Accounting Principles — Account STD 11 Commerce — Question

“Is Trial Balance merely a proof of Arithmetical accuracy”? Explain the errors which are not disclosed by a Trial Balance.

Pass Journal entries in the books of Puneet, Delhi for the following:

1. Received an order from Karan & Co. for supply of goods of ₹ 50,000.
2. Received an order from AK & Co. for goods of ₹ 1,00,000 along with a cheque for ₹ 25,000 as advance.
3. Paid to staff ₹ 40,000 against outstanding salary of ₹ 60,000.
4. Sold goods to Bharat, Kaithal (Haryana) of ₹ 10,000 plus IGST @ 12% out of which 1/5th were returned being defective.
5. Cheque of ₹ 20,000 issued by Feroz was dishonoured.
6. Received 40 paise in a rupee from Feroz against the above dues.
7. Received a cheque of ₹ 25,000 from Mohan after banking hours.
8. Purchased goods from Barun of Chandigarh of ₹ 10,000 plus IGST @ 12% and sold them to Arun of Shimla (HP) at ₹ 22,400, including IGST @ 12%.
9. Arun returned goods of ₹ 6,720, including IGST which were returned to Barun.
10. ABC & Co. purchased 10 TV sets @ ₹ 20,000 per set and paid IGST @ 12%. It sold all the sets @ ₹ 25,000 per set plus CGST and SGST @ 6% each.
11. Paid insurance of ₹ 12,000 plus CGST and SGST @ 6% each for a period of one year.
12. Sold personal car for ₹ 1,00,000 and invested the amount in the firm.
13. Goods costing ₹ 1,00,000 were destroyed in fire. Insurance company admitted the claim for ₹ 75,000. These goods were purchased within Delhi.
14. Purchased machinery for ₹ 56,000 including IGST of ₹ 6,000 and paid cartage thereon ₹ 5,000 and installation charges ₹ 10,000.
15. Goods costing ₹ 40,000 sold to Mr. X at a profit of 20% on sales less 10% Trade Discount plus CGST and SGST @ 6% each and received a cheque under 2% cash discount.
16. Purchased machinery from New Machinery House for ₹ 50,000 and paid it by means of a bank draft purchased from bank. Paid charges ​₹ 500.

What is an Opening Entry? Give an example.

Give any four points of distinction between Provisions and Reserves.

A Van was purchased on 1st April, 2016 for ₹ 60,000 and ₹ 5,000 was spent on its repair and registration. On 1st October, 2017 another van was purchased for ₹ 70,000. On 1st April, 2018, the first van purchased on 1st April, 2016 was sold for ₹ 45,000 and a new van costing ₹ 1,70,000 was purchased on the same date. Show the Van Account from 2016-17 to 2018-19 on the basis of Straight Line Method, if the rate of Depreciation charged is 10% p.a. Assume that books are closed on 31st March every year.

Prepare a Bank Reconciliation Statement as on 31st March, 2019 from the following:

1. On 31st March, 2019, Cash Book of a firm showed bank balance of ₹ 36,000 (Dr.).
2. Cheques had been issued for ₹ 30,000, out of which cheques of ₹ 24,000 were presented for payment.
3. Cheques of ₹ 8,400 were deposited in the bank on 28th March, 2019 but had not been credited by the bank. Also, a cheque of ₹ 3,000 entered in the Cash Book on 30th March, 2019 was banked on 3rd April.
4. A cheque from Suresh for ₹ 2,400 was deposited in the bank on 26th March, 2019 was dishonoured, advice was received on 2nd April.
5. Pass Book showed bank charges of ₹ 120 debited by the bank.
6. One of the Debtors deposited ₹ 3,000 in the bank account of the firm on 26th March, 2019, but the intimation in this respect was received from the bank on 2nd April.

M/s. P & Q purchased machinery for ₹ 40,000 on 1st October, 2016. Depreciation is provided @ 10% p.a. on the Diminishing Balance. On 31st January, 2019, one-fourth of the machinery was found unsuitable and disposed off for ₹ 5,600. On the same date new machinery at a cost of ₹ 15,000 was purchased. Write up the Machinery account for the years ended 31st March, 2017, 2018 and 2019. Accounts are closed on 31st March each year.

On 1st April, 2010, Plant and Machinery was purchased for ₹ 1,20,000. New machinery was purchased on 1st Oct., 2010, for ₹ 50,000 and on 1st July, 2011, for ₹ 25,000. On 1st January, 2013, a machinery of the original value of ₹ 20,000 which was included in the machinery purchased on 1st April, 2010, was sold for ₹ 6,000. Prepare Plant & Machinery A/c for three years after providing depreciation at 10% p.a. on Straight Line Method. Accounts are closed on 31st March every year.

Prepare bank reconciliation statement of Dinesh on 30th June 2014 with following particulars:

1. Pass Book showed an overdraft of ₹ 15,000 on 30th June 2014.
2. A cheque of ₹ 200 was deposited in bank but not recorded in Cash Book.
3. Cheques of ₹ 17,000 were issued but cheques worth only ₹ 10,000 were presented for payment up to 30th June 2014.
4. Cheques of ₹ 2,000 were received and recorded in Cash Book but not sent to bank.
5. Cheques of ₹ 10,000 were sent to bank for collection; out of these cheques of ₹ 2,000 and of ₹ 1,000 were credited respectively on 8th July and 10th July and the remaining cheques were credited before 30th June 2014.
6. Bank paid ₹ 300 fee of Chamber of Commerce on behalf of Dinesh, which was not recorded in Cash Book.
7. Bank charged interest on overdraft ₹ 800 which was not recorded in Cash Book.
8. ₹ 40 for bank charges were recorded two times in Cash Book and bank expenses of ₹ 35 were not at all recorded in Cash Book.
9. Total of credit side of bank column of Cash Book was undercast by ₹ 1,000 by mistake.

Journalise the following transactions in the Journal of M/s. Gupta Brothers (Prop. Shri R. K. Gupta), Delhi and post them to the Ledger:

2019		₹
March 1	Started business with cash	2,00,000
March 2	Opened bank account with SBI	80,000
March 4	Goods purchased from Raj, Jaipur (Rajasthan)	22,000
March 5	Goods purchased for cash	30,000
March 8	Goods sold to Naman, Delhi	12,000
March 10	Cash paid to Raj	22,000
March 15	Cash received from Naman	11,700
	Discount allowed	300
March 16	Paid wages	200
March 18	Furniture purchased for office use	5,000
March 20	Withdrawn from bank for personal use	4,000
March 22	Issued cheque for rent	3,000
March 23	Goods taken for household purpose. These goods were purchased from Raj	2,000
March 24	Drawn cash from bank for office use	6,000
March 26	Commission received	1,000
March 27	Bank charges	300
March 28	Cheque issued for life insurance premium of Proprietor	3,000
March 29	Paid salary	10,000
March 30	Cash sales	20,000