 1,500 from Ramesh was wrongly passed through Sales Book. (2) Sales day book on a folio was carried forward to next page as Rs 560 instead of Rs 650. (3) Cash of Rs 800 paid to Pallav, but only Rs 80 were debited to his Account.
(4) Goods costing Rs 2,500 having the sale value of Rs 2,800 were returned by a customer were not recorded. (5) One item of Rs 250 relating to Prepaid Insurance Account was omitted to be brought forward from the books of previous year. (6) Purchases Return Book undercast by Rs 50. Q.22 What is a computer? How computer is useful in accounting. [6 marks] Q.23 The Trial Balance of Mr. Somnath is given below. Debit Credit Bills Receivables 3,000 Sales 70,000 Debtors 6,000 Bills Payable 5,600 Pant & Machinery 30,000 Creditors 32,850 Land & Building 20,000 Bank Overdraft 4,000 Stock (Opening) 4,500 Capital 22,750 Purchases 40,000 Discount on issue of shares 2,000 Wages 3,000 Mortgage 1,500 Salaries 2,400 Royalty on Sales 2,000 Export Duty 1.500 Carriage 1,200 Drawings 20,000 Rent 1,100 Additional Information: a) Building valued at Rs 16,250 and Machinery will be shown at 90% in the balance sheet. b) Stock at the end valued at Rs 5,000. It includes goods costing Rs 500 which were sold and recorded as Sales but not delivered to the customer. c) Provide 10% Manager Commission on net profit after charging such commission. d) 2% commission to be provided to salesmen on sales and Rent is paid for 11 months. f) Ramesh who owed Rs 200 to firm and included in the list of debtors became insolvent and nothing was recovered from his estate. Prepare the Trading Account, Profit and Loss Account and the Balance Sheet. [8 marks] Q.24 On May 01, 2010, Tom sold goods for Rs 5,200 to Darren and drew a three months after date bill. Darren accepted the bill and returned it to Tom on May 05, 2010. Tom endorsed the bill to Harry in the full settlement of the amount due to Harry of Rs 5,300. On the due date, the bill became dishonored. Harry paid Rs 50 as noting charges. Pass the necessary Journal entries in the books of all three parties Tom, Darren and Harry. [8 marks]
A.1 GST or Goods and Services Tax is an indirect tax which has integrated different taxes being imposed by the Centre and State governments on various goods and services. A.2 Single Entry System is an incomplete and unscientific system because in this system, both the aspects (debit and credit) of transaction are not taken while recording in the books of account. A.3 The excess of revenues of a period over its related expenses during an accounting year is profit. But a profit that arises from the events that are incidental to business such as sale of fixed assets, winning a court case, etc is called gain. Hence, the correct answer is option (c). A.4 Debtors Account is prepared to ascertain credit sales. Generally debtors are the persons To whom goods are sold on credit. A.5 Customised Accounting Software means altering the readymade software available in the market as per the specific needs of the users. A.6 Date 2018 L.F. Cr. Mar.01 Rohit 10,000 Cash A/c 1,200 To Sales A/c 10,000 To Output CGST A/c 600 To Output SGST A/c 600 (Goods sold on credit plus 12% intra-state GST and GST received in cash) A.7 a) False, as according to the Revenue Recognition Concept, revenue is recognised when sales take place and not when actual amount is received from the debtors for sales. b) True, as according to the Cost Concept, an asset is recorded in the books of accounts at its acquisition price, i.e. the price paid to acquire it and not the (current) market price of the asset. c) False, as according to the Going Concern Concept, business has indefinite life. No matter whether the owners of the business are alive or dead, business will continue. A.8 Basis of Distinction Accounting Accountancy Purpose Main purpose is to find out the net results and financial status of the business and communicating the results to its various users. Main purpose of accountancy includes decision making function.
