Class XI Session 2025-26

Subject - Accountancy
Sample Question Paper - 9

Time Allowed: 3 hours Maximum Marks: 80

General Instructions:

1. This question paper contains 34 questions. All questions are compulsory.

2. This question paper is divided into two parts, Part A and B.

3. Questions 1 to 16 and 27 to 30 carry 1 mark each.

4. Questions 17 to 20, 31 and 32 carry 3 marks each.

5. Questions from 21, 22 and 33 carry 4 marks each

6. Questions from 23 to 26 and 34 carries 6 marks each

Part A
1. A cheque is considered as an order in writing drawn upon a bank to pay a specified sum to the bearer or the [1]
person named in it only if it is dated and signed by the ________.

a) Both drawee and drawer b) drawee

c) drawer d) bearer
2. Assertion (A): Environmental protection groups are one of the multiple external users of accounting [1]
information.
Reason (R): Social responsibility groups want to know the impact of business on the environment and steps
taken by an enterprise for the protection of the environment.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

3. Consider the following statements with regard to the accounting treatment of various accounts: [1]
i. Increase in asset is debited and decrease in asset is credited.
ii. Increase in expenses/losses is debited and decrease in expenses/ losses is credited.
iii. Increase in liabilities is credited and decrease in liabilities is debited.
iv. Increase in capital is credited and decrease in capital is debited.
Identify the correct statement/statements:

a) i and ii b) i, ii, iii and iv

c) i, iii and iv d) ii and iii

4. If Cash= Rs.1000; inventories= Rs.4000 Debtors= Rs.5000; fixed assets=? Capital + Liabilities= Rs.18000. Find [1]
out the Amount of fixed assets?

a) Rs.10000 b) Rs.20000

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 c) Rs.8000 d) Rs.15000
OR
Following are the steps involved in developing an accounting equation (in particular order). Arrange the steps in
correct sequence.
i. Find out the effect (in terms of increase or decrease) of a transaction on assets, capitals or liabilities.
ii. Show the effect on appropriate side of an equation and ensure that the total of right hand side is equal to the total
of left hand side.
iii. Ascertain the variables (i.e. assets, liabilities or capital) involved in a transaction.

a) (i), (ii). (iii) b) (iii), (ii), (i)

c) (iii), (i), (ii) d) (ii), (iii), (i)

5. Which of the following details is usually provided on the source documents? [1]

a) Parties involved b) Date

c) Nature of transaction d) All of these

6. Which of these is not a part of current liabilities? [1]

a) Debentures b) Bank Overdraft

c) Bills payable d) Creditors

OR
External users of accounting information are not:

a) Officers b) Employees

c) Public d) Lenders
7. The amount set aside for the purpose of providing any known liability, the amount of which cannot be [1]
ascertained with reasonable accuracy, is known as

a) Reserve b) Secret reserve

c) Provision d) Contingency fund

8. Rule of Debit and Credit for Impersonal account is [1]

a) Dr. all expenses and Cr. all gains & Dr. what b) Dr. the receiver and Cr. the giver
goes out and Cr. what comes in

c) Dr. all expenses and Cr. all gains d) Dr. what goes out and Cr. what comes in
OR
Which of the following is not a type of personal account?

a) SBI Bank A/c b) Investment A/c

c) Ram's A/c d) Atul's Capital A/c

9. Accounting concepts are basic assumptions which are taken for any business and businesses are considered to be [1]
following them. From the given options, identify which of the following cannot be considered a fundamental
accounting assumption?

a) Consistency b) Going concern

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 c) Accrual d) Materiality
10. Reserve is created: [1]

a) To meet the unforeseen liabilities and losses b) To strengthen the financial position of the
business

c) To equalise the rate of dividend d) All of these

11. Expenditure on purchase of machinery is a [1]

a) Expense b) Capital expenditure

c) Revenue expenditure d) Deferred revenue expenditure

12. Purchase of asset on credit is recorded in: [1]

a) Purchases Return Book b) Cash Book

c) Purchases Book d) Journal Proper

13. Purchase of machine by cash means: [1]

a) Decrease in asset and decrease in liability. b) increase in asset and decrease in liability

c) the decrease in asset and increase in capital d) increase in asset and decrease in
another asset
14. Which of the following is Revenue Expenditure? [1]

a) Expenses on purchase of Machinery b) Purchase of Investments

c) Repair Expenses d) Building Construction Expenses

OR
The unsold goods left at the end of the year is called:

a) Opening stock b) Assets

c) Closing stock d) Drawing

15. Assets sold on credit will be entered in ________. [1]

a) Purchase book b) Journal proper

c) Sales book d) Cash book

16. ________ is the reserve, which is created for some specific purpose and can be utilised only for that purpose. [1]

a) General reserve b) Specific reserve

c) Revenue reserve d) Capital reserve

17. When an account is said to have a debit balance and credit balance? [3]
OR
Journalise the following transactions of Sujeet Sharma Traders, timber merchants:
i. Purchased timber from Saksham Kumar, for cash ₹ 2,000 and credit ₹ 10,000.
ii. Paid to Saksham Kumar in full settlement of his account ₹ 9,950.
iii. Paid rent in advance ₹ 10,000.
iv. Purchased machinery for ₹ 1,00,000 by cheque and carriage ₹ 2,000 and installation charges ₹ 1,000 paid in Cash.
v. Purchased goods for ₹ 50,000 from Kunal and sold it to Amit for ₹ 65,000.
18. Why is the consistency principle important? [3]

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 OR
When should revenue be recognised? Are there exceptions to the general rule?
19. Give two characteristics of a business transaction. [3]
20. State whether the balances of the following accounts should be placed in the debit or the credit columns of the [3]
Trial Balance:
i. Furniture
ii. Plant and Machinery
iii. Discount Allowed
iv. Salary
v. Bank Overdraft
vi. Cash in Hand
vii. Creditors
viii. Sundry Debtors
ix. Carriage Inwards
x. Carriage Outwards
xi. Sales
xii. Purchases
xiii. Discount Received
xiv. Interest Received
xv. Interest Paid
xvi. Bad Debts
21. Mr. Sharma, the petty cashier of M/s Balaji Traders received ₹ 10,000 on April 1, 2023 from the Head Cashier. [4]
Following were the petty expenses :

2023 ₹

April 2 Taxi fare 750

3 Refreshments 450

5 Registered postal charges 200

5 Wages 700

8 Auto fare 200

9 Courier charges 150

12 Postal Stamps 600

14 Eraser/Sharpeners/Pencils 400

17 Speed Post charges 200

20 Cartage 600

20 Computer Stationery 500

22 Wages 300

24 Bus fare 600

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 25 Office Sanitation 800

26 Refreshments 750

28 Loading Charges 300

30 Photostatting Charges 200

30 Wages 800

You are required to prepare a Petty Cash Book.

