CA Foundation Exam > CA Foundation Notes > Business and Commercial Knowledge (Old Scheme) > Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022)
Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) | Business and Commercial Knowledge (Old Scheme) - CA Foundation PDF Download
| Download, print and study this document offline |
Please wait while the PDF view is loading
Page 1
1
Test Series: May, 2022
MOCK TEST PAPER 2
FOUNDATION COURSE
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING
ANSWERS
1. (a) (i) False: The Cinema Hall could not be started without license. Expenditure incurred to obtain
the license is pre-operative expense which is capitalized. Such expenses are not revenue and
amortized over a period of time.
(ii) False: If the effect of errors committed cancel out, the errors will be called compensating
errors and the trial balance will agree.
(iii) True: If closing stock appears in trail balance, it depicts that one aspect of the double entry
has been completed, hence it is taken only to Balance Sheet.
(iv) False: Consignment account is a nominal-cum-personal account
(v) False: According to Partnership Act, in the absence of any agreement to the contrary profits
and losses are to be shared equally among partners.
(vi) True: As per Perpetual Existence company has existence independent of its members, it
continues to be in existence despite the death, insolvency or change of members.
(b) Cash and mercantile system: Cash system of accounting is a system by which a transaction is
recognized only if cash is received or paid. In cash system of accounting, entries are made only
when cash is received or paid, no entry being made when a payment or receipt is merely due. Cash
system is normally followed by professionals, educational institutions or non-profit making
organizations.
On the other hand, mercantile system of accounting is a system of classifying and summarizing
trandsactions into assets, liabilities, equity (owner’s fund), costs, revenues and recording thereof.
A transaction is recognized when either a liability is created/ impaired and an asset is
created/impaired. A record is made on the basis of amounts having become due for payment or
receipt irrespective of the fact whether payment is made or received actually.
Mercantile system of accounting is generally accepted accounting system by business entities
(c) Journal Entries
Particulars L.F. Dr.
(`)
Cr.
(`)
(i) Vipin A/c Dr. 900
Furniture A/c Dr. 3,400
To Samay A/c 4,300
(ii) Sales Returns A/c Dr. 15,000
To Palash A/c 15,000
(iii) Sales A/c Dr. 75,000
To P & L A/c (Gain on sale of investments) 15,000
To Investments A/c 60,000
(iv) Drawings A/c Dr. 37,000
To Trade Expenses A/c 37,000
Page 2
1
Test Series: May, 2022
MOCK TEST PAPER 2
FOUNDATION COURSE
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING
ANSWERS
1. (a) (i) False: The Cinema Hall could not be started without license. Expenditure incurred to obtain
the license is pre-operative expense which is capitalized. Such expenses are not revenue and
amortized over a period of time.
(ii) False: If the effect of errors committed cancel out, the errors will be called compensating
errors and the trial balance will agree.
(iii) True: If closing stock appears in trail balance, it depicts that one aspect of the double entry
has been completed, hence it is taken only to Balance Sheet.
(iv) False: Consignment account is a nominal-cum-personal account
(v) False: According to Partnership Act, in the absence of any agreement to the contrary profits
and losses are to be shared equally among partners.
(vi) True: As per Perpetual Existence company has existence independent of its members, it
continues to be in existence despite the death, insolvency or change of members.
(b) Cash and mercantile system: Cash system of accounting is a system by which a transaction is
recognized only if cash is received or paid. In cash system of accounting, entries are made only
when cash is received or paid, no entry being made when a payment or receipt is merely due. Cash
system is normally followed by professionals, educational institutions or non-profit making
organizations.
On the other hand, mercantile system of accounting is a system of classifying and summarizing
trandsactions into assets, liabilities, equity (owner’s fund), costs, revenues and recording thereof.
A transaction is recognized when either a liability is created/ impaired and an asset is
created/impaired. A record is made on the basis of amounts having become due for payment or
receipt irrespective of the fact whether payment is made or received actually.
Mercantile system of accounting is generally accepted accounting system by business entities
(c) Journal Entries
Particulars L.F. Dr.
(`)
Cr.
