Birla Institute of Technology & Science, Pilani

Hyderabad Campus, II Semester 2020-21

Mid Semester Examination (Open Book)
Marks: 25
Course Title: FUNDA OF FIN AND ACCOUNT Course No.: ECON F212/FIN F212
Date: 06-03-2021 Time: 9:00 - 10:30 AM

Q1. The following figures extracted from the books of XYZ Ltd. and Mr. Amit is one of the owners of
the organization. You are required to prepare a Statement of Income and Expenditure for the year
ended 31st March, 2018 and a Balance Sheet as on that date (31/03/2018). [7+6=13]

Trial Balance

Dr Balances Rs Cr. Balances Rs

Mr.Amit's Drawings 42,000 Mr.Amit's Capital Account 2,58,000

Account

Cash Purchases 1,96,000 Returns Outwards 7,000

Freehold Property 60,000 Bills Payable 5,000

Plant and Machinery 1,00,000 Sundry Creditors 40,000

Salaries 42,000 Provision for Doubtful 800

Debts

Office Expenses 12,500 Interest on Loan to 6,000

Mr.Sumit

Office Furniture and 25,000 Sales 4,11,000

Fixtures

Discounts Allowed 1,200

Sundry Debtors 26,600

Loan to Mr.Sumit 43,000

Cash at Bank 26,600

Stock (1st April,2017) 49,175

Wages 62,000

Office Supplies 1,400

Insurance Charges 3,200

Gas and Fuel 2,700

Bad Debts 600

Office Rent 12,600

Freight and Duty 9,000

 Loose Tools 7,000

Factory Lighting 1,600

Cash on hand 3,625

7,27,800 7,27,800

Adjustments:

1) Stock on 31st March, 2018 was valued at Rs. 66,000

2) Wages Rs. 4,600 and Salaries, Rs. 3,600 were outstanding
3) Insurance prepaid was Rs.800
4) Loose tools were valued at Rs. 5,600 on 31st March, 2018.
5) Depreciate Plant and Machinery by 10% p.a.; Furniture and Fixtures by 7.5% per annum, and
Freehold Property by 2 percent per annum.
6) Of the Sundry Debtors Rs 600 are bad and should be written off.
7) Maintain a provision of 5 percent on Sundry Debtors for doubtful debts, and 2 percent for
discount on Debtors and a reserve of 2 percent for discount on Sundry Creditors.

Q2. The following are the transactions of ABC Ltd. Based on the following transactions prepare
journal entries. [7 Marks]

2018 April

2 Started business with Rs 1,00,000: paid into Bank Rs. 50,000

3 Bought furniture for cash, Rs. 5,000.

5 Bought goods for Rs. 30,000

6 Sold goods for cash, Rs. 6,000.

10 Bought printers for Rs. 18,000 from Canon Printers Co., on credit.

13 Sold goods to M/s. Anand & Sons for Rs. 10,000 on credit.

15 Bought goods from M/s Manish & Co. for Rs. 20,000 on credit.

18 Paid Internet charges Rs.2,400 for one year

22 Paid Rs. 1,000 for advertisement

26 Sold goods to M/s Sumit & Co. for Rs. 8,000 for cash

30 Paid Salaries Rs. 2,000

30 Paid rent Rs. 1,000

30 Withdrew from bank Rs. 3000 for private use

30 Bought one delivery truck for Rs.10,00,000 from Tata Motor Co., payment to be made by
monthly instalments of Rs. 1,00,000. First instalment paid by cheque.
MCQ’s (0.5*10 = 5 Marks)

1) The correct double-entry to transfer rent paid for the year to the profit and loss account is:
Debit Credit
A Rent Trading
B Profit & Loss Rent
C Rent Profit & Loss
D Trading Rent

Option A
Option B
Option C
Option D

2) The double entry required to record net losses is:

Debit Credit
A Profit & Loss Capital
B Trading Capital
C Capital Trading
D Capital Profit & Loss
Option A
Option B
Option C
Option D

3) Given the following data: Stock £3,400, Debtors £1,350, Bank overdraft £950, Cash in hand
£60 and creditors £885. The firm’s working capital is valued at:
a) £4,875
b) £5,760
c) £3,925
d) £2,975

4) Given the following data: Gross profit Rs.6700, Carriage inwards Rs.400; Carriage outwards
Rs.250, Rent received Rs.575 and Other expenses Rs.3600, the net profit for the firm would
be:
a) Rs.3,275
b) Rs.3,425
c) Rs.2,450
d) Rs.3,025

5) Including private costs incurred in running a car as business costs would violate the concept
of:
a) Going Concern
b) Business Entity
c) Dual Aspect
d) Consistency.
6) Gross profit less expenses is known as:
a) Net turnover
b) Net Profit
c) Cost of goods sold
d) Total drawings

7) Which of the following statements is not true?

a) Carriage inwards and carriage outwards do not both appear in the trading account
b) Purchase returns and Sales Returns are both debit balances
c) Both types of returns appear in the trading account
d) Carriage inwards and carriage outwards are both debit balances

8) Which of the following would not appear in the profit and loss account?
a) Rent received.
b) Carriage outwards.
c) Drawings.
d) Cash expenses.

9) Which of the following statements does not help to describe a fixed asset?
a) It is likely to be used within the business.
b) It is not purchased specifically for resale.
c) It is likely to be purchased for more than one accounting period.
d) It can be converted into cash quickly without any loss in value.

10) Net turnover can be calculated as:

a) Purchases plus opening stock less returns outwards
b) Sales less returns outwards
c) Sales plus returns inwards
d) Gross profit plus cost of goods sold
[COGS = Sales – Gross Profit]