FIRST B.COM ACCOUNTS, THEORY

FIRST B.COM ACCOUNTS, THEORY


                                                  First B.Com Accounts Revision Material
1. Write journal entries for the following transactions.
            1. Started business with cash Rs 50000
            2. Goods purchased for cash Rs. 30000
            3. Furniture purchased for cash Rs. 5000
            4. Sold goods for Cash Rs. 10000
            5. Sold goods to Naresh Rs. 10000
            6. Goods purchased from Vinod Rs. 5000
            7. Goods sold to Anil and allowed him trade discount @ 10% Rs. 6000
            8. Cash received from Naresh from full settlement Rs. 7600
            9. Cash paid to Vinod Rs 1900, received discount from him Rs. 100
            10. Paid cash into Bank Rs. 80000
            11. Purchase of machinery and payment of cheque Rs. 20000
            12. Paid wages Rs. 300
            13. Withdrew for private use Rs 1700
            14. Paid creditors Rs. 10000
            15. Sold goods on cash (cost price was Rs. 3000) Rs. 4000
            16. Purchased furniture Rs. 500
            17. Received cash for dividend on security Rs. 200
2. You are required to complete the gaps in the following table.
            S.No.              Assets                        Liabilities                   Capital
            1                      25600                         3600                              ?
            2                      56000                         9800                              ?
            3                      33600                         ??                                25000
            4                      39200                         ??                                32900
            5                      ??                                12600                         38400
3. You are required to complete the gaps in the following table.
            S.No.              Assets                        Liabilities                   Capital
            1                      11000                         33800                           ??
            2                      ???                             34400                            66800
            3                      72200                         ??                                57000
            4                      239000                       30800                         ??
            5                      176000                       ???                             124000
4..  Prepare Three column Cash Book.
                        August 1        Balance of Cash                              Rs. 3500
                                                Bank balance                                   Rs. 2500
                                    5          Cheque received from Pondy Rs. 5000, discount allowed Rs. 250
                                    8          Goods purchased for cash Rs. 1500
                                   10        Paid to Roy through cheque Rs. 1000, discount allowed by him 100
                                    12        Salaries paid to staff            Rs. 2000
                                    18        Cash withdrew from bank Rs 5000
                                    25        Purchased typewriter by cheque Rs 5000
5.  Prepare Three column Cash Book.
                        August 1        Balance of Cash                              Rs. 1900
                                                Bank balance                                               Rs. 2000
                                      3        Cash sales                                        Rs. 1000
                                      5        Issued cheque to Giri                      Rs. 550, discount Rs. 50
                                      8        Paid for stationery                            Rs. 200
                                      10      Received cheque from Krishna    Rs. 425, discount Rs. 75
                                       13     Sold old furniture                             Rs. 400
                                       15     Purchased goods from Kiran        Rs. 700
                                       17     Deposited Krishna’s cheque into Bank
                                      20      Paid by cheque to Akbar Rs. 350, discount received Rs. 50
                                      23      Taken cash from bank for office use Rs. 600
                                      25      Received cash from Kiran Rs. 650, discount Rs. 50
                                      27      Received commission        Rs. 800
                                      29      Received cheque from Murali 700, discount 100
                                                Cheque deposited into bank
                                      31      Paid Rent      Rs. 500
6.  Prepare Three column Cash Book.
            August 1        Balance of Cash                              Rs. 2000
                                                Bank balance                                   Rs. 1000
                        3          Deposited cash into bank              Rs.  500
                        5          Paid cheque to Suresh                   Rs. 450, discount Rs. 50
                        8          Received cheque from Rahim         Rs. 350(Cheque deposited)
                        10        Received Rs. 900 from Anand in full settlement of his account Rs. 1000
                        12        Withdrawn cash from bank                        Rs. 900
                        15        Paid Interest                                      Rs. 400
                        18        Received commission                    Rs. 500
                        21        Paid cash into bank                                    Rs. 600
                        24        Cash received from Singh             Rs. 450, discount Rs. 50
                        27        Purchased stationary and issued a cheque Rs. 400
                        28        Sold old machinery                         Rs. 800
                        31        Paid salaries                                     Rs. 300
7. Prepare Three column Cash Book.
            August 1        Balance of Cash                              Rs. 16000
                                    Bank balance                                   Rs. 7000
                        3          Cash purchases Rs. 600
                    5          Received a cheque of Rs. 400 from Prabhakar and gave him discount of 25
                        8          Cash sales Rs. 1200
                        10        Received cheque of Rs. 100 from Venue for interest
                        12        Salary paid to the manager by cheque Rs. 450.
                        15        Withdrew from bank for personal use Rs. 300
                        18        Purchased a bicycle for office use Rs. 300
                        21        Paid office rent                                 Rs. 80
                        24        Goods sold for Cash Rs. 900
                        27        Purchased government bonds Rs. 700
                        28        Received commission Rs. 175
                        29        Gave a cheque to Ajantha for advertisement Rs 60
                        30        The cheque received from Prabhakar on 5th was dishonoured.
                        31        Cash in excess of Rs. 2000 was paid into the bank.
8. Prepare Analytical Petty Cash book from the following particulars.
            March 1          Balance of Cash                              Rs. 75
                                    Received advance from cashier   Rs. 125
                        3          Tiffin expenses                                Rs. 10
                        5          Postal stamps purchased               Rs. 5
                        9          Bus charges                                     Rs. 8
                        11        Tea expenses                                   Rs. 6
                        14        Auto charges                                                Rs. 10
                        18        Tea expenses                                   Rs. 6
                        21        Paid to Rajesh                                  Rs. 20
                        26        Paid telegram to Mumbai               Rs. 15
                        28        Refreshment to guests                   Rs. 20
                        30        Paid repairing charges                   Rs. 10
                        31        Postal cards and covers                 Rs. 10
9. Prepare Analytical Petty Cash book from the following particulars.
            April 1             Received a cheque of Rs. 900 for petty expenses
                     8              Postage                     Rs. 16
                    12            Stationery                  Rs. 50
                    18            Advertisements        Rs. 90
                    20            Wages                        Rs.35
                    22            Wages paid               Rs. 20
                    24            carriage                      Rs. 28
                    26            Conveyance             Rs. 14
                    28            Travelling exp           Rs. 150
                    29            Postage                     Rs. 100
                    30            Office cleaning         Rs. 20
                    31            Telegram                   Rs. 40
                    31            Sent registered notice to the land lord     Rs. 6
10. Prepare Bank Reconciliation Statement from the following particulars as on 31.3.2008
            a. Overdraft Balance as per pass book                Rs. 540
            b. Cheques drawn but not presented for payment till 31st March, 008, Rs. 2800
            c. Cheque paid into bank but not collected till 31st March, 2008 Rs. 3900
            d. Interest on overdraft as per pass book was not entered in cash book Rs. 20
            e. Insurance premium paid by bank but not entered in cash book Rs. 400
            f. Interest on investments collected by bank credited in pass book only Rs. 500   
11. The cash book of Smt. Aruna showed an overdrat of Rs. 18000 on 31.12.08. From the following particulars, prepare a bank reconciliation statement as on 31.12.08.
