SAMPLE PAPER- (solved)

For Examination March 2018

ACCOUNTANCY
Class – XI
Time allowed: 3 hours Maximum Marks: 90

General Instructions:
1. This question paper contains Two parts A & B.
2. Both the parts are compulsory for all.
3. All parts of questions should be attempted at one place.
4. Marks are given at the end of each question.

Book Recommended: ULTIMATE BOOK OF ACCOUNTANCY

Publisher: Vishvas Publications 0172-2210596 & 09256657505

Part – A (Financial Accounting – I)

1. Name any two external users directly concerned with accounting information. [1]
2. ‘Cash Memo’ is a source document or an Accounting Voucher? [1]
3. What is meant by the term ‘Merchandise’ in accounting? [1]
4. Vinod Bros. not following the Double Entry System while preparing books of
accounts. They are preparing accounting on the basis of Single Entry System. Give
any two limitations which they may face in future. [1]
5. Identify Personal, Real and Nominal account from the following: [3]
(i) Rent Paid (ii) Rent Received (iii) Rent Accrued
(iv) Machinery (v) Capital (vi) Purchase
6. Rectify the following errors by passing entries: [3]
(i) Rs.4,800 received from Vinod wrongly entered as from Vikas.
(ii) The Purchase Book was under cast by Rs.2,500.
(iii) Total of Sales return was under cast by Rs.8,100
7. Describe any two objective of International Financial Reporting System. Also identify
any two values disclosed by IFRS. [3]
8. Explain the following Assumptions/Principles of Accounting: [3]
(i) Prudence Principle
(ii) Historical Cost Principle
(iii) Accrual Assumption
9. Give any two differences between Reserve and Provision [4]
10. Fill in the blanks and complete the Journal Entries. [4]
Date Particulars L.F. Debit Credit

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A/c Dr. ?
Vinod’s A/c Dr. 15,000
To A/c ?
(Being goods sold to Vinod and
40% amount received by cheque)

A/c Dr. ?
To A/c ?
(Being cheque received from
Mohan for Rs.5,000 not deposited)

A/c Dr. ?
To A/c ?
(Being goods taken for personal
use costing Rs.3,500; sales price
4,000)

A/c Dr. ?
To A/c ?
(Being sold personal car for
Rs.1,00,000 and brought that
money into business)

11. Vinod owed Rs.10,000 to Mohan. Mohan wrote a bill of exchange for Rs.10,000 on
Vinod for three months, which was duly accepted by Vinod. Mohan discounted
the bill with Bank at a discount of Rs.100. On maturity, Bill was dishonoured.
Bank paid Rs.20 as noting charges. Pass journal entries in the books of Mohan. [4]
12. Prepare Cash Book with Bank Column of Vinod from the following transactions:
[4]
Jan. 1 Cash in hand Rs.2,300 and Bank overdraft Rs.12,000
Jan. 7 Cheque received from Ram Rs.4,000.
Jan. 9 Deposited the above cheque into Bank.
Jan. 12 Goods sold for Rs.15,000 and deposited into the bank on the same day.
Jan. 18 Money withdrawn from bank for office use Rs.2,000.
Jan. 23 Money withdrawn from bank for personal use Rs.1,000.
Jan. 31 Bank charges Rs.200.
13. Vinod has the following transactions. Show accounting equation for the same: [4]
(i) Commenced business with cash Rs.80,000.
(ii) Paid rent in advance Rs.1,000.
(iii) Purchased goods for cash Rs.30,000 and credit Rs.20,000.
(iv) Sold goods costing Rs.20,000 for Rs.30,000.
(v) Paid Salary Rs.800 and Salary outstanding Rs.200.
14. Prepare a Bank Reconciliation Statement of Mr. Divij Jain on 31 May 2017 from
the following: [6]
(i) Dr. Balance as per Pass Book Rs.50,000.
(ii) Cheque issued to Mr. Himesh Rohatgi for Rs.2,000 not entered in Cash
Book.
(iii) Mr. Dhanraj (debtor) deposited an amount of Rs.1,000 directly into the
bank account of Mr. Divij Jain.
(iv) Cheque received from Mr. Dhruv Guleria for Rs.6,000 entered in cash book
but not sent to bank.
(v) There was a credit in the pass book for Rs.600 and another credit of Rs.200
for interest.
(vi) Bank charges Rs.500 entered twice in the cash book.
15. Vinod Ltd., purchased a Plant on 1st April, 2005 for Rs.15,000. It purchased
another plant on 1st October, 2005 costing Rs.20,000 and on 1st July, 2006 costing
Rs.30,000. On 1st January, 2007 the Plant purchased on 1st April, 2005 became
useless and was sold for Rs.2,000. Show Plant Account charging 10% p.a.
depreciation by fixed instalment method for four years. The plant purchased on
1st October, 2005 was sold for Rs.8,000 on 1st January, 2008. Accounts of the
company are closed on 31st December each year.
OR
On January 01 2011, Vinod Transport Co. purchased five trucks for Rs. 20,000
each. Depreciation has been provided at the rate of 10% p.a. using straight line
method and accumulated in provision for depreciation account. On January 01,
2012, one truck was sold for Rs. 15,000. On July 01, 2013, another truck
(purchased for Rs. 20,000 on Jan 01, 2011) was sold for Rs. 18,000. A new truck
costing Rs. 30,000 was purchased on October 01, 2013. You are required to
prepare trucks account, Provision for depreciation account and Truck disposal
account for the years ended on December 2011, 2012 and 2013 assuming that the
firm closes its accounts in December every year. [8]