22. Prepare a Bank Reconciliation Statement of Riya Ltd. as on 31st March, 2023 from the following information: [4]
i. Credit Balance (Overdraft) as per Cash Book ₹25,000
ii. Cheques paid into bank for collection ₹60,000 but cheques of ₹24,000 could only be collected in March,
2023
iii. A Cheque of ₹3,500 issued to a Creditor, was entered by mistake in the Cash Column.
iv. A Cheque of ₹10,000 issued on 22nd March was not presented for payment whereas it was recorded twice in
the Cash Book.
v. A bill receivable for ₹8,000 previously discounted with the bank had been dishonoured and bank charges
debited in the Pass Book amount to ₹ 125.
vi. In the Cash Book, a bank charge of ₹ 150 was recorded twice while another bank charge of ₹40 was not
recorded at all.
OR
From the following particular, prepare the bank reconciliation statement of Shri Krishan as on 31st March, 2017
i. Balance as per pass book is ₹ 10,000.
ii. Bank collected a cheque of ₹ 500 behalf of Shri Kishan but wrongly credited it to Shri Kishan’s account.
iii. Bank recorded a cash deposit of ₹ 1,589 as ₹ 1,598.
iv. Withdrawal column of the passbook undercast by ₹ 100.
v. The credit balance of ₹ 1,500 as on the passbook was recorded in the debit balance.
vi. The payment of a cheque of ₹ 350 was recorded twice in the passbook.
vii. The passbook showed a credit balance for a cheque of ₹ 1000 deposited by Shri Kishan.
23. Raja Ram started a real estate agency business with a cash investment of Rs 42,000. The following business [6]
transactions have been recorded
i. Paid 3 months advance rent for office accommodation Rs 2,520.
ii. Bought car for office Rs 25,200.
iii. Purchased office furniture Rs 8,400.
iv. Bought office typewriter from Comprehensive Company 73,600.
v. Sold extra office furniture at cost to Amar for Rs 1200. Amar paid Rs 720 in cash and accepted a bill at 3
months for the balance.
vi. Veer paid the amount of the bill at maturity and Amar paid half the amount he owed to Comprehensive
Company.
vii. Collected Rs 7,200 as commission.
viii. Paid telephone bill amounting to Rs 180.
OR
Analyse the following transactions, state the nature of accounts and the account that will be debited and credited as

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 per the Traditional Classification of Accounts:
i. Deepak started business introducing capital of ₹ 1,50,000 in cash.
ii. Opened a Bank Account by depositing ₹ 1,00,000 in cash.
iii. Received Loan of ₹ 1,00,000 from Naveen by cheque.
iv. Purchased furniture for ₹ 20,000 in cash from Raj Furniture House.
v. Purchased furniture from U.P. Safe for ₹ 40,000.
vi. Purchased goods for cash ₹ 15,000.
vii. Purchased goods from Manoj ₹ 30,000.
viii. Sold goods to Kamal for cash ₹ 25,000.
ix. Sold goods to Sumit on credit ₹ 30,000.
x. Cash received from Sumit ₹ 20,000.
xi. Cash paid to Manoj ₹ 10,000.
24. The accountant of a firm found that his Trial Balance was out (excess credit) by ₹ 742. He placed the amount in [6]
a Suspense Account and subsequently found the following errors:
i. A discount of ₹ 178 was allowed to Ramesh but in his account, only ₹ 100 is recorded.
ii. The total of the Purchases Book was ₹ 1,000 short.
iii. A sale of ₹ 375 to Guruji was entered in the Sales Book as ₹ 735.
iv. From the Purchases Book, Bose’s Account was debited with ₹ 175.
v. Cash ₹ 250 received from Mahi against debt previously written off was credited to his account.
vi. Purchase of office furniture worth ₹ 750 on credit from Delhi Furnitures was entered in the Purchases Book.
vii. While carrying forward the total of the Sales Book from one page to another the amount of ₹ 11,358 was
written as ₹ 11,538.
viii. The proprietor took goods of the value of ₹ 150 for his domestic consumption. No record of it has been made
in the books.
ix. Repairs bill of ₹ 410 for the proprietor's personal car, has been paid by the firm and debited to the Repairs
Account.
x. A sale to Karan of ₹ 700 has been entered in the Purchases Book.
Rectify the errors by means of suitable Journal entries and show the Suspense Account.
OR
Trial balance of Mridul did not agree and he put the difference to the suspense account. He discovered the following
errors.
a. Sales return book overcast by ₹ 800.
b. Purchase return to Shivam ₹ 2,000 were not posted to his account.
c. Goods purchased on credit from Rao ₹ 4,000 though taken into stock, but no entry was passed in the books.
d. Installation charges on new machinery purchased ₹ 500 were debited to sundry expenses account as ₹ 50.
e. Rent paid for residential accommodation of Mridul (the proprietor) ₹ 1,400 was debited to rent account as ₹
1,000.
Rectify the errors and prepare a suspense account to ascertain the difference in the trial balance.
25. Chetna Ltd. purchased a second-hand machine for ₹ 8,000 plus CGST and SGST @6% each on 1st July, 2020. [6]
They spent ₹ 3,500 on its overhaul and installation. Depreciation is written off 10% p.a. on the original cost. On

30th September, 2023, the machine was found to be unsuitable and sold for ₹ 6,500. Prepare the Machinery A/c

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 for four years assuming that accounts are closed on 31st March.
Note: There will be no effect of CGST and SGST on Machine A/c.
OR
The cost of the Machinery in use with Pramod & Co. on 1st April 2013 was Rs 3,00,000 against which the
depreciation provision stood at Rs 1,00,000 on that date. The firm provided depreciation at 10% on the diminishing
value.
On 1st October 2013, a machine costing Rs 40,000 purchased on 1st April 2011 was sold for Rs 32,000 and on the
same date, another machine was purchased for 50,000. Show the following accounts in the books of Pramod & Co.
for the year 2013-14:
i. Machinery Account
ii. Provision for Depreciation Account
iii. Machinery Disposal Account
26. Enter the following in Shri Shateen’s cash book and show the balance [6]

2013

Mar 1 Balance of cash in hand Rs. 1,500

Mar 8 Purchases goods for cash from X for Rs. 3,20

Mar 15 Sold good for Rs. 4,80 to Y

Mar 20 Received commission Rs. 65

Mar 20 Paid commission Rs. 55

Mar 28 Paid to Ashish on account Rs. 7,15

Mar 31 Paid salary to the office clerks 100 and office rent Rs. 60

OR
(Closing Entries). Give the necessary entries in the Journal Proper of Ram on 31st March 2023 to close their books:
Freehold Premises ₹ 30,000; Plant and Machinery ₹ 20,000; Sundry Debtors ₹ 25,000; Purchases ₹ 37,500; Sales ₹
95,000; Discount (Dr.) ₹ 150; Discount (Cr.) ₹ 175; Sundry Creditors ₹ 12,500; Carriage Inwards ₹ 375; Carriage
Outwards ₹ 600; Furniture and Fixtures ₹ 2,500; Wages ₹ 5,000; Bad Debts ₹ 750; Salaries ₹ 3,600; Commission
(Cr.) ₹ 2,125; Capital Account- ₹ 32,500; Trade Expenses ₹ 2,550; Opening Stock ₹ 22,075; Closing Stock ₹ 10,000;
Ram’s Loan Account ₹ 20,000; Cash in Hand ₹ 9,075; Cash at Bank ₹ 3,125.
Part B
27. Capital in the beginning - Rs.24,000, profit made during the year - Rs.4,000, drawings - Rs.8,000, Capital [1]
introduced during the year- Rs.12,[Link] capital at the end

a) Rs.20,000 b) Rs.28,000

c) Rs.35,000 d) Rs.32,000
OR
Two adjustments should be made to ascertain the profit

a) Capital introduced and drawing b) Capital introduced and purchase

c) Purchase and drawing d) Capital introduced and sale

28. A new firm commenced business on 1st January 2011 and purchased goods costing ₹ 90000 during the year. A [1]

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 sum of ₹ 6000 was spent on freight inward. At the end of the year the cost of goods still unsold was ₹ 15000
(market value ₹ 10000). Sales during the year were ₹ 120000. What is the gross profit earned by the firm

a) ₹ 34000 b) ₹ 30000

c) ₹ 39000 d) ₹ 42000
29. Trading and Profit and Loss Account is prepared: [1]

a) for the some part of year b) for a particular period

c) on a particular date d) for the whole year

30. Net profit of a firm before charging the manager’s commission is ₹ 21,000. If the manager is entitled to 5% [1]
commission after charging such commission, how much manager will get as commission?

a) ₹ 2,100 b) ₹ 1,050

c) ₹ 2,000 d) ₹ 1,000
OR
A machine was purchased in U.P. During transit, the machine was damaged and the cost of repairs incurred is ₹
20,000. This expense is treated as:

a) Revenue expense b) cost

c) Deferred Revenue expense d) Capital expense

31. What are financial statements? What information do they provide. [3]
32. Give any two examples of Capital Expenditure. [3]
33. Mention any four important adjustments that are made for the preparation of trading and profit and loss account. [4]
OR
Extract of Trial Balance
as on 31st March, 2013

Name of Accounts Debit Balance(Rs) Credit Balance(Rs)

Bad Debts 2,400

Sundry Debtors 60,000

Additional Information
Write-off further bad debts Rs 3,000.
Pass an adjusting entry and show how will this appear in final accounts.
34. From the following Trial Balance of Manoj Stores, prepare Trading and Profit & Loss Account for the year [6]
ending 31st March, 2023 and a Balance Sheet as on that date:

Heads of Accounts L.F. Dr. (₹) Cr. (₹)

Cash in Hand 1,080 ____

Cash at Bank 45,260 ____

Purchases 81,350 ____

Returns Outward ____ 1,000

Sales Account ____ 1,97,560

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 Returns Inward 1,360 ____

Wages 30,420 ____

Carriage Inwards 4,080 ____

Opening Stock 16,520 ____

Building 80,000 ____

Machinery 40,000 ____

Salaries 30,000 ____

Patents 15,000 ____

General Expenses 6,000 ____

Insurance 1,200 ____

Capital ____ 1,62,000

Drawings 10,490 ____

Sundry Debtors 29,000 ____

Carriage Outwards 6,400 ____

Sundry Creditors ____ 37,600

Total 3,98,160 3,98,160

Adjustments:

i. Stock in hand on 31st March, 2023 is ₹ 13,600.

ii. Machinery is to be depreciated @ 10% and patents be amortised @ 20%.
iii. Salaries for the month of March, 2023 amounting to ₹ 3,000 were unpaid.
iv. Allow interest on capital @ 5%.
v. Provision for Doubtful Debts is to be created to the extent of 5% on Sundry Debtors.
vi. Stock costing ₹ 4,000 was taken by the owner for his personal use, for which entry has not been passed in the
books of account.
vii. Goods costing ₹ 3,000 were distributed to the employees as staff welfare but entry has not been passed in the
books of account.
viii. A theft occurred on 25th March, 2023 and goods costing ₹ 5,000 were stolen. These goods were fully insured
and insurance company admitted the claim in full.
OR
The following were the balances extracted from the books of Yogita as on 31st March, 2017:

Debit Balances Amount (₹) Credit Balances Amount (₹)

Cash in hand 540 Sales 98,780

Cash at bank 2,630 Returns outward 500

Purchases 40,675 Capital account 62,000

Returns inward 680 Sundry creditors 6,300

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Wages 8,480 Rent 9,000

Fuel and power 4,730

Carriage on sales 3,200

Carriage on purchases 2,040

Opening stock 5,760

Building 32,000

Freehold land 10,000

Machinery 20,000

Salaries 15,000

Patents 7,500

General expenses 3,000

Insurance 600

Drawings 5,245

Sundry debtors 14,500

Taking into account the following adjusments, prepare the trading and profit and loss account and balance sheet as at
31st March, 2017.
i. Stock in hand on 31st March, 2017 was ₹ 6,800.
ii. Machinery is to be depreciated at the rate of 10% and patents @ 20%.
iii. Salaries for the month of March, 2017 amounting to ₹ 1,500 were outstanding.
iv. Insurance includes a premium of ₹ 170 on a policy expiring on 30th September, 2017.
v. Further bad debts are ₹ 725. Create a provision of @ 5% on debtors.
vi. Rent receivable ₹ 1,000.

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 Solution

Part A
1.
(c) drawer
Explanation:
drawer

2. (a) Both A and R are true and R is the correct explanation of A.

Explanation:
Both A and R are true and R is the correct explanation of A.
3.
(b) i, ii, iii and iv
Explanation:
i, ii, iii and iv

4.
(c) Rs.8000
Explanation:
Total assets = capital + Liability
Total assets = Rs. 18000
Now,
Current assets = Cash + inventories+ Debtors
Current assets = 1000+4000+5000
Current assets = 10000
Total Assets = current Assets + Fixed Assets
18000= 10000+ Fixed Assets
Fixed Assets = 18000 -10000
Fixed Assets = Rs. 8000

OR

(c) (iii), (i), (ii)

Explanation:
(iii), (i), (ii)

5.
(d) All of these
Explanation:
All of these

6. (a) Debentures
Explanation:
Debentures are non-current liabilities because their payment falls due after more than one year.
OR
(a) Officers
Explanation:
Officers are not external users of accounting information because he is not part of external users.

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 7.
(c) Provision
Explanation:
Provision are made for anticipated future losses

8.
(c) Dr. all expenses and Cr. all gains
Explanation:
Dr. all expenses and Cr. all gains

OR

(b) Investment A/c

Explanation:
Personal account is an account for use by individual for that person's own need. These account are in the name of person. Like
Ram ,Shyam, SBI Bank Account.
Hence Assets are having real account ,so Investment Account is a Real Account not a personal account.

9.
(d) Materiality
Explanation:
Materiality is a principle.

10.
(d) All of these
Explanation:
All of these

11.
(b) Capital expenditure
Explanation:
It is capital expenditure as it increases the assets it is capitalized in the value of assets.

12.
(d) Journal Proper
Explanation:
Journal Proper

13.
(d) increase in asset and decrease in another asset
Explanation:
Purchase of machine by cash means an increase in asset and decrease in the asset. For example Machinery purchase at Rs.
10,000 so Machinery increase and Rs. 10,000 Cash decrease.

14.
(c) Repair Expenses
Explanation:
Repair Expenses

OR

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 (c) Closing stock
Explanation:
The unsold goods left at the end of the year is called closing stock.

15.
(b) Journal proper
Explanation:
Journal proper

16.
(b) Specific reserve
Explanation:
Specific reserve

17. The difference between the sum of the two sides of an account is called the balance. This is the most important part of an account
as it shows value or position of asset, liability, capital, income or expenses of which the account is a record. If the total of the debit
side exceeds the total of credit side then this would be represented by a debit balance and opposite is true for a credit balance.
OR
Journal Books of Sujeet Sharma
[Link]. Particulars L.F. Debit (₹) Credit (₹)

1 Purchases A/c Dr. 12,000

To Cash A/c 2,000

To Saksham Kumar's A/c

10,000
(Goods purchased for cash and credit)

2 Saksham Kumar's A/c Dr. 10,000

To Cash A/c 9,950

To Discount Received A/c (10,000-9,950)

50
(Cash paid to Saksham Kumar in full settlement)

3 Prepaid Rent A/c Dr. 10,000

To Cash A/c
10,000
(Rent Paid in advance through cash)

4 Machinery A/c Dr. 1,03,000

To Bank A/c 1,00,000

To Cash A/c
3,000
(Machinery purchased through bank and expenses paid through cash)

5 Purchases A/c Dr. 50,000

To Kunal's A/c
50,000
(Goods purchased from Kunal)

Amit A/c Dr. 65,000

To Sales A/c
65,000
(Goods sold to Amit)
Total 2,50,000 2,50,000

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18. It is assumed that accounting policies are consistent from one period to another. The consistency principle states that companies
should use the same accounting treatment for similar events and transactions over time. In other words, companies shouldn’t use
one accounting method today, use another tomorrow, and switch back the day after that. Similar transactions should be accounted
for using the same accounting method over time. This creates consistency in the financial information given to creditors and
investors.
The realization concept states that no revenue should be recognized unless it has been realized. The prudence principle puts a
further brake on it. It is not prudent to record unrealized gain but it is desirable to guard against all possible losses. Conservatism
can be a useful tool in situations of uncertainty and doubt, but the abuse of this principle can definitely lead to misleading and
incorrect financial statements.
OR
The revenue recognition principle states that revenue should be recognized and recorded when it is realized or realizable and when
it is earned. In other words, companies shouldn’t wait until revenue is actually collected to record it in their books. Revenue
should be recorded when the business has earned the revenue. This is a key concept in the accrual basis of accounting because
revenue can be recorded without actually being received.
Revenues are realized or realizable when a company exchanges goods or services for cash or other assets. So if a company enters
into a transaction to sell inventory to a customer, the revenue is realizable. A specific amount of cash is identified in the
transaction. The revenue is not recorded, however, until it is earned. In this case, the retailer would not earn the revenue until it
transfers the ownership of the inventory to the customer.
19. Characteristics of a business transaction are-
i. It results in a change in the financial position of the firm, i.e. a change in the values of some of the assets, liabilities or capital.
ii. The change must be capable of being expressed in terms of money.
20. Classification of accounts at the appropriate side is as follows:-
S. No. Heads of Accounts Logic Debit Balance Credit Balance

1. Furniture A/c Asset ✓

2. Plant and Machinery A/c Asset ✓

3. Discount Allowed A/c Expense ✓

4. Salary A/c Expense ✓

5. Bank Overdraft A/c Liability ✓

6. Cash in Hand A/c Asset ✓

7. Creditors A/c Liability ✓

8. Sundry Debtors A/c Asset ✓

9. Carriage Outwards A/c Expense ✓

10. Carriage Inwards A/c Expense ✓

11. Sales A/c Income ✓

12. Purchases A/c Expense ✓

13. Discount Received A/c Income ✓

14. Interest Received A/c Income ✓

15. Interest Paid A/c Expense ✓

16. Bad Debts A/c Loss ✓

21. Petty cash book
Printing
Amount C.B. V. Total Miscellaneous
Date Particulars Conveyance & Postage Wages Cartage
Received Folio No. Payments Expenses
Stationery

₹ 2023 ₹ ₹ ₹ ₹ ₹ ₹ ₹

10,000 Apr. Cash A/c

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 1

Taxi Fare
2 750 750
A/c

Refreshment
3 450 450
A/c

Postal
5 200 200
Charges A/c

5 Wages A/c 700 700

Auto fare
8 200 200
A/c

9 Courier A/c 150 150

12 Postage A/c 600 600

Stationery
14 400 400
A/c

17 Postage A/c 200 200

20 Cartage A/c 600 600

Stationery
20 500 500
A/c

22 Wages A/c 300 300

24 Bus Fare A/c 600 600

Office
25 Expenses 800 800
A/c

Refreshment
26 750 750
A/c

Loading
28 300 300
Charges A/c

Photostatting
30 200 200
Charges A/c

30 Wages A/c 800 ____ ____ ____ 800 ____ ____

Total
8,500 1,550 900 1,150 1,800 900 2,200
Payments

By Balance
30 1,500
c/d

10,000 10,000

May
1,500 Balance b/d
1

May
8,500 Cash A/c
1
22. BANK RECONCILIATION STATEMENT
as on 31st March, 2023
Particulars Plus Items Minus Items

₹ ₹

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 i. Credit Balance (Overdraft) as per Cash Book 25,000

ii. Cheques sent for collection but not yet collected by bank 36,000

iii. Cheque issued wrongly entered in Cash Column 3,500

iv. Cheque issued but not presented and recorded twice

20,000
(₹10,000+ ₹10,000)

v. Bills receivable dishonoured 8,000

Bank Charges debited in the Pass Book 125

vi. Bank Charge recorded twice in the Cash Book 150

Bank Charge not recorded in the Cash Book 40

20,150 72,665

Debit Balance (Overdraft) as per Pass Book 52,515

OR
Bank Reconciliation Statement as on March 31, 2017
Particulars (+) Amount ₹ (-) Amount ₹

1. Credit balance as per passbook 10,000

2. Cheque wrongly credited to another customer account 500

3. Error in carrying forward 3,000

4. Cheque recorded twice 350

5. Excess credit for cash deposit 9

6. Under casting of withdrawal column 100

7. Wrong credit 1,000

8. Debit balance as per cash book 12,741

13,850 13,850
23. In the books of Raja Ram
Journal
Debit Credit
Date Particulars L/F Amount Amount
Rs) (Rs)

Cash A/c
1 To Capital A/c Dr. 42,000 42,000
(Being business started with cash)

Prepaid Rent A/c

2 To Rent A/c Dr. 2,520 2,520
(Being rent paid in advance for 3 months of office)

Car A/c
3 To Cash A/c Dr. 25,200 25,200
(Being car purchased for office use)

Furniture A/c
4 To Cash A/c Dr. 8,400 8,400
(Being office furniture purchased)

Typewriter A/c
5 To Comprehensive Company A/c Dr. 73,600 73,600
(Being typewriter purchased)

Page 16 of 27
6 Cash A/c Dr. 720 2,000
Bills Receivable A/c Dr. 1,280
To Furniture A/c
(Being extra office furniture sold to Amar)

Cash A/c
7 To Veer's A/c Dr. 1,280 1,280
(Being bill amount paid by Veer on maturity)

Comprehensive company A/c

8 To Amar's A/c Dr. 36,800 36,800
(Being half amount of the typewriter's amount was paid by Amar)

Cash A/c
9 To Commission Received A/c Dr. 7,200 7,200
(Being commission collected)

Telephone Bill A/c

10 To Cash A/c Dr. 180 180
(Being telephone bill paid)

1,99,180 1,99,180
Total
====== ======
OR
ANALYSIS OF TRANSACTIONS
Accounts Nature of Debit Credit
Transactions How Affected
Involved Account (₹) (₹)

Deepak started business Cash Real Cash is coming in. 1,50,000

i.
with cash ₹ 1,50,000. Capital Personal Deepak is the giver. 1,50,000

Deposited ₹ 1,00,000 to open a Bank Bank Personal Bank is the receiver. 1,00,000
ii.
Account. Cash Real Cash is going out. 1,00,000

Bank Personal Bank is the receiver. 1,00,000

Received Loan of ₹ 1,00,000 from
iii. Loan from
Naveen by Cheque. Personal Naveen is the giver. 1,00,000
Naveen

Purchased furniture for ₹ 20,000 in Furniture Real Furniture is coming in. 20,000
iv.
cash. Cash Real Cash is going out. 20,000

Purchased furniture from U.P. Safe for Furniture Real Furniture is coming in. 40,000
v.
₹ 40,000. U.P. Safe Personal U.P. Safe is giver. 40,000

Purchases Goods come in. Purchase is

Nominal 15,000
vi. Purchased goods for cash ₹ 15,000. (Note 1) an expense.

Cash (Note 2) Real Cash is going out. 15,000

Goods come in. Purchase is

Purchases Nominal 30,000
vii. Purchased goods from Manoj ₹ 30,000. an expense.

