Fundamentals of Accounting 9

Which financial statement represents the accounting equation, Assets = Liabilities + Owner’s equity?

A purchased a car for Rs.5,00,000, making a down payment of Rs. 1,00,000 and signing a
Rs. 4,00,000 bill payable due in 60 days. As a result of this transaction.

The debts written off as bad, if recovered subsequently are———-

A withdrawal of cash from business by the proprietor should be credited to:

Contra entries are passed only when————

Consignment account is———-

All of the following are functions of Accounting except————

Manufacturing account is prepared to———-

On March 31, 2010 after sale of goods worth Rs. 2,000, he is left with the closing inventory of Rs. 10,000. This is——-

Financial statements only consider———

Economic life of an enterprise is split into the periodic interval as per ________ concept.

Accounting policies refer to specific accounting ________.

Dividends are usually paid as a percentage of ______

Outgoing partner is compensated for parting with firm’s future profits in favour of remaining
partners. The remaining partners contribute to such compensation amount in ______

The balance of the petty cash is ______.

Interest on capital will be paid to the partners if provided for in the agreement but only from________

A proforma invoice is sent by ________

If a venturer draws a bill on his co-venturer and if the drawer discounts the bill with same
sets of books maintained, the discounting charges will be borne by________.

X draws a bill on Y. X endorsed the bill to Z. ________will be the payee of the bill.

A Company wishes to earn a 20% profit margin on selling price. ________is the profit mark
up on cost, which will achieve the required profit margin?

A businessman purchased goods for Rs. 25,00,000 and sold 80% of such goods during the
accounting year ended 31st March, 2010. The market value of the remaining goods was
Rs. 4,00,000. He valued the closing inventory at cost. He violated the concept of——-

M/s ABC Brothers, which was registered in the year 2008, has been following Straight
Line Method (SLM) of depreciation. In the current year it changed its method from
Straight Line to Written Down Value (WDV) Method, since such change would result in
the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to
be declared as a sick industrial unit. The auditor raised objection to this change in the
method of depreciation.
The objection of the auditor is justified because

It is easy to detect——— than to ————–

Original cost = Rs. 1,26,000; Salvage value = Nil; Useful life = 6 years. Depreciation for the
first year under sum of years digits method will be

If sales revenues are Rs. 4,00,000; cost of goods sold is Rs. 3,10,000 and operating expenses
are Rs.60,000, the gross profit is———-

Consider the following for Alpha Co. for the year 2009-10:
Cost of goods available for sale Rs.1,00,000
Total sales Rs. 80,000
Opening inventory of goods Rs. 20,000
Gross profit margin 25%
Closing inventory of goods for the year 2009-10 was

A and B entered into a joint venture and purchased a piece of land for Rs 20,000 and sold
it for Rs 60,000 in 2010. Originally A had contributed Rs 12,000 and B Rs 8,000. The
profit on venture will be

On 1.1.2010 X draws a bill on Y for Rs. 50,000. At maturity, the bill returned dishonoured as Y
became insolvent and 40 paise per rupee is recovered from his estate. The amount recovered is:

Average inventory = Rs 12,000. Closing inventory is Rs. 3,000 more than opening inventory.
The value of closing inventory will be———–

Find the goodwill of the firm using capitalization method from the following information:
Total Capital Employed in the firm Rs. 8,00,000
Reasonable Rate of Return 15%
Profits for the year Rs. 12,00,000

A & B are partners sharing profits and losses in the ratio 5:3. After admission of C, new
profit sharing ratio between A, B and C are 7:5:4. The sacrificing ratio among A:B will be—-

The cash book showed an overdraft of Rs. 1,500, but the pass book made up to the same
date showed that cheques of Rs. 100, Rs. 50 and Rs. 125 respectively had not been presented
for payments; and the cheque of Rs.400 paid into account had not been cleared. The overdraft
balance as per the pass book will be————–

A second hand machinery is purchased for Rs. 10,000, the amount of Rs. 1,500 is spent on its
transportation and Rs. 1,200 is paid for installation. The amount debited to machinery
account will be———–

Consider the following data pertaining to a company for the month of March 2010:
Particulars Rs.
Opening inventory   22,000
Closing inventory     25,000
Purchases less returns 1,10,000
Gross profit margin (on sales) 20%
The sales of the company during the month are

Capital reserve is carried out of ———

The profits of last five years are Rs. 85,000; Rs. 90,000; Rs. 70,000; Rs. 1,00,000 and
Rs. 80,000. Find the value of goodwill, if it is calculated on average profits of last five years
on the basis of 3 years of purchase.