Part – B (Financial Accounting – II)

16. How would you define ‘Provision for Doubtful Debts’? [1]
17. ‘Manual Accounting is not that effective, computerized accounting system is
better’. How would you express this statement? [1]
18. (a) Identify any two values disclosed by Not-for Profit Organisations in India.
(b) Find out the amount to be shown in the Liabilities Side of Balance Sheet.
Tournament Fund.................................Rs.6,00,000
Tournament Expenses………………. Rs.1,80,000
Receipts from Tournament…………. Rs.2,40,000. [3]
19. Vinod Bros. prepare accounts by using Single Entry System. They have provided
the following information at the end of the year. You are required to calculate the
profit for Vinod Bros.
Capital at the end of the year...................................Rs.10,00,000
Capital in the beginning of the year……………... Rs.15,00,000
Drawings made during the period ……………….Rs.7,50,000
Additional capital introduced……………………. Rs.1,00,000 [3]
20. Vinod maintains his account on Single Entry System. Calculate his profit on 31 st
March, 2013 from the following information: [6]
Particulars 1 April 2012 31 March 2013
Cash in hand 6,000 2,000
Bank Balance 18,000 14,000
Furniture 8,000 8,000
Stock 4,000 12,000
Creditors 16,000 12,000
Debtors 12,000 16,000
During the year his drawings were Rs.4,000 and additional capital invested
Rs.8,000.
21. Following is the extract from a Trial Balance: [6]
Particulars Amount (Dr.) Amount (Cr.)
Debtors 21,000 --
Bad Debts 500 --
Adjustments:
(i) Write off Rs.1,000 as further bad debts.
(ii) Create a provision for doubtful debts at 5% on Sundry Debtors.
Show the treatment of above items in final accounts.
22. Explain Readymade and Customized software with their advantages &
limitations. [6]
23. Given below is the Receipts and payments Account of Vinod Sports Club for the
year ended 31.12.2008. [6]
Receipts Amount Payments Amount
Balance of Cash 400 Salaries 10,000
Balance of Bank 3,600 Billiard Table 8,000
Subscriptions 11,000 Office Expenses 3,400
Life Membership Fee 8,000 Stationery 2,700
Tournament Fund 15,000 Tournament Expenses 16,000
Locker Rent 2,000 Furniture purchased 5,000
Sale of old sports 3,000 Sports equipment purchased 6,000
material (costing 5,000) Fixed Deposit on 1.1.2008 @ 12% p.a. 5,900
Sale of old newspapers 2,000 Balance of Cash 200
Legacy 10,000 Balance of Bank 2,800
Entrance Fee 5,000
60,000 60,000
Additional information:
(i) On 1.1.2008 subscriptions outstanding were Rs.800 and on 31 December 2008
Rs.900.
(ii) On 1.1.2008 the club had Building Rs.50,000; Furniture Rs.20,000 and Sports
Equipment Rs.14,000. Charge depreciation @10% on these items (including
purchases).
Prepare Income and Expenditure Account. [6]
24. Vinod Bros. providing you following information on 31st March 2015. Show the
treatment of following items in related accounts without doing calculation of
profit or loss: [8]
Particulars Amount Amount
Debtors 51,000 --
Bad debts 1,500 --
Provision for doubtful debts -- 800
Prepaid salaries 300 --
Outstanding rent -- 400
Commission received -- 6,000