Manoj Personal Manoj is giver. 30,000

Sold goods to Kamal for cash ₹ Cash (Note 2) Real Cash is coming in. 25,000
viii.
25,000. Sales Nominal Sales is an income. 25,000

Sold goods to Sumit on credit ₹ Sumit Personal Sumit is the receiver. 30,000
ix.
30,000. Sales (Note 3) Nominal Sales is an income. 30,000

Page 17 of 27
 x. Cash received from Sumit (Debtor) ₹ Cash Real Cash is coming in. 20,000
20,000.
Sumit Personal Sumit is the giver. 20,000

Manoj Personal Manoj is the receiver. 10,000

xi. Cash paid to Manoj ₹ 10,000.
Cash Real Cash is going out. 10,000
Notes:
1. Purchases Account is used for purchase of goods for resale and not for purchase of asset.
2. In cash purchases, the seller's name is not relevant. Hence, it is not considered. Similarly in cash sales, the purchaser's name is
not relevant. Hence, it is not considered.
3. Sales means selling the goods. Sale of old assets is not 'sale' in the accounting.
24. In The Books Of Firm
Journal Entries
S. Debit Credit
Particulars L.F.
No. Amount ₹ Amount ₹

(i) Suspense A/c (178 - 100) Dr. 78

To Ramesh A/c
(Discount allowed ₹ 178 to Ramesh was wrongly entered as ₹ 100 in his account, 78
now rectified)

(ii) Purchases A/c Dr. 1,000

To Suspense A/c
1,000
(Purchases Book was undercast, now rectified)

(iii) Sales A/c (735 - 375) Dr. 360

To Guruji A/c
360
(Sale of Goods ₹375 was wrongly entered as ₹ 735 in Sales Book, now rectified)

(iv) Suspense A/c (175 + 175) Dr. 350

To Bose A/c
350
(Purchases from Bose ₹175 was debited to his account, now rectified)

(v) Mahi A/c Dr. 250

To Bad Debt Recovered A/c

(Cash Received from Mahi which had been previously written off as bad debt, was 250
Credited to account, now rectified)

(vi) Furniture A/c Dr. 750

To Purchases A/c
(Purchases of Office furniture was wrongly entered in the Purchases Book, now 750
rectified)

(vii) Sales A/c (11,538 - 11,358) Dr. 180

To Suspense A/c
180
(Total of Sales Book carry forward by excess amount, now rectified)

(viii) Drawings A/c Dr. 150

To Purchases A/c
150
(Goods drawn by proprietor was not recorded, now rectified)

(ix) Drawings A/c Dr. 410

Page 18 of 27
 To Repair A/c 410
(Repair of proprietor’s personal Car was wrongly debited to Repairs Account, now
rectified)

(x) Karan A/c (700 + 700) Dr. 1,400

To Sales A/c 700

To Purchases A/c
700
(Sale to Karan was wrongly entered in the Purchases Book, now rectified)
Suspense Account
Dr. Cr.

Date Particulars Amount ₹ Date Particulars Amount ₹

To Balance b/d 742 (ii) By Purchases A/c 1,000

(i) To Ramesh A/c 78 (vii) By Sales A/c 180

(iv) To Bose A/c 350

To Balance c/d 10

1,180 1,180
When errors are only one sided entry is passed by entering suspense account on other side.
OR
Journal
Amt Amt
Date Particulars L.F.
(Dr.) (Cr.)

Suspense A/c Dr 800

To Sales Return A/c 800

(rectification entry made for overcasting of Sales return book by ₹ 800)

Shivam's A/c Dr 2,000

To Suspense A/c 2,000

(rectification entry made for purchase return to Shivam but not recorded in his personal account)

Purchases A/c Dr 4,000

To Rao's A/c 4,000

(goods purchased from Rao not recorded, now rectified

Machinery A/c Dr 500

To Sundry Expenses A/c 50

To Suspense A/c 450

(installation charges on machinery ₹ 500, wrongly debited to machinery account ₹ 50, now
rectified.)

Drawings A/c Dr 1,400

To Rent A/c 1,000

To Suspense A/c 400

(rectification entry made for payment of proprietor's house rent ₹ 1,400 but debiting rent account
by ₹ 1,000)

Page 19 of 27
 Suspense Account
Dr. Cr.

Amt Amt
Date Particulars J.F. Date Particulars J.F.
(₹) (₹)

To Sales Return A/c 800 By Shivam 2,000

To Balance c/d (difference as per trial balance) 2,050 By Machinery A/c 450

By Drawings A/c 400

2,850 2,850
25. MACHINERY ACCOUNT
Dr. Cr.

Amount Amount
Date Particulars Date Particulars
(₹) (₹)

2020 July 01 To Bank A/c (8,000 + 3,500) 11,500 2021 Mar. 31 By Depreciation A/c (for 9 months) 863

Mar. 31 By Balance c/d 10,637

11,500 11,500

2021 Apr. 01 To Balance b/d 10,637 2022 Mar. 31 By Depreciation A/c 1,150

Mar. 31 By Balance c/d 9,487

10,637 10,637

2022 Apr. 01 To Balance b/d 9,487 2023 Mar. 31 By Depreciation A/c 1,150

Mar. 31 By Balance c/d 8,337

9,487 9,487

2023 Apr. 01 To Balance b/d 8,337 2023 Sept. 30 By Depreciation A/c 575

Sept. 30 By Bank A/c (Sale) 6,500

Sept. 30 By Profit and Loss A/c (Loss on Sale) 1,262

8,337 8,337
Working Note:
Value of machinery = ₹ 8,000 + ₹ 3,500 = ₹ 11,500
Calculations of Profit and Loss:-
Amount
Particulars
(₹)

Price of Machinery on dated Apr. 01, 2023 8,337

Less: Depreciation for 6 months 11, 500 × 10

100
×
6

12
(575)

Value of Machinery on dated Sept. 30, 2023 7,762

Less: Sale Value (6,500)

Loss on Sale of Machinery 1,262

OR
In the Books of Pramod & Co.
Machinery Account
Dr. Cr.

Date Particulars J.F. Amount (Rs) Date Particulars J.F. Amount (Rs)

1.4.13 To Balance b/d 3,00,000 1.10.13 By Machinery Disposal A/c 40,000

Page 20 of 27
1.10.13 To Bank A/c 50,000 31.3.14 By Balance c/d 3,10,000

3,50,000 3,50,000

1.4.14 To Balance b/d 3,10,000

Provision For Depreciation Account
Dr. Cr.