(`)
(i) Vipin A/c Dr. 900
Furniture A/c Dr. 3,400
To Samay A/c 4,300
(ii) Sales Returns A/c Dr. 15,000
To Palash A/c 15,000
(iii) Sales A/c Dr. 75,000
To P & L A/c (Gain on sale of investments) 15,000
To Investments A/c 60,000
(iv) Drawings A/c Dr. 37,000
To Trade Expenses A/c 37,000
2
2. (a) Profit and Loss Adjustment Account
` `
To Advertisement (samples) 2,40,000 By Net profit 24,00,000
To Sales 6,00,000 By Electric fittings 90,000
(goods approved in April to By Samples 2,40,000
be taken as April sales) By Stock (Purchases of March 15,00,000
To Adjusted net profit 50,40,000 not included in stock)
By Sales (goods sold in March
wrongly taken as April sales)
12,00,000
By Stock (goods sent on approval
basis not included in stock)
4,50,000
58,80,000 58,80,000
Calculation of value of inventory on 31
st
March, 2022
`
Stock on 31
st
March, 2022 (given) 22,50,000
Add: Purchases of March, 2022 not included in the stock 15,00,000
Goods lying with customers on approval basis 4,50,000
42,00,000
(b) S &Co.
Dr. Machinery Account Cr.
Date Particulars Amount
(`)
Date Particulars Amount
(`)
1.1.2019 To, Bank A/c 1,00,000 31.12.2019 By Balance c/d 1,00,000
1,00,000 1,00,000
1.1.2020 To, Balance b/d 1,00,000
1.7.2020 To, Bank A/c 1,50,000 31.12.2020 By Balance c/d 2,50,000
2,50,000 2,50,000
1.1.2021 To, Balance b/d 2,50,000 31.12.2021 By, Machinery Disposal
A/c
1,00,000
31.12.2021 By Balance c/d 1,50,000
2,50,000 2,50,000
1.1.2022 To, Balance b/d 1,50,000
Dr. Provision for Depreciation Account Cr.
Date Particulars Amount
(`)
Date Particulars Amount
(`)
31.12.2019 To, Balance c/d 15,000 31.12.2019 By, Depreciation A/c 15,000
15,000 15,000
31.12.2020 To, Balance c/d 39,000 1.1.2020 By, Balance b/d 15,000
31.12.2020 By, Depreciation A/c
(` 12,750+`11,250)
24,000
39,000 39,000
Page 3
1
Test Series: May, 2022
MOCK TEST PAPER 2
FOUNDATION COURSE
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING
ANSWERS
1. (a) (i) False: The Cinema Hall could not be started without license. Expenditure incurred to obtain
the license is pre-operative expense which is capitalized. Such expenses are not revenue and
amortized over a period of time.
(ii) False: If the effect of errors committed cancel out, the errors will be called compensating
errors and the trial balance will agree.
(iii) True: If closing stock appears in trail balance, it depicts that one aspect of the double entry
has been completed, hence it is taken only to Balance Sheet.
(iv) False: Consignment account is a nominal-cum-personal account
(v) False: According to Partnership Act, in the absence of any agreement to the contrary profits
and losses are to be shared equally among partners.
(vi) True: As per Perpetual Existence company has existence independent of its members, it
continues to be in existence despite the death, insolvency or change of members.
(b) Cash and mercantile system: Cash system of accounting is a system by which a transaction is
recognized only if cash is received or paid. In cash system of accounting, entries are made only
when cash is received or paid, no entry being made when a payment or receipt is merely due. Cash
system is normally followed by professionals, educational institutions or non-profit making
organizations.
On the other hand, mercantile system of accounting is a system of classifying and summarizing
trandsactions into assets, liabilities, equity (owner’s fund), costs, revenues and recording thereof.
A transaction is recognized when either a liability is created/ impaired and an asset is
created/impaired. A record is made on the basis of amounts having become due for payment or
receipt irrespective of the fact whether payment is made or received actually.
Mercantile system of accounting is generally accepted accounting system by business entities
(c) Journal Entries
Particulars L.F. Dr.
(`)
Cr.
(`)
(i) Vipin A/c Dr. 900
Furniture A/c Dr. 3,400
To Samay A/c 4,300
(ii) Sales Returns A/c Dr. 15,000
To Palash A/c 15,000
(iii) Sales A/c Dr. 75,000
To P & L A/c (Gain on sale of investments) 15,000
To Investments A/c 60,000
(iv) Drawings A/c Dr. 37,000
To Trade Expenses A/c 37,000
2
2. (a) Profit and Loss Adjustment Account
` `
To Advertisement (samples) 2,40,000 By Net profit 24,00,000
To Sales 6,00,000 By Electric fittings 90,000
(goods approved in April to By Samples 2,40,000
be taken as April sales) By Stock (Purchases of March 15,00,000
To Adjusted net profit 50,40,000 not included in stock)
By Sales (goods sold in March
wrongly taken as April sales)
12,00,000
By Stock (goods sent on approval
basis not included in stock)
4,50,000
58,80,000 58,80,000
Calculation of value of inventory on 31
st
March, 2022
`
Stock on 31
st
March, 2022 (given) 22,50,000
Add: Purchases of March, 2022 not included in the stock 15,00,000
Goods lying with customers on approval basis 4,50,000
42,00,000
(b) S &Co.
Dr. Machinery Account Cr.
Date Particulars Amount
(`)
Date Particulars Amount
(`)
1.1.2019 To, Bank A/c 1,00,000 31.12.2019 By Balance c/d 1,00,000
1,00,000 1,00,000
1.1.2020 To, Balance b/d 1,00,000
1.7.2020 To, Bank A/c 1,50,000 31.12.2020 By Balance c/d 2,50,000
2,50,000 2,50,000
1.1.2021 To, Balance b/d 2,50,000 31.12.2021 By, Machinery Disposal
A/c
1,00,000
31.12.2021 By Balance c/d 1,50,000
2,50,000 2,50,000
1.1.2022 To, Balance b/d 1,50,000
Dr. Provision for Depreciation Account Cr.
Date Particulars Amount
(`)
Date Particulars Amount
(`)
31.12.2019 To, Balance c/d 15,000 31.12.2019 By, Depreciation A/c 15,000
15,000 15,000
31.12.2020 To, Balance c/d 39,000 1.1.2020 By, Balance b/d 15,000
31.12.2020 By, Depreciation A/c
(` 12,750+`11,250)
24,000
39,000 39,000
3
31.12.2021 To, Machinery
Disposal A/c
[100000-61,413]
38,587 1.1.2021 By, Balance b/d 39,000
31.12.2021 To, Balance c/d 32,063 31.12.2021
31.12.2021
By, Depreciation A/c
By Depreciation
20,813
10,837
70,650 70,650
1.1.2022 By, Balance b/d 32,063
Dr. Machinery Disposal Account Cr.
Date Particulars Amount
(`)
Date Particulars Amount
(`)
31.12.2021 To, Machinery
A/c
1,00,000 31.12.2021 By, Provision for
Depreciation A/c
38,587
31.12.2021 By, Bank A/c 50,000
31.12.2021 By, Profit & Loss A/c
(Loss on Sale)
11,413
1,00,000 1,00,000
Working Notes:
1. Depreciation for the machine purchased on 1.7.2020.
For the year 2020 (Used for 6 months) = ` 1,50,000 x 15% x
12
6
= ` 11,250
For the year 2021 (Used for full year) = ` 1,38,750 x15 % = ` 20,813
2. Depreciation for the machine purchased on 1.1.2019.
Depreciation = ` 1,00,000 x 15% = ` 15,000
So, Depreciation for 2
nd
year = ` 85,000 x15% = ` 12,750
3. (a) Let us take 12.07.2021 as Base date.
Bills receivable
Due date No. of days from 12.07.2021 Amount Product
04/09/2021 54 10,200 5,50,800
08/09/2021 58 8,700 5,04,600
12/07/2021 0 17,400 0
14/08/2021 33 5,100 1,68,300
23/09/2021 73 5,700 4,16,100
47,100 16,39,800
Bills payable
Due date No. of days from 12.07.2021 Amount Product
01/08/2021 20 7,500 1,50,000
07/09/2021 57 10,200 5,81,400
12/07/2021 0 17,100 0
34,800 7,31,400
Page 4
1
Test Series: May, 2022
MOCK TEST PAPER 2
FOUNDATION COURSE
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING
ANSWERS
1. (a) (i) False: The Cinema Hall could not be started without license. Expenditure incurred to obtain
the license is pre-operative expense which is capitalized. Such expenses are not revenue and
amortized over a period of time.
(ii) False: If the effect of errors committed cancel out, the errors will be called compensating
errors and the trial balance will agree.
(iii) True: If closing stock appears in trail balance, it depicts that one aspect of the double entry
has been completed, hence it is taken only to Balance Sheet.
(iv) False: Consignment account is a nominal-cum-personal account
(v) False: According to Partnership Act, in the absence of any agreement to the contrary profits
and losses are to be shared equally among partners.
(vi) True: As per Perpetual Existence company has existence independent of its members, it
continues to be in existence despite the death, insolvency or change of members.
(b) Cash and mercantile system: Cash system of accounting is a system by which a transaction is
recognized only if cash is received or paid. In cash system of accounting, entries are made only
when cash is received or paid, no entry being made when a payment or receipt is merely due. Cash
system is normally followed by professionals, educational institutions or non-profit making
organizations.
On the other hand, mercantile system of accounting is a system of classifying and summarizing
trandsactions into assets, liabilities, equity (owner’s fund), costs, revenues and recording thereof.
A transaction is recognized when either a liability is created/ impaired and an asset is
created/impaired. A record is made on the basis of amounts having become due for payment or
receipt irrespective of the fact whether payment is made or received actually.
Mercantile system of accounting is generally accepted accounting system by business entities
(c) Journal Entries
Particulars L.F. Dr.
(`)
Cr.
(`)
(i) Vipin A/c Dr. 900
Furniture A/c Dr. 3,400
To Samay A/c 4,300
(ii) Sales Returns A/c Dr. 15,000
To Palash A/c 15,000
(iii) Sales A/c Dr. 75,000
To P & L A/c (Gain on sale of investments) 15,000
To Investments A/c 60,000
(iv) Drawings A/c Dr. 37,000
To Trade Expenses A/c 37,000
2
2. (a) Profit and Loss Adjustment Account
` `
To Advertisement (samples) 2,40,000 By Net profit 24,00,000
To Sales 6,00,000 By Electric fittings 90,000
(goods approved in April to By Samples 2,40,000
be taken as April sales) By Stock (Purchases of March 15,00,000
To Adjusted net profit 50,40,000 not included in stock)
By Sales (goods sold in March
wrongly taken as April sales)
12,00,000
By Stock (goods sent on approval
basis not included in stock)
4,50,000
58,80,000 58,80,000
Calculation of value of inventory on 31
st
March, 2022
`
Stock on 31
st
March, 2022 (given) 22,50,000
Add: Purchases of March, 2022 not included in the stock 15,00,000
Goods lying with customers on approval basis 4,50,000
42,00,000
(b) S &Co.
Dr. Machinery Account Cr.
Date Particulars Amount
(`)
Date Particulars Amount
(`)
1.1.2019 To, Bank A/c 1,00,000 31.12.2019 By Balance c/d 1,00,000
1,00,000 1,00,000
1.1.2020 To, Balance b/d 1,00,000
1.7.2020 To, Bank A/c 1,50,000 31.12.2020 By Balance c/d 2,50,000
2,50,000 2,50,000
1.1.2021 To, Balance b/d 2,50,000 31.12.2021 By, Machinery Disposal
A/c
1,00,000
31.12.2021 By Balance c/d 1,50,000
2,50,000 2,50,000
1.1.2022 To, Balance b/d 1,50,000
Dr. Provision for Depreciation Account Cr.
Date Particulars Amount
(`)
Date Particulars Amount
(`)
31.12.2019 To, Balance c/d 15,000 31.12.2019 By, Depreciation A/c 15,000
15,000 15,000
31.12.2020 To, Balance c/d 39,000 1.1.2020 By, Balance b/d 15,000
31.12.2020 By, Depreciation A/c
(` 12,750+`11,250)
24,000
39,000 39,000
3
31.12.2021 To, Machinery
Disposal A/c
[100000-61,413]
38,587 1.1.2021 By, Balance b/d 39,000
31.12.2021 To, Balance c/d 32,063 31.12.2021
31.12.2021
By, Depreciation A/c
By Depreciation
20,813
10,837
70,650 70,650
1.1.2022 By, Balance b/d 32,063
Dr. Machinery Disposal Account Cr.
Date Particulars Amount
(`)
Date Particulars Amount
(`)
31.12.2021 To, Machinery
A/c
1,00,000 31.12.2021 By, Provision for
Depreciation A/c
38,587
31.12.2021 By, Bank A/c 50,000
31.12.2021 By, Profit & Loss A/c
(Loss on Sale)
11,413
1,00,000 1,00,000
Working Notes:
1. Depreciation for the machine purchased on 1.7.2020.
For the year 2020 (Used for 6 months) = ` 1,50,000 x 15% x
12
6
= ` 11,250
For the year 2021 (Used for full year) = ` 1,38,750 x15 % = ` 20,813
2. Depreciation for the machine purchased on 1.1.2019.
Depreciation = ` 1,00,000 x 15% = ` 15,000
So, Depreciation for 2
nd
year = ` 85,000 x15% = ` 12,750
3. (a) Let us take 12.07.2021 as Base date.
Bills receivable
Due date No. of days from 12.07.2021 Amount Product
04/09/2021 54 10,200 5,50,800
08/09/2021 58 8,700 5,04,600
12/07/2021 0 17,400 0
14/08/2021 33 5,100 1,68,300
23/09/2021 73 5,700 4,16,100
47,100 16,39,800
Bills payable
Due date No. of days from 12.07.2021 Amount Product
01/08/2021 20 7,500 1,50,000
07/09/2021 57 10,200 5,81,400
12/07/2021 0 17,100 0
34,800 7,31,400
4
Excess of products of bills receivable over bills payable = 16,39,800 -7,31,400= 9,08,400
Excess of bills receivable over bills payable = 47,100 - 34,800 = 12,300
Number of days from the base date to the date of settlement is
9,08,400
12,300
= 73.85 (appox.)
Hence date of settlement of the balance amount is 74 days after 12
th
July i.e. 24
th
September.
On 24
th
September, 2021 Ravi has to pay Ramesh ` 12,300 to settle the account.
(b) (i) XY in Account Current with AB as on 31
st
Oct, 2021
(`) Days Product
(`)
(`) Days Product
(`)
01.07.21 To Bal. b/d 1,500 123 1,84,500 28.08.21 By Sales
Returns
400 64 25,600
20.8.21 To Sales 2,500 72 1,80,000 25.09.21 By Bank 1,600 36 57,600
31.10.21 To Interest 37 20.10.21 By Cash 1,000 11 11,000
20.10.21 By Balance of
Products
2,70,300
____ ______ 31.10.21 By Bal. c/d 1,037
4,037 3,64,500 4,037 3,64,500
Note:
Interest = ` 2, 70,300 x
365
1
100
5
? = ` 37 (approx.)
(ii) In the Books of Ms. Sangeeta
Journal Entries
Dr. Cr.
Date Particulars L.F. ` `
2022 Sales A/c Dr. 13,000
March 31 To Trade receivables A/c 13,000
(Being the cancellation of original
entry for sale in respect of goods lying
with customers awaiting approval)
March 31 Inventories with Customers on Sale or
Return A/c
Dr. 10,000
To Trading A/c (Note 1) 10,000
(Being the adjustment for cost of
goods lying with customers awaiting
approval)
April 25 Trade receivables A/c Dr. 7,800
To Sales A/c 7,800
(Being goods costing worth ` 7,800
sent to Ms. Mansi on sale or return
basis has been accepted by her)
Page 5
1
Test Series: May, 2022
MOCK TEST PAPER 2
FOUNDATION COURSE
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING
ANSWERS
1. (a) (i) False: The Cinema Hall could not be started without license. Expenditure incurred to obtain
the license is pre-operative expense which is capitalized. Such expenses are not revenue and
amortized over a period of time.
(ii) False: If the effect of errors committed cancel out, the errors will be called compensating
errors and the trial balance will agree.
(iii) True: If closing stock appears in trail balance, it depicts that one aspect of the double entry
has been completed, hence it is taken only to Balance Sheet.
(iv) False: Consignment account is a nominal-cum-personal account
(v) False: According to Partnership Act, in the absence of any agreement to the contrary profits
and losses are to be shared equally among partners.
(vi) True: As per Perpetual Existence company has existence independent of its members, it
continues to be in existence despite the death, insolvency or change of members.
(b) Cash and mercantile system: Cash system of accounting is a system by which a transaction is
recognized only if cash is received or paid. In cash system of accounting, entries are made only
when cash is received or paid, no entry being made when a payment or receipt is merely due. Cash
system is normally followed by professionals, educational institutions or non-profit making
organizations.
On the other hand, mercantile system of accounting is a system of classifying and summarizing
trandsactions into assets, liabilities, equity (owner’s fund), costs, revenues and recording thereof.
A transaction is recognized when either a liability is created/ impaired and an asset is
created/impaired. A record is made on the basis of amounts having become due for payment or
receipt irrespective of the fact whether payment is made or received actually.
Mercantile system of accounting is generally accepted accounting system by business entities
(c) Journal Entries
Particulars L.F. Dr.
(`)
Cr.
(`)
(i) Vipin A/c Dr. 900
Furniture A/c Dr. 3,400
To Samay A/c 4,300
(ii) Sales Returns A/c Dr. 15,000
To Palash A/c 15,000
(iii) Sales A/c Dr. 75,000
To P & L A/c (Gain on sale of investments) 15,000
To Investments A/c 60,000
(iv) Drawings A/c Dr. 37,000
To Trade Expenses A/c 37,000
2
2. (a) Profit and Loss Adjustment Account
` `
To Advertisement (samples) 2,40,000 By Net profit 24,00,000
To Sales 6,00,000 By Electric fittings 90,000
(goods approved in April to By Samples 2,40,000
be taken as April sales) By Stock (Purchases of March 15,00,000
To Adjusted net profit 50,40,000 not included in stock)
By Sales (goods sold in March
wrongly taken as April sales)
12,00,000
By Stock (goods sent on approval
basis not included in stock)
4,50,000
58,80,000 58,80,000
Calculation of value of inventory on 31
st
March, 2022
`
Stock on 31
st
March, 2022 (given) 22,50,000
Add: Purchases of March, 2022 not included in the stock 15,00,000
Goods lying with customers on approval basis 4,50,000
42,00,000
(b) S &Co.
Dr. Machinery Account Cr.
Date Particulars Amount
(`)
Date Particulars Amount
(`)
1.1.2019 To, Bank A/c 1,00,000 31.12.2019 By Balance c/d 1,00,000
1,00,000 1,00,000
1.1.2020 To, Balance b/d 1,00,000
1.7.2020 To, Bank A/c 1,50,000 31.12.2020 By Balance c/d 2,50,000
2,50,000 2,50,000
1.1.2021 To, Balance b/d 2,50,000 31.12.2021 By, Machinery Disposal
A/c
1,00,000
31.12.2021 By Balance c/d 1,50,000
2,50,000 2,50,000
1.1.2022 To, Balance b/d 1,50,000
Dr. Provision for Depreciation Account Cr.
Date Particulars Amount
(`)
Date Particulars Amount
(`)
31.12.2019 To, Balance c/d 15,000 31.12.2019 By, Depreciation A/c 15,000
15,000 15,000
31.12.2020 To, Balance c/d 39,000 1.1.2020 By, Balance b/d 15,000
31.12.2020 By, Depreciation A/c
(` 12,750+`11,250)
24,000
39,000 39,000
3
31.12.2021 To, Machinery
Disposal A/c
[100000-61,413]
38,587 1.1.2021 By, Balance b/d 39,000
31.12.2021 To, Balance c/d 32,063 31.12.2021
31.12.2021
By, Depreciation A/c
By Depreciation
20,813
10,837
70,650 70,650
1.1.2022 By, Balance b/d 32,063
Dr. Machinery Disposal Account Cr.
Date Particulars Amount
(`)
Date Particulars Amount
(`)
31.12.2021 To, Machinery
A/c
1,00,000 31.12.2021 By, Provision for
Depreciation A/c
38,587
31.12.2021 By, Bank A/c 50,000
31.12.2021 By, Profit & Loss A/c
(Loss on Sale)
11,413
1,00,000 1,00,000
Working Notes:
1. Depreciation for the machine purchased on 1.7.2020.
For the year 2020 (Used for 6 months) = ` 1,50,000 x 15% x
12
6
= ` 11,250
For the year 2021 (Used for full year) = ` 1,38,750 x15 % = ` 20,813
2. Depreciation for the machine purchased on 1.1.2019.
Depreciation = ` 1,00,000 x 15% = ` 15,000
So, Depreciation for 2
nd
year = ` 85,000 x15% = ` 12,750
3. (a) Let us take 12.07.2021 as Base date.
Bills receivable
Due date No. of days from 12.07.2021 Amount Product
04/09/2021 54 10,200 5,50,800
08/09/2021 58 8,700 5,04,600
12/07/2021 0 17,400 0
14/08/2021 33 5,100 1,68,300
23/09/2021 73 5,700 4,16,100
47,100 16,39,800
Bills payable
Due date No. of days from 12.07.2021 Amount Product
01/08/2021 20 7,500 1,50,000
07/09/2021 57 10,200 5,81,400
12/07/2021 0 17,100 0
34,800 7,31,400
4
Excess of products of bills receivable over bills payable = 16,39,800 -7,31,400= 9,08,400
Excess of bills receivable over bills payable = 47,100 - 34,800 = 12,300
Number of days from the base date to the date of settlement is
9,08,400
12,300
= 73.85 (appox.)
Hence date of settlement of the balance amount is 74 days after 12
th
July i.e. 24
th
September.
On 24
th
September, 2021 Ravi has to pay Ramesh ` 12,300 to settle the account.
(b) (i) XY in Account Current with AB as on 31
st
Oct, 2021
(`) Days Product
(`)
(`) Days Product
(`)
01.07.21 To Bal. b/d 1,500 123 1,84,500 28.08.21 By Sales
Returns
400 64 25,600
20.8.21 To Sales 2,500 72 1,80,000 25.09.21 By Bank 1,600 36 57,600
31.10.21 To Interest 37 20.10.21 By Cash 1,000 11 11,000
20.10.21 By Balance of
Products
2,70,300
____ ______ 31.10.21 By Bal. c/d 1,037
4,037 3,64,500 4,037 3,64,500
Note:
Interest = ` 2, 70,300 x
365
1
100
5
? = ` 37 (approx.)
(ii) In the Books of Ms. Sangeeta
Journal Entries
Dr. Cr.
Date Particulars L.F. ` `
2022 Sales A/c Dr. 13,000
March 31 To Trade receivables A/c 13,000
(Being the cancellation of original
entry for sale in respect of goods lying
with customers awaiting approval)
March 31 Inventories with Customers on Sale or
Return A/c
Dr. 10,000
To Trading A/c (Note 1) 10,000
(Being the adjustment for cost of
goods lying with customers awaiting
approval)
April 25 Trade receivables A/c Dr. 7,800
To Sales A/c 7,800
(Being goods costing worth ` 7,800
sent to Ms. Mansi on sale or return
basis has been accepted by her)
5
Balance Sheet of Ms. Sangeeta as on 31st March, 2022 (Extracts)
Liabilities ` Assets ` `
Trade receivables
(` 1,50,000 - ` 13,000)
1,37,000
Inventories-in-trade 1,00,000
Add: Inventories with customers on
Sale or Return
10,000
1,10,000
2,47,000
Notes:
(1) Cost of goods lying with customers = 100/130 x ` 13,000 = ` 10,000
(2) No entry is required on 15
th
April, 2022 for goods returned by Ms. Divya. Goods should be
included physically in the Inventories
(c) In the books of Ravi
Journal Entries
Date Particulars Debit Credit
Amount Amount
2021 ` `
April 15 Bills receivable account Dr. 45,000
To Rishi’s account 45,000
(Being acceptance received from Rishi for mutual
accommodation)
April 18 Bank account Dr. 44,100
Discount account Dr. 900
To Bills receivable account 45,000
(Being bill discounted with bank)
April 18 Anup’s account Dr. 15,000
To Bank account 14,700
To Discount account 300
(Being one-third proceeds of the bill sent to Rishi)
July 18 Rishi’s account Dr. 52,500
To Bills payable account 52,500
(Being Acceptance given)
July 18 Bank account Dr. 8,475
Discount account (1,200 x 3/4) Dr. 900
To Anup’s account 9,375
(Being proceeds of second bill received from Rishi)
Oct.21 Bills payable account Dr. 52,500
To Rishi’s account 52,500
(Being bill dishonoured due to insolvency)
Oct.31 Anup’s account (30,000+9,375) Dr. 39,375
Read More
|
21 videos|90 docs|24 tests
|
FAQs on Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) - Business and Commercial Knowledge (Old Scheme) - CA Foundation
| 1. What are the basic principles of accounting? |  |
Ans. The basic principles of accounting include the principles of going concern, consistency, substance over form, prudence, accrual, and materiality. The principle of going concern assumes that the business will continue to operate for the foreseeable future. The principle of consistency ensures that accounting methods and practices are consistently applied over time. The principle of substance over form requires transactions to be recorded based on their economic substance rather than their legal form. The principle of prudence requires caution in recording uncertain events and transactions. The principle of accrual recognizes transactions and events when they occur, regardless of when the cash is received or paid. The principle of materiality states that only significant information should be disclosed in the financial statements.
| 2. What is the difference between financial accounting and management accounting? | |
Ans. Financial accounting focuses on the preparation of financial statements that are used by external stakeholders like investors, creditors, and regulators to assess the financial performance and position of a company. It follows a set of generally accepted accounting principles (GAAP) and is primarily historical in nature. On the other hand, management accounting provides information to internal stakeholders like managers and decision-makers to support planning, controlling, and decision-making within the organization. It is more future-oriented and can include non-financial information. Management accounting is not bound by GAAP and can be tailored to the specific needs of the organization.
| 3. What is the accounting equation? | |
Ans. The accounting equation is a fundamental concept in accounting that represents the relationship between a company's assets, liabilities, and owner's equity. It is expressed as:
Assets = Liabilities + Owner's Equity
Assets are the economic resources owned by the company, such as cash, inventory, property, and equipment. Liabilities are the company's obligations to external parties, such as loans, accounts payable, and accrued expenses. Owner's equity represents the residual interest in the company's assets after deducting liabilities. It is the owner's claim on the company's assets and is also known as shareholders' equity or net worth.
| 4. What is the purpose of financial statements? | |
Ans. The purpose of financial statements is to provide information about the financial performance, position, and cash flows of a company to various stakeholders, including investors, creditors, employees, and regulators. The main financial statements include the income statement, balance sheet, statement of cash flows, and statement of changes in equity. These statements provide a comprehensive view of the company's financial activities, including its revenues, expenses, assets, liabilities, and equity. They help stakeholders make informed decisions about investing in or lending to the company, assessing its profitability and liquidity, and evaluating its overall financial health.
| 5. How are revenues and expenses recognized in accounting? | |
Ans. Revenues and expenses are recognized in accounting using the accrual basis of accounting. Under this basis, revenues are recognized when they are earned, regardless of when the cash is received. This means that revenue is recognized when goods are delivered or services are rendered to customers, and the company has a right to receive payment. Expenses, on the other hand, are recognized when they are incurred, regardless of when the cash is paid. This means that expenses are recognized when goods or services are consumed, and the company has an obligation to pay for them. The accrual basis of accounting provides a more accurate representation of a company's financial performance by matching revenues with the expenses incurred to generate those revenues.
Related Exams
About this Document
|
4.74/5 Rating |
|
Dec 22, 2024 Last updated |
Document Description: Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) for CA Foundation 2024 is part of Business and Commercial Knowledge (Old Scheme) preparation.
The notes and questions for Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) have been prepared according to the CA Foundation exam syllabus. Information about Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) covers topics
like and Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) Example, for CA Foundation 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises and tests below for Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022).
Introduction of Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) in English is available as part of our Business and Commercial Knowledge (Old Scheme)
for CA Foundation & Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) in Hindi for Business and Commercial Knowledge (Old Scheme) course.
Download more important topics related with notes, lectures and mock test series for CA Foundation
Exam by signing up for free. CA Foundation: Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) | Business and Commercial Knowledge (Old Scheme) - CA Foundation
Description
Full syllabus notes, lecture & questions for Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) | Business and Commercial Knowledge (Old Scheme) - CA Foundation - CA Foundation | Plus excerises question with solution to help you revise complete syllabus for Business and Commercial Knowledge (Old Scheme) | Best notes, free PDF download
Information about Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022)
In this doc you can find the meaning of Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) defined & explained in the simplest way possible. Besides explaining types of
Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) theory, EduRev gives you an ample number of questions to practice Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) tests, examples and also practice CA Foundation
tests
|
21 videos|90 docs|24 tests
|
Download as PDF
|
Explore Courses for CA Foundation exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
Related Searches
video lectures
,Free
,Objective type Questions
,Important questions
,Viva Questions
,Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) | Business and Commercial Knowledge (Old Scheme) - CA Foundation
,Summary
,Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) | Business and Commercial Knowledge (Old Scheme) - CA Foundation
,mock tests for examination
,study material
,Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) | Business and Commercial Knowledge (Old Scheme) - CA Foundation
,Sample Paper
,Exam
,practice quizzes
,ppt
,Extra Questions
,past year papers
,Semester Notes
,shortcuts and tricks
,MCQs
,Previous Year Questions with Solutions
;
Additional Information about Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) for CA Foundation Preparation
Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) Free PDF Download
The Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) is an invaluable resource that delves deep into the core of the CA Foundation exam.
These study notes are curated by experts and cover all the essential topics and concepts, making your preparation more efficient and effective.
With the help of these notes, you can grasp complex subjects quickly, revise important points easily,
and reinforce your understanding of key concepts. The study notes are presented in a concise and easy-to-understand manner,
allowing you to optimize your learning process. Whether you're looking for best-recommended books, sample papers, study material,
or toppers' notes, this PDF has got you covered. Download the Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) now and kickstart your journey towards success in the CA Foundation exam.
Importance of Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022)
The importance of Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) cannot be overstated, especially for CA Foundation aspirants.
This document holds the key to success in the CA Foundation exam.
It offers a detailed understanding of the concept, providing invaluable insights into the topic.
By knowing the concepts well in advance, students can plan their preparation effectively.
Utilize this indispensable guide for a well-rounded preparation and achieve your desired results.
Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) Notes
Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) Notes offer in-depth insights into the specific topic to help you master it with ease.
This comprehensive document covers all aspects related to Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022).
It includes detailed information about the exam syllabus, recommended books, and study materials for a well-rounded preparation.
Practice papers and question papers enable you to assess your progress effectively.
Additionally, the paper analysis provides valuable tips for tackling the exam strategically.
Access to Toppers' notes gives you an edge in understanding complex concepts.
Whether you're a beginner or aiming for advanced proficiency, Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) Notes on EduRev are your ultimate resource for success.
Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) CA Foundation Questions
The "Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) CA Foundation Questions" guide is a valuable resource for all aspiring students preparing for the
CA Foundation exam. It focuses on providing a wide range of practice questions to help students gauge
their understanding of the exam topics. These questions cover the entire syllabus, ensuring comprehensive preparation.
The guide includes previous years' question papers for students to familiarize themselves with the exam's format and difficulty level.
Additionally, it offers subject-specific question banks, allowing students to focus on weak areas and improve their performance.
Study Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) on the App
Students of CA Foundation can study Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) alongwith tests & analysis from the EduRev app,
which will help them while preparing for their exam. Apart from the Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022),
students can also utilize the EduRev App for other study materials such as previous year question papers, syllabus, important questions, etc.
The EduRev App will make your learning easier as you can access it from anywhere you want.
The content of Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II(May 2022) is prepared as per the latest CA Foundation syllabus.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup