BCOM/I/CC/01 Student's Copy
2 0 1 8
CBCS
1st Semester
COMMERCE
Fundamentals of Accounting
Full Marks 75
Time 3 hours
Simple calculator can be used in this paper
PART A—OBJECTIVE
Marks 25
The figures in the margin indicate full marks for the questions
SECTION—A
Marks 10
Choose the correct answer and place its code in the brackets provided 1×10=10
1. Income is measured and financial position is assessed on the basis of
matching concept
consistency concept
time period concept
dual aspect concept
/14 1 Contd.
2. Anticipate no profit and provide for all possible losses is the teaching of
consistency principle
conservatism concept
accounting concept
materiality concept
3. Depreciation is the process of
allocation of cost of the assets to the period of its life
valuation of assets
maintenance of an asset in a state of efficiency
revaluation of assets
4. According to diminishing balance method, depreciation is a charge on
original cost of assets
average cost
written-down value
market value
5. Outstanding salaries are shown in the Balance Sheet as
an asset
a current liability
a long-term liability
accrued expenses
6. Cost of sample goods distributed free of charge should be treated as
manufacturing expenses
trade expenses
office expenses
selling expenses
BCOM/I/CC/01/14 2 Contd.
7. Factor affecting the value of goodwill is
special advantage
nature of business
Both and
None of the above
8. If new partner brings the amount of goodwill in cash, goodwill is
transferred to Old Partners' Capital Accounts in
sacrificing ratio
gaining ratio
new ratio
old ratio
9. On the retirement of a partner, the whole goodwill amount is credited to
the account of
all partners excluding retiring partner
all partners including retiring partner
only remaining partner
only retiring partner
10. On dissolution of a firm, Partners' Capital A/cs are closed through
Realisation Account
Revaluation Account
Bank Account
Current Account
BCOM/I/CC/01/14 3 Contd.
SECTION—B
Marks 15
Write short notes on the following 3×5=15
UNIT—I
1. Money measurement concept
OR
2. Accounting equation
UNIT—II
3. Factors to be considered for calculating depreciation
OR
4. Specific reserves
UNIT—III
5. Trading Account
OR
6. Errors which are not disclosed by the Trial Balance
UNIT—IV
7. Goodwill
OR
8. Fixed capital vs. Fluctuating capital
UNIT—V
9. Revaluation of assets and liabilities
OR
10. Dissolution of a firm
BCOM/I/CC/01/14 4 Contd.
PART B—DESCRIPTIVE
Marks 50
The figures in the margin indicate full marks for the questions
UNIT—I
1. Write a note on accounting conventions. 10
OR
2. What do you mean by 'double-entry system' of Book-keeping? Enumerate
its advantages and disadvantages. 3+7=10
UNIT—II
3. The following balances appear in the books of a firm
January 2012—Machinery account R 1,00,000
Provision for depreciation—R 45,000
The depreciation is charged 10% on straight-line method and in
terms of firm's accounting policy, acquisitions during the year are
depreciated for a full year irrespective of the date of purchase and no
depreciation is charged on assets in the year of their disposal
On 30th June, 2012, the following transactions took place
Sold machinery for R 43,500 which was purchased for R 80,000 on
1st January, 2008
On 1st September, 2013, new machinery costing R 40,000 was
purchased
Prepare Machinery Account for 3 years assuming accounts are closed on
31st December each year. 10
OR
4. What are provisions? How are they created? Give accounting treatment in
case of provision for doubtful debts.
BCOM/I/CC/01/14 5 Contd.
UNIT—III
5. The following balances were extracted from the books of Mr. A on
30th June, 2003
R R
Capital 24,500 Bad Debts 550
Drawings 2,000 Loan 7,880
General Expenses 2,500 Sales 65,360
Buildings 11,000 Purchases 47,000
Machinery 9,340 Scooter 2,000
Stock 16,200 Provision for Bad Debts 900
Power 2,240 Commission 1,320
Taxes and Insurance 1,315 Scooter Expenses 1,800
Wages 7,200 Bills Payable 3,850
Debtors 6,280 Cash 80
Creditors 2,500 Bank Overdraft 3,300
Charity 105
Prepare Final Accounts for the year ended 30th June, 2003 after giving
effect to the following adjustments 10
Stock on 30th June, 2003 was valued at R 23,500
Write off a further of R 160 as bad debts and maintain the provision for
bad debts at on debtors
Depreciate machinery at 10% and scooter 12%
Provide R 750 for outstanding interest on overdraft
A commission of on the gross profit is to be provided to Works
Manager
General Manager is to be allowed a commission on net profit
after charging Works Manager's and before charging General
Manager's Commission
BCOM/I/CC/01/14 6 Contd.
OR
6. The Trial Balance of Mr. X as on 31st December, 2004 was as follows
Name of accounts Debit Credit

Purchases 1,62,505
Sales 2,52,400
Reserve for doubtful debts 5,200
Sundry debtors 50,200
Sundry creditors 30,526
Bills payable 3,950
Opening stock 26,725
Wages 23,137
Salaries 5,575
Furniture 7,250
Postage 4,226
Power and fuel 1,350
Trade expenses 5,831
Bad debts 525
Loan to Ram 10% (September 2004) 3,000
Cash in hand and at bank 10,000
Trade expenses accrued, not paid 700
Drawings account 4,452
Capital account 10,000
Outstanding wages 2,000
3,04,776 3,04,776
Prepare Trading and Profit Loss Account for the year ending
31st December, 2004 and the Balance Sheet as on that date taking into
consideration the following information 10
Depreciation on furniture is to be charged 10%
Sundry debtors include an item of R 500 due from a customer who has
become insolvent
Reserve for bad debts is to be maintained on sundry debtors
Goods of the value R 1,500 have been destroyed by fire and insurance
company admitted a claim for R 1,000
Stock on 31st December, 2004 was R 12,550
BCOM/I/CC/01/14 7 Contd.
UNIT—IV
7. What is partnership? Explain Partner's Capital Account. Differentiate
between Fixed Capital and Fluctuating Capital.
OR
8. A and B are in partnership sharing profits and losses in the proportion
of three-fourth and one-fourth respectively. Their Balance Sheet on
31st March, 2003 was as follows
Cash—R 1,000; Sundry debtors—R 25,000; Stock—R 22,000; Plant
and Machinery—R 4,000; Sundry creditors—R 12,000; Bank
overdraft—R 15,000; capital—R 15,000; capital—R 10,000
On 1st April, 2003, they admitted C into partnership on the following
terms
C is to purchase one-third of the goodwill for R 2,000 and provide
R 10,000 as capital. Goodwill not to appear in the books.
Future profits and losses are to be shared by B and C equally.
Plant and Machinery is to be reduced by 10% and R 500 is to be
provided for estimated bad debts. Stock is to be taken at a valuation
of R 24,940
By bringing in or withdrawing cash, the capitals of A and B are to be
made proportionate to that of C on their profit sharing basis
Prepare Partners' Capital Accounts and opening Balance Sheet of the
new firm. 10
UNIT—V
9. B and C share profits and losses in the ratio of 5 3 2. Partner A died
on February 20, 2003. Balance Sheet as on that date was shown
Liabilities R Assets R
Capital Accounts Land 6,000
(A—12,000; B—16,000 Machinery 35,000
C—12,000) 40,000 Furniture 6,000
Loan from A 5,000 Stock 9,000
General Reserve 7,000 Debtors 15,000
Creditors 22,000 Bank 3,000
74,000 74,000
BCOM/I/CC/01/14 8 Contd.
In addition to the assets shown above, the firm had three life policies in the
name of each partner, at an insured value of R 20,000 each, the premiums
of which were charged to the Profit and Loss Account.
According to the partnership deed, on the death of a partner, the assets
and liabilities are to be valued by a valuer. The revalued figures were
Land—R 21,000; Machinery—R 45,000; Debtors are subject to a
provision for doubtful debts at Furniture—R 7,000
Provision for taxation to be created for R 1,500
Death claim for policy in the name of A realized in full and the
surrender value off the other two policies were R 7,500 each
The business will be continued by B and henceforth sharing profits and
losses equally. The net balance due to A is transferred to a loan account,
which will be paid of later.
Show Capital Account, Revaluation Account and New Balance Sheet of
the firm. 10
OR
10. Ajay, Vijay, Ram and Shyam are partners in a firm sharing profits
and losses in the ratio of 4 1 2 3. The following is their Balance Sheet
as at 31.3.1996
Liabilities R Assets R
Creditors 3,00,000 Debtors 3,50,000
Capital Accounts Less Provision
Ajay 7,00,000 for Bad Debts 50,000 3,00,000
Shyam 3,00,000 10,00,000 Cash 1,40,000
Stock 2,00,000
Other Assets 3,10,000
Capital Accounts
Vijay 2,00,000
Ram 1,50,000 3,50,000
13,00,000 13,00,000
BCOM/I/CC/01/14 9 Contd.
On 31.3.1996, the firm is dissolved and the following points are
agreed upon
Ajay is to take over debtors at 80% of book value; Shyam is to take
over the stock at 95% of the value; and Ram is to discharge
creditors.
Other assets realized R 3,00,000 and the expenses of realization
come to R 30,000. Vijay is found insolvent and R 21,900 is realized
from his estate.
Prepare Realization Account, Cash Account and Capital Accounts of the
partners. The loss arising out of capital deficiency may be distributed
following the decision in Garner vs. Murray. 10