Date Particulars J.F. Amount (Rs) Date Particulars J.F. Amount (Rs)

1.10.13 To Machinery Disposal A/c 9,220 1.04.13 By Balance B/d 1,00,000

31.3.14 To Balance c/d 1,11,660 1.10.13 By Depreciation A/c 1,620

31.3.14 By Depreciation A/c 19,260

1,20,880 1,20,880

31.3.14 By Balance b/d 1,11,660

Machinery Disposal Account
Dr. Cr.

Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)

By Provision for Dep. A/c

1.10.13 To Machinery A/c 40,000 1.10.13 9,220
(1)

To Profit & Loss A/c (Profit transferred

1.10.13 1,220 1.10.13 By Bank A/c 32,000
(3))

41,220 41,220
Working Notes:
i. Calculation of Depreciation provided for the machine disposed off on 1.10.2013:
Particulars Amount (Rs) Depreciation Provided (Rs)

Value of Machine on 1.4.2011 40,000

Less: Depreciation for 11-12 @ 10% 4,000 4,000

36,000

Less: Depreciation for 12-13 @ 10% on Rs 36,000 3,600 3,600

32,400

Less: Depreciation for 6 months on Rs 32,400 1,620 1,620

Net Book Value of machinery / Total Depreciation 30,780 9,220

ii. Calculation of Depreciation on the Machinery in use:

Particulars Amount (Rs) Depreciation Provided (Rs)

On 1.4.2012 3,00,000

Less: Value of asset sold 40,000 7,600

2,60,000 92,400

Working Notes:Calculation of Profit or Loss on the sale of machine

iii. S. No. Particular Amount (Rs)

1. Depreciation at 10% on Rs 1,67,600 (Rs 2,60,000 - Rs 92,400) = 16,760

Add: Depreciation for 6 months on Rs 50,000 (Addition) 2,500

Page 21 of 27
 19,260

4,000 (2011-12) + Rs 3,600 (2012-13) = Rs 7,600

2. Profit on Sale of Machine = Rs 32,000 (Sale Price) - Rs 30,780 (Net Book Value) 1,220
26. Cash Book
Amount Amount
Date Receipts [Link]. Date Receipts [Link].
(Rs) (Rs)
01 March, 2018 To Balance b/d 1,500 08 March, 2018 By Purchase A/c 320

20 March, 2018 To Commission A/c 65 20 March, 2018 By Commission A/c 55

28 March, 2018 By Ashish's A/c 715

31 March, 2018 By Salary A/c 100

31 March, 2018 By Rent A/c 60

31 March, 2018 By Balance c/d 315

1,565 1,565
====== ======
01 April, 2018 To Balance b/d 315
OR
IN THE BOOKS OF RAM
JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)

2023

March 31 Trading A/c Dr. 42,875

To Purchases A/c 37,500

To Carriage Inwards A/c 375

To Wages A/c 5,000

(debited to trading account for gross profit)

March 31 Sales A/c Dr. 95,000

To Trading A/c 95,000

(Credited to Trading account for gross profit)

March 31 Trading A/c Dr. 52,125

To Profit & Loss A/c 52,125

(Gross profit transferred to P&L A/c)

March 31 Profit & Loss A/c Dr. 7,650

To Discount A/c 150

To Carriage Outward A/c 600

To Bad Debits A/c 750

To Salaries A/c 3,600

To Trade Expenses A/c 2,550

(expenses debited to P & L A/c for Net Profit)

Page 22 of 27
 March 31 Discount A/c Dr. 175

Commission A/c Dr. 2,125

To Profit & Loss A/c 2,300

(incomes credited to P & L A/c for Net profit)

March 31 Profit & Loss A/c (52,125 - 7,650 + 2,300) Dr. 46,775

To Capital A/c 46,775

(net profit Transfer to Capital A/c)

Part B
27.
(d) Rs.32,000
Explanation:
capital at the end of the year = opening capital + capital introduced + profit - drawing
= 24,000 + 12,000 + 4,000 - 8,000
= 32,000

OR
(a) Capital introduced and drawing
Explanation:
Calculation of profit/(loss) during the year:
capital at the end of year ***

Add: drawing during the year ***

***

Less: capital introduced during the year ***

adjusted capital at the end ***

Less: capital at the beginning of year ***

profit\loss for the year ***

Hence, for the computation of profit drawing and further capital brought in should be adjusted in the opening and closing
capital of the business.
28. (a) ₹ 34000
Explanation:
Trading A/C
Particulars ₹ Particulars ₹

Purchases 90000
Sales 120000
Freight inwards 6000
Closing stock 10000
Gross profit 34000

130000 130000

29.
(b) for a particular period
Explanation:
Trading and Profit and Loss Account is prepared for a particular period. It is prepared to calculate profit or loss of a business.

30.
(d) ₹ 1,000
Explanation:

Page 23 of 27
 If Net Profit is ₹ 100
then, Commission payable = ₹ 5
Thus Net profit after charging the commission = 100 + 5 = ₹ 105
Here, ₹ 21,000 is equal to 105%
5
Then, 5% = 21,000 × 105

= ₹ 1,000

OR

(d) Capital expense

Explanation:
This type of expense is treated as a capital expense. It is assumed that repair is incurred at the time of purchase.

31. Financial statements are the final products of an accounting process, which begins with the identification of accounting
information and recording it in the books of primary entry.
A complete set of financial statements include:
i. Balance sheet (or position statement) which shows the financial position of an enterprise at a particular point of time.
ii. Trading and profit and loss account (or income statement) which shows the financial performance of business operations
during an accounting period.
iii. Schedules and notes to accounts forming part of the balance sheet and profit and loss account.
While the Balance sheet provides the information of the position of the assets and liabilities of a business, the Income statement
provides the information related to the incomes and expenses of the business and moreover the profits generated or losses
incurred.
32. i. Purchase of Machinery
ii. Expenditure on the installation of Machinery.
33. The trading profit and loss account is made up of two separate accounts within the general ledger.
i. The trading account.
ii. The profit and loss account.
The purpose of the two accounts is to separately identify the gross profit and net profit of the business. The trading account is the
top part of the trading profit and loss account and is used to determine the gross profit. The profit and loss account is the lower
part of the trading profit and loss account and is used to determine the net profit of the business. The following are some
adjustments:
Outstanding Expense: Added to the expense paid during the year on the debit side.
Expense A/c Dr
To Outstanding Expense A/c
Prepaid Expense: Deducted from the respective expenses on the debit side
Prepaid Expense A/c Dr
To Expense A/c
Interest On Capital: Shown on the debit side of the P/L A/c.
Interest on capital A/c Dr
To Capital A/c
Interest on Drawings: Shown on the credit side of the Profit & Loss A/c.
Drawings A/c Dr
To Interest on Drawings A/c
OR
JOURNAL
Bad Debts A/c Dr 3,000

