B.

Sc & BCA DEGREE EXAMINATION

Fourth Semester

Allied 4 : Business Accounting

Time: 3 hours Maximum Marks : 75
Section A
1. Outstanding Wages is to be added to
(a) Wages Account (b) Outstanding Expenses (c) Liability account (d)
None of the above
2. Purchase return means goods returned to the supplier due to
(a) Good quality (b) Defective quality (c) Super quality d) None of the
above
3.As per business entity assumption, the business is different from the
. Owners (b)Banker (c)Creditor (d)Government
. 4.Rent outstanding is
( a) liability (b) an Asset (c) an income d) None of the above
5. All the items given in the adjustment will appear at --------------------- in the final
accounts
(a) Three places (b)Two places (c) One place (d) None
of the above
6. Cost of Production is
(a) Material + Labour + Wages ( b) Prime cost + Works cost (c) None of
the above (d) Cost of sales
7. The budget is
(a) a post-mortem analysis (b) an aid to management (c) a substitute of
management (d) None of the above
8. Bad debts is a -------------------------expense
9. Expand LIFO ----------------------------------------
Indicate whether the following statements are true or false
10. Cost refer to an expenditure
 Section B (5 X 5 =25 MARKS)
Answer All the questions
11 (a). Explain the various accounting concepts (or)
11 (b) Explain steps in journalizing

12 (a) Journalise the following transaction in the books of Thiru Krishnan

2017 March 1 Sold goods to Mohan Rs.75,000
2017 March 12 Purchased goods from Renkan Rs.70,000
2017 March 15 Sold goods for cash from Dravid Rs.50,000
2017 March 18 Goods returned from Mohan Rs.8,000
2017 March 25 Renkan retuned the goods Rs.5,000 (or)
12 (b) Record the following transactions in the proper subsidiary books of M/s.Ram &
Co and post them in to ledger.
2017 April 1 Goods sold to Ramesh Rs.1,000
2017 April 5 Sold goods to Kumar Rs.2,200
2017 April 8 Sold goods to Shankar Rs.3,000
2017 April 10 Goods returned by Kumar Rs.600
2017 April 15 Credit note sent to Shankar for Rs.200 being the invoice over
charged

13 (a) Explain the various accounting assumptions (or)

13 (b) The Trial Balance (31.03.2017) shows the following
Dr. Cr.
Bank Loan @ 14% (1.4.2016) --- Rs.10,00,000
Interest paid Rs.60,000
Provide interest outstanding. Pass adjusting entry and show how this item will
appear in the Final accounts
14 (a) Explain the various elements of cost (or)
14 (b) From the following particulars prepare cost sheet. Direct materials Rs.8,000 Direct
wages Rs.6,000 Direct expenses Rs.2,500 Factory Over head Rs.8,000 Opening
Work-in-Progress Rs.400 Closing work-in-progress Rs.500 Administrative
overheads Rs.4000 Opening stock of finished goods Rs.1,000 Closing stock of
finished goods Rs.1500 Sales Rs.30,000.
15 (a).What are the essentials of a budget? (or)
15 (b) . From the following particulars, prepare a production budget of Lingam Sales
Corporation for the year ended 30th June 2017.

Estimated Stock (Units)

Product Sales (Units) July 1, 2016 June 30, 2017

Life Care 1,50,000 14,000 15,000

Life Aid 1,00,000 5,000 4,500

Life Desire 70,000 8,000 8,000

Section C (5 X 8 = 40 marks)
Answer All the questions
16 (a) Explain the significance of debit and credit balances of various types of
Accounts (or)
16 (b) Mr.Senthi Kumar books shows the following balances. Prepare his Trading and
Profit & Loss account for the year ended 31st March 2017 and Balance sheet as on that
date.
Particulars Debit (Rs.) Credit (Rs.)
Opening Stock 1,50,000
Purchases 1,30,000
Sales 3,00,000
Carriage Inwards 2,000
Salaries 50,000
Printing & Stationary 8,000
Drawings 17,000
Sundry Creditors 20,000
Sundry Debtors 1,80,000
Furniture 10,000
Capital 2,50,000
Postage & Telegram 7,500
Interest paid 4,000
Machinery 41,500
Loan account 25,000
Bills payable 5,000
6,00,000 6,00,000

Adjustments:
1.Closing stock Rs.1,20,000
2.Provide 5% for bad & doubtful debts on debtors
3.Depreciate machinery & furniture by 5%
4.Prepaid printing charges Rs.2,000 (or)

