Bhavnagar University 2007 B.Com BASIC FINANCIAL ACCOUNTING - Question Paper

B.Com. DEGREE EXAMINATION, DECEMBER 2007.
BASIC FINANCIAL ACCOUNTING

Time : 3 hours Maximum : 100 marks
PART A — (5 ? eight = 40 marks)
ans any 5 ques..
All ques. carry equal marks.
1. What are the functions of Accounting?
2. What is avg. due date? discuss its uses.
3. Distinguish ranging from Capital and Revenue Expenditure.
4. Distinguish ranging from Consignment and Joint Venture.
5. What are the drawbacks of Single entry system?
6. Journalise the subsequent transactions :
2005
April 1 Arul commenced business with Rs. 2,00,000
4 Cash deposited into bank Rs. 1,00,000
6 Bought goods for cash Rs. 5,000
8 Sold goods to Kannan for cash Rs. 10,000
10 Mani sold goods Rs. 20,000
12 Mohan purchased goods Rs. 15,000
18 Paid salaries by cheque Rs. 15,000
20 Received commission Rs. 1,000
7. On fifth February 2004, Palani draw a bill on Velu for
Rs. 8,000 payable after three months. Palani discounted the bill with his bank on eighth February 2004 at 6% p.a. On the identical day he remits half of the proceeds of the bill to Velu. On fifth May 2004 Palani remits Rs. 4,000 to enable Velu to meet his acceptance on eighth May, 2004. Velu meets the bill on the due date. Journalise the transactions in the books of both parties.
8. Prakash keeps his books by the Single Entry method. His position on 31st December 2005 was as follows :
Cash in hand Rs. 200, Cash at bank Rs. 3,000, Stock
Rs. 20,000, Debtors Rs. 8,500, Furniture Rs. 1,800, Plant
Rs. 15,000, Creditors Rs. 22,000. During the year Prakash introduced Rs. 5,000, as further capital and withdrew
Rs. 750 p.m.
On 31.12.2006 his position was as follows :
Cash in hand Rs. 300, Cash at bank Rs. 2,000, Debtors
Rs. 14,000, Stock in trade Rs. 19,000, Plant Rs. 27,000, Furniture Rs. 1,500, Creditors Rs. 29,000.
Calculate Profit and Loss made by him for the year ended 31st December, 2006.
PART B — (4 ? 15 = 60 marks)
ans any 4 ques..
All ques. carry equal marks.
9. Discuss the different Accounting concepts.
10. Explain the difference ranging from single entry and double entry system of Accounting.
11. Discuss the different methods of depreciation.
12. From the subsequent Trial Balance prepare final accounts for the year 2002.
Debit Credit
Rs. Rs.
Capital – 50,000
Plant and machinery 80,000 –
Sales – 1,77,000
Debit Credit
Rs. Rs.
Purchases 60,000 –
Returns 1,000 750
Opening stock 30,000 –
Discount 350 800
Bank charges 75 –
Debtors 45,000 –
Creditors – 35,000
Salaries 6,800 –
Wages 10,000 –
Carriage inwards 750 –
Carriage outwards 1,200 –
Bad debts provision – 525
Rent 20,000 –
Advertisement 2,000 –
Cash in hand 900 –
Cash at bank 6,000 –
2,64,075 2,64,075
Adjustments :
(a) Closing stock Rs. 43,000.
(b) Provide depreciation on plant at 15%.
(c) Charge 5% as reserve for bad debts.
(d) Rent prepaid Rs. 1,500.
13. A company purchased three years lease on January 1, 2000 for Rs. 25,000. It decides to give for the replacement of the lease at the end of 3 years by setting up a depreciation fund. It is expected that investment will yield interest at 5%. Table indicates that an annual payment of Re. one at 5% compound interest in 3 years accumulates Rs. 3.1525. Investments are made to the closest rupee. On January 1, 2003, the investment were sold for Rs. 15,250. provide lease account, depreciation fund a/c and depreciation fund investment account.
14. Kumaran of Tripur sends 40 cases of Hosiery goods worth Rs. 20,000 to Gopal of Bombay to be sold on consignment basis on 1.4.2004. Kumaran pays Rs. 500 towards freight charges. The goods are received by Gopal and he accepts a bill drawn on him by Kumaran at three months, for Rs. 10,000 on fifth April 2004. The bill was discounted on the next day by Kumaran at 6% per annum. On fifth July 2004, Gopal sends an account sales to Kumaran showing that sales of the entire stock have been effected totalling Rs. 24,800. His expenses are : Godown rent
Rs. 500 and insurance Rs. 250. Gopal is entitled to a commission of 6% on sale proceeds. Gopal sent a bank draft for the balance due to Kumaran and settled his account.
Pass necessary Journal entries and prepare the ledger account in the books of both parties.
15. The subsequent is the Receipts and Payment Account of the Madras Sports Club for the year ending 31st December, 2005.
Receipts Rs. Payments Rs.
To Balance b/d 600 By Rent 5,200
To Entrance fees 550 By Stationery 3,000
To Subscription – 2004 200 By Wages 5,330
To Subscription – 2005 16,900 By Furniture 3,900
To Lockers rent 2,500 By Interest 1,500
To Sale of old By Balance c/d 3,270
news paper 1,450
22,200 22,200
Locker rent Rs. 120 referred to 2004, Rs. 180 is still owing; Rent Rs. 1,300 pertained to 2004 and Rs. 1,300 is still due. Stationary expenses Rs. 312 related to 2004 still owing
Rs. 364; Subscription unpaid for 2005 Rs. 468; prepare Income and Expenditure Account of the club for the year ending
31st December, 2005.

Earning:   Approval pending.