Mock Test: Principles and Practice of Accounting(Paper-1) - Series-II(Dec. 2023) | Mock Tests & Past Year Papers for CA Foundation PDF Download

 Page 1


1 
 
MOCK TEST PAPER 2 
FOUNDATION COURSE 
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING 
Question No. 1 is compulsory. 
Attempt any four questions from the remaining five questions. 
Wherever necessary, suitable assumptions should be made and disclosed by way of note forming part of 
the answer. 
Working Notes should form part of the answer. 
Time Allowed: 3 Hours Maximum Marks: 100 
1. (a)  State with reasons, whether the following statements are true or false: 
(i)  The provision for bad debts is debited to sundry debtors account.  
(ii)  Discount column of the cash book is never balanced.  
(iii)  Goods sold on approval or return basis are not recorded as credit sales initially when they are 
sent-out.  
(iv) In case the due date of a bill falls after the date of closing the account, the interest from the 
date of closing to such due date is known as Red-Ink interest. 
(v) Business of partnership comes to an end on death of a partner.  
(vi) Non-participating preference shareholders enjoy voting rights.  
(6 Statements x 2 Marks = 12 Marks) 
(b) Discuss the limitations which must be kept in mind while evaluating the Financial Statements . 
 (4 Marks) 
(c) The following are the details of the spare parts of a Printing Press:  
1-1-2023  Opening Inventory   Nil  
1-1-2023  Purchases   100 units @ ` 300 per unit  
15-1-2023  Issued for consumption   50 units  
1-2-2023  Purchases   200 units @ ` 400 per unit  
15-2-2023  Issued for consumption   100 units  
20-2-2023  Issued for consumption   100 units  
 Find out the value of Inventory as on 31.3.2023, if the company follows Weighted Average Method. 
 (4 Marks) 
2. (a) The following mistakes were located in the books of a concern after its books were closed and a 
Suspense Account was opened in order to get the Trial Balance agreed: 
(i) A Bill Receivable for ` 1,550 was passed through Bills Payable Book. The Bill was given by 
Hament. 
(ii) A sale of ` 25,000 to Nidhi was wrongly debited to the Account of Vidhi. 
(iii) General expenses ` 360 was posted in the General Ledger as ` 630. 
(iv) Sales Day Book was overcast by ` 5,000. 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
Page 2


1 
 
MOCK TEST PAPER 2 
FOUNDATION COURSE 
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING 
Question No. 1 is compulsory. 
Attempt any four questions from the remaining five questions. 
Wherever necessary, suitable assumptions should be made and disclosed by way of note forming part of 
the answer. 
Working Notes should form part of the answer. 
Time Allowed: 3 Hours Maximum Marks: 100 
1. (a)  State with reasons, whether the following statements are true or false: 
(i)  The provision for bad debts is debited to sundry debtors account.  
(ii)  Discount column of the cash book is never balanced.  
(iii)  Goods sold on approval or return basis are not recorded as credit sales initially when they are 
sent-out.  
(iv) In case the due date of a bill falls after the date of closing the account, the interest from the 
date of closing to such due date is known as Red-Ink interest. 
(v) Business of partnership comes to an end on death of a partner.  
(vi) Non-participating preference shareholders enjoy voting rights.  
(6 Statements x 2 Marks = 12 Marks) 
(b) Discuss the limitations which must be kept in mind while evaluating the Financial Statements . 
 (4 Marks) 
(c) The following are the details of the spare parts of a Printing Press:  
1-1-2023  Opening Inventory   Nil  
1-1-2023  Purchases   100 units @ ` 300 per unit  
15-1-2023  Issued for consumption   50 units  
1-2-2023  Purchases   200 units @ ` 400 per unit  
15-2-2023  Issued for consumption   100 units  
20-2-2023  Issued for consumption   100 units  
 Find out the value of Inventory as on 31.3.2023, if the company follows Weighted Average Method. 
 (4 Marks) 
2. (a) The following mistakes were located in the books of a concern after its books were closed and a 
Suspense Account was opened in order to get the Trial Balance agreed: 
(i) A Bill Receivable for ` 1,550 was passed through Bills Payable Book. The Bill was given by 
Hament. 
(ii) A sale of ` 25,000 to Nidhi was wrongly debited to the Account of Vidhi. 
(iii) General expenses ` 360 was posted in the General Ledger as ` 630. 
(iv) Sales Day Book was overcast by ` 5,000. 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
2 
(v) Cash received from Aman was debited to Vimal ` 3,200. 
(vi) Legal Expenses ` 2,910 paid to Mr. Mohan was debited to her personal account. 
(vii) While carrying forward the total of one page of the Purchases Book to the next, th e amount 
of ` 1,235 was written as ` 1,325. 
 Find out the nature and amount of the Suspense Account and Pass entries for the rectification of 
the above errors in the subsequent year’s books. 
(b)  Prepare the Bank Reconciliation Statement of M/s. Nath Associates on 30
th
 June 2023 from the 
particulars given below: 
(i) The Bank Pass Book had a debit balance of ` 25,000 on 30th June, 2023. 
(ii)  A cheque worth ` 400 directly deposited into Bank by customer but no entry was made in the 
Cash Book. 
(iii)  Out of cheques issued worth ` 34,000, cheques amounting to ` 20,000 only were presented 
for payment till 30
th
 June, 2023. 
(iv) A cheque for ` 4,000 received and entered in the Cash Book but it was not sent to the Bank. 
(v)  Cheques worth ` 20,000 had been sent to Bank for collection but the collection was reported 
by the Bank as under. 
(1)  Cheques collected before 30th June, 2023, ` 14,000 
(2) Cheques collected on 10th July, 2023, ` 4,000 
(3) Cheques collected on 12th July, 2023, ` 2,000. 
(vi) The Bank made a direct payment of ` 600 which was not recorded in the Cash Book. 
(vii) Interest on overdraft charged by the bank ` 1,600 was not recorded in the Cash Book. 
(viii)  Bank charges worth ` 80 have been entered twice in the cash book whereas Insurance 
charges for ` 70 directly paid by Bank was not at all entered in the Cash Book. 
(ix)  The credit side of bank column of Cash Book was under cast by ` 2,000. 
 (10 + 10 = 20 Marks) 
3. (a)  Ram of Lucknow consigned to Shiv of Jaipur, goods to be sold at invoice price which represents 
125% of cost. Shiv is entitled to a commission of 10% on sales at invoice price and 25% of any 
excess realised over invoice price. The expenses on freight and insurance incurred by Ram were 
` 15,000. The account sales received by Ram shows that Shiv has effected sales amounting to ` 
1,50,000 in respect of 75% of the consignment. His selling expenses to be reimbursed were ` 
12,000. 10% of consignment goods of the value of ` 18,750 were destroyed in fire at Jaipur 
godown. Shiv remitted the balance in favour of Ram.  
  You are required to prepare consignment account in the books of Ram along with the necessary 
calculations.  
(b) Mr. Bosco and Mr. Ben had the following mutual dealings. They desired to settle their account on 
the average due date: 
Purchases by Bosco from Ben: ` 
6
th
 January, 2023 60,000 
2
nd
 February, 2023 28,000 
31
st
 March, 2023 20,000 
  
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
Page 3


1 
 
MOCK TEST PAPER 2 
FOUNDATION COURSE 
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING 
Question No. 1 is compulsory. 
Attempt any four questions from the remaining five questions. 
Wherever necessary, suitable assumptions should be made and disclosed by way of note forming part of 
the answer. 
Working Notes should form part of the answer. 
Time Allowed: 3 Hours Maximum Marks: 100 
1. (a)  State with reasons, whether the following statements are true or false: 
(i)  The provision for bad debts is debited to sundry debtors account.  
(ii)  Discount column of the cash book is never balanced.  
(iii)  Goods sold on approval or return basis are not recorded as credit sales initially when they are 
sent-out.  
(iv) In case the due date of a bill falls after the date of closing the account, the interest from the 
date of closing to such due date is known as Red-Ink interest. 
(v) Business of partnership comes to an end on death of a partner.  
(vi) Non-participating preference shareholders enjoy voting rights.  
(6 Statements x 2 Marks = 12 Marks) 
(b) Discuss the limitations which must be kept in mind while evaluating the Financial Statements . 
 (4 Marks) 
(c) The following are the details of the spare parts of a Printing Press:  
1-1-2023  Opening Inventory   Nil  
1-1-2023  Purchases   100 units @ ` 300 per unit  
15-1-2023  Issued for consumption   50 units  
1-2-2023  Purchases   200 units @ ` 400 per unit  
15-2-2023  Issued for consumption   100 units  
20-2-2023  Issued for consumption   100 units  
 Find out the value of Inventory as on 31.3.2023, if the company follows Weighted Average Method. 
 (4 Marks) 
2. (a) The following mistakes were located in the books of a concern after its books were closed and a 
Suspense Account was opened in order to get the Trial Balance agreed: 
(i) A Bill Receivable for ` 1,550 was passed through Bills Payable Book. The Bill was given by 
Hament. 
(ii) A sale of ` 25,000 to Nidhi was wrongly debited to the Account of Vidhi. 
(iii) General expenses ` 360 was posted in the General Ledger as ` 630. 
(iv) Sales Day Book was overcast by ` 5,000. 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
2 
(v) Cash received from Aman was debited to Vimal ` 3,200. 
(vi) Legal Expenses ` 2,910 paid to Mr. Mohan was debited to her personal account. 
(vii) While carrying forward the total of one page of the Purchases Book to the next, th e amount 
of ` 1,235 was written as ` 1,325. 
 Find out the nature and amount of the Suspense Account and Pass entries for the rectification of 
the above errors in the subsequent year’s books. 
(b)  Prepare the Bank Reconciliation Statement of M/s. Nath Associates on 30
th
 June 2023 from the 
particulars given below: 
(i) The Bank Pass Book had a debit balance of ` 25,000 on 30th June, 2023. 
(ii)  A cheque worth ` 400 directly deposited into Bank by customer but no entry was made in the 
Cash Book. 
(iii)  Out of cheques issued worth ` 34,000, cheques amounting to ` 20,000 only were presented 
for payment till 30
th
 June, 2023. 
(iv) A cheque for ` 4,000 received and entered in the Cash Book but it was not sent to the Bank. 
(v)  Cheques worth ` 20,000 had been sent to Bank for collection but the collection was reported 
by the Bank as under. 
(1)  Cheques collected before 30th June, 2023, ` 14,000 
(2) Cheques collected on 10th July, 2023, ` 4,000 
(3) Cheques collected on 12th July, 2023, ` 2,000. 
(vi) The Bank made a direct payment of ` 600 which was not recorded in the Cash Book. 
(vii) Interest on overdraft charged by the bank ` 1,600 was not recorded in the Cash Book. 
(viii)  Bank charges worth ` 80 have been entered twice in the cash book whereas Insurance 
charges for ` 70 directly paid by Bank was not at all entered in the Cash Book. 
(ix)  The credit side of bank column of Cash Book was under cast by ` 2,000. 
 (10 + 10 = 20 Marks) 
3. (a)  Ram of Lucknow consigned to Shiv of Jaipur, goods to be sold at invoice price which represents 
125% of cost. Shiv is entitled to a commission of 10% on sales at invoice price and 25% of any 
excess realised over invoice price. The expenses on freight and insurance incurred by Ram were 
` 15,000. The account sales received by Ram shows that Shiv has effected sales amounting to ` 
1,50,000 in respect of 75% of the consignment. His selling expenses to be reimbursed were ` 
12,000. 10% of consignment goods of the value of ` 18,750 were destroyed in fire at Jaipur 
godown. Shiv remitted the balance in favour of Ram.  
  You are required to prepare consignment account in the books of Ram along with the necessary 
calculations.  
(b) Mr. Bosco and Mr. Ben had the following mutual dealings. They desired to settle their account on 
the average due date: 
Purchases by Bosco from Ben: ` 
6
th
 January, 2023 60,000 
2
nd
 February, 2023 28,000 
31
st
 March, 2023 20,000 
  
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
3 
Sales by Bosco to Ben:  
6
th
 January, 2023 66,000 
9
th
 March, 2023 24,000 
20
th
 March, 2023 5,000 
 You are asked to ascertain the average due date taking base date as 6
th
 January 2023.  
(c)  The following are the transactions that took place between P and Q during the period from  
1st October, 2022 to 31st March, 2023: 
2022 ` 
Oct.1  Balance due to P by Q 3,000 
Oct  18  Goods sold by P to Q 2,500 
Nov. 16  Goods sold by Q to P (invoice dated November, 26) 4,000 
Dec.7  Goods sold by Q to P (invoice dated December, 17) 3,500 
2023 ` 
Jan. 3 Promissory note given by P to Q, at three months 5,000 
Feb. 4  Cash paid by P to Q 1,000 
Mar. 21  Goods sold by P to Q 4,300 
Mar.28  Goods sold by Q to P (invoice dated April, 8) 2,700 
 Draw up an Account Current up to March 31st, 2023 to be rendered by P to Q, charging interest at 
10% per annum. Interest is to be calculated to the nearest rupee.   (10 + 5 + 5 = 20 Marks) 
4. (a)  Inder, Anil and Pawan are in partnership, sharing profits and losses equally. Pawan died on  
30th June 2023.   
The Balance Sheet of Firm as at 31
st
 March 2023 stood as:  
Liabilities Amount Assets Amount 
Creditors 20,000 Land and Building 1,50,000 
General Reserve  12,000 Investments 65,000 
Capital Accounts:  Stock in trade 15,000 
 Inder 1,00,000 Trade receivables             35,000  
 Anil 75,000 Less: Provision for doubtful debt (2,000) 33,000 
 Pawan 75,000 Cash in hand 7,000 
  Cash at bank 12,000 
 2,82,000  2,82,000 
In order to arrive at the balance due to Pawan, it was mutually agreed that: 
(i) Land and Building be valued at ` 1,75,000 
(ii)  Debtors were all good, no provision is required 
(iii)  Stock is valued at ` 13,500 
(iv)  Goodwill will be valued at one year's purchase of the average profit of the past five years.  
Pawan's share of goodwill be adjusted in the account of Inder and Anil. 
(v) Pawan's share of profit from 1
st
 April 2023, to the date of death be calculated on the basis of 
average profit of preceding three years. 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
Page 4


1 
 
MOCK TEST PAPER 2 
FOUNDATION COURSE 
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING 
Question No. 1 is compulsory. 
Attempt any four questions from the remaining five questions. 
Wherever necessary, suitable assumptions should be made and disclosed by way of note forming part of 
the answer. 
Working Notes should form part of the answer. 
Time Allowed: 3 Hours Maximum Marks: 100 
1. (a)  State with reasons, whether the following statements are true or false: 
(i)  The provision for bad debts is debited to sundry debtors account.  
(ii)  Discount column of the cash book is never balanced.  
(iii)  Goods sold on approval or return basis are not recorded as credit sales initially when they are 
sent-out.  
(iv) In case the due date of a bill falls after the date of closing the account, the interest from the 
date of closing to such due date is known as Red-Ink interest. 
(v) Business of partnership comes to an end on death of a partner.  
(vi) Non-participating preference shareholders enjoy voting rights.  
(6 Statements x 2 Marks = 12 Marks) 
(b) Discuss the limitations which must be kept in mind while evaluating the Financial Statements . 
 (4 Marks) 
(c) The following are the details of the spare parts of a Printing Press:  
1-1-2023  Opening Inventory   Nil  
1-1-2023  Purchases   100 units @ ` 300 per unit  
