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IIND PRELIMINARY EXAMINATION OF ACCOUNTS
Accounts Preliminary Examination Total Marks 100

2008 - 09 OMTEX - CLASSES Preliminary Examination – 002

ACCOUNTS
Time – 3 hrs. 4 PAGES Max. Marks : 100

Q1. Attempt any four of the following. (20 marks)

A. Answer in one sentence each. (5 marks)
1. What do you mean by scrap value?
2. What are noting charges?
3. What is the relationship between coventurers?
4. What is partnership deed?
5. State the formula for calculating Normal Profit?
B. Write the word/term/phrase which can substitute each of the following statement: (5
marks)
1. Goods returned to the supplier.
2. It is a stick or lever used to change the position of the cursor on a screen.
3. A bill in which the period of the bill is counted from the date of the bill accepted.
4. The receipts that are an unusual nature not arising through named activities of the business.
5. A fixed asset which is not essential for conduct of business.
C. Match the following pairs. (5 marks)
D. Select the most appropriate alternative from hose given below each statement. (5 marks)
1. Partner’s drawings are transferred to his __________ a/c under fixed capital method.
a. Capital A/c
b. Current A/c
c. Trading A/c
d. Profit and loss A/c
2. Sale of old materials must be shown on credit side of ____________
a. Cash book
b. Income and expenditure account
c. Balance sheet
d. Receipt and Payments account
3. Cost of asset = _____________
a. Purchase price + scrap value
b. Purchase price + depreciation
c. Purchase price + incidental cost
d. None of the above
4. A person in whose favour the bill is endorsed is called ___________
a. Endorsee
b. Endorser
c. Drawer
d. None of the above
5. Expenses incurred by coventurers is debited to ___________
a. None of the below
b. Consignee’s account
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IIND PRELIMINARY EXAMINATION OF ACCOUNTS
Accounts Preliminary Examination Total Marks 100
c. Co venturers account
d. Joint venture account.
Group A Group B
1. Partner’s Salary a. Balance sheet asset side.
2. Subscription received in advance b. Current asset.
for the current year. c. Deducted from gross profit.
3. Dishonour of bill. d. Credited to joint venture account.
4. Cash in hand. e. Credited to coventurers A/c
5. Unsold goods taken over by co – f. Noting Charges.
ventures g. Closing balance sheet liability side.
h. Fixed assets.
E. Select the most appropriate alternative from hose given below each statement. (5 marks)
1. Partner’s drawings are transferred to his __________ a/c under fixed capital method.
a. Capital A/c
b. Current A/c
c. Trading A/c
d. Profit and loss A/c
2. Sale of old materials must be shown on credit side of ____________
a. Cash book
b. Income and expenditure account
c. Balance sheet
d. Receipt and Payments account
3. Cost of asset = _____________
a. Purchase price + scrap value
b. Purchase price + depreciation
c. Purchase price + incidental cost
d. None of the above
4. A person in whose favour the bill is endorsed is called ___________
a. Endorsee
b. Endorser
c. Drawer
d. None of the above
5. Expenses incurred by coventurers is debited to ___________
a. None of the below
b. Consignee’s account
c. Co venturers account
d. Joint venture account.

F. State with reason whether the following statements are true of false. (5 marks)
1. Balance sheet is a statement and not an account.
2. Partnership firm enjoys business continuity.
3. When the bill is sent to bank for collection, bank A/c is credited.

F. Drawer: Shekhar Desai, Spastic Road, Mahad. (5 marks)

Drawee – Sharad Verma, Narayan Peth, Pune.
Payee – Mukund Pande, Panvel.
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IIND PRELIMINARY EXAMINATION OF ACCOUNTS
Accounts Preliminary Examination Total Marks 100
Amount - Rs. 5775/-
Period - 50 days
Date of Bill Drawn – 15th March, 1995
Date of Acceptance – 19th March, 1995 (Accepted for only Rs. 5700)
Q2. On 1-1-2002 Champaklal & Sons purchased furniture for Rs. 15000. On 1-7-2002 additional
furniture was purchased for Rs. 8000. On 30-6-2003 the furniture purchased on 1-1-2002 was skid for Rs.
12,000.
The firm charges depreciation @ 10% p.a. under the reducing balance method.
Prepare Furniture account, for the years 2002, 2003, 2004 assuming that accounting year of the firm is
calendar year and depreciation account for the year ending 31 – 12 - 2003. (10marks)
OR
A. Find out value of goodwill from the following. Net profits for last 5 years are Rs. 30,000; Rs.
36,000; Rs. 24,000; Rs. 4,000; Rs. 14,000. Goodwill to be valued at 3 years purchase of average
net profit. (5 marks)

B. Explain 'Abacus’ as a phase in the history of computer. (5 marks)

Ans. It was in about 400 B.C., that a sort of adding machine called ABACUS was invented in
China. It consists of a rectangular frame. The rods or wires are fitted to the frame which carry
sound beads. Abacus is still being used in some countries. Counting id done by shifting the beads
from one side to another. It is proved that an expert operator of abacus is faster in calculations
than a clerk using a calculator.

