AFM Question Bank- Unit 2

Book Keeping

3 marks

1. What is meant by Book keeping?

2. What is ledger?
3. Give the format of ledger account.
4. What do you mean by posting?
5. What is debit balance?
6. What is trial balance?
7. Give the format of trial balance.
8. What are subsidiary books?
9. List the different types of subsidiary books.
10. What is purchase book?
11. What is a sales book?
12. What is a purchase return book
13. What is sales return book?
14. What is cash book?
15. What is journal proper? What entries are in it?
16. What is a contra entry?

7 marks

1. State the objectives of book keeping.

2. What is trial balance? List out the various assets and liabilities recorded in trial balance.
3. Define sales book & purchase book? Give a format purchase book & sales book with
imaginary transactions.
4. What is cash book? Mention the different types of cash book with format.
5. Prepare the personal account of Mr. X from the following transactions:

1st Jan, 2020: Sold goods to Mr. X worth Rs. 90,000

2nd Jan, 2020: Purchased goods from Mr. X Rs. 30,000
5th Jan, 2020: Received cash from Mr. X Rs. 20,000
18th Jan, 2020: Paid cash to Mr. X Rs. 50,000

6. Prepare a simple cash book from the following transactions in the books of ABC traders

1st Jan, 2020: Cash in hand Rs. 80,000

 2nd Jan, 2020: Cash received from Mr. X Rs. 22,000
5th Jan, 2020: insurance paid Rs. 16,000
10th Jan, 2020: purchased furniture for cash Rs. 44,000
15th Jan, 2020: sold goods for cash Rs. 20,000
18th Jan, 2020: purchased goods for cash Rs. 20,000
20th Jan, 2020: purchased stationery Rs. 5,500
22nd Jan, 2020: paid salary Rs. 12,500
25th Jan, 2020: paid monthly rent Rs. 30,500

10 marks
1. What are the various advantage and disadvantages of book keeping?

2. Prepare a trial balance from the following ledger balances.

Capital 60,000
Loan taken 20,000
Machinery account 27,000
Investment 20,000
Sales account 70,000
Purchases account 62,000
Wages 5,000
Cash at bank account 36,000

3. Enter the following transactions in a two column cash book and also prepare bank
account in the ledger.

Jan. 1 commenced business with cash Rs. 10,000

Jan 6 received a cheque for Rs. 5,000 for goods sold
Jan. 7 issued a cheque for Rs. 500 for furniture purchases
Jan.8 purchased goods for Rs. 3,000 and paid by cheque
Jan.10 paid into bank of India Rs. 5,000 from Mr. Rajesh
Jan.12 received a cheque for Rs. 490 in settlement of Rs. 500 on account from Mahesh
 Jan.14 paid wages in cash Rs. 200
Jan.18 drew a cheque for personal use Rs. 400
Jan. 25 drew for office use Rs. 250
Jan.27 paid electricity charges in cash Rs. 15
Jan.28 paid salaries by cheque Rs. 500

4. Enter the following transactions in a three column cash

book.

Jan. 1 commenced business with cash Rs. 8,000

Jan. 2 paid into bank Rs. 7,250
Jan.10 bought goods for Rs. 1,925 and paid by cheque
Jan.10 bought furniture for cash Rs. 340
Jan.15 sold goods for cash Rs. 1,300 and deposited the same into the bank
Jan.16 bought goods for Rs. 2,425 and paid by cheque
Jan.20 bought stationary of Rs. 92.50
Jan. 22 received cash from Mohit Rs. 340 allowing him discount of Rs.10
Jan.24 paid Praveen dues by a cheque Rs.120 receiving a discount of Rs.5
Jan.25 paid Chandra by cheque Rs.200
Jan.26 sold goods for cash Rs.292.50 and remitted the same into the bank
Jan.30 drew cheque for salary Rs. 1,182.50
Jan.31 drew cheque for personal use Rs.50