Dependence Scope Accounting depends on the information provided by book keeping. Accounting is narrow in scope. It starts where book keeping ends. Accountancy independently guides both book-keeping and accounting. It is wider in scope because it explains the principles and techniques that are required to be followed in accounting and includes both accounting and book keeping. A.9 According to the Matching Concept, the following transactions will be considered as revenue expenditure. (a) Wages due but not paid Rs 200 (c) Depreciation charged on machinery Rs 400 (h) Interest Rs 300 paid on loan for the current year A.10 Profit and Loss Account Cr. Salaries and Wages 5,000 Gross Profit 32,000 Rent 2,000 Rent from Tenant 3,000 Interest on Loan 800 Interest on Investment 500 Interest on Capital 400 Interest on Drawings 200 Commission paid 500 Sale of Old Newspaper 200 Loss on Exchange 150 Stationery 200 Depreciation on Machinery 500 Manager s Commission 50 Net Profit 26,300 35,900 35,900 A.11 Readymade software is the software that is designed and developed not for a specific purpose but for the purpose in general. The following are the various advantage of readymade software. (i) The cost of readymade software is comparatively low. Thus, it is economical. (ii) It is user-friendly and easier to implement and learn. (iii) Training provision from vendor is available. A.12 Trial Balance is a statement prepared with the debit and credit balances of ledger accounts to test the arithmetical accuracy of books. If both the debit and credit column are equal, it is assumed that books of accounts are arithmetically correct. But it should never be taken as conclusive proof of accuracy of books of accounts as only those errors that affect the agreement of a trial balance are detected. Such errors are generally one
sided errors as they affect only one side of the trial balance and due to this the one of the side of the trial balance does not match with the other side, hence, these are detected and then rectified. However, certain errors like errors of principle that do not affect the arithmetic accuracy of trial balance may be present. These are two sided errors wrongly recorded in the books of accounts. In case of Errors of Principle, Compensating errors and complete omission of transaction, the trial balance will match but in reality there is an undetected error. A.13 External users of information are the individual or the organisations that have direct or indirect interest in the business firm; however, are not a part of management. They do not have direct access to the internal data of the firm and uses published data or reports like profit and loss accounts, balance sheets, annual reports, press releases, etc. Some examples of external users are government, tax authorities, labour unions, etc. 1. Banks and other financial institutions Banks provide finance in form of loans and advances to various businesses. Thus, they need information regarding liquidity, creditworthiness, solvency and profitability to advance loans. 2. Creditors These are those individuals and organisations to whom a business owes money on account of credit purchases of goods and receiving services; hence, the creditors require information about credit worthiness of the business. 3. Investors and potential investors They invest or plan to invest in the business. Hence, in order to assess the viability and prospectus of their investment, creditors need information about profitability and solvency of the business. 4. Tax Authorities- They need accounting information to know whether the amount of sales, production, profits, revenues, etc. are correctly calculated and shown unambiguously in the books. This is very important so that appropriate and correct tax rates (of taxes such as sales tax, excise duty, etc.) are levied on the business. A.14 Books of Mr. Deewan Cash Book Cr. Bank Rs Date L.F. Cash Bank Cash Date L.F. Rs Rs Rs 2017 2017 Apr.01 Balance B/d 500 Apr.01 Balance b/d 1,200 (Overdraft) Apr.02 Capital 5,000 Apr.07 Purchases 3,000 Apr.05 Sales 2,000 Apr.15 Bank (c) 1,950 Apr.12 Amrita 1,950 Apr.18 Cash (c) 300 Apr.15 Cash (c) 1,950 Apr.20 Wages 800 Apr.18 Bank (c) 300 Apr.22 Mr. B 1,500 Apr.30 Balance c/d 2,500 450 9,750 1,950 9,750 1,950
A.15 Bank Reconciliation Statement of Shyam Babu as on December 31, 2017 (+) items ( ) items Over draft as per the Pass Book 7,200 a) Cheques deposited but not cleared in December 3,200 b) Cheques issued but not presented for payment in December 5,000 c) Interest on overdraft charged by the bank 300 d) Cheques wrongly debited in the Cash Column of the 200 Cash Book but cleared in December Overdraft as per the Cash Book 8,900 12,400 12,400 A.16 Statement of Profit and Loss as on March 31, 2018 Capital at the end as on March 01, 2018 1,46,000 Add: Drawings 10,000 1,56,000 Less: Capital in the beginning as on April 01, 2017 1,75,000 Loss incurred before adjustments 19,000 Less: Interest on Capital @ 10% 17,500 Less: Provision for bad and doubtful debts 900 Loss incurred during the year 37,400 Working Note: Calculation of capital as on Mar 31, 2018 Statement of Affairs as on March 31, 2018 Liabilities Assets Sundry Creditors 15,000 Machinery 20,000 Bank overdraft 4,500 Sundry Debtors 45,000 Capital (Balancing Figure) 1,46,000 Stock of Goods 41,000 Cash in Hand 15,000 Bills Receivable 42,000 Office Furniture 2,500 1,65,500 1,65,500
A.17 Date Debtors Account Cr. Date Balance b/d 20,000 Sales Returns 1,800 Sales 25,000 Cash/Bank 28,000 Bad Debt 200 Discount 300 Balance c/d 14,700 45,000 45,000 Date Creditors Account Cr. Date Purchases Returns 2,000 Balance b/d 12,000 Cash/Bank 14,000 Purchases 16,000 Discount 250 Balance c/d 11,750 28,000 28,000 A.18 Errors in simple terms are unintentional mistakes committed at the time of recording any business transactions or at the time of their posting in the Ledgers. Examples of these errors are recording of wrong amount, recording in wrong Account (Ledger), posting in wrong ledger, or incorrect calculations. Clerical Errors are those errors that arise due to mistake committed in ordinary course of accounting work. Following are two types of clerical errors: (i) Errors of Omission: Whenever any transaction is altogether omitted to be recorded in the books then such type of an error will be called as Error of Omission. These types of error do not effect trial balance as transaction is not at all recorded so neither debit nor credit aspect of transaction has been considered. If transaction is although recorded but omitted to be posted in their respective ledgers then such an error is also Error of Omission. (ii) Errors of Commission: These errors are related to wrong recording of amount, wrong totaling, wrong calculation, wrong balancing of Ledgers and often are regarded as clerical errors. All these errors are either recorded wrongly or they may be recorded correctly but incorrectly posted in the Ledger Account. (iii) Compensating Errors: Compensating Errors are those errors in which effect of one error is compensated by the effect of another error or errors with the same amount.
So in this way two different errors simultaneously counterbalance effect of each other. These errors do not affect Trial Balance. A.19 Books of A Journal Date L.F. Debit Credit 2017 May 01 B 5,000 To Sales A/c 5,000 (Goods sold To B) May 01 Bills Receivable A/c 5,000 To B 5,000 (B's acceptance for three months received) May 04 Bank A/c 4,850 Discount A/c 150 To Bills Receivable A/c 5,000 (Bill discounted) Aug. 04 B 5,150 To Bank A/c 5,150 (B's acceptance dishonoured and the bank paid Rs 150 noting charges) Aug. 04 Cash A/c 2,150 To B 2,150 ( received from B) Aug. 04 Bills Receivable A/c 3,000 To B 3,000 (B's acceptance for three months received) Nov. 07 B 3,000 To Bills Receivable A/c 3,000 (Bill dishonoured) Nov. 07 Bad Debt A/c 3,000 To B 3,000 ( due from B became bad) Books of B Journal Date L.F. 2017 Debit Credit
May 01 Purchases A/c 5,000 To A 5,000 (Goods bought from A) May 01 A 5,000 To Bills Payable A/c 5,000 (Bill accepted drawn by A for three months) Aug. 04 Noting Charges A/c 150 Bills Payable A/c 5,000 To A 5,150 (Bill dishonoured on the due date) A 2,150 To Cash 2,150 (Cash paid To A) Aug. 04 A 5,000 To Bills Payable A/c 5,000 (Bill accepted drawn by A for three months) Nov. 07 Bills Payable A/c To A (Bill dishonoured) Nov. 07 A 3,000 To Deficiency A/c 3,000 ( due To A transferred To Deficiency Account) A.20 Machinery Account Cr. Date J.F. Date J.F. Jan.01 Bank (i) 1,20,000 (80,000 + 40,000) Dec.31 Depreciation (i) 12,000, (ii) 1,250 13,250 Oct.01 Bank (ii) 50,000 Dec.31 Balance c/d (i) 1,08,000, (ii) 1,56,750 48,750 1,70,000 1,70,000 2010 2010 Jan.01 Balance c/d Dec.31 Depreciation (i) 1,08,000, (ii) 48,750 1,56,750 (i) 12,000, (ii) 5,000 17,000 Dec.31 Balance c/d (i) 96,000, (ii) 43,750 1,39,750 1,56,750 1,56,750 2011 2011 Jan.01 Balance c/d Jan.01 Bank (i) 1/ 3 rd of 25,000
Machinery (i) 96,000, (ii) 43,750 1,39,750 Jan.01 Profit and Loss (loss) 7,000 Jan.01 Bank (iii) 1,00,000 Dec.31 Depreciation (i) 12,000 (2/3) = 8,000 (ii) 5,000, (iii) 23,000 10,000 Balance c/d (i) 56,000 (ii) 38,750 (iii) 90,000 1,84,750 2,39,750 2,39,750 Working Note: Calculation of Loss on Sale of 1/3 rd of the Machinery (i) Years Opening Closing Depreciation Balance Balance Jan 01, 2009 1,20,000 12,000 = 1,08,000 Jan 01, 2010 1,08,000 12,000 = 96,000 Jan 01, 2011 96,000 January 01, 2011 Book Value of (1/3) rd of Machinery (i) = 96,000 (1/3) = 32,000 Sale of 1/3 rd of the Machinery (25,000) Loss on Sale of Machine Rs 7,000 January 01, 2011 Book Value of (2/3) rd of the Machinery (i) = 96,000 (2/3) = Rs 64,000 Depreciation will be charged on the original cost of the Machinery (i) on December 31, 2011 = 1,20,000 (2/3) (10/100) = Rs 8,000 A.21 Date L.F. Debit Credit 1. Purchases A/c 1,500 Sales A/c 1,500 To Ramesh 3,000 (Goods purchased from Ramesh was wrongly passed through Sales Book, now rectified) 2. Suspense A/c 90 To Sales A/c 90 (Sales day book Total of one page Rs 560 was carried forward To next page as Rs 650, now rectified)
3. Pallav 720 To Suspense A/c 720 (Cash paid To Pallav Rs 800 was wrongly debited To his Account as Rs 80, now rectified) 4. Sales Returns A/c 2,800 To CusTomer A/c 2,800 (Goods returned by customer not recorded, now recorded) 5. Prepaid Insurance A/c 250 To Suspense A/c 250 (Prepaid Insurance was omitted To be brought forwarded from Previous Year, now rectified) 6. Suspense A/c 50 To Purchases Return A/c 50 (Purchases Return Book undercast, now rectified) A.22 A computer may be defined as an electronic device whose basic function is to take information