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Principles of Accounting | Model Question Solution | NEB Accounting 11

Arjun EP

Published on: July 6, 2021

GRADE XI

Principles of Accounting I | NEB Model Question Solution

Model Questions

Time: 3 Hours

Full Marks: 75

Candidates are required to give their answers in their own words as far as practicable. The figures in the margin indicate.

Section A: Very Short Answer Questions

Attempt All Questions [11 x 1 mark = 11 marks]

Q: 1. What is bookkeeping?

Bookkeeping is the combination of two words ‘book and keeping’.

Book is the collection of financial data or information; keeping is the process of recording these data.

Q: 2. Mention any two objectives of accounting.

The main objective of bookkeeping is to find out financial transactions.

After finding out financial transactions, they must be classified into personal, real and nominal accounts.

Q: 3. Write the meaning of the money measurement concept.

According to the money measurement concept, only monetary terms are recorded.

It ignores those transactions that cannot be expressed in-term-of money.

Q: 4. Define trial balance.

According to the Microsoft Corporation, “Trial balance is a statement to check the debits and credits.”

Q: 5. What is a cross cheque?

When two slanted or parallel lines are drawn on the left-hand side of the cheque, it is known to cross of the cheque.

Cross cheque is deposited into account then the amount of cheque will be credited into the account.

Q: 6. Write about the error of principle.

When an accountant does not know properly about capital and revenue, the principle of error occurs.

Example: Salary paid to staff is debited to his/her personal account.

Q: 7. What is the reserve?

In accounting, a reserve means an amount keep aside out of profit.

Reserve helps to make strong financial position of the business firm.

Q: 8. Write any one difference between capital expenditure and revenue expenditure.

Differences between Capital and Revenue Expenditures

Bases	Capital expenditures	Revenue expenditures
Purpose	It is incurred to purchase fixed assets or improve their life.	It is incurred to manage day-to-day business activities.

Q: 9. What is dhapot?

Dhapot was final statement under syaha sresta pranali.

It was similar to the final accounts of the modern accounting system.

Q: 10. Define bank cash book.

A bank cash book is a book of account maintained by operating level offices in the government office.

In this book, cash and banking transactions are recorded.

Q: 11. State the use of the budget sheet.

A budget sheet is used for controlling budget expenditures.

It provides information about annual appropriation, budget release and budget expenditure.

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Section B: Short Answer Questions

Attempt All Questions [8 x 5 marks = 40 marks]

Q: 12 A. State accounting process in brief.

A complete sequence of accounting procedures is an accounting process.

It is also popularly known by accounting cycle.

It includes recording, classifying, summarizing and interpreting.

An accounting cycle begins with the recording of transactions and ending with the preparation and interpretation of the final account.

Accounting process is of cyclic and sequential order.

It is given in the following:

> Documenting the financial transactions

> Classifying and recording the financial transactions into the journals

> Posting the transactions into the respective ledger accounts

> Balancing the ledger accounts

> Preparing a trial balance

> Preparing the financial statements like Trading account, Profit and loss account and Balance sheet

Q: 12 B. Prepare accounting equation from following details:

a. Started business with cash $ 200,000 and furniture $500,000

b. Purchase goods worth $80,000 on cash and 70,000 on credit.

c. Paid rent $90,000

d. Sold goods costing $20,000 in cash for $25,000.

[Answer: A = $685,000; C = $615,000; L = $70,000]

SOLUTION

Accounting Equation

Particulars		Assets		=	Capital		+	Liabilities
a	Business started with cash and furniture	200,000	cash	=	700,000		+	0
		500,000	furn.
	First equation	700,000		=	700,000		+	0
b	Goods purchased in cash and credit	150,000	stock		0			70,000	A/P
		(80,000)	cash
	New equation	770,000		=	700,000		+	70,000
c	Rent paid	(90,000)	cash		(90,000)	exp		0
	New equation	680,000		=	610,000		+	70,000
d	Sold goods costing $20,000 in cash for	25,000	cash		5,000	profit		0
	$25,000.	(20,000)	stock
	Final equation	685,000		=	615,000		+	70,000

Q: 13 A. Cash and banking transactions are given below by ABC Traders:

Sep 1: Opening balance of cash and bank are $60,000 and $200,000 respectively.

Sep 13: Cash deposited at the bank of $30,000.

Sep 22: Paid $32,000 to Ram through cheque for settling the account of $35,000.

Sep 27: Received a cheque from Aviral cheque of $19,000 and cash of $3,000 for selling the machine.

Required: Triple column cash book for the month

[Answer: Balance b/d: Cash = $33,000; Bank = $217,000]

(Assume Poush = September)

SOLUTION

Triple Column Cash Book

Date	Particulars	LF	Cash	Bank	Dis	Date	Particulars	LF	Cash	Bank	Dis
Sep 1	To Balance b/d		60,000	200,000		Sep 13	By Bank	C	30,000
Sep 13	To Cash	C		30,000		Sep 22	By Ram			32,000	3,000
Sep 27	To Machine		3,000	19,000		Sep 30	By Balance c/d		33,000	217,000
			63,000	249,000	Nil				63,000	249,000	3,000
Oct 1	To Balance b/d		33,000	217,000

Q: 13 B. Transactions related to ABC Furniture House for the purchase of furniture are given below:

Dec 5: Purchase from Karuna Suppliers:

10 coffee tables for $100,000

20 small chairs @ $4,000 each

Trade discount @ 10%

Dec 19: Purchased from Anjali Traders:

5 beds @ 15,000 each

8 pieces of sofa @ $25,000 per sofa

Required: Purchase book

[Answer: Total creditors ($162,000 + $275,000) = $437,000]

SOLUTION

Purchase Book

In the book of ABC Furniture House

Date	Particulars	LF	Invoice	Amount	Amount
Dec 5	Purchase from Karuna Suppliers:
	10 coffee tables @ $10,000 each			100,000
	20 small chairs @ $4,000 each			80,000
				180,000
	Less: Trade discount (180,000 x 10%)			(18,000)	162,000

Dec 19	Purchased from Anjali Traders:
	5 beds @ $15,000 each			75,000
	8 pieces sofa @ $25,000			200,000	275,000
	Total creditors or suppliers				437,000

Q: 14. Following information are given by XYZ Traders:

(a) Cashbook showed a balance of $80,000.

(b) Bank credited $20,000 only out of various cheques of $75,000 deposited in the bank.

(d) A customer deposited a cheque of $44,000 directly in the bank but has not been recorded in the cash book.

(e) Bank debited $500 as bank charge in the passbook.

(f) Cheque of $12,000 received and entered into the cash book but failed to deposit in the bank.

Required: Bank Reconciliation Statement [5]

[Answer: Balance as per passbook = $66,500]

SOLUTION

Bank Reconciliation Statement

For the month of ….

Particulars		Amount	Amount
Debit balance as per cashbook			80,000
Add:	Cheque issued but not presented for payment	10,000
	Customer directly deposited at the bank but not recorded in the cashbook	44,000	54,000

Less:	Cheque deposited into bank but not yet cleared (75,000 – 20,000)	55,000
	Bank charge debited in the passbook	500
	Cheque entered into cashbook but failed to deposit at the bank	12,000	(67,500)
Balance as per passbook			66,500

Q: 15 A. Rectify the following errors before preparing of trial balance. [3]

(a) Cash sales to Sharma $45,000 debited to his account

(b) Sales of machinery @ $19,000 were wrongly credited in the sales account.

[Answer: (a) Sharma credited $45,000;

(b) Machine credited $19,000;

(c) Pema credited $40,000]

SOLUTION

Rectified Journal Entry

Date	Particulars		LF	Amount Dr	Amount Cr
a.	Cash account	Dr		45,000
	To Sharma				45,000
	(Being- wrong entry, now rectified)

b.	Sales account	Dr		19,000
	To Machine account				19,000
	(Being- wrong entry, now rectified)

c.	Purchase account	Dr		20,000
	Sales account	Dr		20,000
	To Pema				40,000
	(Being- wrong entry, now rectified)

Given and working note:

a. Cash sales to Sharma $45,000 debited to his account

*Step 1,*				÷	*Step 2,*
Correct entry					Wrong entry
Cash	Dr	45,000			Sharma	Dr	45,000
To Sales			45,000		To Sales			45,000

Again, correct entry just copy and paste but wrong debit entry credited and wrong credit entry debited

*Step 3,*					*Step 4,*
Correct entry				x	Wrong entry
Cash	Dr	45,000			Sales	Dr	45,000
To Sales			45,000		To Sharma			45,000

Step 5,

Sales Dr	45,000	Final entry
Sales Cr	45,000	Cash	Dr	45,000
	Nil	To Sharma			45,000

b. Sales of machinery @ $19,000 were wrongly credited in the sales account.

*Step 1,*				÷	*Step 2,*
Correct entry					Wrong entry
Cash	Dr	19,000			Cash	Dr	19,000
To Machine			19,000		To Sales			19,000

Again, correct entry just copy and paste but wrong debit entry credited and wrong credit entry debited

*Step 3,*					*Step 4,*
Correct entry				x	Wrong entry
Cash	Dr	19,000			Sales	Dr	19,000
To Machine			19,000		To Cash			45,000

Step 5,

Cash Dr	19,000	Final entry
Cash Cr	19,000	Sales	Dr	19,000
	Nil	To Machine			19,000

c. Purchase goods from Pema $20,000 recorded in the sales book.

*Step 1,*				÷	*Step 2,*
Correct entry					Wrong entry
Purchase	Dr	20,000			Pema	Dr	20,000
To Pema			20,000		To Sales			20,000

Again, correct entry just copy and paste but wrong debit entry credited and wrong credit entry debited

*Step 3,*					*Step 4,*
Correct entry				x	Wrong entry
Purchase	Dr	20,000			Sales	Dr	20,000
To Pema			20,000		To Pema			20,000

Step 5,

Pema Cr	20000	Final entry
Pema Cr	20,000	Purchase	Dr	20,000
	40,000	Sales	Dr	20,000
		To Pema			40,000

Q: 15 B. Following information are extracted from the trial balance:

Particulars	Amount Dr	Amount Cr
Sundry debtors	52,000
Provision for bad debts		7,000
Bad debts	1,000

Additional information:

a. Bad debt $2,000

b. provision for bad debt @ 5%

Required: Provision for bad debt account [2]

[Answer: To P&L (b/f) = $1,500]

SOLUTION

Provision for Bad Debt Account

Particulars	Amount	Particulars	Amount
To Bad debts (old)	1,000	By Balance b/d	7,000
To Bad debts (new)	2,000
To P&L account (b/f)	1,500
To Balance c/d	2,500
($52,000 – $2,000) x 5%
	7,000		7,000

An unadjusted trial balance of ABC Trading Concern is given below:

Particulars	Amount Dr	Particulars	Amount Cr
Land and building	4,00,000	Capital	4,25,000
Debtors	2,25,000	Creditors	1,20,000
Bank balance	1,45,000	Sales	5,15,000
Salary	80,000	Loan	2,50,000
Office expenses	40,000
Purchase	3,80,000
Cash	25,000
Prepaid insurance	15,000
	13,10,000		13,10,000

Additional information:

Office expenses prepaid $3,000

Land appreciated by 10%

Salary outstanding $1,500

Bad debts written off $2,500

Prepaid insurance expire $10,000

Required: Adjusted Trial balance [5]

[Answer: Adjustment = $57,000; Adjusted TB = $13,51,000]

SOLUTION

Journal Entry

Date	Particulars		LF	Amount Dr	Amount Cr
	Prepaid office expenses	Dr		3,000
	To Office expenses				3,000
	(Being: office expenses paid in advance)

	Land and building	Dr		40,000
	To Appreciation on land				40,000
	(Being: appreciation on land viz 400,000 x 10%)

	Salary account	Dr		1,500
	To Salary payable				1,500
	(Being: salary payable)

	Bad debts account	Dr		2,500
	To debtors account				2,500
	(Being: bad debts written off)

	Prepaid insurance expired account	Dr		10,000
	To Prepaid insurance				10,000
	(Being: prepaid insurance expired)

Adjusted Trial Balance

	Trial Balance		Adjustment		Adjusted Trial Balance
	Dr	Cr	Dr	Cr	Dr	Cr
Land and building	4,00,000		40,000		4,40,000
Debtors	2,25,000			2,500	2,22,500
Bank balance	1,45,000				1,45,000
Salary	80,000		1,500		81,500
Office expenses	40,000			3,000	37,000
Purchase	3,80,000				3,80,000
Cash	25,000				25,000
Prepaid insurance	15,000			10,000	5,000
Capital		4,25,000				4,25,000
Creditors		1,20,000				1,20,000
Sales		5,15,000				5,15,000
Loan		2,50,000				2,50,000
	13,10,000	13,10,000
Prepaid office expenses			3,000		3,000
Appreciation on land				40,000		40,000
Salary payable				1,500		1,500
Bad debts			2,500		2,500
Prepaid insurance expired			10,000		10,000
Total			57,000	57,000	13,51,500	13,51,500

Q: 16. On 1^st January 2018 ABC Company purchased a motor van for $6,00,000. On 1^st July 2019, the company purchased another van worth $8,00,000. On 1^st July 2020, the first motor van was sold bearing the loss of $50,000 and on the same date, the company purchased another van for $10,00,000. Depreciation was charged @10% p.a. under the fixed installment method. The accounts of the company were closed on 31^st December each year.

Required: Motor van account for the first three years [1+2+2 = 5]

[Answer: Depreciation in 2018 = $60,000;

Depn in 2019 ($60,000 + $40,000) = $100,000;

Depn in 2020 ($30,000 sold + $80,000 + $50,000);

Balance on 31 Dec 2020 = $16,30,000;

Loss (given); CSV (450,000 – 50,000 loss) = $400,000

SOLUTION

Given and working note:

Depreciation @ 10% p.a. on FIM

Particulars	Date			Assets						Total
	Old	New	Year	V1 = 6,00,000		V = 8,00,000		V = 10,00,000		Depn
Purchase	1 Jan		2018	600,000
Depreciation	31 Dec		2018	60,000						60,000
Book value/Purchase	1 Jan	1 July	2019	540,000		800,000
Depreciation	31 Dec	31 Dec	2019	60,000		40,000	(6m)			100,000
Book value/Purchase	1 Jan	1 July	2020	480,000		760,000		10,00,000		30,000 +
Depreciation	31 Dec	31 Dec	2020	30,000	(6m)	80,000		50,000	(6m)	130,000
Balance				450,000		680,000		950,000

CSV = $450,000 BSV – $50,000 loss = $400,000

Motor Van Account

For the year ended 31^st December

Date	Particulars	Amount	Date	Particulars	Amount
2018			2018
1 Jan	To Bank account (V1)	6,00,000	Dec 31	By Depreciation	60,000
			Dec 31	By Balance c/d	5,40,000
		6,00,000			6,00,000
2019			2019
Jan 1	To Balance b/d	5,40,000	Dec 31	By Depn (V1 + V2)	1,00,000
Jul 1	To Bank account (V2)	8,00,000	Dec 31	By Balance c/d	12,40,000
		13,40,000			13,40,000
2020			2020
Jan 1	To Balance b/d	12,40,000	Jul 1	By Bank account (sold)	4,00,000
Jul 1	To Bank account (V3)	10,00,000	Jul 1	By Depn (on sold)	30,000
			Jul 1	By P&L account (loss)	50,000
			Dec 31	By Depn (V2 + V3)	1,30,000
			Dec 31	By Balance c/d	16,30,000
		22,40,000			22,40,000

Q: 17. Trial balance of Nabin Trader on 31^st December 2021 is given below:

Particulars	Amount Dr	Particulars	Amount Cr
Selling expenses	5,000	Gross profit b/d	87,000
Interest	5,000	Creditors	8,000
Debtors	25,000	Bank loan	19,000
Bad debts	2,000	Provision for bad debts	2,000
Insurance	1,000	Capital	50,000
Salaries	20,000
Investment	40,000
Cash	14,000
Machinery	50,000
Rent	4,000
	166,000		166,000

Additional information:

a. Depreciation on machinery 10% p.a.

b. Salary payable $4,000

c. New bad debt $1,000

Required: (i) Profit and loss account; (ii) Balance sheet [3+2]

[Answer: Net profit = $42,000; BS = $123,000]

SOLUTION

Profit and Loss Account

Nabin Trader

As on 31^st December 2021

Particulars		Amount	Particulars	Amount
To Salaries	20,000		By Gross profit	87,000
Add: Salary payable	+ 4,000	24,000	By provision for bad debts	2,000
To Bad debts	2,000
Add: New bad debts	+ 1,000	3,000
To Depn on machinery		5,000
To Selling expenses		5,000
To Interest expenses		5,000
To Insurance expenses		1,000
To Rent expenses		4,000
To Net profit		42,000
		89,000		89,000

Balance Sheet

Nabin Trader

As on 31^st December 2021

Liabilities		Amount	Assets		Amount
Capital	50,000		Cash		14,000
Add: Net profit	+ 42,000	92,000	Debtors	25,000
			Less: Bad debts	(1,000)
Creditors		8,000		24,000
Bank loan		19,000	Less: PBD	Nil	24,000
Salary payable		4,000	Investment		40,000
			Machinery	50,000
			Less: Depreciation	(5,000)	45,000

		123,000			123,000

Q: 18. RC Club provides the following information:

Balance Sheet as on 1-1- 2020

Liabilities	Amount Dr	Assets	Amount Cr
Capital fund	400,000	Fixed assets	300,000
Loan	60,000	Investment	100,000
		Closing cash balance	60,000
	460,000		460,000

Receipts and payments of on 31^st Dec 2020:

Receipts:	Payment:
Subscriptions $50,000	Tournament expenses $10,000
Entrance fees $30,000	Wages expenses $20,000
Interest on investment $5,000	Printing expenses $7,500
Sale of old furniture $5,000	General expenses $12,000
	Newspaper expenses $1,800

Other information and outstanding are given below:

Printing outstanding $500 and wages outstanding $3,000

40% of the entrance fee is to be capitalized

Fixed assets depreciate by 10%

Subscription due for the year $22,000

Required: (i) Receipts and payment account; (ii) Income and Expenditure account [2+3 = 5]

[Answer: (i) Cash balance = $98,700; (ii) Surplus = $15,200;

*Net Subscription = $72,000; Balance sheet = $490,700;

SOLUTION

Receipt and Payment Account

RC Club

As on 31^st December 2021

Receipt	Amount	Payment	Amount
To Balance b/d (cash balance)	60,000	By Tournament expenses	10,000
To Subscription	50,000	By Wages expenses	20,000
To Entrance fees	30,000	By Printing expenses	7,500
To Interest on investment	5,000	By General expenses	12,000
To Sales of old furniture	5,000	By Newspaper expenses	1,800
		By Balance c/d	98,700
	150,000		150,000

Income and Expenditures Account

RC Club

As on 31^st December 2021

Expenditures		Amount	Incomes		Amount
To Tournament expenses		10,000	By Subscription	50,000
To Wages	20,000		Less: O/s last year	Nil
Add: O/s current year	3,000	23,000	Add: O/s current year	22,000
To Printing expenses	7,500		Add: Advance last year	Nil
Add: O/s current year	500	8,000	Less: Advance next year	Nil	72,000
To General expenses		12,000	By Entrance fees (30,000 x 60%)		18,000
To Newspaper expenses		1,800	By Interest on investment		5,000
To Depreciation		30,000	By Sales of furniture		5,000
To Surplus		15,200
		100,000			100,000

Balance Sheet

RC Club

As on 31^st December 2021

Liabilities		Amount	Assets		Amount
Capital fund	400,000		Fixed assets	300,000
Add: Entrance fees	12,000		Less: Depreciation	(30,000)	270,000
Surplus	15,200	427,200	Investment		100,000
Loan		60,000
			Outstanding subscription	(OSCY)	22,000
Outstanding wages (OSCY)		3,000	Cash balance		98,700
Outstanding printing exp		500
		490,700			490,700

Q: 19 A. Shweta keeps her account under the single entry system. She started a business with $200,000 on 1^st Jan 2020. She withdraws $2,000 per month for household work. The position of her business at the end of the year was as follows:

Fixed assets	190,000	Creditors	50,000
Inventory	85,000	Debtors	40,000
Due expenses	10,000	Bank balance	60,000

Required: (i) Closing statement of affairs; (ii) Statement of profit and loss [1+1 = 2]

[Answer: Closing capital = $315,000; Profit = $139,000]

SOLUTION

Statement of Affairs

As on 31 December 2020

Liabilities	Amount	Assets	Amount
Due expenses	10,000	Fixed assets	190,000
Creditors	50,000	Inventory	85,000
Closing capital (b/f)	315,000	Debtors	40,000
		Bank balance	60,000
	375,000		375,000

Profit and Loss Statement

Particulars	Amount	Amount
Closing capital		315,000
Add: Drawings ($2,000 x 12)		24,000
		339,000
Less: Opening capital		(200,000)
Net profit for the year		139,000

Q: 19 B. Following transactions of District Level Office are given:

(a)	Dec 1	House rent @ $8,000 per month for three months paid to house owner Sailesh
(b)	Dec 15	Furniture advance of $5,000 was cleared as per bill of $6,000 and bank voucher of $1,000 submitted by Na. Su. Ramchandra
(c)	Dec 30	Staff remuneration of Kartik $30,000 (without provident fund) was distributed after deducting PF $6,000, social security $300 and income tax $1,500.

Required: Journal vouchers

[Answer: (a) Advance rent = $24,000;

(c) Total salary = $33,000; DTCO = $25,200]

*Month has been changed, December = Chaitra

SOLUTION

AGF No. 203

Central/Province/Local Level

Government of Nepal

District Level Office

Date: Dec 1

Office Code No. 125

JV No. 1

Journal Voucher

Electronics Transaction No.

Types of Journal Voucher: Expenses

Budget Sub-head No.

Code

Activities

Particulars

Sources

Debit

Credit

Sub-head

Program

Level

Bearer

Type

Payment

Amount

No.

Code No.

Orgