ECO-2 No. of Printed Pages : 7

BACHELOR'S DEGREE PROGRAMME

Term-End Examination .

June, 2011

ELECTIVE COURSE : COMMERCE

ECO-2 : ACCOUNTANCY-I Time 2 hours Maximum Marks : 50

Note : Attempt any four questions, including question no. 1

which is compulsory.

1. Answer any two questions from the following. 7+7

(a) What do you understand by Dual Aspect Concept ? Explain its accounting implications with examples.

(b) What is Trial Balance ? Explain the various forms in which it is prepared.

(c) Explain Bank Reconciliation Statement and its advantages.

(d) What is Journal Proper ? State the transactions that are usually recorded in Journal Proper.

2. (a) Differentiate between a Bill of exchange and a promissory Note. 6+6

(b) What do you understand by Matching Costs against revenue ? Explain the main implication of the Matching Concept.

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3. (a) What is the difference between normal loss and abnormal loss ? Give examples. 6+6

(b) What is Sectional Balancing ? How does it differ from self balancing ? Give proforma of a Total Debtors Account.

4. Give journal entries for the following adjustments. 12

(a) Interest received in advance Rs. 60,000.

(b) Interest on drawings Rs.12,000

(c) Provision for discount on creditors Rs. 2,000.

(d) Loss of goods by theft Rs. 8,500.

(e) Drawing of goods by the proprietor Rs. 7,500.

(f) Out standing wages Rs. 3,000.

5. The Trial Balance of Siva did not tally. The credit 12 side exceeded by Rs. 1455. This amount was entered in the debit column against suspense account and the Trial Balance was made to tally. Later the following errors were discovered.

(a) Goods worth Rs. 1,250 were sold to Mahesh on credit. This was entered in the sales book but was not posted.

(b) Goods worth Rs. 313 were returned by Ahmed. The amount was credited to his account but was not recorded in the return inwards book.

,(c) Manoj paid Rs. 670 but his account was wrongly credited with Rs. 607.

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(d) An amount of Rs. 375 owed by Dinesh was omitted from the schedules of sundry debtors.

(e) The sales book was undercast by Rs. 420.

Give journal entries to rectify the errors and show the suspense account.

6. The receipts and payments account of ABC & Co. 12 is given below.

Receipts and Payments Account For the year ending March 31 2009

Receipts Rs. Payments Rs. To Balance b/d 5000 By Charities 14500 To cash at Bank 2700 By Salaries 2600 To cash in hand 8000 By Rent & Taxes 1200 To subscriptions 4000 By Printing 300 To Endowment Fund 15000 By Postage 100 To Legacies 6000 By Advertisements 250 To Interest on Investment 9500 By Furniture 650 To Interest on deposits 150 By Insurance 1200 To sales of old news papers 75 By Investments 14000

By Advance for building 5000 By balance c/d cash at Bank 8000 Cash in hand 2625

50425 50425

Prepare the Income and Expenditure Account for the year ended March 31, 2009 after considering the following.

(a) It was decided to treat one half of the amount received on account of legacies and donations as income.

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(b) Liabilities to be provided for are.

Rent Rs. 200 Salaries Rs. 300 Advertisement Rs. 50

(c) Insurance premium was paid in advance for three months.

(d) Rs. 500 due for Interest on investment was not actually received.

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