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1. Explain the need for accounting information to the following uses categories :
(a) Potential investors
(b) Long term creditors (3)
2. Differentiate between grouping and marshalling of assets and liabilities. (3)
3. Explain the meaning of :
(a) Open cheque
(b) Stale cheque (3)
4. Differentiate between general reserve and specific reserve with appropriate examples. (3)
5. Describe three items with which voyage account is credited. (3)
6. Discuss about the concept of deferred revenue expenditure with two examples. (3)
7. Briefly discuss about the concept of cost book mining company. (3)
8. Define :
(a) Sunk cost
(b) Conversion cost (3)
9. What do you mean by double account system? (3)
10. What is book keeping? Explain its scope with regard to accounting process. (5)
11. Briefly discuss about the limitations of financial accounting. (5)
12. State with reason whether each of the following statement is True or False :
(a) Financial statement is the term used to denote balance sheet.
(b) Outstanding salary is shown as an asset in balance sheet.
(c) Discount received is shown on the credit side of trading account.
(d) Goodwill is an example for tangible asset.
(e) In the order of liquidity capital is presented as the first liability
item. (5)
13. Pass journal entries to close the following accounts :
(a) Purchase return
(b) Freight
(c) Commission received
(d) Wages
(e) Interest received (5)
14. Explain the need for depreciation. (5)
15. Differentiate between bill of exchange and promisory note. (5)
16. On 1st April 2020, X Ltd purchased a machine worth 40,000 and spent 10,000 for its installation. The life of the machine is 4 years with expected scrap value of 2,000. On 1st October 2021, the machine was sold for 28,000. Depreciation was charged under straight line method. Prepare machinery account assuming that business follows financial year for accounting. (5)
17. How would you treat the following items with regard to voyage in progress.
(a) Income received for incomplete portion of the journey.
(b) Expense on incomplete portion of the journey. (5)
18. Write notes on :
(a) Bunker cost
(b) Stevedoring charges. Explain their accounting treatment in voyage
account. (5)
19. Discuss about the advantages of self balancing ledger. (5)
20. Compute the income from subscription for the year 2022 from the extracts relating to a club.
1.1.2022 31.12.2022
Outstanding subscription 9,500 7,000
Advance subscription 22,800 5,200
Subscription received during the year 1,48,900. (5)
21. Prepare the format for manufacturing account. (5)
22. Differentiate between process costing and job costing. (5)
23. List the major components of general balance sheet under double entry system. (5)
24. From the following extract, compute prime cost. Stock on 1st Jan 2022
Raw materials 22,000
Finished goods (1600 tonnes) 17,600 Stock on 31st Dec. 2022
Raw materials : 24,000
Finished goods (3200 tonnes) : 35,200
Purchase of raw materials : 1,32,000
Direct wages : 1,10,000
Carriage inwards : 1,500
Rent : 44,000 (5)
25. Pass rectification entries :
(a) A cheque for 2,000 given to Mr. X was wrongly debited to
Mr. “Y” ’s a/c.
(b) Sale of furniture for 5,000 has been credited to sales a/c
(c) Life insurance premium paid 500 has been debited to insurance
account.
(d) Payment of salary by cheque 8,000 has been posted to the credit
side of salary a/c. (8)
26. How will you treat the following adjustment items in the final accounts?
(a) Reserve for discount on creditors.
(b) Manager’s commission on profit.
(c) Goods in transit
(d) Interest on drawings. (8)
27. Give journal entries as would appear in Mr. X’s books. On 5th January 2022, Mr. X drawn three bills on Mr. Y for 1,000, 800 and 500 payable at 4, 3 and 2 months respectively.
10th Jan : He endorced the first bill in favour of Mr. Z.
15th Jan : He discounted the second bill with his bank for 750
20th Jan : He was paid the proceeds of the third bill at a rebate of 5% on the total amount of the bill. On due date first and second bills were dishonoured, but the third bill was paid. (8)
28. What are the major differences between income and expenditure account and receipt and payment account? (8)
29. From the following information, compute machine hour rate for Machine No. 3
Cost of machine 22,000 Scrap value 600 Repairs for working life 1,500 Standing expenses for 4 week period 1,600 Effective working life 10000 hrs Power 6 units @ 5 paise/unit Operating hours during 4 week Period 120 hrs There are 40 machines in number in the work shop each bearing equal overhead charges. (8)
30. Elaborate about the advantages and disadvantages of double account system. (8)
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