DISTANCE EDUCATION
B.B.A. DEGREE EXAMINATION, MAY 2017.
BASIC FINANCIAL ACCOUNTING
(2005 onwards)
Time Three hours Maximum 100 marks
PART A — 8 40 marks)
Answer any FIVE questions.
1. Define accounting. What are the advantages of
accounting?
2. Distinguish between 'Receipts and Payments Account'.
3. On 1-4-2013, Balu draws a bill on Ravi for . 1,600 for
goods sold at 90 days after sight. Ravi accepts the bill on
5-4-2013. Balu, however, endorsed the bill to sogan in
settlement of a debt of . 1,700. On maturity the bill was
duly honoured by Ravi.
Show the journal entries in the books of all the parties.
4. What is single entry system? How does it differ from
double entry system?
5. Explain the method of preparing self-balancing ledgers
and its significance.
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6. Prepare Correct Trial balance.
. .
Capital 8,000 Debtors 7,580
Bad debts recovered 250 Bank deposit 2,750
Creditors 1,250 Discount allowed 40
Returns outward 350 Drawings 600
Bank overdraft 1,570 Returns inward 450
Rent 360 Sales 14,690
Salaries 850 Bills payable 1,350
Postage 300
Cash in hand 210
Opening stock 2,450
Purchases 11,870
27,460 27,460
7. Shahid and Wahid entered into a joint venture in timber.
Profits were to be shared equally. Shahid was to purchase
timber and send it to Wahid who would sell it.
On 1st July 2012, Shahid purchased timber worth
. 20,000 and incurred . 1,500 as expenses on
forwarding it to Wahid. He immediately drew upon
Wahid for Rs. 20,000 for 3 months. The acceptance was
discounted at per annum.
Wahid paid . 2,000 as freight, . 600 as commission to
agents and . 400 as rent. The whole timber was
disposed of for . 30,000. He forwarded a cheque to
Shahid for the amount due on 31st December 2012.
Prepare ledger accounts in the books of 60th the parites.
8. Distinguish between consignment and joint venture.
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PART B — × 15 60 marks)
Answer any FOUR questions.
9. Enter the following transactions in the ledger of Hans Raj
of Chennai.
2013 .
March 1 Hans Raj commenced business with
capital of 60,000
2 Purchased furniture for cash 4,000
3 Purchased goods from Balu 40,000
5 Sold goods for cash 24,000
7 Purchased goods from Kali, the list
price of which is 16,000 at trade
discount
10 Returned goods of 600 to Kali
12 Got a house for 1,000 monthly rent
allotted and paid advance rent of 1,000
15 Appointed a commission agent and paid
him commission 600
16 Paid 400 donation to political parties
17 Received grant of 800 from State Govt.
20 Withdrew 360
25 Purchased goods worth 16,000 from
Dayalan
30 Sold goods for cash 14,000
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10. A partner has withdrawn the following sums of money
during the half year ending 30.6.2013.
Jan 15 300
Feb 18 250
Mar 10 150
Mar 26 200
April 20 400
May 16 300
June 18 500
Interest is to be charged at p.a. Find out the average
due date and calculate the amount of interest to be
debited to the partner.
11. From the following prepare an Income and Expenditure
account for 2012
Receipts . Payments .
Opening balance Salaries 4,800
Bank 1,800 Rent 500
Subscriptions Stationery and
postage
200
2011 500 Bicycle purchased 300
2012 8,300 National savings
2013 600 9,400 certificates 3,000
Help to needy
Sale of investments 2,000 students 2,000
Sale of old furniture
(Book value 400)
300 Balance Bank 2,700
13,500 13,500
Subscriptions for 2012 still receivable were 700.
Interest due on savings certificates 100 and rent
unpaid but due was 60.
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12. Ramesh keeps his books on single entry basis. Prepare a
statement of affairs as on 31.10.2012 and a statement of
profit loss for the period ending 31.10.2012.
Assets and Liabilities 1.11.2011
31.10.2012
Bank balance 560 350
Cash on hand 10 50
Debtors 4,500 3,600
Stock 2,700 2,900
Plant 4,000 4,000
Furniture 1,000 1,000
Ramesh had withdrawn . 2,000 during the year and had
introduced fresh capital of . 4,200 on 1.7.2012. A
provision of on debtors is necessary. Write off
Depreciation on Plant at 10% and Furniture at 15%.
Interest on capital is to be allowed at 5%.
13. and entered into a joint venture in steel furniture.
Profits were to be shared equally. A was to purchase steel
furniture and send it to B who would sell it.
On 1-3-2012 purchased steel furniture worth
. 10,000 and incurred . 600 expenses on forwarding it
to He immediately draws upon for . 10,000 for
3 months. The acceptance was discounted at p.a.
paid . 1,000 as freight, . 500 as commission to
agents and . 200 as rent. The whole stock of furniture
as disposed of for . 16,000. He forwarded a cheque to
for the amount due on 30-6-2012. Prepare joint venture
account and the party account in the books of and
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14. The following details were extracted from the books of a
company for the six months ended 31.12.2012.
.
1.7.2012 Sales ledger balances 37,000
Provision for doubtful debts 2,500
31.12.2012 Sales 73,000
Return inwards 700
Cash received 70,000
Bills accepted by customers 2,600
Bills dishonoured 300
Bad debts written off 600
Discount allowed 1,500
Prepare the Sales Ledger Adjustment A/c in the General
Ledger and General Ledger Adjustment A/c in the Sales
Ledger.
15. Rajashree Co, Madras consigned 50 cases of corkery to
Gowri Co, Kolkatta. Each case is at the cost of . 400.
Rajashree Co paid . 3,000 for carriage etc. Gowri
Co. Sends on account sales with the following details
30 cases sold at 700
20 cases sold at 720
Freight, Cartage etc, 2,000
Dock dues, Marine Insurance 600
Commission at
Pass the necessary journal entries and prepare
the important Ledger Accounts in the books of
Rajashree Co.