            a. Cheques deposited by her were Rs. 6400. However, the cheques amounting to Rs. 3800 were not collected in December, 008.
            b. A cheque received from Gopal for Rs. 2080 was dishonoured. This information reached Smt. Aruna in the first week of January 2009.
            c. Credits made in the pass book by bankers Rs. 800
            d. Cheques issued in December 2008 for Rs. 10000, but not presented before due date were Rs. 9000
            e. Bank charges Rs. 50, interest on overdraft Rs. 150 and interest credit Rs. 25 appearing in the pass book alone.
12. The bank pass book of a trader showed an overdraft for Rs. 4500 on 31.3.2008 and a difference was noted when compared with the balance as per cash book. On a careful scrutiny the following facts were noticed.
            a. Cheques deposited for Rs. 7500 but were not credited by the bank before 31.3.2008.
            b. Cheques issued for Rs. 3850 were presented for payment on 4th April, 2008,.
c. Bank column total of debit side of the cash book folio 36 for Rs 65950 was carried          forward to the next folio as Rs. 56950.
            d. Withdrawn column of the bank pass book was added Rs. 600 excess.
            e. A cheque for Rs. 3500 withdrawn from bank but recorded in the cash book as Rs. 5300.
            f. Bank charges Rs. 150 debited by the bank but not recorded in cash book.
You are required to prepare a Bank Reconciliation statement as at 31.3.2008 and ascertain the balance as shown by the cash book on that date.
13. Prepare Bank Reconciliation statement from the following data as on 31.3.2008.
            a. Balance as per pass book on 31.3.2008 overdrawn Rs. 9204.
b. Cheques drawn on 31.3.2008 but not cleared till March 2008 Rs. 3225, Rs. 745 and Rs. 926
            c. Bank overdraft interest charged on 28.3.2008 not entered in the cash book Rs. 1610
d. Cheques received on 26.3.2008 entered on 26.3.2008 entered in the cash book not deposited to bank till 3rd April, 2008 Rs. 11322 and Rs. 1730.
            e. Chequ received for Rs. 35 entered in cash book twice.
f. Bill receivable was sent to bank for collection on 28.3.2008 and was entered in the cash book forth with but the proceeds were not credited in bank pass book till 3rd April, 2008 Rs. 2980
g. A periodic payment by bank of Rs. 80 under standing instruction not credited in the bank   cash book.
h. Cheques deposited on 30th March, 2008 dishonoured but the entry for dishonor was not made in the cash book Rs. 1890.
14. On 31.3.2008, the pass book of X a debit balance of Rs. 41000. Prepare a Bank Reconciliation Statement with the following information
a. Cheques amount to Rs. 15600 were drawn on 27th January 2008 out of which cheques for Rs. 11000 were cashed upto 31st January 2008.
            b. A wrong debit of Rs. 800 has been given by the bank in pass book.
            c. A cheque for Rs. 200 was credited in pass book but was not recorded in cash book.
            d. Cheques for Rs. 21000 were deposited for collection. But cheques for Rs. 7400 have been credited in pass book of 5th February 2008.
            e. A cheque for Rs. 1000 returned dishonoured and were debited in pass book only.
      f. Interest and bank charges amounted to Rs. 100 and were not accounted for in cash book.
15. The pass book shows a favourable balance of Rs. 15510 as on 31st December, 2007. On  comparing the same with his cash book following difference were noticed. Calculate the bank  balance as per cash book.
         a. A cheque for Rs. 1450 received from Swathi & Co was entered twice in the cash book.
            b. Bills discounted, got dishonoured Rs. 500
            c. The receipts column of the cash book has been over added by Rs. 940
            d. Several cheques totalling Rs. 6000 were issued to different suppliers.  Of these, cheques worth Rs. 1500 were debited in pass book on 2nd January, 2008 and Rs. 2500 on 4th January. The balance being debited before 31st December 2007.
            e. Uncredited cheque Rs. 1000
            f. A cheque of Rs. 400 was credited in pass book but was not recorded in cash book.
16. Prepare Bank Reconciliation statement.
            a. Pass book showed a debit balance Rs. 9550 as on 31.3.2008.
            b. Cheque issued on 11.3.2008 for purchased for Rs. 5900 was credited in the pass book as Rs. 5400 on 25.3.08.
c. A bill of Rs 2500 discounted at 5% flat was returned dishonoured and was wrongly credited in the pass book on 27.3.2008.
d. An amount of Rs. 850 paid in cash, towards salary was wrongly posted to the salary amount as Rs. 1850.
e. A cheque for Rs. 2150 received from Mr. Z was entered twice in the cash book on 20.3.2008 but the cheque was not collected by the bankers till 31.3.2008
f. A cheque for Rs. 1725 appears to have been deposited directly by Mr. Clock on 20.3.2008 was returned dishonoured on 30.3.2008.
17.  From the following particulars, prepare a BRS on 31.12.2008.
            a. Balance as per pass book (debit balance) Rs. 12900
            b. Cheques drawn on 30.12.2008, but not presented till January 2nd, 2009, Rs. 4190, Rs. 790 and Rs. 350.
            c. Bank charged interest on overdraft on 26.12.2008, not entered in cash book 2200
            d. Cheque Rs. 40 entered in the debit side of the cash book twice.
            e. A periodic payment by bank of Rs. 80 under standing instructions not entered in cash book.
            f. Cheques received but not sent to bank for collection as on reconcile day Rs.7000
            g. Bills receivable sent for collection to the bank, but not yet received any intimation from bank, Rs. 3440.
            h. Cheque deposited for collection, was dishonoured but no entry in the cash book
Rs. 7320.
18. Rectify the following errors through the suspense account wherever necessary.
            a. Stock sold to rama for Rs. 3000. This transaction was not recorded.
            b. Purchase book was undercast by Rs. 300
            c. Old furniture sold for Rs. 200 is debited to purchases account.
            d. Rs. 230 received from Mohan was posted to his account as Rs. 320.
            e. Sales to Narayana for Rs. 102 has been posted to his account as Rs. 120.
