Series OSS                                                                                                                           Code No. 201

                                                                             FINANCIAL ACCOUNTING
                                                                                  (Theory) Paper I

Time allowed : 3 hours                                                                                             Maximum Marks : 60

 

 

1. What is Profit & Loss Account ? Why is it prepared ?

 

2. State any four characteristics of depreciation.

 

3. Explain capital expenditures with examples.

 

4. What is meant by Account Current ?

 

5. State any two advantages of the system of ‘Sectional balancing ledger’.    2

 

6. Enumerate any four advantages of preparing ‘Cash Budget’.

 

7. What are the Fictitious Assets ? How do they differ from Fixed Assets ? Give names of two such Assets.

 

8. Hema Ltd. purchased a machine for Rs. 9,200 on 1st April, 2006 and paid Rs. 800 for its overhauling charges. The machine was sold for Rs. 5,000 on 31st March, 2009. Prepare the  Machine  Account  for 3 years providing depreciation    @ 10% per annum by diminishing balance method. Accounts are closed on 31st March every year.

 

11. What is meant by self balancing system ? Explain the steps taken to keep the Accounts by self balancing system.    3

 

 

12. From the following information  find  out  the  Cash Balance as  on 31st December, 2009 through preparing Cash Budget :

. . . Cash Balance as on 1st Day Cash Sales Expenses Credit Sales Credit Purchases

November 2009          Rs./-       .        4,000      14,000      10,000      24,000      30,000

December 2009          Rs./-        .        3,000      13,000        8,000      30,000      32,000

All credit sales/purchases are recovered/paid in the following month only.

 

13. K and Sons close their financial books on 31St December. Stock taking  takes about two weeks. In 2009, the value of closing stock thus arrived at was Rs. 25,000. During the two weeks in which stock taking took place, purchases made were Rs. 1,000 and sales totalled Rs. 4,000. The firm makes a Gross Profit of 30% on sales. Ascertain the value of
closing stock on 31st December, 2009.    4

 

14. Calculate what amount will be debited as Stationery to Income & Expenditure Account for the year ending on 31st December, 2009 :

. . . Stock of Stationery  Creditors for Stationery  Advances paid for Stationery

On 1-1-2009         Rs./-     .        300        200         20

On 31-12-2009          Rs./-       .          50         130          30

Amount paid for Stationery during the year ending on 31st December, 2009, Rs. 1,080.                          4

 

15. From the following transactions prepare an Account Current to be sent by Ram to Shyam on 30th June 2009 :

On 1st January, 2009 Shyam owes Ram Rs. 400.

On 1st February, 2009 Shyam remits cash Rs. 200.

On 15th March,    2009 Ram sold goods to Shyam (due on 1st May, 2009) worth Rs. 600.

On 31st March, 2009 Shyam sends Bill in Payment Rs. 400 (due on 1st October, 2009 including days of grace)

On 30th May, 2009 Shyam purchased goods worth Rs. 800 (due on 31st August, 2009)

Interest is to be calculated at 5% per annum.    5

 

16. From the following particulars extracted from the books of M/s Rahul & Co., who keep a bought ledger and a general ledger on the self balancing system, prepare Purchase Ledger Adjustment Account.
Creditors Balance (1-1-2009) Rs. 1,09,800.
Transactions during the month of January, 2009 :                                  5

(i)     Credit purchases Rs. 41,000

(ii)     Returns outwards Rs. 1,200

(iii)    Cash paid to creditors Rs. 61,400

(iv)    Discount allowed by creditors Rs. 1,340

(v)     Bills Payable accepted Rs. 24,000

 

17. From the following balances calculate capital of M/s Dhyey & Sons as on 318t December, 2009 by preparing Balance Sheet :    6

. Stock Debtors Creditors Salary Outstanding Prepaid rent Loans payable

Rs./-       25,000    20,000    10,000         500         600    30,000

. Bank Drawings Building Commission received in Advance Net profit

Rs./-       20,000      8,000    50,000      1,000    14,000

 

 

18. Prepare  Income  and  Expenditure  Account  for  the   year   ended 31St December, 2009 from the Receipt and Payment Account given below :    6

Receipts	Rs./-	Payments	Rs./-
To Donations To Subscriptions (includes By Salaries Rs.1,250 for 2008) To Tournament receipts To Bank interest To Dinner receipts	12,000   7,250 25,000   2,300   8,450 .            55,000	By Rent (includes Rs. 500 for2008) By Salaries By Furniture By Tournament Expenses By Telephone (includes Rs.400 for 2008) By Bank Balance By Cash Balance	9,000 11,500   2,600 20,000   1,900   6,500   3,500 55,000

                                                                    OR
Distinguish between :    3+3=6
(i) Trial Balance and Balance Sheet
(ii) Income & Expenditure Account and Receipt & Payment Account.