To Sundry Debtors A/c

3,000
(Being further bad Debts writtten-off)
Treatment of additional bad-debts in Financial Statements :

Page 24 of 27
 Further Bad debts of ₹3,000 given in adjustments will be added to the existing bad debts of ₹2,400 (appearing inside the Trial
Balance), on the debit side of the profit and loss account. Furthermore, the amount of additional bad-debts of ₹3,000 will also be
deducted from debtors on the assets side of Balance Sheet.
Extract of Profit and Loss Account
for the year ended 31st March, 2013
Dr Cr

Particulars Amt(₹) Particulars Amt(₹)

To Bad Debts 2,400

Add: Further Bad Debts 3,000 5,400

Extract of Balance Sheet
as at 31st March, 2013
Liabilities Amt(Rs) Assets Amt(Rs)

Sundry Debtors 60,000

Less : Bad Debts 3,000 57,000

34. TRADING AND PROFIT & LOSS ACCOUNT
for the year ended 31st March, 2023
Dr. Cr.

Particulars ₹ Particulars ₹

To Opening Stock 16,520 By Sales 1,97,560

To Purchases 81,350 Less: Returns Inward 1,360 1,96,200

Less: Goods distributed as By Closing Stock 13,600

Staff Welfare (3,000)

Drawings (Goods) (4,000)

Returns Outward (1,000)

Loss of Stock (5,000) 68,350

To Wages 30,420

To Carriage Inwards 4,080

To Gross Profit transferred to Profit & Loss A/c 90,430

2,09,800 2,09,800

To Carriage Outwards 6,400 By Gross Profit transferred from Trading A/c 90,430

To Salaries 30,000

Add: Outstanding Salaries 3,000 33,000

To General Expenses 6,000

To Insurance 1,200

To Depreciation on:

Machinery (₹ 40,000 × 10%) 4,000

Patents (₹ 15,000 × 20%) 3,000 7,000

To Provision for Doubtful Debts (₹ 29,000 × 5%) 1,450

To Staff Welfare Expenses (WN 1) 3,000

5
To Interest on Capital (₹ 1,62,000 × 100
) 8,100

Page 25 of 27
To Net Profit transferred to Capital A/c 24,280

90,430 90,430
BALANCE SHEET
as at 31st March, 2023
Liabilities ₹ Assets ₹

Capital 1,62,000 Building 80,000

Add: Net Profit 24,280 Machinery 40,000

Interest on Capital 8,100 Less: Depreciation 4,000 36,000

1,94,380 Patents 15,000

Less: Drawings (₹ 10,490 + ₹ 4,000) 14,490 1,79,890 Less: Depreciation 3,000 12,000

Outstanding Salaries 3,000 Sundry Debtors 29,000

Sundry Creditors 37,600 Less: Provision for Doubtful Debts 1,450 27,550

Closing Stock 13,600

Insurance Company (WN 3) 5,000

Cash at Bank 45,260

Cash in Hand 1,080

2,20,490 2,20,490
Working Notes:

1. Journal Entry for distribution of Goods among Employees for Staff Welfare: ₹ ₹

Staff Welfare Expenses A/c Dr. 3,000

To Purchases A/c 3,000

2. Journal Entry for Goods Withdrawn by Owner for Personal Use: ₹ ₹

Drawings A/c Dr. 4,000

To Purchases A/c 4,000

3. Following Journal entries will be passed to record Loss of Stock by Theft: ₹ ₹

Loss of Stock (Theft) A/c Dr. 5,000

To Purchases A/c 5,000

Insurance Company Dr. 5,000

To Loss of Stock (Theft) A/c 5,000

OR
Trading and Profit and loss Account
for the year ended 31st March, 2017
Dr Cr

Particulars Amt (₹) Particulars Amt (₹)

To Opening Stock 5,760 By Sales 98,780

To purchases 40,675 Less : sales return (680) 98,100

less: purchase return (500) 40,175 By Closing Stock 6,800

To Wages 8,480

To Fuel and Power 4,730

Page 26 of 27
To Carriage on Purchases 2,040

To Gross Profit transferred to Profit & loss A/c 43,175

1,04,900 1,04,900

To Carriage on Sales 3,200 By Gross Profit b/d 43,175

To Salaries 15,000 By Rent 9,000

(+)Outstanding Salaries 1,500 16,500 (+)Receivable Rent 1,000 10,000

To General Expenses 3,000

To Insurance 600

(-)Unexpired Insurance (note ) (85) 515

To Further Bad debts 725

To Provision for Bad Debts(@ 5% on Rs.13,775) 689

To Depreciation on Machinery 2,000

To Depreciation on Patents 1,500

To Net Profit Transferred to Capital A/c 25,586

53,715 53,715
Balance Sheet
as at 31st March,2017
Amt Amt
Liabilities Assets
(₹) (₹)
Creditors 6,300 Cash in hand 540

Salaries Outstanding 1,500 Cash at bank 2,630

Capital 62,000 Closing Stock 6,800

(+)Net Profit transferred from Profit & Loss

25,586 Sundry Debtors 14,500
A/c

87,586 (-)Further Bad Debts (725)

(-)Drawings (5,245) 82,341 13,775

(-)Provision for Bad Debts (@ 5% on

(689) 13,086
13,775)

Rent Receivable 1,000

Insurance Prepaid 85

Patents 7,500

(-)Depreciation (1,500) 6,000

Freehold Land 10,000

Building 32,000

Machinery 20,000

(-)Depreciation (2,000) 18,000

90,141 90,141
Note : Insurance Premium of ₹ 170 has been paid till 30th September, 2017. It means it has been paid in advance for 6 months.
Therefore, it has been deducted from the total Insurance paid this year. The amount of prepaid insurance will be shown in the
Asset side.

Page 27 of 27