DISTANCE EDUCATION
B.B.A. DEGREE EXAMINATION, MAY 2016.
BASIC FINANCIAL ACCOUNTING
(2005 onwards)
Time Three hours Maximum 100 marks
PART A — × 8 40 marks)
Answer any FIVE questions.
Each question carries 8 marks.
1. What is double entry system? What are its uses?
2. What the differences between consignment and sale?
3. What is depreciation? Explain the different methods of
providing depreciation.
4. What is Self balancing ledger? State its advantages.
5. What do you mean by Capital expenditure? Explain with
suitable examples.
6. A partner has withdrawn the following sums from the
business for his personal use during the half-year ending
30th June, 2003.
Rs.
22nd January 500
31st January 200
18th February 100
9th March 150
4th May 400
30th June 1,000
Find the average due date and calculate interest at the
rate of per annum.
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7. On 1st January, 1992 a limited company purchased
machines for Rs. 12,000 and on 30th June 1983, it
acquired additional machine at a cost of Rs. 2,000. On
31st March 1984 one of the original machines which had
cost of Rs. 5,000 was found to have become obsolete and
was sold for Rs. 800. Depreciation is to be provided at
15% per annum on the written down value. Show ledger
accounts for the first three years.
8. Calculate the amount to be posted to Income and
Expenditure account for stationary from the following
data
Rs.
Stock of stationery on 1.1.1999 300
Advance paid for stationery on 31.12.1998 20
Amount paid for stationery in 1999 1,080
Stock of stationery on 31.12.1999 50
Creditors for stationery on 31.12.1999 130
Advance paid for stationery on 31.12.1999 30
Creditors for stationery on 1.1.1999 200
PART B — × 15 60 marks)
Answer any FOUR questions.
Each question carries 15 marks.
9. What is a Balance Sheet? Bring out the differences
between Trial Balance and Balance sheet.
10. On 1st July 1974, Sadiq of Salem sent to Shafiq of
Shillong 50 cases of Red Label Tea Dust at Rs. 250 per
case. Sadiq spent Rs. 500 on packing, Rs.750 on freight
and Rs. 500 on transit insurance. On the same date,
Sadiq drew on Shafiq a bill at 2 months for Rs. 5,000.
Shafiq paid octroi duty amounting to Rs. 450 and cartage
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Rs. 100 to bring goods to his godown. Shafiq also incurred
Rs. 200 on godown rent and Rs. 500 on salaries to
salesmen. Shafiq sent on 1st October 1974 an Account
Sales stating that he bad sold 40 cases of Tea Dust at
Rs. 360 per case. Shafiq is also entitled to a commission
of on gross sales. He remitted the balance by bank
draft. Show the Consignment Account and Shafiq's
Account in Sadiq's ledger and also indicate how the
unsold stock will be valued.
11. The following information is supplied to you for March,
1998.
Rs.
Balance on 1st March, 1998
Debtors 20,600
Creditors 11,500
Credit sales 40,300
Credit purchases 19,800
Cash received from customers 28,400
Discount allowed to them 1,400
Bad Debts written off 700
Bill Receivable received 9,600
Charges debited to Customer 150
Amount received from customers whose accounts
Were previously written off 400
Cash paid to suppliers 15,600
Bills payable issued 6,100
Discount received 400
Prepare sales Ledger Adjustment Account and Purchases
Ledger Adjustment Account in the General Ledger.
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12. Ahmed received on March 2004, two bills from Basheer
for Rs. 2,000 payable after 1 month and Rs. 4,000 payable
after 2 months. Ahmed sent both the bills to his bank for
collection. Ahmed was advised by the bank that the bill
for Rs. 2,000 was honoured and that the bill for Rs. 4,000
was dishonored on the respective due dates. Journalise
the transactions in the books of Ahmed and Basheer.
13. From the following Trial Balance, prepare the Trading
and Profit and Loss A/c for the year ended 31st March,
2000 and a Balance Sheet as on that date.
Particulars Dr. Cr.
Rs. Rs.
Capital 40,000
Sales 25,000
Purchases 15,000
Salaries 2,000
Rent 1,500
Insurance 300
Drawings 5,000
Machinery 28,000
Bank 4,500
Cash 2,000
Stock 5,200
Debtors 2,500
Creditors 1,000
66,000 66,000
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Adjustments required
Closing stock on hand Rs. 4,000
Salaries owing Rs. 3,000
Rent paid in advance Rs. 200
Insurance paid in advance Rs. 90
Depreciate machinery by 10%
During December Ram took Rs. 100 worth of goods
for his own use.
14. Given below is the Receipts and Payments Account of
Trichy Club for the year ended 31st March, 2001
Receipts Rs. Payments Rs.
To Balance b/d 1,025 By Salaries 600
To Subscriptions By Expenses 75
2000 40 By Drama expenses 450
2001 2,050 By News papers 150
2002 60 By Municipal tax 40
To Donations 540 By Charity 350
To Sale of Drama Tickets 950 By Investments 2,000
To Sale of waste paper 45 By Electric charges 145
By Balance c/d 900
4,710 4,710
Prepare the Club's Income and Expenditure A/C for the
year ended 31st March, 2001 and its Balance Sheet as on
that date after taking the following information into
account.
There are 500 members each paying an annual
subscriptions of Rs. of Rs. 5 p.a., Rs. 50 being in
arrears for the year 2000.
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Municipal Taxes amounting Rs. 40 per annum have
been paid up to 30th June, 2002; Rs. 50 for salaries
is outstanding.
Buildings amount Rs. 5,000 stand in the books.
Interest has accrued on investments for five months
at p.a.
15. Mr. Krishnan commenced business on 1.1.1998 with a
capital of Rs. 25,000. He immediately bought furniture
for Rs. 4,000. During the year, he borrowed Rs. 5,000
form his wife and out of which introduced a further
capital of Rs. 3,000. He has withdrawn Rs. 600 at the end
of each month for family expenses. From the following
particulars obtained from his books, you are required to
prepare Trading and Profit and Loss A/c and balance
sheet as on 34.12.98
Rs.
Sales (Including cash sales of Rs. 30,000) 1,00,000
Purchases (Including cash purchases
of Rs. 10,000) 75,000
Carriage 700
Wages 300
Discount 800
Salaries 6,200
Bad debts written off 1,500
Trade Expenses 1,200
Advertisement 2,200
Krishnan has used goods worth Rs. 1,300 for private
purposes and paid Rs. 500 to his son which is not
recorded anywhere. On 31.12.98, his debtors were
Rs. 21,000, Creditors Rs. 15,000 and Stock in trade
Rs. 10,000. Furniture is to be depreciated at 10% p.a.