Securities premium account is shown in the balance sheet under———

According to companies Act,1956 balance sheet of a company is prepared as per ———

Omega Ltd., a listed company, acquired assets worth Rs. 7,50,000 from Alpha Ltd. and
issued shares of Rs. 100 each at premium of 25%. The number of shares to be issued by
Omega Ltd. to settle the purchase consideration will be———-

X sent out certain goods to Y of Delhi. 1/10 of the goods were lost in transit. Invoice value of
goods lost Rs. 12,500. Invoice value of goods sent out on consignment will be:

F Ltd. purchased Machinery from G Company for a book value of Rs.4,00,000. The
consideration was paid by issue of 10% debentures of Rs.100 each at a discount of 20%. The
debenture account was credited with———–

P Ltd. issued 5,000, 12% debentures of Rs.100 each at a premium of 10%, which are
redeemable after 10 years at a premium of 20%. The amount of loss on redemption of
debentures to be written off every year is——

X and Y share profits and losses in the ratio of 2 : 1. They take Z as a partner and the new
profit sharing ratio becomes 3 : 2 : 1. Z brings Rs. 4,500 as premium for goodwill. The full
value of goodwill will be———–

The profits of last three years are Rs. 42,000; Rs. 39,000 and Rs. 45,000. Find out the
goodwill of two years purchase.

T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 01, 2008 and
the company pays interest half-yearly on June 30, and December 31 every year. On March 31,
2010, the amount shown as “interest accrued but not due” in the Balance Sheet will be——

A and B enter into a joint venture sharing profit and losses in the ratio 2:1. A purchased
goods costing Rs. 2,00,000. B sold the goods for Rs. 2,50,000. A is entitled to get 1% commission
on purchase and B is entitled to get 5% commission on sales. The profit on venture will be:

Ashok purchased a machine on 01.01.2010 for Rs 1,20,000. Installation expenses were Rs.
10,000. Residual value after 5 years Rs. 5,000. On 01.07.2010, expenses for repairs were
incurred to the extent of Rs 2,000. Depreciation is provided under straight line method.
Annual Depreciation is—————-

X draws a bill on Y for Rs. 30,000. X wants to endorse it to W in settlement of
Rs 35,000 at 2% discount with the help of Y’s acceptance and balance in cash. How much
cash X will pay to Y?

A and B entered into joint venture for equal profits. A purchased 1,000 kg of rice costing Rs.
200 each. Carriage Rs. 2,000, insurance Rs. 3,000. 4/5th of the boxes were sold by B at Rs.
250 per boxes. Remaining inventory were taken over by B at cost. The amount of inventory
taken over will be:

A company sends its cars to dealers on ‘sale or return’ basis. All such transactions are
however treated like actual sales and are passed through the sales day book. Just before the
end of the financial year, two cars which had cost Rs.55,000 each have been sent on ‘sale or
return’ and have been debited to customers at Rs.75,000 each, cost of goods lying with the
customers will be————

Electricity charges paid on 1 October, 2008 for the year to 30 September, 2009 was
Rs. 2,400 and electricity charges paid on 1 October, 2009 for the year to 30 September, 2010
was Rs. 3,200. Electricity charges paid, as shown in the profit and loss account for the year
ended 31 December 2009, would be:

Goods costing Rs 2,00,000 sent out to consignee at Cost + 20%. Invoice value of the goods will be——

R, J and D are the partners sharing profits in the ratio 7:5:4. D died on 30th June 2010 and
profits for the accounting year 2009-2010 were Rs. 24,000. How much share in profits for
the period 1st April 2010 to 30th June 2010 will be credited to D’s Account.

X of Kolkata sends out certain goods at cost + 25%. Invoice value of goods sends out
Rs. 2,00,000. 4/5th of the goods were sold by consignee at Rs.1,76,000. Commission is 2%
upto invoice value and 10% of any surplus above invoice value.
The amount of commission will be:

Debit balance as per Cash Book of ABC Enterprises as on 31.3.2010 is
Rs. 1,500. Cheques deposited but not cleared amounts to Rs. 100 and Cheques issued but
not presented is Rs. 150. The bank allowed interest amounting Rs. 50 and collected dividend
Rs. 50 on behalf of ABC Enterprises. Balance as per pass book should be———

If a purchase return of Rs.1,000 has been wrongly posted to the debit of the sales returns
account, but has been correctly entered in the suppliers’ account, the total of the——-

X and Y are partners sharing profits in the ratio 5:3. They admitted Z for 1/5th share of
profits, for which he paid Rs. 1,20,000 against capital and Rs. 60,000 against goodwill. Find
the capital balances for each partner taking Z’s capital as base capital.

The reserve which is created for particular purpose and which is a charge against revenue is called——

A company forfeited 2,000 shares of Rs. 10 each (which were issued at par) held by Mr. John
for non-payment of allotment money of Rs. 4 per share. The called-up value per share was
Rs.9. On forfeiture, the amount debited to share capital will be __________

X, Y and Z are partners sharing profits in the ratio 2:2:1. On retirement of Y, goodwill was
valued as Rs. 30,000. The contribution of X and Z to compensate Y will be __________