ASSIGNMENT B.

Com (IS) FIRST SEMESTER SUBJECT CODE BM 0001 (4 CREDITS) 60 MARKS SET I SUBJECT: FINANCIAL ACCOUNTING AN INTRODUCTION NOTE: Each question carries TEN marks
1. What are the three branches of accounting and briefly describe the various kinds of accounting activities. 2. a) Why is a bank reconciliation statement prepared? b) Cash balance as per pass book is Rs.32000 on 31-05-2006. On the same date, cash balance as per the cash book is different and therefore a scrutiny of the various transactions reveals that: Cheques deposited in bank on 27th March, 2006 were not collected before 31st May Rs.9,800 ii) Cheques issued on 30th May, 2006, were cleared by the bank only on 4th June, 2006. iii) Cash deposited by customers directly to our business account in the bank Rs 6300, not yet recorded in the cash book. iv) Cheques which were sent for collection, subsequently got dishonored on 31st May, 2006 Rs.4,800, not yet recorded in the cash book. v) The bank has debited our account as bank charges Rs.70, not yet recorded in cash book. Prepare Bank Reconciliation Statement and show the balance as per cash book. 7 marks i) 3. Write journal entries for the following transactions and prepare ledger accounts. 1. Kishor commenced business with cash 2. Purchased goods on credit 3. Withdrew for private use 4. Goods purchased for cash 5. Paid wages 6. Paid to creditors 7. Sold goods on credit 8. Sold goods for cash (Cost price Rs.3000) 9. Purchased furniture for cash Rs. 1,00,000 64000 3000 12000 5000 40000 92000 6000 5000 3 marks

10. Received from debtors

31000

4. a) Briefly state the particulars of Accounting Standard 10.

4 marks

b) Compare fixed installment and reducing balance method of depreciation accounting. Which is a better system and why? 5. a) What do you mean by secondary books of account? 6 marks

(2 Marks)

b) Record the following transactions in the personal account of Mr. Somanath and balance the account at the end of each month. The opening debit balance of Somanath on 1st September 2003 is Rs. 5,600. Find out the closing balance for the month.of September and October. Date 2003 September 1 4 4 15 18 October 1 3 21 31 Sold goods to Somanath Received from Somanath Allowed him a discount Somanath bought goods Received from Somanath cash on account Balance from last month Sold goods to Somanath Received from Somanath cash Allowed him discount Received cash in full settlement of account (8 Marks) 54250 51538 2712 60000 20000 ? 10000 3960 40 ? Particulars Amount Rs.

6. a) The following Trial balance was extracted from the books Chetan, a small businessman. Do you think that it is correct? If not, rewrite it in the correct form. Debits Stock Purchases Returns outwards Discount received Wages and salaries Rent and rates Sundry debtors Bank Overdraft Rs. 8250 12750 700 800 2500 1850 7600 2450 Credits Capital Sales Returns inwards Discount allowed Scooty Carriage charges Sundry Creditors Bills payable 6 marks b) What do you mean by electronic data processing centres? 4 marks. Rs. 10000 15900 1590 800 1750 700 7250 690

ASSIGNMENT B.C0m (IS) FIRST SEMESTER SUBJECT CODE BM 0001 (4 CREDITS) 60 MARKS SET II SUBJECT: FINANCIAL ACCOUNTING AN INTRODUCTION NOTE: Each question carries TEN marks 1.What statements of accounts are regarded as final financial statements? Explain the objectives of each financial statement. 2 a) Explain and illustrate errors that can be disclosed by trial balance. b) An accountant finds that the trial balance of his client did not tally and it He transferred it to a suspense account and later discovered the following errors. a) Rs.1,456 paid to Anand has been credited to his account as Rs 1546. b) A purchase of Rs.2749 has been posted as Rs 7294 to the purchases account c) An expenditure of Rs.546 on repairs has been credited to the Buildings account d) Rs.80 was allowed by B as discount which has not been entered in the books. e) A sum of Rs.3895 realized on the sale of old furniture has been posted to the sales account. Give journal entries to rectify the errors and show the suspense account as it would appear after adjustments. ( 5 Marks ) (5 Marks)

3. Journalise the following transactions and open only the personal accounts in the ledger. 2004July 1 Gopichand started business with the following assets: Cash Goods July 5 July 9 July 12 July 15 July 20 Furniture Sold goods to Muni Sold goods for cash to Ganesh Received from Muni on account Purchased goods from Mani Paid Mani Paid interest to Mani Amount Rs.

40,000 30,000 5,000 15,000 13,000 13,000 49,000 25,000 500

July 30

Paid stationery charges Paid Salaries Paid rent

1600 1250 1160

4. Enter the following transactions in the cash book with discount, cash and bank columns and find out the closing balances. May, 2004 1st .Balance of cash in hand Rs. 24000; cash at bank Rs.23,500. 4th Invested further capital Rs.20000 out of which Rs.16000 was deposited in the bank. 6th Sold goods for cash Rs. 30000 6th Collected from debtors Rs.80000; Discount allowed to them Rs. 2000. 10th Purchased goods for cash Rs. 45,000 11th Paid Ram, our creditor Rs. 25,000; discount allowed by him Rs.1650 13th Commission paid to our agent Rs. 5,300 14th Office furniture sold for cash Rs. 2,000, the cost of which was Rs.3500 14th Rent paid Rs 2400; electricity charges paid Rs. 1,000 14th Drew cheque for personal use Rs. 7,000 17th Cash sales Rs. 35,000 18th Collection from Atul Rs.30,000, deposited in the bank on 19th May. 19th Drew from the bank for office use Rs.15000 22nd Drew cheque for petty expenses Rs.3,500 24th Dividend received by cheque Rs.7500, deposited in the bank on the same day. 25th Commission received by cheque Rs.2,300, de[posited in the bank on 28th May 29th Drew from the bank for salary of the office staff Rs15,000 30th Deposited cash in the bank Rs.12,000. 5. Mr. X has sold goods worth Rs.15,000 on credit on 4th Jan, 2008 to Mr. Y. Y paid Rs. 5,000 and for the remaining balance, he accepted a bill of exchange for three months period on the same day. X endorsed the bill to Mr. A, who got it discounted at Rs.9500 from bank. On the date of maturity, the bill was dishonored and the bank charged extra collection charges Rs.200. Draw journal entries in the books of X, Y and A.

6. On 31st Dec, 2006, the following trial balance was prepared from the books of Rajiv. Debits Sundry debtors Bills receivable Plant and machinery Purchases Freehold Premises Salaries Wages Postage and stationery Carriage inwards Carriage outwards Bad debts General charges Cash at bank Cash in hand Closing stock Total Rs 50600 5000 75000 90000 50000 11000 14400 750 750 1000 950 1500 5300 800 29000 337500 Credits Sundry creditors Capital Bad debts reserve Bills payable Reserve Sales RS. 10000 70000 1000 5000 20000 231700

Total

337500

The following adjustments are required: 1. Rajiv gets a salary of Rs.9000 per annum 2. Allow 5% interest on capital 3. Bad debts provision to be adjusted to 2.5% on Sundry debtors 4. 5% of net profits should be credited to reserve 5. It was discovered that stock on 31st Dec, 2006 was overcast by Rs.1000. 6. You are required to prepare Trading, Profit and Loss account and Balance Sheet.