DISTANCE EDUCATION
B.B.A. (Banking) DEGREE EXAMINATION, MAY 2016.
FINANCIAL ACCOUNTING
Time Three hours Maximum 100 marks
SECTION A — 8 40 marks)
Answer any FIVE questions.
1. The following transactions are to be entered in to
purchase and sales books. These books are to be closed on
31st Jan 2014.
2014 Jan 1 Purchased goods from Mahendra at the last
price of Rs. 40,000 less 10% trade discount
5 Sold goods to Moti for Rs. 10,000
7 Shyam singh sent goods for Rs. 30,000
8 Sold goods to Harish for Rs. 12,000
19 Sent goods to Moti for Rs. 6,000
27 Sold goods to Mahesh for Rs. 8,000
2. Explain the errors which are disclosed by trial balance.
3. The following errors were found in the books of
M/s. Kevin Sons give the necessaary entries to correct
them.
Salary of Rs. 1,000 paid to Mohan due to him has
been debited to his personal account.
Rs. 1,500 paid in cash for a typewriter was charged
to office expenses account.
Rs. 5,000 paid for furniture purchased has been
charged to purchased account.
Sub. Code
15
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Repairs made were debited to building account for
Rs. 250.
An amount of Rs. 500 with down by the proprietor
for his personal use has been debited to trade
expenses account.
4. Aruna of Allahabad consigned 500 toys to Banu of
Bangalore to be sold on her account and at her risk. The
cost of one toys is Rs. 200. Aruna paid Rs. 5,500 as
freighted and insurance and received Rs. 40,000 as
advance from Banu. Banu paid Rs. 1,000 as Octroi and
cartage, Rs. 1,500 as rent and Rs. 1,200 as insurance. 410
toys were sold for Rs. 1,10,000. Banu was entitled to a
commission of on sale Rs. 250 per toy and 25% of
any surplus price realised.
Prepare consignment account and Banu's account in the
books of Aruna.
5. Explain the essential features of receipts and payments
account.
6. Chandran and Govindan are partners in a business
sharing profit and losses in the ratio of 1:2 on 1st April
2013 their capitals are Rs. 4,000 and Rs. 5,000
respectively. On that date they admit Ram in partnership
and give him one fourth of share in future profits Ram
brings Rs. 4,000 as his capital and Rs. 3,000 as good will.
The amount of good will is immediately with drawn by
the old partners is cash. Draft journal entries and show
capital account of all partners.
7. A joint stock company was registered with a nominal
capital of Rs. 5,00,000 divided in Rs. 5,00,000 share a
Rs. 100 each payable Rs. 10 per share on application and
allotment and the balance on the first final call. All the
shares are takenup fully paid by public. Pass jounral
entries.
8. Discuss the prudential accounting norms in brief.
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SECTION B — × 15 60 marks)
Answer any FOUR questions.
9. The following are the balances of Shrivari trades as on
30th June 2014.
Debit balances Rs. Rs.
Cash in hand 540 Salaries 15,000
Cash at bank 2,630 General expenses 3,000
Purchases 40,675 Insurance 600
Returns inward 680 Drawings 5,245
Wages 8,480 Sundry debtors 14,500
Fuel and power 4,730 Credit balances
Carriage on sales 3,200 Sales 98,780
Carriage on purchases 2,040 Returns outwards 500
Stock on 1st July 2013 5,760 Capital 62,000
Buildings 22,000 Sundry creditors 6,300
Freehold land 10,000
Machinery 20,000
Rent 9,000
Investments 10,000
Patents 7,500
Taking in to account the following adjustments prepare
the trading and profit and loss account and balance sheet
as on 30th June 2014
Stock on hand on 30th June 2014 Rs. 6,800
Machinery is to be depreciated at the rate of 10%
and patents at the rate of 20%.
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Salaries for the month of June 2014 amounting to
Rs. 1,500 were unpaid.
Insurance includes a premium of Rs. 170 on a policy
expiring on 31st Dec 2014.
Bad debts are Rs. 725.
Rent received in advance Rs. 1,000.
Interest an investment of Rs. 2,000 is accrued.
10. Enter the following transactions in a three column cash
book.
Rs.
2014
Jan
1
Started business with cash 20,000
2 Opened current account with Canara Bank 8,000
3 Bought goods by cheque 150
4 Received cheque from Rama 200
Allowed him discount 10
5 Sold goods for cash 40
7 Paid in to bank
Cash 30
Cheque 200 230
8 Paid Shyam by cheque 345
Discount received 5
10 Drew from bank cash-or office 200
30 Paid wages by cheque 60
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11. From the following particulars make out an account
current to be rendered by Natraj to Aruna as at 30th June
charging interest at per annum.
Rs.
Jan 1 Balance due to Nataraj by Aruna 800
11 Goods sold by Nataraj to Aruna 2,200
20 Received bill accepted by Aruna at 2
months
1,000
Feb 25 Cash received from Aruna 1,200
Mar 12 Bought goods of Aruna 5,500
13 Nataraj accepted Aruna's draft at one
month
2,000
April 25 Cash paid to Aruna 2,000
30 Goods sold to Aruna due by end of May 2,400
May 21 Bought goods from Aruna 1,500
June 10 Sold goods from Aruna due on 20th June 2,200
June 25 Bought goods from Aruna 3,000
12. From the following trial balance and the necessary
information given below for a public school, prepare
income and expenditure account for the year 2015 and
balance sheet as at 31.12.13
Debit
balances
Credit balances
Buildings 2,50,000 Admission fees 5,000
Furniture and
fittings
40,000 Tuition and other fees 2,00,000
Library books 60,000 Creditors for supplies 6,000
Investments

2,00,000 Rent for the hall 4,000
Salaries 2,00,000 Miuscellaneous receipts 12,000
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Stationery 15,000 Govt. grants 1,40,000
General
expenses
8,000 Capital fund 4,00,000
Annual sports
expenses
6,000 Donation received for
Cash at bank 20,000 Purchase of library 25,000
Cash in hand 1,000 Sale of old furniture 8,000
8,00,000 8,00,000
Fees yet to be received for the year is Rs. 10,000 salaries
yet to be paid amount to Rs. 12,000 furniture costing
Rs. 15,000 was purchased on 1.7.13. The book value of
the furniture sold on 1.1.13 was Rs. 20,000. Depreciation
is to be charged 10% per annum on furniture and
fittings, 15% on library books and on building.
13. Explain the various methods of treating goodwill at the
time of admission of partners.
14. A company issues 10,000 shares of the face value of
Rs. 10 each, payable Rs. 3 on application, Rs. 3 on
allotment, 3 Rs. 2 on first call and Rs. 2 on final call. All
the shares are subscribed and duly alloted and both the
calls are made. All cash duly received except the final call
on 200 shares. These are subsequently forfeited by the
directors and are resold as fully paid for Rs. 1,400. Give
necessary entries to record the transaction in the
company's journal.
15. From the given information you are required to prepare
the profit and loss account of Asoka Bank Ltd for the year
ended 31st Dec 2013.
Rs. Rs.
Interest on cash
credits
4,46,000 Postage and
telegrams
2,800
Interest on loans 5,18,000 Sundry charges 2,000
Interest on
current accounts
84,000 Provident fund
contribution
1,400
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Discount on bills
discounted
3,90,000 Director's and
auditor's fees
8,400
Interest on over
drafts
1,08,000 Printing 4,000
Interest on
savings bank
1,36,000 Law charges 1,800
Interest on fixed
deposits
5,50,000 Establishment 1,08,000
Commission 16,000 Locker's rent 700
Exchange 400 Transfer fees 1,400
Rent and rates 36,000 Depreciation on
bank's property
10,000
Rebate on bills
discounted
98,000
Bad debts 58,000