15-1-2023  Issued for consumption   50 units  
1-2-2023  Purchases   200 units @ ` 400 per unit  
15-2-2023  Issued for consumption   100 units  
20-2-2023  Issued for consumption   100 units  
 Find out the value of Inventory as on 31.3.2023, if the company follows Weighted Average Method. 
 (4 Marks) 
2. (a) The following mistakes were located in the books of a concern after its books were closed and a 
Suspense Account was opened in order to get the Trial Balance agreed: 
(i) A Bill Receivable for ` 1,550 was passed through Bills Payable Book. The Bill was given by 
Hament. 
(ii) A sale of ` 25,000 to Nidhi was wrongly debited to the Account of Vidhi. 
(iii) General expenses ` 360 was posted in the General Ledger as ` 630. 
(iv) Sales Day Book was overcast by ` 5,000. 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
2 
(v) Cash received from Aman was debited to Vimal ` 3,200. 
(vi) Legal Expenses ` 2,910 paid to Mr. Mohan was debited to her personal account. 
(vii) While carrying forward the total of one page of the Purchases Book to the next, th e amount 
of ` 1,235 was written as ` 1,325. 
 Find out the nature and amount of the Suspense Account and Pass entries for the rectification of 
the above errors in the subsequent year’s books. 
(b)  Prepare the Bank Reconciliation Statement of M/s. Nath Associates on 30
th
 June 2023 from the 
particulars given below: 
(i) The Bank Pass Book had a debit balance of ` 25,000 on 30th June, 2023. 
(ii)  A cheque worth ` 400 directly deposited into Bank by customer but no entry was made in the 
Cash Book. 
(iii)  Out of cheques issued worth ` 34,000, cheques amounting to ` 20,000 only were presented 
for payment till 30
th
 June, 2023. 
(iv) A cheque for ` 4,000 received and entered in the Cash Book but it was not sent to the Bank. 
(v)  Cheques worth ` 20,000 had been sent to Bank for collection but the collection was reported 
by the Bank as under. 
(1)  Cheques collected before 30th June, 2023, ` 14,000 
(2) Cheques collected on 10th July, 2023, ` 4,000 
(3) Cheques collected on 12th July, 2023, ` 2,000. 
(vi) The Bank made a direct payment of ` 600 which was not recorded in the Cash Book. 
(vii) Interest on overdraft charged by the bank ` 1,600 was not recorded in the Cash Book. 
(viii)  Bank charges worth ` 80 have been entered twice in the cash book whereas Insurance 
charges for ` 70 directly paid by Bank was not at all entered in the Cash Book. 
(ix)  The credit side of bank column of Cash Book was under cast by ` 2,000. 
 (10 + 10 = 20 Marks) 
3. (a)  Ram of Lucknow consigned to Shiv of Jaipur, goods to be sold at invoice price which represents 
125% of cost. Shiv is entitled to a commission of 10% on sales at invoice price and 25% of any 
excess realised over invoice price. The expenses on freight and insurance incurred by Ram were 
` 15,000. The account sales received by Ram shows that Shiv has effected sales amounting to ` 
1,50,000 in respect of 75% of the consignment. His selling expenses to be reimbursed were ` 
12,000. 10% of consignment goods of the value of ` 18,750 were destroyed in fire at Jaipur 
godown. Shiv remitted the balance in favour of Ram.  
  You are required to prepare consignment account in the books of Ram along with the necessary 
calculations.  
(b) Mr. Bosco and Mr. Ben had the following mutual dealings. They desired to settle their account on 
the average due date: 
Purchases by Bosco from Ben: ` 
6
th
 January, 2023 60,000 
2
nd
 February, 2023 28,000 
31
st
 March, 2023 20,000 
  