19. Pass necessary entries to rectify the following errors after preparation of Trial balance.
            a. Rs. 1500 received from Gopal has been wrongly credited to Bhoopal account
            b. The purchases book was undercast by Rs. 1000
            c. Repairs to Machinery Rs. 800, were debited to Machinery account.
d. Discount allowed to Mahipal Rs. 200 correctly entered in cash book, has not been posted to his account.
            e. Bill receivable from Mr. Anil Rs. 1000 was entered in the bills payable book.
20. Write the rectification entries for the following errors.
            a. Purchase book was overcast by Rs. 300
            b Travelling expenses Rs. 350 was posted in the account Rs. 530
            c. Furniture cost Rs. 500 has been debited to general expenses account.
            d. Rs. 500 withdrawn for personal use has been debited to general expenses account.
            e. Insurance paid Rs. 150 debited to rent account.
           
21. The following mistakes were located in the books of a concern after its books were closed and a suspense account was opened in order to get the trial balance agreed.
            a. Sales day book was overcast by Rs. 100
            b. A sale of Rs. 50 to X was wrongly debited to the account of Y.
            c. General expenses of Rs. 18 were posted in the general ledger as Rs. 80.
         d. A bill receivable for Rs. 155 was passed through bill payable books. The bill given by P.
            e. Legal expenses Rs. 119 paid to Mr. D were debited to his personal account.
            f. Cash received from C has been debited to G Rs. 150.
g. While carrying forward the total of one page of the purchases book to the next, the amount of Rs. 1235 was written as Rs. 1325.
Find out the nature and amount of the suspense account and pass entries for the rectification of the above errors in the subsequent year’s book.
22. The trial balance of a firm is out by Rs. 2344 (excess credit) the following errors were found.  You are required to pass journal entries to correct them and prepare suspense a/c.
            a. Sale to Ram for Rs. 1500 was credited to his account.
b. Goods worth Rs. 165 returned by a customer, taken into stock, but no entry was made for their return.,
            c. Purchase of Rs. 697 was posted to the debit of the seller Krishnan as Rs. 629.
            d. Furniture sold for Rs. 1540 was posted to the credit of sales account.
            e. Purchase returns book has been cast short by Rs. 1200.
f. Cheque received for Rs. 890 from Ganesh was dishonoured and while passing entry for dishonor it was posted to the credit of Ganesh as Rs. 980.
g. Discount of Rs. 1050 allowed to Lakshmi was not entered in the discount column of cash book not posted in the account of lakshmi.
23. A book keeper finds that the totals of his trial balance do not agree by Rs. 480. He temporarily debit this amount to a suspense account. On an examination of the books by the accountant, the following errors are discovered.
a. Rs. 220 the total of the sales returns book, has been posted to credit of the purchases return account.
            b. Total of the credit side of Gupta’s account has been added up Rs. 40 too much.
c. An item of Rs. 60, written off as a bad debt from Rao account has not been debited to bad debts account.
d. A receipt of Rs. 53 from Devi has been entered in the cash book correctly, but has been posted to the personal account as Rs. 13.
            e. The sales book has been undercast by Rs. 20.
            Pass journal entries to rectify the errors and show suspense account.
24. Rectify the errors if any from the following.
            a. Total of the purchase book is Rs. 1000 excess.
b. Discount allowed by Atmaram Rs. 15 correctly entered in cash book, has not been posted to his account.
c. Sales of goods Rs. 200 to Suri has been entered in the sales book and debited to Suri Account.
d. Purchase of furniture, Rs. 600 has been entered in the purchases book and credited to the party’s account.
            e. While posting a sale of Rs. 300 to Ram, his account has been debited.
25. From the following trial balance prepare final account for the year ended 31.12.2008.
                        Particulars                            Debit                          Credit
                        Purchases, sales                 125000                       175000
                        Returns                                      1000                           4700
                        Rent                                           2500                             500
                        Opening stock                        15000
                        Debtors, creditors                   30000                         25000
                        Salaries                                   22500
                        Wages                                      10800
                        Machinery                              10000
                        Furniture                                 10000
                        Cash                                       29400
                        Interest                                       2500
                        Discount                                    5000                           1000
                        Drawings, capital                     6300                         63800
                                                                        270000                       270000
            Adjustments:
            1. Closing stock value Rs. 12000             2. Outstanding salaries Rs. 1500
            3. Prepaid Rent           Rs. 500                   4. Provide reserve for bad debts 5%
            5. Provide depreciation on machinery 10%.
26. From the following trial balance prepare final account for the year ended 31.12.2008.
            Particulars                            Debit              Particulars                            Credit
            Purchases                             25200             Sales                                      61604
            Furniture                                 1600             Capital                                   35000
            Wages                                      3500             Purchase returns                     225
            Machinery                             20000             Creditors                                  3900
            Opening stock                      17525             Bank overdraft                        3000
            Sales returns                                      1200             Bills payable                           2000
            Debtors                                  10400
            Carriage on purchases           200
            Salaries                                 10600
            Carriage on sales                    503
            Rent and taxes                       2001
            Cash at bank                                      8000
            Drawings                                 5000
                                                            105729                                                           105729
            Adjustments:
            1. Closing stock Rs. 16800                        2. Outstanding salaries Rs. 400
            3. Prepaid rent Rs. 201                              
            4. Write off Rs. 400 as bad debts and create 5% reserve for bad debts.
            5. Depreciate Machinery by 10%
            6. Interest on capital 5% and interest on drawings 10% is to be provided.
            7. Provide 2% as reserve for discount on creditors.
27.  From the following trial balance prepare final account for the year ended 31.12.2008.
            Particulars                            Debit              Particulars                            Credit
            Cash                                      13500             Capital                                   60000
            Goodwill                                20000             Creditors                                10000
            Factory insurance                  2000             Commission received           7500
            Audit charges                         1500             Sales                                      130000
            Debtors                                  20000             Return outwards                  2000
            Wages                                      5000             Interest received                   5000
            Opening stock                      12000             Outstanding salaries                       2500
            Machinery                             30500             Bills payable                                     3500
            Purchases                             95000
            Carriage inwards                   2500
            Salaries                                 12500
            Office Rent                              5000
            Rent paid in advance            1000
                                                            220500                                                           220500
            Adjustments:
            1. Closing stock Rs. 16800                        2. Outstanding wages Rs. 1000
            3.Write off Rs. 2000 as bad debts and provide 5% reserve for doubtful debts
            4. Depreciate Machinery by 10%  5. Provide Interest on capital 5%
            6. Commission  to be received Rs. 200
28.  From the following trial balance prepare final account for the year ended 31.12.2008.
            Particulars                            Debit              Particulars                            Credit
            Purchases                             50000             Sales                                      120500
            Returns                                    2000             Creditors                                  15000
            Rent & Taxes                          3000             Mortgage loan                        20000
            Debtors                                  30000             Capital                                     70000
            Salaries                                 20000             Outstanding rent                      2000
            Carriage                                   1000             Interest received                       7000
            Wages                                    10000             Reserve for bad debts             1000
            Machinery                             30000
            Furniture                               10000
            Drawings                                 5000
            Bad debts                                4000
            Insurance                                5000
            Motive power                                      2500
            Cash in hand                                   30000
            Depreciation on machinery             6000
            Prepaid insurance                 1000
            Closing stock                                    25000
                                                          235500                                                              235500
            Adjustments:
            1. Interest on capital 5%, interest on drawings 10% is to be provided.
            2. Write off bad debts Rs. 2000
            3. Create a reserve of Rs. 1000 towards bad and doubtful debts.
            4. Interest received in advance Rs. 1000
29. From the following trial balance prepare final account for the year ended 31.12.2008.
            Particulars                            Debit              Particulars                            Credit
            Purchases                             70000             Sales                                      100000
            Sales returns                                      1000             Capital                                     80000
            Carriage inwards                     500             Purchase returns                     2000
            Salaries                                   1500             Creditors                                  25000
            Rent and insurance                          1500             Commission                             2000
            Debtors                                  36000             RBD                                            2100
            Machinery                             50000             Bills payable                              5000
            Furniture                                 9000
            Cash at bank                                    20000
            Opening stock                      20000
            Bad debts                                5000
            Wages                                      1100
            Advertisements                        500
                                                          216100                                                             216100
            Adjustments:
            1. Closing stock Rs. 10000            2. Create 5% reserve for doubtful debts.
            3. Outstanding salaries Rs. 200
            4. Depreciation @ 10% on Machinery and 5% on furniture is to be provided
5. Fire accident destroyed goods worth Rs. 5000 and insurance company   agreed to pay Rs. 4000.
30. From the following trial balance prepare final account for the year ended 31.12.2008.
            Particulars                            Debit              Particulars                            Credit
            Machinery                             20000             Sales                                      80000
            Opening stock                        8000             Purchase returns                     600
            salaries                                    6000             Creditors                                  8000
            Purchases                             50600             Discount                                    600
            Sales returns                                        800             Capital                                   40000
            Carriage inwards                   1600             RBD                                           800
            Carriage outwards                 2500             Outstanding wages               1800
            Debtors                                  21000
            Furniture                                 5000
            Taxes, insurance                  1200
            Wages                                      4000
            Drawings                                 1800
            Bad debts                                2000
            Cash in hand                                     7000
            Prepaid insurance                   300
                                                            131800                                                           131800
            Adjustments:
            1. Closing stock Rs. 12000                                    2. Outstanding salaries Rs. 400
            3. Further bad debts to Rs. 1000               4. Create 5% Reserve for doubtful debts.
            5. Provide 10% depreciation on furniture and machinery.
            6. Goods worth Rs. 2000 are used by Raju for his family use.
31. From the following trial balance prepare final account for the year ended 31.12.2008.
            Particulars                            Debit                          Credit
                        Purchases, sales                 125000                       175000
                        Returns                                      1000                           4700
                        Rent                                           2500                             500
                        Opening stock                        15000
                        Debtors, creditors                   30000                         25000
                        Salaries                                   22500
                        Wages                                      10800
                        Machinery                              10000
                        Furniture                                 10000
                        Cash                                       29400
                        Interest                                       2500
                        Discount                                    5000                           1000
                        Drawings, capital                     6300                         63800
                                                                        270000                       270000
            Adjustments:
            1. Closing stock value Rs. 15000             2. Rent to be received Rs. 500
            3. Bad debts Rs. 1000                                 4. Provide reserve for bad debts 2000
            5. Provide depreciation on machinery 5000 and on furniture Rs. 1500
32. From the following particulars of Mr. Vamsi prepare final accounts of the year ended 31.3.2009 by taking into account the following adjustments.
            1. Closing Stock Rs. 20000; 2. Provide 5% depreciation on machinery; 3. Interest on capital 6%; 4. 5% provision is to be made for doubtful debts; 5. There was a fire accident in the month of March and destroyed goods worth Rs. 4000 and insurance company agreed to pay Rs. 2500.
            Particulars                                                    Debit                          Credit
            Stock                                                              6000
            Purchases, sales                                         42000                         65000
            Machinery                                                     38000
            Furniture                                                         6000
            Advertisements                                              1400
            Audit fee                                                            800
            Printing and stationery                                 3200
            Returns                                                            1500                             800
            Wages                                                              6200
            Cash at bank                                                              1200
            Bills payable                                                                                       8000
            Bank overdraft                                                                                  12000
            Debtors, creditors                                         24000                         10000
            Capital                                                                                               80000
            Interest received                                                                                   750
            Buildings                                                       32650
            Factory rent                                                     1200
            Insurance                                                          900
            Bad debts and RBD                                                    700                             500
                                                                                    177050                       177050
33. The cochin Consignment account in the books of Ranaji of Bombay showed a debit balance of Rs 1500 representing the cost of 10 bycycles on 1.1.2009. On March1, Ranaji sent a further consignment to Cochin of 40 bicycles costing Rs 160 each. The freight and other charges Rs. 210. On 1st June, the Cochin agent sent an account sales showing that 8 bicycles from the old stock realized Rs. 140 each and 25 bicycles from the second consignment realized Rs. 200 each and 15 bicycles remained in stock unsold. Two bicycles from the old stock being unsaleable at Cochin were returned to Bombay, for which the Cochin agent sent is separate debit note for Rs. 30 being expenses incurred by him. The Cochin agent is entitled to a selling commission of 5% which covers all out of pocket expenses in respect of the consignment. Show the consignment account.
34. On 1.7.2010 Radio house of Delhi consigned 200 radios to Benerjee Bros. of Calcutta. The cost of each radio was Rs. 400. Radio house paid Rs. 5000 for freight ad insuranc. On 7th July, 2010 Benerjee Bros. accepted a 3 months bill drawn upon them by Radio house for Rs. 50000. Benerjee Bros. paid Rs. 2200 as rent and Rs. 1300 for advertisement and upto 31st Dec.2010 (on which date radio house close their books) they sold 180 radios at Rs. 500 each. Benerjee Bros. were entitled to a commission of 5% on sales.
Prepare necessary accounts to record the above transactions in the books of Delhi Radio House.
35. Atlas Ltd. Forwarded on 1st January 2011, 100 bicycle to Gupta and Co. of Lucknow to be sold on behalf of atlas Ltd. The cost of one bicycle was Rs. 250 but the invoice price was Rs.300. Atlas Ltd. Incurred Rs. 1000 on freight and insurance and received Rs. 10,000 as advance from Gupta and Co. Gupta and Co. paid Rs.500 an octroi and carriage, Rs. 400 as rent and Rs. 300 as insurance and had disposed of 80 bicycles for Rs. 25,000 by 30th June 2011. Gupta and Co. is entitled to commission as sales at 5% on proforma invoice price and 25% of any surplus price realized. Gupta and Co. remitted the amount due from them by a bank draft
            You are required to give journal entries to record the above transactions in the books of the consignor and consignee and also write up the ledger accounts in the books of both the parties.
36. Rani consigned 1,000 radio sets costing Rs. 900 each to Vani, her agent on 1st January, 2008. Rani incurred the following expenditure on sending the consignment carriage Rs. 6,500, freight Rs. 9000, and insurance Rs. 3250,. Vani received the delivery of 950 radio sets. Account sales subsequently revealed that 750 set were sold for Rs. 9, 00,000 and Vani’s expenses were Rs. 3,000 for carriage and Rs. 7,500 for customs duty. She is also entitled to a commission @ 6% on sales Rani could get only Rs.35, 000 from insurance company for the lost radio sets prepare Consignment A/c.
37. Arun of Meerut consigned 100 sewing machines to Sanjay of Ranchi to be sold on his risk. The cost of one sewing machine was Rs.150 but the invoice price was Rs.200. Arun paid freight Rs. 600 and insurance in transit Rs.200.
            Sanjay sent a bank draft to Arun for Rs. 10,000 as advance payment and letter sent an account sales showing that 80 sewing machines were sold at Rs. 220 each. Expenses incurred by Sanjay were: Carriage inward Rs.25, octri Rs. 75, godown rent Rs.500 abd advertisement Rs. 300. Sanjay is entitled to a commission of 5% on sales.
            Prepare Consignment a/c and Consignee a/c in the books of Arun.
             
38. On 1st January 2009 Sudha of Srinagar consigned goods value of Rs. 20000 to Indira of Warangal. Sudha paid cartage and other expenses Rs. 1500. On 1st April 2009, Indira sent account sales with following information.
            a. 50% of the goods sold for Rs. 15000.
            b. Indira incurred expenses amounting to Rs. 750.
            c. Indira is entitled to receive commission @ 5% on sales
            d. Bank draft enclosed for the balance due. Prepare the necessary ledger accounts                        in the books of Sudha.
39. Varma of Vijayawada consigned goods of value of Rs. 20000 to Ananth of Ahmedabad.  Varma paid forwarding charges Rs. 1000 and drew a bill of two months of Ananth for Rs. 10000. The bill was discounted with bankers for Rs. 9500. Ananth sent the account sales of the consignment starting that the entire stock was sold for Rs. 28000, agent commission Rs. 2000 and a bank draft for the balance. Prepare necessary ledger accounts in Varma books.
40. Ameer of Surat consigned goods to Praveen of Patna the value of Rs. 50000 and invoiced the same proforma at 20% above cost.  Ameer paid Rs. 800 for carriage and Rs. 600 for insurance.  Ameer drew on Praveen for Rs. 20000 of 2 months bill and received Praveen’s acceptance.  Later Ameer received account sales from Praveen stating the following.       Total goods sold for Rs. 70000 and the sales expenses Rs. 1000 and his commission 5% on sales.Praveen deducted all above and sent a cheque for remaining balance.  Prepare necessary account in the books of Ameer.
41. On 1st January 2008 Sridhar sold goods to Ravi for Rs. 6000 and drew upon him a bill at two months for the amount. Ravi accepted the bill and returned to Sridhar.  On the due date Ravi expressed his inability to honour the bill and offered to pay Rs. 2000 in cash and to accept a new bill for the balance plus interest at 12% p.a for three months.  Sridhar agreed to the proposal.  Pass necessary journal entries in the books of Sridhar.
42. Bharat of Chirala consigned 200 bales of Tobacco @ 250 each to Vikram of Vijayawada.  Bharat paid cartage and freight etc Rs.1250. Bharat drew a bill on Vikram for 3 months for Rs. 30000. Vikram sold the entire consignment and rendered account sales showing that the goods realised Rs. 60000 out of which he deducted his charges Rs. 400 and commission at 5% on sales.  Make entries in the journal and show necessary ledger accounts in the books of Bharat.
43. On January 15, 2009 Vijaya of Hyderabad sent 400 Bicycles to be sold on consignment to Ravi of Warangal.  The Bicycles were invoiced at Rs. 1000 per each carriage and other expenses Rs. 6000. Vijaya received the following account sales.
            15th March - 100 Bicycles were sold at Rs. 1450 per piece on which 5% commission was charged and Rs. 3750 were deducted as expenses.
            10th April - 150 Bicycles were sold at Rs. 1400 per piece on which 5% commission was charged and Rs. 2900 were deducted as expenses incurred after 15th March.
            Prepare consignment account and other accounts in the books of Vijaya.
44. Arun of Ahmedabad consigned 100 sewing machines to Sarma of Bidar to be sold on his risk.  The cost of one sewing machine was Rs. 150, but the invoice price was Rs. 200. Arun paid Rs. 800 towards freight and insurance.  sarma sent a draft to Arun for Rs. 8000 as advance and later sent an account sales showing that 80 sewing machines were sold at Rs. 210 each. Expenses incurred by Sarm were Rs. 200. Sarma is entitled to a commission of 5% on sales.
            Pass necessary ledger accounts in the books of Arun.
45. Samatha of Hyderabad consigned 100 cycles to Kavitha of Kanur to be sold on behalf of Samatha.  The cost of each cycle was Rs. 300, but the invoice price was Rs. 350. Samatha incurred Rs. 2000 on freight and insurance and received Rs. 20000 as advance from Kavitha.  Kavitha paid Rs. 500 as Octroi and carriage Rs. 500 as an rent and Rs. 500 as insurance and disposed of 75 cycles for Rs. 30000.  Kavitha is entitled to a commission @ 10% on sales .  Kavitha remitted the amount due to him by a bank draft.  Prepare necessary ledger accounts in the books of Samata.
46. ‘A’ of Ahmedabad and ‘B’ of Bombay enter into a Joint venture to consign 100 bales to ‘C’ at Calcutta to be sold on their Joint account. They agree to share profits or losses equally. ‘A’ sent 50 bales valued at Rs. 60,000 and pays freight and expenses Rs. 1200. ‘B’ sent 50 bales valued at Rs. 55,000 and pays expenses for Rs. 900.
            All the bales reached Calcutta in time. However, 5 bales were found to have been tampered with during the transit. ‘A’ recovered Rs. 3,000 from the insurance company, ‘C’ sold remaining bales for Rs. 1, 35,000. He charged 3% as selling commission and deducted Rs. 1500 towards expenses. He remitted the balance amount to ‘A’ by D/D on State Bank of India payable at Ahmedabad. ‘A’ settled the account by ‘B’ by bank draft. Prepare  accounts in the books of ‘A’.
47. A and B enter into joint venture. A agrees to bring capital in cash: Accordingly a joint bank account is opened by A for a sum of Rs. 80,000. B buys goods worth Rs. 50,000 as part of his share capital. Further goods worth Rs. 1,18,000 were purchased from C paying Rs. 60,000 and balance by a promissory note signed by a and B.
            The goods were sent to Calcutta for sale. Expenses totaling Rs. 5000 were incurred in sending the goods. Part of the goods damaged and a sum of Rs. 25,000 were sold for Rs. 2, 20,000.
            Prepare J/V a/c and J/B a/c. Assuming that the promissory note was fully honoured.
48. A and B enter into a joint venture to ship goods abroad. A sends goods to the value of Rs. 1,000 pays freight Rs.100 and sundry expenses Rs. 150. These transactions take place on 1st January. 2006. B sends goods valued at Rs. 750, on Feb. 1st and pays freight and insurance Rs.80 and sundry expenses Rs.50. B advances to A on March 1st April Rs.450 on account of venture. A receives amount sales and remittance and net proceeds for whole of the goods amounting to Rs.2500 on 1st April. Final settlement between A and B is made on 30thy April, 2006, show the transactions of the venture calculating interest at 5% p.a. in months.
49. On 1st October, 2006 Hiren bought a parcel of precious stony for Rs. 85,000. He consigned it to Dhiren who agreed to share with him equally the profit and loss in the venture. Hiren paid Rs. 900 on account of carriage and insurance. He drawn on Dhiren at 3 months for Rs. 40,000 on account, discounting the bill on 4th October, 2006 for Rs. 39,600. Discount is borne by them equally.
            On receipt of the stony on 3rd October, Dhiren paid for insurance Rs. 300 and Rs. 800 for cutting and polishing. On 28th February, 2007. Dhirun sold the stones for Rs. 1,05,000 his expenses being Rs.900. On 31st March, he sent to Hiren account sales along with a bank draft for the amount due to him.
            Write up the accounts as they would appear in the books of Hiren and Dhirum respectively.
50. A and B enter into Joint venture sharing profit 3/5 and 2/5. A is to purchases timber in Madya Pradesh and forward it to B in Delhi. A purchases timber worth Rs. 10,000 and pays Rs. 1,000 as expenses. B received the concerned and immediately accepted A’s draft for Rs. 8,000. A gets discounted for Rs. 7,850 B sold the timber for Rs. 16,000. He has to spend Rs. 350 for fire insurance and Rs. 300 for other expenses. Under the agreement he is entitled to a commission of 5% sales. Give Ledger accounts in the books of A.
51. A and B enter into joint venture. A agrees to bring capital in cash. Accordingly a joint bank account is opened by A for a sum of Rs. 80,000. B buys goods worth Rs. 50,000 as part of his share of capital. Further goods worth Rs. 1, 18,000 were purchased from C paying Rs. 60,000 and balance by a promissory note signed by A and B.
            The goods were sent to Calcutta for Sale. Expenses totaling Rs.5000 were incurred in sending the goods. Parts of goods were damaged and sums of Rs. 25,000 were recovered from the insurance company. The balance goods were sold for Rs. 2, 20,000. Prepare Ledger accounts.
52. On 1.1.2007 Ramesh bought a machine for Rs. 46,000 and installed it by incurring Rs. 4,000 towards installation expenses. On 1st July, 2007 he purchased additional machinery worth Rs., 35000 on 31.12.2009. He sold the machinery purchased on 1st July 2007 for Rs. 20000. Ramesh decided to write off depreciation @ 10% as per fixed instalment method Prepare machinery account for 3 years assuming that the accounting year closes on 31st December every year.
53. A firm desires to debit its profit and loss account with a uniform figure every year in respect of repairs and renewals. It expects that considering the life of the asset in question Rs. 10000 will be  average amount to spent per year. Actual repairs are Rs. 1000 in the first year, Rs 2300 in second year and Rs. 3700 in the third year. Show the Provision for Repairs and Renewals account.
54. Reddy acquired a machine on 1st July 2006 at a cost of Rs. 140000 and spent Rs. 10000 on its installation. The firm writes off depreciation at 10% of the original cost every year. The books are closed on 31st December every year. Show the machinery account and depreciation account for four years.
55 A firm desires to debit its profit and loss account with a uniform figure every year in respect of repairs and renewals. It expects that considering the life of the asset in question Rs. 40000 will be  average amount to spent per year. Actual repairs are Rs. 4000 in the first year, Rs 9200 in second year and Rs. 14800 in the third year. Show the Provision for Repairs and Renewals account.
56. X Ltd., has purchased a second hand machinery on 1.2.08 for Rs. 50000, paid Rs. 11000 for its overhauling and Rs. 5000 for its installation which was completed by 31st March, 2008.
            The company provides depreciation on its machinery at 15% p.a an diminishing balance method from the date it is put to use and closes its books as 31st December every year.
            As 1st January, 2009 a repair work was carried out as the machine and Rs. 5000 was paid for th same. The machine was sold as 31st October, 2010 for a sum of Rs. 11000 and amount of Rs. 1000 was paid as dismantling charges.
57. X limited provided Rs. 10000 as reserve for repairs and renewals every year The actual expenses incurred by them for repairs and renewals in 2008 was Rs. 5000, in 2009 was Rs. 8000 and in Rs. 12000. You are required to prepare the reserve for repairs and renewal account for the years ending 31st December, 2010.
58. A manufacturing concern, whose books are closed on 31st March, purchased machinery for Rs. 150000 on 1st April 2003. Additional machinery was acquired for Rs. 40000 on 30th September, 2004 and for Rs. 25000 on 1st April 2006. The machinery which was purchased for Rs. 40000 on 30th September, 2004 was sold for Rs. 34000 on 30th September, 2006.
            Giver the machinery account for the year ending 31st March, 2007 taking into account depreciation at 10% p.a on the written down value
59 On July1, 2006 X Ltd., purchased second hand machine for Rs. 60000 and reconditioned the same by spending Rs. 9000. On January 2007 a new machine was purchased for Rs. 36000. On June30, 2008 the machine purchased on January1, 2007 was sold for Rs. 24000 and another machine was installed at a cost of Rs. 45000. The company writes off 10% on original cost every year on 31st March, Show the machinery account.
60.  A firm desires to debit its profit and loss account with a uniform figure every year in respect of repairs and renewals. It expects that considering the life of the asset in question Rs. 20000 will be  average amount to spent per year. Actual repairs are Rs. 2000 in the first year, Rs 4600 in second year and Rs. 7400 in the third year. Show the Provision for Repairs and Renewals account.
61.  Krishna purchased a machinery for Rs. 75000 on 1.9.03 and paid Rs. 5000 for its installation charges. He closes his accounts on 31st March of every year. He adopts the method of depreciating the machine @ 20% p.a. under diminishing balance method. Show the machine account and depreciation account for four years.
62.  A firm desires to debit its profit and loss account with a uniform figure every year in respect of repairs and renewals. It expects that considering the life of the asset in question Rs. 40000 will be  average amount to spent per year. Actual repairs are Rs. 4000 in the first year, Rs 9200 in second year and Rs. 1400 in the third year. Show the Provision for Repairs and Renewals account.
                   5 MARKS THEORY QUESTIONS
           
1.Explain the advantages of computerized accounting.              Vikas Degree College,Nrt
 Advantages:
a.    The main advantage of computer is that it works with high speed. It provides accurate information to the required persons in short time.
b.    It provides upto date information to management and enables them to take decisions at correct time.
c.    It saves time, manual labour and reduces the recurring expenses.
d.    In computerized accounting, transactions entered are automatically processed, posted into ledger and accounts are balanced. Hence it is easy to present final accounts to management at any time without any difficulty.
2. What do you mean by suspense account?
            When ledger balances are posted in trial balance on debit and credit sides, the sum of the balances in both sides should be equal. If they are not equal, it implies that there are some errors in the balances obtained from ledger accounts.
            The difference between debit and credit sides is temporarily placed in suspense account. Later, when the errors are located, they are rectified through the suspense account. Ultimately, the suspense account should not be left with any balance.
3. Explain the process of creating ledger using tally.
            Ledgers are actual accounts to which all individual transactions are allotted. For starting any transaction, first we have to create concerned ledger. For creating ledger, we have to mention the link between ledgers and groups. First we have to mention the group under which the particular ledger appears on the screen. For example, if we want to create a ledger for ‘printing and stationery’, we have to mention that group under which printing and stationery is displayed. That item comes under the group ‘indirect expenses’ when we are creating a particular ledger, a pop up menu consisting of various groups appears on screen. Now we have to select ‘indirect expenses’ from the ledger groups.
4. What are the differences between consignment and sale?
                        Consignment                                                                                  Sale
1. Ownership: Ownership remains with the consignor                       1.Ownership passes to the buyer.
2. Relation: Relation is that of principal and agent.                  2. Relation is that of buyer & seller.
3. Risk: Risk is not transferred to the consignee.                      3. Risk is transferred to the buyer.
4. Order: There is no order from the consignee.                       4. There must be order from buyer.
5. Commission: Consignee gets commission on sale.           5. Buyers gets discount on purchase.
6. Profit or loss: It arising from the articles is that of the         6. After the sale, the profit or loss
Consignor.                                                                                        Arising from the articles is that of                                                                                       
                                                                                                  buyer.    
7. Returns: Goods may be returned, if not sold.                        7. Goods once sold can’t be returned
5. What is need for preparing Bank Reconciliation Statement?
                         Bank Reconciliation statement is a statement which contains a complete and satisfactory explanation of the difference in balances as per the cash book and bank statement. A BRS is to be prepared whenever a bank statement is received and is prepared on a particular / stated date.
            Need for Bank reconciliation statement:
1.    It reflects the actual bank balance position.
2.    It helps to detect any mistake in the cash book and in the pass book.
3.    It prevents frauds in recording the balancing transactions.
4.    It explains any delay in the collection of the cheques.
5.    It identifies valid transactions recorded by one party but not by the other.
6.    Write the differences between Provision and Reserve.      
Provision                                                                  Reserve
1.    Provision is a charge to P/L account              1. Reserve is an appropriation of profit.
2.    Creating of provisions decrease the              2. Creation of reserves increases the
The funds of the business.                                 Working capital of the business.
3.    Provision is made because of legal               3. Creation of reserve is a matter of financial
Necessity.                                                               Prudence and to save the business
                                                                                                    Concern from prospective losses.
4.    Provisions can be made irrespective of         4. Reserves cannot be created when the
the fact whether the business has earned       business has incurred losses.
Profits or not.
5.    Provisions are set aside to make                    5. Reserves are created for general
Necessary adjustments in the future                 purposes to safeguard the business
against known and expected losses.                 Against unexpected losses in future
                                                                                  and thereby to strengthen financial
                                                                                  condition of the business.
7.State the method of rectification of errors.
            a. Before preparation of trial balance: If it is a double sided error a suitable entry will be passed in order to reverse the effect and to bring about correct situation. If it is single sided error then it is not possible to pass double entry for its rectification and hence rectification will be made directly in the ledger by debiting (or) crediting the account affected by error.
            b. After preparing trial balance: If the errors remain undetected at the time of preparing trial balance a difference may arise in totals. Such difference will be transferred to a newly opened suspense account. One sided errors will be rectified by passing a journal entry through suspense account and two sided errors will be rectified by passing the reverse entry.
            c. After preparation of final accounts: If errors are not found out even after preparing trial balance, then the final accounts may be prepared by showing suspense account in the balance sheet. Later if the errors are detected in the next year then capital account will be affected if the error is committed in revenue account and if an error affected an asset or liability then those accounts will be debited or credited for rectification. Further if these are one side errors then suspense account will be debited or credited.
8. What are the rules for debit and credit for different types of accounts?
            An account is a summary of the record of all the transactions relating to a person, asset, expense or gain. It has two sides – the left hand side is called ‘debit’ and the right hand side is called ‘credit’ side. Accounts are classified into three heads: i) Real accounts, ii) Personal accounts, iii) Nominal accounts.
            In order to decide which account is to be debited and which account is to be credit for the purpose of recording any particular transaction, the first important point is to see which class of accounts are affected by that transaction. Having ascertained that the following rules debit and credit will have to be followed.
i.      Real Accounts: Accounts relating to properties or assets are known as real accounts. The rule for writing up a real account a ‘Debit what comes in, Credit what goes out’.
            ii.  Personal account: Accounts relating to persons, firms, companies are known as personal accounts. Personal accounts may be:
a.    Accounts of natural persons such as Mahesn, Ramesh etc.
b.    Accounts of artificial persons such as State Bank, Tata Limited etc.,
c.    Representative personal accounts such as outstanding salaries, prepaid insurance etc.,
The rule for writing up a personal account is ‘Debit the received and Credit the giver’.
iii. Nominal accounts: Accounts relating to expenses, losses, incomes and gains are known as nominal accounts. E.g : wages, salaries, commission etc., A separate account is maintained for each item of expense loss, income or gain.             Vikas Degree College,Nrt
            The rule for writing up nominal accounts is ‘debit all expense and losses and Credit all incomes and gains’.
            Real account and nominal account together called as impersonal accounts.
9. Write about Straight line method and written down value methods of depreciation.
            Fixed installment method: According to this method, the depreciation of fixed assets is written off in equal annual installments over a period of its life. So as to reduce the asset account to nil (or) to its scrap value at the end of the estimated life of the asset.
            Diminishing balance method: Under this method, the amount of depreciation is calculated as a fixed percentage of the reducing or diminishing value of the asset standing in the books at the beginning of the year. So as to bring down the book value of the asset to its residual value. Since depreciation is based on the diminishing value of the asset, it is heavier in the initial period and goes on reducing year after year.
10. Explain briefly about various types of commissions paid to consignee.
            General commission: It is the reward to the agent for selling goods on behalf of consignee. This commission is normally fixed as percentage on sales and thus more the sales, more is the commission earned by the agent. Besides a normal commission at a certain rate on sales, agent may be allowed following commission also.
            DelcredEre commission:  This commission is allowed to the agent in order to cover the risk of loss due to bad debts. Once an agent is authorized for such a commission, he becomes liable to all losses on account of non-recovery of debts and consignor ceases to be responsible for any loss of this type. This is normally calculated on total sales unless it is specifically agreed to between the principal and the agent that delcredere commission shall be allowed on credit sales only.
            Overriding commission: It is an extra commission in addition to normal commission. It is also calculated on total sales. This commission is normally granted only when the consignor wants his agent to work hard to push a new line of product in the market.
11. What are the differences between book keeping and accounting?
            Book-keeping is the art of recording business transactions and accounting is the analysis and interpretation of book keeping records. Differences between book keeping and accounts are:
                        Book Keeping                                                                     Accounting
            1. It is the recording phase of an accounting     1. It is summarizing phase of an account
               system.                                                                       system.
            2. It is basis for accounting.                                   2. It is the basis for business language.
            3. Persons responsible for book-keeping                        3. Persons responsible for accounting are
               are called book keepers.                              called accountants.
            4. It does not require any special skill or              4. It required special skill and knowledge.
                knowledge.
            5. The main aim is to prepare original book        5. The main aim is to record, analyze and
                of accounts.                                                               Interpret the business transactions.
6.It follows generally accepted accounting         6. Various firms follow various methods of
    concepts and conventions.                                    reporting and interpretation.
7.It does not give the complete picture of the     7. It gives the complete picture of the
    Financial condition of the business unit.            financial condition of the business unit.
12. What is meant by Depreciation? Give its causes.
            Fixed assets of a business concern like Building, Machinery etc, are acquired for use in business. These assets gradually lose their value on account of wear and tear (or) due to lapse of time. This loss (or) decrease in value of fixed assets is called ‘Depreciation’. It is a reduction in the book value of an asset due t wear and tear. According to Pickles ‘Depreciation may be defined as the permanent and continuous diminution in the quality, quality (or) value of an asset.
            Causes of Depreciation:                                                   Vikas Degree College,Nrt
a.    Wear and tear due to actual use.                                Vikas Degree College,Nrt
b.    Efflux of time i.e., more passage of time will cause a fall in the value of an asset, irrespective of its use. Ex: Lease, patent rights etc.,
c.    A new inventions or a permanent change in demand may render the asset useless.
d.    Try in market price.
e.    Accidents.
f.     In the case of mines they lose their value due to periodical extraction of quantity of materials from them.
13. Explain the functions of accounting.
            a. Keeping systematic records: The first function of accounting is to keep systematic record of financial transactions, to post them to ledger accounts and ultimately prepare final statements.
            b. Protecting properties of the business: The second function of accounting is to protect the property of the business. An authorized dissipation of assets of the firm will bring it to the threshold of insolvency. An accountant thus has to design such a system of accounting which will protect its assets from an unjustified and unwarranted use.
            c. Communicating the results: The third function of accounting is to communicate the results obtained from arranging of data to interested parties like proprietors, investors, creditors, employee, government officials and researchers.
            d. Meeting legal requirements: The fourth and last function of accounting is to devise such a system as will meet legal requirements. Under the provisions of law, a businessman has to file various statements. E.g.: Income tax returns, returns for sales tax purpose and so on. Accounting system aims at fulfilling this requirement of law.
14. What are the objectives of accounting?
            The following are the main objectives of accounting.
i)             To keep a permanent, accurate and complete record of business transactions of a business firm in scientific manner.
ii)            To calculate profit or loss during a specific period by maintaining complete records of incomes, expenses and losses.
iii)           To ascertain the financial position of the business concern by preparing the financial statements.
iv)           To provide information for legal and tax purposes.
v)            To review business policies in the light of past records.
vi)           To measure the efficiency and performance of staff by analyzing the financial statements.
15. Explain the process of recording vouchers using tally.
            In tally we record all the transactions using vouchers. A voucher is a documentary support of transaction. In manual system we record a journal entry and is posted to ledger accounts and finally prepare trial balance.
            In tally the manual process is processed through different types of vouchers like ContraF4, Payment voucher F5, Receipt voucher F6, Voucher F7, Sales voucher F8, Purchase voucher F9, Memos F10, etc.
            There are pre-defined vouchers in tally. Each voucher has a different function and are programmed in such a way that it take care of rest of the accounting process one you feed in the transaction using voucher. We can alter vouchers and create new one to suits as per out needs.
            For recording transactions select the type of voucher.
            Gateway of tally   -------- Accounting voucher.
            Write date, Ref: Dr, Cr Accounts,.
            Amount and Narration.

5 comments:

  1. Very interesting....Thanks for sharing. Please visit us at


    Tally Sales

    ReplyDelete
  2. Sir, Can you please post key answers .

    ReplyDelete
  3. It's really great! Thank you for helping students to get target their aims. It is really nice job to encourage. Keep it up. May be this information will be helps for someone, TheTuitionTeacher.com also providing good 1 to 1 Home Tuition in Lucknow and Delhi.
    Home Tutor Delhi | Home Tuition Service

    ReplyDelete