Additional Information:
(i) Further bad debts were Rs.1,000.
(ii) Bad debts recovered Rs.600.
(iii) Make provision for doubtful debts @ 5%.
Commission received includes 1/3 for the next year.
OR
From the following Trial Balance of M/s.Vinod and Sons as on 31st March. 2015,
prepare Trading and Profit & Loss Account and Balance Sheet.
Particulars Amount Particulars Amount
Opening stock 10,000 Capital 5,00,000
Purchases 1,05,000 Sales 2,02,000
Sales return 2,000 Creditors 80,000
Interest on bank loan 300 B/P 20,000
Import duty 700 Outstanding expenses 5,000
Cash in hand 4,000 10% Bank Loan (1 Dec.2014) 15,000
Cash at bank 22,000 Purchase Return 5,000
Manufacturing expenses 6,000
Expenses on purchase 2,000
Expenses on sales 3,000
Salaries & wages 8,000
Land & building 2,64,000
Plant & machinery 1,80,000
Investments 1,50,000
Debtors 70,000

8,27,000 8,27,000
Adjustments:
(i) Stock at the end was Rs.60,000 (cost) and Rs.80,000 market price.
(ii) Bad debts Rs.2,000.
(iii) Make provision for doubtful debts 5% on debtors.
(iv) Depreciate plant & machinery @ 10% p.a.
(v) Manager is entitled for a commission on net profit @ 10% after charging such
commission. [8]

y Board Paper is becoming very difficult for the students. We strongly recommend that students must do each and every illustration
Solution
1. (i) Creditors (ii) Bankers or Financial Institutions
2. Cash Memo is prepared by the seller (when goods are sold in cash), it is a source
document.

3. ‘Goods for Resale’ are known as Merchandise in accounting.

4. (i) Difficult to find correct profit (ii) Balance sheet does not reflect the true picture.

5. Personal, Real and Nominal Accounts:

(i) Rent Paid-------------Nominal A/c

(ii) Rent Received--------Nominal A/c
(iii) Rent Accrued--------Personal A/c
(iv) Machinery--------------Real A/c
(v) Capital-------------------Personal A/c
(vi) Purchase----------------Nominal A/c

6. Rectifying Entries
(i) Vikas Dr. 4,800 and Vinod Cr.4,800
(ii) Purchase Dr.2,500 and Suspense Cr.2,500.
(iii) Sales Return Dr.8,100 and Suspense Cr.8,100.

7. The IFRS Foundation is an independent, not-for-profit private sector organisation working

in the public interest. Its principal objectives are:
(1) To develop a single set of high quality, understandable, enforceable and globally
accepted
International Financial Reporting Standards (IFRS) through its standard-setting body,
the IASB;
(2) To promote the use and rigorous application of those standards;

Values: (i) Transparency (ii) Trust and Honesty

8. Prudence Principle: This principle is nothing but a formal expression of the maxim
“Anticipate no profits and provide for all possible losses.” In other words, it considers all
possible losses but ignores all possible profits.
Historical Cost Principle: According to this concept all fixed assets are recorded in the books at cost
i.e. the price paid to acquire them. Any subsequent increase or decrease in their value will not be
shown in the records except the depreciation of these assets. In subsequent years, therefore fixed
assets are shown at cost less depreciation provided on them up to date. Continuous charging of
depreciation on the asset will ultimately eliminate the asset from the books.

Accrual Assumption: Under this assumption of accounting, all transactions are recorded in

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the books of accounts (Cash and Non-Cash). Entries are made on the Accrual basis, it means
cash and Non-cash both transactions are recorded in the books of accounts when it is
entered into and not when the settlement takes place.

9. Differences between Reserve and Provision:

Reserve Provision
1. Reserve is an appropriation of profit. 1. A provision is a charge on profit.
2. Main purpose of creating a reserve is to 2. Main purpose of provision is to meet the
strengthen the financial position and to meet known liability.
the unforeseen losses or liabilities.

10. Journal Entries.

Date Particulars L.F. Debit Credit

Bank A/c Dr. 10,000
Vinod’s A/c Dr. 15,000
To Sales A/c 25,000
(Being goods sold to Vinod and
40% amount received by cheque)

Cheques in Hand A/c Dr. 5,000

To Mohan’s A/c 5,000
(Being cheque received from
Mohan for Rs.5,000 not deposited)

Drawings A/c Dr. 3,500

To Purchase A/c 3,500
(Being goods taken for personal use
costing Rs.3,500; sales price 4,000)

Cash A/c Dr. 1,00,000

To Capital A/c 1,00,000
(Being sold personal car for
Rs.1,00,000 and brought that money
into business)

11. Mohan’s Journal

Date Particulars L. Debit Credit
F.
Bills Receivable A/c Dr 10,000 10,000
To Vinod
(Being acceptance received)
Bank A/c Dr. 9,900
Discount A/c Dr 100
To Bills Receivable A/c 10,000
(Being bill discounted)

Vinod Dr. 10,020

To Bank 10,020
(Being bill dishonoured and noting charges paid by
bank)

12. Cash Book

Date Particulars L.F Cash Bank Date Particulars L.F Cash Bank
Jan 1 To Balance b/d 2,300 Jan. 1 By balance 12,000
9 To Cheque in hand 4,000 18 By Cash C 2,000
12 To Sales 15,000 23 By drawings 1,000
18 To Bank C 31 By bank charge 200
31 By balance 2,300 3,800

2,300 19,000 2,300 19,000

Feb 1 To Balance b/d 2,300 3,800

13. Accounting Equation

Particulars Assets = Liabilities

Cash + Stock + Prepaid Rent = Creditors + Capital
(i) Commenced Business 80,000 + 0 + 0 = 0 + 80,000
(ii) Paid Rent in advance (1,000) + 0 + 1,000 = 0 + 0

New Equation 79,000 + 0 + 1,000 = 0 + 80,000

(iii) Purchased goods (30,000) + 50,000 + 0 = 20,000 + 0

New Equation 49,000 + 50,000 + 1,000 = 20,000 + 80,000

(iv) Sold goods 30,000 + (20,000) + 0 = 0 + 10,000

New Equation 79,000 + 30,000 + 1,000 = 20,000 + 90,000

(v) Salary paid & outstanding (800) + 0 + 0 = 200 + (1,000)

Final Equation 78,200 + 30,000 + 1,000 = 20,200 + 89,000

14. Bank Reconciliation Statement

Particulars Amount Amount

Rs. Rs.

Balance as per passbook 50,000

Add : Direct deposit by customer 1,000
Add : Credit in pass book 600 + 200 800
Add: Bank charges 500 2,300
47,700
Less: Cheque of Mr. Himesh Rohtagi 2,000
Less: Cheque received not sent to bank 6,000 8,000
Balance as per cash book (Cr.) 39,700

15. Machinery Account

Date Particulars Amount Date Particulars Amount

2005 To Bank 15,000 2005 By Depreciation A/c 1,625
April 1 To Bank 20,000 Dec.31 By Balance c/d 33,375
Oct 1 35,000 35,000

2006 To Balance b/d 33,375 2006 By Depreciation A/c

Jan.1 To Bank A/c 30,000 Dec 31 By Balance c/d 5,000
July 1 58,375
63,375 63,375
2007 To Balance b/d 2007 By Bank
Jan. 1 58,375 Jan 1 By P/L A/c 2,000
By Depreciation A/c 10,375
Dec 31 By Balance c/d 5,000
41,000
58,375 58,375
2008 To Balance b/d 41,000 2008 By Bank 8,000
Jan 1 Jan 1 By P/L A/c 7,500
By Depreciation A/c 3,000
Dec 31 By Balance c/d 22,500
41,000 41,000
2009
Jan 1 To Balance b/d 22,500

OR

Truck Account
Date Particulars Amount Date Particulars Amount
2011 2011
Jan 1 To Bank 1,00,000 Dec.31
By Balance c/d 1,00,000
1,00,000 1,00,000
2012 2012
Jan. 1 To Balance b/d 1,00,000 Jan. 1 By Asset Disposal 20,000
Dec 31 By Balance c/d 80,000
1,00,000 1,00,000
2013 2013
Jan. 1 To Balance b/d 80,000 July 1 By Asset Disposal 20,000
Oct. 1 To Bank A/c 30,000 Dec. 31 By Balance c/d 90,000

Truck Disposal Account

Date Particulars Amount Date Particulars Amount

2012 Truck A/c 20,000 2012 Prov. for Dep. 2,000
Bank A/c 15,000
P/L A/c 3,000
20,000 20,000
2013 Truck A/c 20,000 2013 Prov. for Dep. 5,000
P/L A/c 3,000 Bank A/c 18,000
23,000 23,000

Provision for Depreciation Account

Date Particulars Amount Date Particulars Amount

2011 2011
Dec 31 To Balance c/d 10,000 Dec 31
By Depreciation A/c 10,000
10,000 10,000
2012 2012
Jan. 1 To Truck Disposal 2,000 Jan. 1 By Balance c/d 10,000
Dec 31 To Balance b/d 16,000 Dec 31 By Depreciation A/c 8,000

18,000 18,000
2013 To Truck Disposal 5,000 2013 By Balance c/d 16,000
Jan. 1 To Balance b/d 18,750 Jan. 1 By Depreciation A/c 7,750
Dec 31 Dec 31

16. Provision for doubtful debts is always calculated as a percentage of debtors. This provision is
made against debts of the amount that are doubtful of recovery.
17. Computerized accounting system is better than manual accounting system because Computers are
able to perform all accounting tasks at high speed without committing errors.

18. (a) Values: (i) Social Work (ii) Promotion of Art, Science, Culture, Traditions and good
values without any personal benefit.
(b) Balance of Tournament fund to be shown in the liabilities side Rs.6,60,000
6,00,000 + 2,40,000 – 1,80,000 = 6,60,000
19. Calculation of Profit = Profit = 10,00,000 + 7,50,000 - 15,00,000 – 1,00,000 = 1,50,000

20. Statement of Affairs (opening)

Liabilities Amount Assets Amount

Creditors 16,000 Cash in hand 6,000
Capital (Bal.fig) 32,000 Bank Balance 18,000
Furniture 8,000
Stock 4,000
Debtors 12,000
48,000 48,000

Statement of Affairs (closing)

Liabilities Amount Assets Amount
Creditors 12,000 Cash in hand 2,000
Capital (Bal.fig) 40,000 Bank Balance 14,000
Furniture 8,000
Stock 12,000
Debtors 16,000
52,000 52,000
Calculation of profit:
Capital at the end + Drawings – Additional capital – opening capital
20,000 + 2,000 – 4,000 – 16,000 = 2,000

21. Profit & Loss Account

Particulars Amount Particulars Amount
Bad debts provision 2,500

Balance Sheet
Liabilities Amount Assets Amount
Sundry Debtors 21,000
Less : Bad debts 1,000
Less : Provision 1,000 19,000
22. Readymade Software: These software’s are ready to use, easy to handle or easy to
operate. These software’s save time and cost. The best example for accounting software is
'Tally'
Advantages of Readymade Software’s
(i) Suitable for small business firms.
(ii) Easily available.
(iii) Affordable (Less expensive)
(iv) User friendly (No special training required)

Limitations of Readymade Software’s

(i) Knowledge of computer is required (as well as knowledge of accounting is also
required).
(ii) Costly and installation problems.
(iii) Not safe.
Customized Software: Readymade software’s are modified as per the requirement. It is
known as customized Software’s. The cost of customised software is higher than the
readymade software cost and this cost is paid by the user.
Advantages of Customised Software’s
(i) Suitable for medium and large business houses.
(ii) All transactions are recorded in a systematic manner.
(iii) Software is customised according to the requirement.
(iv) Reliable.

Limitations of Customised Software’s

(i) Special training is required to handle these types of software’s.
(ii) Costly.
(iii) Outdated software’s may cause problems.

23. Income and Expenditure Account

Expenditure Amount Income Amount

To Salaries 10,000 By Subscriptions 11,000 + 900 – 800 11,100
To Office Expenses 3,400 By Locker Rent 2,000
To Stationery 2,700 By Sale of old newspapers 2,000
To Loss on sale of sports material 2,000 By Entrance Fee 5,000
To Depreciation on Building 5,000 By Accrued interest 708
To Depreciation on Furniture 2,500 By Deficit 7,792
To Depreciation on Sports Equipment 2,000
To Tournament Expenses 1,000
28,600 28,600

24. Profit and Loss Account (Extract)

Particulars Amount Particulars Amount

Bad Debts 1,500 Bad debts 600
Add : Further bad debts 1,000 2,500 recovered
Provision for bad debts: Commission 6,000 4,000
Debtors 51,000 Less : 1/3 2,000
Less : 1,000 (new bad
debts) 50,000

Now; 50,000 x 5/100 = 2,500

Less : Old provision 800 1,700

Balance Sheet (Extract)

Liabilities Amount Assets Amount

Commission (advance) 2,000 Debtors 51,000
Outstanding Rent 400 Less : Bad debts 1,000
Less : Provision 2,500 47,500
Cash (bad debts 600
recovered) 300
Prepaid Salaries

OR

Gross Profit Rs.1,41,300; Net Profit Rs.1,06,400 before manager commission and Rs.96,727
after manager’s commission; Balance Sheet Rs.7,26,600.