PRACTICE ASSIGNMENT # 15, ANSWERS TO ASSIGNMENT # 14 AND PA 1 EXAM

TASK # 1 

DO THE ASSIGNMENT  GIVEN BELOW FOR PRACTICE.

ASSIGNMENT # 15

JOURNALISE THE FOLLOWING TRANSACTIONS:

REMEMBERING THE STEPS TO JOURNALISE:

1	Received an order of goods for Rs. 50,000 from Rinku and Received 10 % as advance.
2	Rinku's order was executed and balance money received by cheque.
3	Wages of Rs. 1,000 paid by owner from his personal funds.
4	Rent of owners personal house paid from office cash Rs. 2,000.
5	Paid Rs. 250 for subscribing for newspapers.		6	Received Rs. 700 from sale of old chairs and tables.
7	Paid interest on Loan Rs. 300.	8	Goods stolen of cost price Rs. 2,000 (sales price Rs. 3,000).
9	Paid income tax Rs. 1,000 and Life Insurance Premium Rs. 4,000.
10	Paid Life Insurance premium of owner 1.000 and Insurance of Building of Business 2,000. TASK # 2 CHECK THE ANSWERS TO THE ASSIGNMENT # 14

ASSIGNMENT # 14

1	Purchased chairs from personal money and contributed to business Rs. 1,000.
2	Purchased Machinery of 1,00,000 for which 20 % advance was already given, balance paid by two cheques of equal amount one from savings A/c and one from Current A/c.
3	Extra office Air conditioner taken to home Rs. 15,000		.
4	Stationery given to the children of the owner Rs. 800		.
5	Borrowed from bank Rs. 7,500.	6	Started business by taking loan from father Rs. 50,000.
7	Gave loan of Rs. 5,000 to brother Ramesh.
8	Paid railway freight on behalf of our customer Mr. Nitin Rs. 800.
9	Received an order of goods for Rs. 1,00,000 from Sonu.
10	Sonu's order was executed and cartage Rs. 5,000 was paid in this regard. ANSWERS TO ASSIGNMENT # 14

1	Furniture A/C…Dr To Capital A/C (Being chairs purchased by personal cash)		1,000	1,000
2	Machinery A/C…Dr To Advance for machinery A/C To Bank A/c To Capital A/c (Being Machinery purchased)		1,00000	20,000  40,000  40,000
3	Drawings A/C...Dr To Office Equipments A/C (Being extra air conditioner taken by proprietor)		15,000	15,000
4	Drawings A/C…Dr To Stationery A/C (Being stationery given to children of proprietor)		800	800
5	Bank A/C…Dr To Bank Loan A/C (Being loan taken from bank)		7,500	7,500
6	Cash A/C…Dr To Capital A/C (Being business started)		50,000	50,000
7	Loan to Ramesh…Dr To Cash A/C (Being loan given to Ramesh, proprietor’s brother)		5,000	5,000
8	Nitin’s  A/c…Dr To Cash A/C (Being carriage paid on behalf of our customer Mr. Nitin)
9	No entry for order received
10	Sonu…Dr To Sales A/C  Carriage A/C…Dr                       To Cash A/C (Being goods sold to Sonu)		1,00,000      5,000	1,00,00 5,000

TASK # 3

CHECK THE ANSWERS TO PA 1 EXAM

Section Order

Section A

MCQ'/ True / False

1.Real account relates to expenses and revenue of the business
True False

Ans. False

2. Rent of proprietors house paid, from business account on cash will:
Decrease the profit Increase the profit Reduces the capital of the business Reduce the cash as well as capital of the business

Ans. Reduce the cash as well as capital of the business.

3. During the Accounting period 2018-19, the total sales were ₹700000, out of which cash sales were of ₹450000. The total expenses for the year were ₹500000 out of which ₹210000 are still outstanding. Determine income of the firm for 2018-19 as per: Cash Basis of Accounting

1. ₹240000 2.₹200000
3. ₹160000. 4.₹290000

Ans. 3

4. During the Accounting period 2018-19, the total sales were ₹700000, out of which cash sales were of ₹450000. The total expenses for the year were ₹500000 out of which ₹210000 are still outstanding. Determine income of the firm for 2018-19 as per: Accrual Basis of Accounting

1. ₹240000 2.₹200000
3. ₹160000. 4.₹290000

Ans. 200000

5. M/s Krishna Traders follows accrual basis of accounting. The firm sold goods of ₹40000 in June 2018 on two months credit. According to the accountant, the sale should be recorded in the month of August, when the cash will be received. Do you agree?
Agree Disagree

Ans. Disagree

6. In the Financial year 2018-19, Amit earned a total revenue of ₹690000, out of which ₹ 470000 was received in cash. The total expenses paid by him were ₹ 440000, out of which ₹ 20,000 pertains to 2019-20. The expenses of ₹30000 are still outstanding. Determine Aman's Income for 2018-19 as per: Cash Basis of Accounting
1. ₹30000 2.₹40000 3. ₹20000 4. ₹80000

Ans. 1

7. In the Financial year 2018-19, Amit earned a total revenue of ₹690000, out of which ₹ 470000 was received in cash. The total expenses paid by him were ₹ 440000, out of which ₹ 20,000 pertains to 2019-20. The expenses of ₹30000 are still outstanding. Determine Aman's Income for 2018-19 as per: Accrual Basis of Accounting

1. ₹470000. 2. ₹220000. 3. ₹230000
4. ₹ 240000

Ans 4

8.Source documents are authentic proof of the correctness of the recorded transactions.
True False

Ans. True
9. Furniture purchased for personal use is debited to furniture account. True False

Ans. False
10. Which of the following is not a business transaction.
Office cash misappropriated by the manager ₹20,000
Appointed Raj as the manager of the business on a monthly salary of ₹12000
Took goods of ₹ 3000 from the shop for use at home.
Repaid the loan taken from Tanishq for the marriage of his daughter out of the funds of the business.

Ans. Appointed Raj as the manager of the business on a monthly salary of ₹12000



Section B

Fill in the blanks/ One word answer

1.According to the ____ accounting principle, the stock is valued at lower of cost or net realizable value.

Ans. Prudence
2. According to Modern Approach, purchases account is ______ account.

Ans. Expense
3. Decrease in liability is recorded on the ______ side.

Ans. Debit
4. Goods returned to suppliers are are ______ to purchase return account.

Ans. Credited
5. The allowance made for prompt payment is called_____.


Ans. Cash Discount
6. Paid to Rahul on behalf of Sanjay ₹ 12000 will be debited to:

Ans. Sanjay' s account
7. Name any internal user of accounting information. (Any two)

Ans. Owners Management, Employees
8. Drawings reduces the ____of the owners.

Ans. Capital
9. Expense is the cost incurred by a business in the process of earning the _____.

Ans. revenue.
10. According to ______ assumption, a transaction is recorded in the books when it is entered into and not when the settlement takes place.
Ans. Accrual Assumption


Section C
One sentence

1. If a trader sells goods of the list price of ₹ 20000 at 10% trade discount and 2% cash discount, the net amount receivable by him is:

Ans. ₹ 17640
2. Purchase goods from Vinod of the list price ₹ 40000 at 10% trade discount.
Returned goods to Vinod of the list price ₹1000.
Calculate the amount due to Vinod.

Ans. ₹ 35100
3. Bought goods from Trisha for ₹ 200000 at 10% trade discount and 5% cash discount. Half the amount is paid by cheque at the time of purchase. Calculate the amount paid to Trisha.


Ans. ₹ 85500
4. The following balances appeared in the books of Vishal stores on 1st April 2015:
Assets : Cash ₹ 15000, Bank balance ₹ 5000, Stock ₹ 40000, Furniture ₹ 3600, Debtors ₹ 24000
Liabilities: Bank loan ₹ 10000 Creditors ₹ 12,500.
Calculate the value of Capital.

Ans. ₹ 65100
5. Purchased machinery by giving a cheque of ₹ 300000 and paid ₹ 25000 in cash as wages on its installation and ₹ 10000 for carriage. The Machinery account will be debited with:

Ans ₹ 335000
6. Purchase of goods from X for Cash, should be credited to:

Ans. Cash
7. Gopal is a debtor for ₹ 10000. He became insolvent and only 60 paise in a rupee is received from him. The balance of ₹ 4000 would be entered to the debit of which account?

Ans. Debit of bad debt account
8. Write the correct Accounting Equation.

Ans. Assets
9. Give the journal entry for 'goods sold to Shyam on credit' ₹5000

Ans. Shyam debit ₹5000
To sales account ₹ 5000

10. Give the journal entry for the amount of ₹ 5000 due from Shyam received after deducting 10% discount by cheque.

Ans. Bank dr. ₹4500
Discount allowed dr. ₹ 500
To Shyam ₹5000