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
3 
Sales by Bosco to Ben:  
6
th
 January, 2023 66,000 
9
th
 March, 2023 24,000 
20
th
 March, 2023 5,000 
 You are asked to ascertain the average due date taking base date as 6
th
 January 2023.  
(c)  The following are the transactions that took place between P and Q during the period from  
1st October, 2022 to 31st March, 2023: 
2022 ` 
Oct.1  Balance due to P by Q 3,000 
Oct  18  Goods sold by P to Q 2,500 
Nov. 16  Goods sold by Q to P (invoice dated November, 26) 4,000 
Dec.7  Goods sold by Q to P (invoice dated December, 17) 3,500 
2023 ` 
Jan. 3 Promissory note given by P to Q, at three months 5,000 
Feb. 4  Cash paid by P to Q 1,000 
Mar. 21  Goods sold by P to Q 4,300 
Mar.28  Goods sold by Q to P (invoice dated April, 8) 2,700 
 Draw up an Account Current up to March 31st, 2023 to be rendered by P to Q, charging interest at 
10% per annum. Interest is to be calculated to the nearest rupee.   (10 + 5 + 5 = 20 Marks) 
4. (a)  Inder, Anil and Pawan are in partnership, sharing profits and losses equally. Pawan died on  
30th June 2023.   
The Balance Sheet of Firm as at 31
st
 March 2023 stood as:  
Liabilities Amount Assets Amount 
Creditors 20,000 Land and Building 1,50,000 
General Reserve  12,000 Investments 65,000 
Capital Accounts:  Stock in trade 15,000 
 Inder 1,00,000 Trade receivables             35,000  
 Anil 75,000 Less: Provision for doubtful debt (2,000) 33,000 
 Pawan 75,000 Cash in hand 7,000 
  Cash at bank 12,000 
 2,82,000  2,82,000 
In order to arrive at the balance due to Pawan, it was mutually agreed that: 
(i) Land and Building be valued at ` 1,75,000 
(ii)  Debtors were all good, no provision is required 
(iii)  Stock is valued at ` 13,500 
(iv)  Goodwill will be valued at one year's purchase of the average profit of the past five years.  
Pawan's share of goodwill be adjusted in the account of Inder and Anil. 
(v) Pawan's share of profit from 1
st
 April 2023, to the date of death be calculated on the basis of 
average profit of preceding three years. 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
4 
(vi)  The profit of the preceding five years ended 1
st
 March were:  
2023   2022   2021   2020   2019 
25,000   20,000  22,500  35,000   28,750 
You are required to prepare Revaluation account and Capital accounts of the partners as at 1
st
 July 
2023.  
(b)  The trial balance of Chawla as at 31st December, 2022 is as follows: 
  Dr. Cr. 
  ` ` 
Chawla’s capital account  -        38,345  
Stock 1
st
 January, 2022           23,400   -  
Sales  -  1,94,800 
Returns inward         4,300   -  
Purchases 1,60,850   -  
Returns outward  -              2,900  
Carriage inwards             9,800   -  
Rent & taxes             2,350   -  
Salaries & wages             4,650   -  
Sundry debtors 12,000   -  
Sundry creditors  -              7,400  
Bank loan @ 14% p.a.  -            10,000  
Bank interest                550   -  
Printing and stationary expenses 7,200   -  
Bank balance             4,000   -  
Discount earned  -              2,220  
Furniture & fittings         2,500   -  
Discount allowed 900   -  
General expenses             5,725   -  
Insurance               650   -  
Postage expenses           1,165   -  
Cash balance                190   -  
Travelling expenses                435   -  
Drawings           15,000   -  
         2,55,665         2,55,665  
The following adjustments are to be made: 
(1) Provision for bad and doubtful debts be created at 5% and for discount @ 2% on sundry 
debtors. 
(2) Personal purchases of Chawla amounting to ` 300 had been recorded in the purchases day 
book. 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
Page 5


1 
 
MOCK TEST PAPER 2 
FOUNDATION COURSE 
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING 
Question No. 1 is compulsory. 
Attempt any four questions from the remaining five questions. 
Wherever necessary, suitable assumptions should be made and disclosed by way of note forming part of 
the answer. 
Working Notes should form part of the answer. 
Time Allowed: 3 Hours Maximum Marks: 100 
1. (a)  State with reasons, whether the following statements are true or false: 
(i)  The provision for bad debts is debited to sundry debtors account.  
(ii)  Discount column of the cash book is never balanced.  
(iii)  Goods sold on approval or return basis are not recorded as credit sales initially when they are 
sent-out.  
(iv) In case the due date of a bill falls after the date of closing the account, the interest from the 
date of closing to such due date is known as Red-Ink interest. 
(v) Business of partnership comes to an end on death of a partner.  
(vi) Non-participating preference shareholders enjoy voting rights.  
(6 Statements x 2 Marks = 12 Marks) 
(b) Discuss the limitations which must be kept in mind while evaluating the Financial Statements . 
 (4 Marks) 
(c) The following are the details of the spare parts of a Printing Press:  
1-1-2023  Opening Inventory   Nil  
1-1-2023  Purchases   100 units @ ` 300 per unit  
15-1-2023  Issued for consumption   50 units  
1-2-2023  Purchases   200 units @ ` 400 per unit  
15-2-2023  Issued for consumption   100 units  
20-2-2023  Issued for consumption   100 units  
 Find out the value of Inventory as on 31.3.2023, if the company follows Weighted Average Method. 
 (4 Marks) 
2. (a) The following mistakes were located in the books of a concern after its books were closed and a 
Suspense Account was opened in order to get the Trial Balance agreed: 
(i) A Bill Receivable for ` 1,550 was passed through Bills Payable Book. The Bill was given by 
Hament. 
(ii) A sale of ` 25,000 to Nidhi was wrongly debited to the Account of Vidhi. 
(iii) General expenses ` 360 was posted in the General Ledger as ` 630. 
(iv) Sales Day Book was overcast by ` 5,000. 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
2 
(v) Cash received from Aman was debited to Vimal ` 3,200. 
(vi) Legal Expenses ` 2,910 paid to Mr. Mohan was debited to her personal account. 
(vii) While carrying forward the total of one page of the Purchases Book to the next, th e amount 
of ` 1,235 was written as ` 1,325. 
 Find out the nature and amount of the Suspense Account and Pass entries for the rectification of 
the above errors in the subsequent year’s books. 
(b)  Prepare the Bank Reconciliation Statement of M/s. Nath Associates on 30
th
 June 2023 from the 
particulars given below: 
(i) The Bank Pass Book had a debit balance of ` 25,000 on 30th June, 2023. 
(ii)  A cheque worth ` 400 directly deposited into Bank by customer but no entry was made in the 
Cash Book. 
(iii)  Out of cheques issued worth ` 34,000, cheques amounting to ` 20,000 only were presented 
for payment till 30
th
 June, 2023. 
(iv) A cheque for ` 4,000 received and entered in the Cash Book but it was not sent to the Bank. 
(v)  Cheques worth ` 20,000 had been sent to Bank for collection but the collection was reported 
by the Bank as under. 
(1)  Cheques collected before 30th June, 2023, ` 14,000 
(2) Cheques collected on 10th July, 2023, ` 4,000 
(3) Cheques collected on 12th July, 2023, ` 2,000. 
(vi) The Bank made a direct payment of ` 600 which was not recorded in the Cash Book. 
(vii) Interest on overdraft charged by the bank ` 1,600 was not recorded in the Cash Book. 
(viii)  Bank charges worth ` 80 have been entered twice in the cash book whereas Insurance 
charges for ` 70 directly paid by Bank was not at all entered in the Cash Book. 
(ix)  The credit side of bank column of Cash Book was under cast by ` 2,000. 
 (10 + 10 = 20 Marks) 
3. (a)  Ram of Lucknow consigned to Shiv of Jaipur, goods to be sold at invoice price which represents 
125% of cost. Shiv is entitled to a commission of 10% on sales at invoice price and 25% of any 
excess realised over invoice price. The expenses on freight and insurance incurred by Ram were 
` 15,000. The account sales received by Ram shows that Shiv has effected sales amounting to ` 
1,50,000 in respect of 75% of the consignment. His selling expenses to be reimbursed were ` 
12,000. 10% of consignment goods of the value of ` 18,750 were destroyed in fire at Jaipur 
godown. Shiv remitted the balance in favour of Ram.  
  You are required to prepare consignment account in the books of Ram along with the necessary 
calculations.  
(b) Mr. Bosco and Mr. Ben had the following mutual dealings. They desired to settle their account on 
the average due date: 
Purchases by Bosco from Ben: ` 
6
th
 January, 2023 60,000 
2
nd
 February, 2023 28,000 
31
st
 March, 2023 20,000 
  
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
3 
Sales by Bosco to Ben:  
6
th
 January, 2023 66,000 
9
th
 March, 2023 24,000 
20
th
 March, 2023 5,000 
 You are asked to ascertain the average due date taking base date as 6
th
 January 2023.  
(c)  The following are the transactions that took place between P and Q during the period from  
1st October, 2022 to 31st March, 2023: 
2022 ` 
Oct.1  Balance due to P by Q 3,000 
Oct  18  Goods sold by P to Q 2,500 
Nov. 16  Goods sold by Q to P (invoice dated November, 26) 4,000 
Dec.7  Goods sold by Q to P (invoice dated December, 17) 3,500 
2023 ` 
Jan. 3 Promissory note given by P to Q, at three months 5,000 
Feb. 4  Cash paid by P to Q 1,000 
Mar. 21  Goods sold by P to Q 4,300 
Mar.28  Goods sold by Q to P (invoice dated April, 8) 2,700 
 Draw up an Account Current up to March 31st, 2023 to be rendered by P to Q, charging interest at 
10% per annum. Interest is to be calculated to the nearest rupee.   (10 + 5 + 5 = 20 Marks) 
4. (a)  Inder, Anil and Pawan are in partnership, sharing profits and losses equally. Pawan died on  
30th June 2023.   
The Balance Sheet of Firm as at 31
st
 March 2023 stood as:  
Liabilities Amount Assets Amount 
Creditors 20,000 Land and Building 1,50,000 
General Reserve  12,000 Investments 65,000 
Capital Accounts:  Stock in trade 15,000 
 Inder 1,00,000 Trade receivables             35,000  
 Anil 75,000 Less: Provision for doubtful debt (2,000) 33,000 
 Pawan 75,000 Cash in hand 7,000 
  Cash at bank 12,000 
 2,82,000  2,82,000 
In order to arrive at the balance due to Pawan, it was mutually agreed that: 
(i) Land and Building be valued at ` 1,75,000 
(ii)  Debtors were all good, no provision is required 
(iii)  Stock is valued at ` 13,500 
(iv)  Goodwill will be valued at one year's purchase of the average profit of the past five years.  
Pawan's share of goodwill be adjusted in the account of Inder and Anil. 
(v) Pawan's share of profit from 1
st
 April 2023, to the date of death be calculated on the basis of 
average profit of preceding three years. 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
4 
(vi)  The profit of the preceding five years ended 1
st
 March were:  
2023   2022   2021   2020   2019 
25,000   20,000  22,500  35,000   28,750 
You are required to prepare Revaluation account and Capital accounts of the partners as at 1
st
 July 
2023.  
(b)  The trial balance of Chawla as at 31st December, 2022 is as follows: 
  Dr. Cr. 
  ` ` 
Chawla’s capital account  -        38,345  
Stock 1
st
 January, 2022           23,400   -  
Sales  -  1,94,800 
Returns inward         4,300   -  
Purchases 1,60,850   -  
Returns outward  -              2,900  
Carriage inwards             9,800   -  
Rent & taxes             2,350   -  
Salaries & wages             4,650   -  
Sundry debtors 12,000   -  
Sundry creditors  -              7,400  
Bank loan @ 14% p.a.  -            10,000  
Bank interest                550   -  
Printing and stationary expenses 7,200   -  
Bank balance             4,000   -  
Discount earned  -              2,220  
Furniture & fittings         2,500   -  
Discount allowed 900   -  
General expenses             5,725   -  
Insurance               650   -  
Postage expenses           1,165   -  
Cash balance                190   -  
Travelling expenses                435   -  
Drawings           15,000   -  
         2,55,665         2,55,665  
The following adjustments are to be made: 
(1) Provision for bad and doubtful debts be created at 5% and for discount @ 2% on sundry 
debtors. 
(2) Personal purchases of Chawla amounting to ` 300 had been recorded in the purchases day 
book. 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
5 
(3) Depreciation on furniture & fittings @ 10% shall be written off. 
(4) Included amongst the debtors is ` 1,500 due from Dyal and included among the creditors  
` 500 due to him. 
(5) A quarter of the amount of printing and stationary expenses is to be carried forward to the 
next year. 
(6) Credit purchase invoice amounting to ` 200 had been omitted from the books. 
(7) Stock on 31.12.2022 was ` 39,300. 
(8) Interest on bank loan shall be provided for the whole year. 
You are required to prepare Trading & profit and loss account for the year ended 31.12.2022. 
(8 + 12 = 20 Marks) 
5. (a) The following information of M/s. Freelancer Club are related for the year ended 31
st
 March, 2023: 
(1) 
Balances As on 01-04-2022 
(`) 
As on 31-3-2023 
(`) 
Stock of Sports Material 4,50,000 6,75,000 
Amount due for Sports Material 4,05,000 5,85,000 
Subscription due 67,500 99,000 
Subscription received in advance  54,000 31,500 
(2) Subscription received during the year  `  22,50,000 
(3)  Payments for Sports Material during the year ` 13,50,000 
 You are required to: 
(A)  Ascertain the amount of Subscription and Sports Material that will appear in Income & 
Expenditure Account for the year ended 31.03.2023 and 
 (B)  Also show how these items would appear in the Balance Sheet as on 31.03.2023.  
(b) Following information is provided for M/s. Shrikant Traders for the year ended 31
st
 March, 2023: 
` 
 Opening Inventory     1,00,000 
 Purchases      6,72,000 
 Carriage Inwards        30,000 
 Wages          50,000 
 Sales            11,00,000 
 Returns inward      1,00,000 
 Returns outward        72,000 
 Closing Inventory     2,00,000 
You are required to pass necessary closing entries in the journal proper of M/s. Shrikant Traders. 
(c)  A, B and C are partners in a firm.  On 1
st
 April 2021 their fixed capital stood at ` 50,000, ` 25,000 
and ` 25,000 respectively. 
As per the provision of partnership deed: 
(1) C was entitled for salary of `5,000 p.a. 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation