1. What is a Journal? Why it is called the book of original entry

2. Following accounts are being maintained in the books of John Co. classify under 'Personal', and 'Nominal' headings (any ten)

Depreciation

Land and Building

Interest

ABC Co.

Goodwill Account

Rent

Cash

Bank

Commission

Loan Account


Bad Debts

Drawing Account

3. Why is a trial balance prepared? List the errors which are revealed by the trial balance.

4. Prepare Trading and Profit and Loss Account as on 31st December, 2012. The adjustments are as follows:

Closing stock RS 7,500

Write off bad debts RS 1,500

Provision for bad debts 10% on sundry Debtors

Depreciate Kitchen Equipment and Furniture 10% and 20% respectively

TRIAL BALANCE
DR Amount CR Amount
Drawings 15,000 Capital Account 50,000
Purchases 2,25,000 Sales 2,40,000
Sales Returns 2,000 Purchase Returns 1,000
Opening Stock 8,000 Bad Debts Reserve 2,500
Bad Debts 1,000 Discount 1,500
Carriage Inwards 2,000 Interest 2,000
Bills Receivable 5,000 Commission 3,000
Wages 3,000 Rent 10,000
Carriage 4,000 S. Creditors 4,000
Gas and Power 3,000 Bills Payable 3,000
Printing and Stationary 2,000
Postage 1,000
Cash in hand 5,000
Cash at Bank 10,000
Furniture 5,000
Kitchen Equipment 10,000
S. Debtors 16,000
TOTAL 3,17,000 TOTAL 3,17,000

5. What is a Bank Reconciliation Statement? What are the advantages of preparing a bank reconciliation statement

6. Write short notes on (any four)

LIFO

K.O.T.

Cost Price

Gross Profit

Consumption Sheet

Indent

7. Calculate as given under:

Cost percentage. When cost is RS 500 and Sales is RS 2,000

Cost, when cost percentage is 30% and Sale is RS 1,500

Sale, when cost percentage is 25% and cost is RS 750

8. Why is it important to prepare Funds Flow Statement? Explain in detail with its limitations.

9. What is a Cash Flow Statement? Differentiate between Funds Flow Statement and Cash Flow Statement.

10. What are the advantages and disadvantages of Double Entry System of book-keeping? Describe in brief the systems of book-keeping.