Q3. Softy accepted a bill of Rs. 20,000 drawn by Kwality at 3 months. Kwality got the bill discounted
with his bank for Rs. 19,500. Before the due date softy approached Kwality for renewal of the bill. It was
agreed to pay Rs. 15,000 immediately together with interest on the remaining amount a 10% for 3 months
and for the balance Softy should accept a new bill for 3 months. These arrangements were carried
through. But afterwards softy became insolvent and only 40% of the amount could be recovered from his
estate. Pass necessary Journal entries in the books of Softy & show Kwality’s account in Softy’s ledger.
(12 marks)
OR
Q3. Raj sold goods worth Rs. 7,000 to Dev & Rs. 9,500 to Chetan on credit on 31-1-2004. On 1-
2-2004, Dev accepted a bill of Rs. 5,000/- at 2 months paid cash Rs. 1,900 in full settlement of
his account. On the same date Chetan accepted a bill for the due amount at 3 months.
Raj discounted the first bill at 6% p.a. and sent the second bill to bank for collection. On
the due date of the first bill, Dev approached bank for renewal of bill. Raj accepted on the
condition that Rs. 3000 be paid immediately, along with the interest on the balance Rs. 40 &
accepts a fresh bill for the balance amount. These arrangements were carried through.
Raj honoured his acceptance on the due date. However Dev became insolvent &
dividend of 20% could be recovered from his estate. (12 marks)
Q4. Ram and Shyam entered into joint venture to prepare building for a private firm who agree to
pay Rs. 2,00,000 on the completion of the work. A bank account was opened in their joint names
Ram contributing Rs. 25,000 and Shyam Rs. 25,000. They share the profits and losses in the ration
2:3 respectively. Payments made out of the joint bank account where:
Purchase of Rs. 15,000 Hire Charge for equipments Rs. 12,000
equipments
Wages Rs. 85,000 Materials Rs. 20,000
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IIND PRELIMINARY EXAMINATION OF ACCOUNTS
Accounts Preliminary Examination Total Marks 100
Office Expenses Rs. 68,000
Ram paid Rs. 5,000 and Shyam Paid Rs. 3,000 for the other expenses. The building was completed
and government paid the amount by cheque. Sham took equipments at a valuation of Rs. 6,000 and
Ram took material of Rs. 5,000.
Prepare: Joint venture account, Joint bank account and coventurers account. (12 marks)
st st
Q5. Saishree Ltd. Purchased a Machine worth Rs. 1,00,000 on 1 April, 2000. On 1 April 2001, the
company purchased additional machine for Rs. 20,000. On 1st Oct 2002, the company sold the machine
purchased on 1st April, 2001 for Rs. 16,000. Company writes off depreciation at the rate of 10% p.a. on
reducing balance system. The Accounts being closed on 31st March every year. Show Machinery account
and Depreciation account for 3 years. i.e. 2000 – 01, 20010 – 02 & 2002 – 03. (10 marks)
Q6. From the following information prepare Income and Expenditure account for the year ended 31st
March, 2008 of Youth Association and a balance sheet as on that date.
(16 marks)
Receipts Amount Payments Amount
To Bal. b/d – 3500 By Salaries
To Subscriptions 1500 2007 250
2006 - 07250 2008 2250 2500
2007 - 083500 By Rent 4300
2008 - 09750 4500 By Postage 300
To Entrance Fees 1600 By Printing and Stationary 3000
To interest on investments 2000 By Balance C/d 2400
12500 12500
Adjustments
1. Salaries unpaid Rs. 250, printing unpaid includes Rs. 600 for the year.
2. Printing paid includes Rs. 500 pertaining to the previous year.
3. Subscriptions outstanding Rs. 650 for the year.
4. Balances on 1st April 2007, Furniture – Rs. 6000, Investment – Rs. 50,000, Building - Rs. 2000
5. Provide 5% depreciation on furniture and building.

Q7. Govindan & Mukul are partner sharing profits and loses in the ratio 3:2. Following is the trial
balance as on 31st Match 2006. (20 marks)
Trial Balance as on 31 – 3 – 2006
PARTICULARS Debit. Credit.
Capital
Mr. Govindan 50000
Mr. Mukul 50000
Stock on 1st April 2005 20000
Machinery 70000
Bills Receivable & 10000 8000
Payable 10000 12000
Purchase & Sales 0
Furniture 6000 5000
Returns 2000
Current Account
Mr. Govindan 2000
Mr. Mukul 1000
 OMTEX CLASSES
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IIND PRELIMINARY EXAMINATION OF ACCOUNTS
Accounts Preliminary Examination Total Marks 100
Customers Account 30000 40000
Supplies Account
Salaries (11 months) 11000
Productive Wages 10000
Office Insurance 3000
General Expenses 2000 3000
Commission 10000
10% Bank Loan
Interest on Loan 400
Bad debts 1000
Advertisement 8000 1000
R.D.D.
Land & Building 10600
28700 287000
0
Adjustments:
1. Closing stock is valued at market price Rs. 55000 which is 10% above cost.
2. Machinery includes Rs. 10000 purchased on 31st March 2006.
3. Depreciate Machinery @ 10% p.a.
4. Provide R.D.D. Rs. 2,000 on debtors & provide 2% for reserve for discount on debtors.
5. Mr. Govindan is entitled to a salary of Rs. 400 p.m. from 1st August 2005.
6. Provide 10% for reserve for discount on creditors.
7. Mr. Mukul is entitled to get 2% commission on gross profit.
Prepare Trading Account and Profit or loss account for the year ended 31st March 2006 and
Balance sheet as on that date.
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