17(a) The stock of a material as on 1st April 2017 was 200 units at Rs.5 each. The
following purchases and issues were made subsequently. Prepare Stores Ledger
Account showing how the value of issues would be recorded under LIFO method.
2017 April 5 Purchases 100 units @ Rs.5.50 each
10 Purchases 150 units @ Rs.5.40 each
20 Purchases 180 units @ Rs.5.50 each
 2 Issues 150 units
7 Issues 100 units
12 Issues 100 units
28 Issues 200 units (or)
17 (b) Compile three column cash book of Mr.K.Sundarapandian from the following
transaction
2017 August 1, 2017 Sundar started Business with cash Rs.2,00,000
August 2 Deposited into bank Rs.50,000
August 4 Cash purchases Rs.5,000
August 5 Purchases by cheque Rs.6,000
August 6 Goods sold to Nathan on credit Rs.5,000

August 8 Received cheque from Mano Rs.490 Discount allowed Rs.10

August 10 Paid carriage Rs.1,000
August 12 Withrew from Bank for office use Rs.10,000
August 15 Paid to Sundari Rs.4,960, Discount allowed by her Rs.40
August 20 Received a cheque for Rs.4,950 from Nathan in full settlement of his
account, which deposited into bank. (or)
18 (a)Prepare Trading Profit & Loss Account and Balance sheet as on 31.03.2017 from
the trial balance of Mr.Rajan
Particulars Debit (Rs.) Credit (Rs.)
Capital 1,50,000
Bank Overdraft 25,200
Sales 9,03,000
Furniture 30,600
Business Premises 1,20,000
Creditors 79,800
Opening stock 1,32,000
Debtors 1,08,000
Rent 6,000
Purchases 6,60,000
Discount 2,400
Insurance 16,000
Wages 24000
Salaries 54,000
Advertisements 13,200
Carriage on Purchases 10,800
Provision for Bad and Doubtful debts 7,000
Bad debts 800
Income tax 4,000
11,73,4000 11,73,4000

Adjustments
1.ClosingStock on 31.03.2017 was Rs.1,20,000
2.Make a provision of 5% on Sundry debtors for bad and doubtful debts.
3.Rent received in advance Rs.2,000
4.Provide 10% depreciation on Furniture and Business premises. (or)

18(b) Prepare a statement of cost and profit from the following data
Opening stock of Raw Materials Rs.1,00,000 Purchase of Raw materials Rs.4,00,000
Materials returned to supplier Rs.20,000 Closing stock of materials Rs.80,000
Direct wages Rs.20,000 Works on cost 25% on wages; Office on cost 20% on works
cost; Selling on cost 10% on works cost ;Profit 10% on cost

19 (a) Comorin Polymers & Plantations Limited , Coimbatore manufactures two

products Serjun and Life Aid. Its sales department has three divisions: East, West,
North. Prepare sales budgets for the year ending 31st March 2017 based on the
assessment of the divisional managers were: Product: Serjun : East = 3,00,000
units West = 6,00,000 units North = 1,50,000 units Product: Life Aid: East =
4,00,000 units West = 5,00,000 units and North = NIL. Arrangements are made
for the extensive advertising of products Serjun and Life Aid and it is estimated
that East division sales will increase by 1,50,000 units. Arrangements are also

made to advertise and distribute product Life Aid in the Northern area in the
second half of 2017 when sales are expected to be 6,00,000 units. Since the
estimated sales of the West division represented an unsatisfactory target, it is
agreed to increase both the estimates by 20%. Prepare a sales budget (or)

19 (b)State the advantages and disadvantages of Budgetary Control

20 (a) Comorin Latex Products, Coimbatore, Manufactures a special product Thin Latex
Gloves. The following particulars were collected from its books.
Monthly demand 1,000 units. Cost of placing an order Rs.100. Annual Carrying
cost per unit Rs.15. Normal usage 50 units per week. Minimum usage 25 units per
week. Maximum usage 75 units per week. Reorder period 4 to 6 weeks. Compute
from the above (a) Reorder quantity, (b) Reorder Level, (c) Minimum level (d)
Maximum level (e) Average Stock Level.(or)

20 (b) ) A company manufactures two products A and B. A forecast for the number of
units to be sold in the first four months of the year is given below:
Month Product A (Units) Product B (Units)
January 3000 6000
February 3400 6000
March 4200 5200
April 5000 4400
It is anticipated that (i) There will No Work-In-Progress at the end of any Month
and (ii) Finished Units equal To Half the Sales for the next month will be in Stock
at the end of each Month (Including previous December). Prepare for the three
months ending 31st March, a production budget for each month.
*******************
 B.Sc & BCA DEGREE EXAMINATION
Fourth Semester

Allied 4 : Business Accounting

Time: 3 hours Maximum Marks : 75
Section A
Answer ALL questions
1. Current liabilities are recorded in the Balance sheet on
(a) Not recorded (b)Liability side (c) Assets side (d) Capital Account
2. Credit Purchase is obtained from
(a) Bills receivable account( b)Total debtors account (c) Total creditors account
(d) Sales Account
3.Outstanding interest on loan borrowed is to be added to
a) Assets Account b)Income Account c) Loan account d) Interest account
4. Current liabilities are recorded in the Balance sheet on
a) Not recorded b)Liability side c) Assets side d) Capital Account
5. Wages paid to workers for the construction of a building should be debited to :
a) Wages Account b) Building account c)Factory expenses account d) Repairs &
Maintenance
6.Credit sales is obtained from
a) Bills receivable account b) Total debtors account c) Total creditors account d)
Sales Account
7.Bin card is maintained by
 (a) Store keeper (b) Cost Accountant (c) Production Manager (d)
Foreman
8. Management accounting functions are
(a) Neutral in effect (b) complementary nature (c) contradictory in nature (d) No
effect
9. The budget is
(a) a post-mortem analysis (b) an aid to management (c) a substitute of
management (d) Planning
10.One of the most important tools of cost planning is
(a) Budget (b) Direct cost (c) cost sheet (d) Decision making

Section B (5 X 5 =25 MARKS)

Answer All the questions
11 (a) .What are the Golden rules for Debit and Credit? (or)
11 (b) Define Management Accounting. What is its objective?
12(a) Journlise the following transaction of Mr.Ravi ‘s Books of account
01.04.2017 Ravi invested Rs.5,00,000 cash in the business
03.04.2017 Purchased goods from Sitaraman & Co Rs.4,50,000
05.04.2017 Sold goods to Ramar & Co Rs.4,00,000
25.04.2017 Withdrew cash from bank Rs.50,000
30.04.2017 Paid Salary to Manager Mohan Rs.40,000 (or)
12(b) What is bad debt? Write a notes on Provision for bad and doubtful debts
13(a). Prepare Trial balance from the following balances of Mrs.Sathya Narranyan
Rs. Rs.
Capital 4,41,000 Cash in hand 25,000
Building 1,15,000 Cash at Bank 84,700
Machinery 60,000 Salaries 94,000
Furniture 11,000 Rent paid 48,000
Car 68,000 Commission received 1,400
Opening stock 86,000 Rates & Taxes 2,600
Purchases 94,000 Bad debts 3,200
Sales 1,96,000 Insurance 2,400
Sundry Debtors 16,200 General Expenses 800
Sundry creditors 68,000 Miscellaneous income 4,500
(or)
13(b)Draw a specimen of Cost Sheet
14 (a) From the following data, relating to the manufacture of a standard product during
the month of March 2017. Prepare a statement showing cost and profit per unit.
Raw materials consumed Rs. 15,000
Direct wages Rs. 9,000
Machine hours worked 900 hours
Machine hour rate Rs. 5 per hour
Office overhead 20% on works cost
Selling overhead Re. 0.50 per unit
Units produced 17,100 units
Units sold @ Rs. 4 each. 16,000 units
Prepare a cost sheet to show (i) Prime Cost, (ii) Works cost, (iii) Cost of
production, (iv) Cost of goods sold, (v) Cost of sales and (vi) Profit (or)
14(b) What are the objectives of Material control
15(a). The following transaction took place in respect of an item of material
 Receipts Rate Issues
Quantity Rs. Quantity
02.03.2017 200 2.00
10.03.2017 300 2.40
15.03.2017 ---- ---- 250
19.03.2017 250 2.60
20.03.2017 ---- ----- 200
Record the above transaction in the stores ledger pricing the issues at weighted average
Method (or)

15(b) .From the following data, prepare a flexible budget for production of 40,000 units
and 75,000 units, distinctly showing variable cost and fixed cost as well as total cost.
Also indicate element-wise cost per unit. Budgeted output is 1,00,000 units and budgeted
cost per unit is as follows:

Rs.
Direct materials 95
Direct labour 50
Production Overhead (Variable) 40
Production over head (fixed) 05
Administrative Overhead (Fixed) 05
Selling overhead (10% fixed) 10
Distribution overhead (20% fixed) 15
Section C (5 X 8 = 40 marks)
Answer All the questions
16 (a) What are the rules for making entries in the double column cash book with cash
and bank column? (or)

16 (b) From the following particulars given below, Calculate Economic Order
Quantity and the number of order to be placed per year.
Total consumption of material per year 10000 Kgs. Buying Cost per order
Rs.50, Unit Cost of Material Rs.2 per kg. Carrying and Storage
cost – 8% of Average inventory
17(a) From the Trial Balances of Mr.Rangarajan as on 31st March 2017 prepare final
accounts
Particulars Debit (Rs.) Credit (Rs.)
Capital 3,60,000
Drawings 6,400
Stock (1.4.2016) 18,000
Purchases 1,29,000
Sales 2,38,000
Sales Returns 4,000
Wages 32,000
Insurance premium 3,000
Packing expenses 4,000
Postage 200
Advertisement 2,000
Carriage outwards 16,000
 Bad debts 600
Commission received 1,000
Bills payable 18,000
Bank overdraft 6,000
Land & Building 2,61,000
Plant & Machinery 1,80,000
Sundry Debtors 50,800
Sundry Creditors 84,000
7,07,000 7,07,000

Adjustments:
1. Closing stock on 31.03.2017 Rs.15,000
2. Write off bad debts Rs.800 and make provision for Bad & doubtful debts @ 5%
on Sundry debtors
3. Commission accrued but not received Rs.2,000 (or)
17(b) Kumar’s book shows the following balances. Prepare his Trading and Profit &
Loss account for the year ended 31st March 2017 and Balance sheet as on that date.
Particulars Debit (Rs.) Credit (Rs.)
Opening Stock 1,50,000
Purchases 1,30,000
Sales 3,00,000
Carriage Inwards 2,000
Salaries 50,000
Printing & Stationary 8,000
Drawings 17,000
Sundry Creditors 20,000
Sundry Debtors 1,80,000
Furniture 10,000
Capital 2,50,000
Postage & Telegram 7,500
Interest paid 4,000
Machinery 41,500
Loan account 25,000
Bills payable 5,000
6,00,000 6,00,000
Adjustments
1.Closing stock Rs.1,20,000
2.Provide 5% for bad & doubtful debts on debtors
3.Depreciate Machinery & Furniture at 10% per cent (or)
18(a) The received side of the stores ledger account shows the following particulars:
Jan 1 Opening balance 500 units @ Rs.4
Jan 5 Received from Vendor 200 units@ Rs.4.25
Jan 12 Jan 5 Received from Vendor 150 units@ Rs.4.10
Jan 20 Received from Vendor 200 units@ Rs.4.25
Jan 25 Received from Vendor 400 units@ Rs.4
Issued of material were as follows:
Jan 4 : 200 units; Jan 10 :400 units; Jan 15 :100 units Jan 19 : 100 units Jan 26 : 200
units and Jan 30 :250 units. Issues are to be priced on the principle of LAST IN FIRST
OUT. Write stores ledger account.(or)
18(b) From the following information calculate 1.Maximum stock level 2.Minimum
stock level 3.Re-order level
Minimum Consumption 240 units per day
Normal consumption 300 units per day
Maximum consumption 420 units per day
Re-order quantity 3600 units
Re-order period 10 to 15 days
Normal order period 12 days

19(a) Prepare a statement of cost and profit from the following data
Opening stock of raw materials Rs.10,000
Purchase of raw materials Rs.40,000
Materials returned to suppliers Rs.2,000
Closing stock of raw materials Rs.8,000
Direct wages Rs.20,000
Works on cost 25% on wages, Office on cost 20% on works cost, selling on cost
10% on works cost Profit 10% on cost (or)
19 (b) Rubbertex , Kottayam wishes to arrange overdraft facilities with its bankers during
the period April to June 2018 when it will be manufacturing mostly for stock.
Prepare cash budget from the following data, indicating the extent of the bank
facilities the company will require at the end of each month. 50 per cent of credit
sales are realized in the month following sales and the remaining 50 per cent in the
second month following. Creditors are paid in the month of purchase. Cash at
Bank on 1.4.2018 (estimated) Rs.25,000.

Credit Sales Purchases Wages

Rs. Rs. Rs.
February 2018 1,80,000 1,24,800 12,000
March 1,92,000 1,44,000 14,000
April 1,08,000 2,43,000 11,000
May 1,74,000 2,46,000 10,000
June 1,26,000 2,68,000 15,000

20(a) Define Budgetary Control and state its objective (or)

20(b) Draw a flexible budget for overhead expenses on the basis of the following data
and determine the overhead rates at 70%, 80% and 90% plant capacity.
At 70% Capacity At 80% Capacity At 90% Capacity
Rs. Rs. Rs.
Variable Overhead
Indirect Labour - 12,000 -
Stores including spares - 4,000 -
Semi-VariableOverhead
Power
(30% Fixed, 70% Variable) - 20,000 -
 Repairs and Maintenance -
(60% Fixed, 40% Variable) - 2,000 -
Fixed Overhead
Depreciation - 11,000 -
Insurance - 3,000 -
Salaries - 10,000 -
---------
Total Overhead 62,000
=====
Estimated direct labour hours 1,24,000 hrs