Origin of Transactions Sources Documents and Preparation of Voucher — Account STD 11 Commerce — Question

What is retirement of a bill of exchange?

Distinguish between Bills of Exchange and Promissory Note on the basis of:

1. Drawer.
2. Acceptance.
3. Payee.
4. Number of parties.

The cash book shows a bank balance of ₹ 7,800 . On comparing the cash book with the passbook the following discrepancies were noted:
i. Cheque deposited in bank but not credited ₹ 3,000
ii. Cheque issued but not yet present for payment ₹ 1,500
iii. An insurance premium paid by the bank ₹ 2,000
iv. Bank interest credit by the bank ₹ 400
v. Bank charges ₹ 100
vi. Directly deposited by a customer ₹ 4,000

Tiwari and Sons find that the bank balance shown by their Cash Book on December 31, 2016 is ₹ 40,500 (Credit) but the Pass Book shows a difference due to the following reasons:

1. A cheque for ₹ 5,000 drawn in favour of Manohar has not yet been presented for payment.
2. A post-dated cheque for ₹ 900 has been debited in the bank column of the Cash Book but it could not have been presented in any case.
3. Cheques totalling ₹ 10,200 deposited with the bank have not yet been collected and an another cheque for ₹ 4,000 deposited in the account has been dishonoured.
4. A Bill Payable for ₹ 10,000 was retired by the Bank under a rebate of ₹ 150 but the full amount of the bill was credited in the bank column of the cash book.

Prepare a Bank Reconciliation Statement and find out the balance as per Pass Book.

Put the following on the proper side of Cash account, Debtor's account and Creditor's account:

1. Sold goods for cash ₹ 60,000.
2. Sold goods to Hari on credit ₹ 20,000.
3. Purchased goods from Krishan on credit ₹ 36,000.
4. Purchased goods from Krishan for cash ₹ 10,000.
5. Cash received from Hari ₹ 15,000.
6. Cash paid to Krishan ₹ 28,000.

“Capital is a liability for the business." Explain this statement with the principle applied.

From the following particulars prepare a bank reconciliation statement of Govil as on 31st December, 2014.
Balance as per Pass Book on 31st December 2014 is ₹ 8,500. Cheques for ₹ 5,100 were issued during the month of December but of these cheques for ₹ 1,200 were presented in the month of January 2015 and one cheque for ₹ 200 was not presented for payment. Cheques and cash amounting to ₹ 4,800 were deposited in bank during December but credit was given for ₹ 3,800 only. A customer has deposited ₹ 800 into bank directly. The bank credited the merchant for ₹ 200 as interest and has debited him for ₹ 30 as bank charges for which there are no corresponding entries in Cash Book.

A Company purchased a second-hand machine on 1st April, 2016, for ₹ 30,000 and immediately spent ₹ 4,000 on its repair and ₹ 1,000 on its installation. On Oct. 1, 2018, the machine was sold for ₹ 25,000. Prepare Machine Account after charging depreciation @ 10% p.a. by diminishing balance method, assuming that the books are closed on 31st March every year. IGST was charged @12% on purchase and sale of machine.

Rectify the following errors:

1. The Sales Book has been totalled ₹ 1,000 short.
2. Goods worth ₹ 1,500 returned by Green and Co. have not been recorded anywhere.
3. Goods purchased worth ₹ 2,500 have been posted to the debit of the supplier, Gupta and Co.
4. Furniture purchased from Gulab and Co. worth ₹ 10,000 has been entered in Purchases Day Book.
5. Cash received from A ₹ 2,500 has not been posted in his account.

Define a Trial Balance. Why is it prepared?