storing and processing it according to the set of information and gives back the output (result) to the user. The following are the various characteristics of computer. (i) Speed- Speed of a computer is faster than the manual techniques. It can perform a task in much lesser time with very high speed. It is capable of performing millions of calculation per second. (ii) Accuracy- A computer performs any function or computation with very a high degree of accuracy. Errors if any exist only due to wrong commands or wrong programming. (iii) Reliable- Function performed by a computer are more reliable as it can work for comparatively long hours without any tiredness, lack of concentration and without creating any mistakes. It can perform any number of calculations with the same degree of accuracy. (iv) Versatility- A computer has the capacity to perform variety of tasks. A task may be simple as well as complicated. It is able to perform variety of jobs. (v) Storage- A computer has in-built capacity to store huge data in a very small space. It stores the data in a safe way. If needed, its storage capacity can also be increased through secondary storage devices such as floppy disks, optical disks, etc. A.23 Trading Account Cr.
Opening Stock 4,500 Sales 70,000 Purchases 40,000 Closing Stock 5,000 Wages Less: Sold and Wrongly 3,000 included 500 4,500 Carriage 1,200 Gross Profit (Balancing Figure) 25,800 74,500 74,500 Profit and Loss Account Cr. Depreciation on: Gross Profit 25,800 Building 3,750 Machinery 3,000 6,750 Outstanding Commission on sale 1,400 Royalty on Sales 2,000 Export Duty 1.500 Bad Debts 200 Salaries 2,400 Rent 1,100 Add: Outstanding rent 100 1,200 Outstanding Manager s Commission 941 Net Profit 9,409 25,800 25,800 Balance Sheet Liabilities Assets Capital 22,750 Fixed Assets Less: Drawings 20,000 Plant & Machinery 30,000 Add: Net Profit 9,409 12,159 Less: Depreciation 3,000 27,000 Mortgage 1,500Land and Building 20,000 Current Liabilities Less: Depreciation (3,750) 16,250 Bank Overdraft 4,000Current Assets Bills Payable 5,600Closing Stock (5,000 500) 4,500 Creditors 32,850Bills Receivables 3,000 Outstanding Rent 100Debtors 6,000 Outstanding commission on sale 1,400 Less: Bad Debts 200 5,800
Outstanding Manager s Commission 941Discount on issue of shares 2,000 Working Note: 10 Manager's Commission 10,350 Rs 941 110 Ans. 24 Journal of Tom 58,550 58,550 Date L.F. Debit Credit 2010 May 01 Darren 5,200 To Sales A/c 5,200 (Goods sold To Darren) May 05 Bills Receivable A/c 5,200 To Darren 5,200 (Darren's acceptance received for three months) May 05 Harry 5,300 To Bills Receivable A/c 5,200 To Discount Received A/c 100 (Darren's acceptance endorsed To Harry and discount received for Rs 100) Aug.04 Darren 5,250 Discount Received A/c 100 To Harry 5,350 (Darren's acceptance dishonored and Harry paid Rs 50 as Noting charges) Journal of Darren Date L.F. Debit 2010 May 01 Purchases A/c 5,200 Credit
To Tom 5,200 (Goods brought from Tom) May 01 Tom 5,200 To Bills Payable A/c 5,200 (Bill drawn by Tom for three months accepted) Aug.04 Bills Payable A/c 5,200 Noting Charges A/c 50 To Tom 5,250 (Bill drawn by Tom got dishonored and Noting charges Rs 50) Journal of Harry Date L.F. Debit Credit 2010 May 05 Bills Receivable A/c 5,200 Discount Allowed A/c 100 To Tom 5,300 (Bill received from Harry and allowed him discount Rs 100) Aug.04 Tom 5,350 To Bills Receivable A/c 5,200 To Discount Allowed A/c 100 To Cash A/c 50 (Bill received from Tom dishonoured and Rs 50 paid as noting charges )