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DEEN DAYAL UPADHYAYA COLLEGE

(University of Delhi)
Write your Roll No_______________
Home Examination 2010-2011
BBS Part-I
Semester- I
Paper No. 104
Time Allotted: 3 hours
Maximum Marks: 75

Paper Title: Financial Accounting

All Questions are compulsory

Q1

(a) Journalise the following transactions and prepare the Machinery A/c to determine the profit/loss on
sale of machinery:
(10 marks)
(i)
Purchased machinery for Rs. 3,000 and incurred Rs. 500 for its installation.
(ii)
Sold the machinery during the year for Rs 4,800; the depreciation to be charged till the date of
sale being Rs. 300.
(iii)
Rs 30 were paid for removal of the machine from the factory.
(iv)
Rs. 43 was incurred as commission to the selling agent.
(b) The following Trial Balance was drawn by a trainee book keeper, scrutinise and redraw the trial
balance rectifying discrepancies, if any and state reasons for the same:
(5 marks)
Trial Balance of M/s Kraft India as at 31st March 2010
Particualrs
Debit (Rs.) Credit (Rs.)
Capital
26,850
Insurance expenses
3,150
Stock as on 1-4-2009
11,175
Purchases
69,300
Sales
1,18,275
Salaries
18,615
Lighting and Heating
930
Plant and Machinery
10,800
Delivery expenses
690
Rates paid
1,170
Rent received
1,815
Accumulated depreciation
1,050
Rent paid
3,345
Delivery Vehicle
4,425
Cash
330
Trade Creditors
14,775
Trade debtors
41,760
Bank Overdraft
2,925
Carriage Outwards
1,500
Outstanding rent
1,500
Total

1,67,190

1,67,190

(a) From the following Trial Balance of Mr. Pankaj, prepare final accounts for the year ended 31 st
March, 2010 after giving effect to adjustments:
Rs.
Rs.
Opening Stock
1,00,000 Capital
1,60,000
Debtors
40,000 Creditors
35,100
Balance at Bank
2,000 Sales
3,02,000
Sundry Assets
2,02,500 Discount
4,000
Bad Debts
1,000 Provision for bad and doubtful debts
6,000
Accrued Income
1,500 Salaries outstanding
2,000
Purchases
1,23,500 Loan
10,000
Depreciation
4,500
Income Tax
10,500
Salaries
4,600
Wages
28,000
Interest on loan for six months
1,000
5,19,100
5,19,100
Q2

Adjustments:
1. Closing stock on 31st March 2010, amounted to Rs. 20,000
2. There was a loss of stock by fire of Rs. 25,000 on 20 th March 2010. A claim of Rs. 10,000 was admitted
by the insurance company.
3. Debtors include Rs. 5,000 due from Khushi and creditors include Rs. 10,000 due to Khushi.
4. Sales include Rs. 6,000 value of goods sent to a customer on approval basis on 25 th March 2010. Profit
equal to 1/5 of cost had been added to determine the sale price. However, the customer has not given his
approval till 31st March 2010.
5. Debtors include bad debts amounting to Rs. 3,000; create reserve for doubtful debts @ 5%.
6. Rs. 1,200 paid as rent was debited to landlords account and included in debtors.
7. Furniture of book value of Rs. 6,000 on 31.3.2009 was sold off at Rs. 4,000 in part exchange for new
furniture costing Rs. 5,000. However, a net invoice of Rs. 1,000 was passed through the purchase
daybook.
8. A dishonoured cheque for Rs. 5,000 has not been recorded. It is expected that only 20% of the amount
will be recovered.
(20 marks)
Q 3 (a) State the traditional classification of ledger accounts and classify the following accounts:
(i) Bank account
(ii) Interest received in advance
(iv) Patents and Copyrights (v) Goodwill

(5 marks)

(iii) Salaries

(b) Show the following items under appropriate headings of a Company Balance Sheet as per Schedule
VI to Companies Act, 1956:
(10 marks)
(i) Calls in arrears
(ii) Provision for Tax
(iii) Capital Reserve
(iv) Preliminary expenses
(v) Sundry Debtors
(vi) Stock in trade
(vii) Discount on Issue of shares
(viii) Securities Premium
(ix) Loose Tools
(x) Interest accrued and due on debentures
Q 3 Write short notes on:
(a) Going Concern Concept
(b) Deferred revenue expenditure

(5 X 5 marks)
(b) Convention of Prudence
(d) Cash vs. Accrual basis

(e) Dual aspect concept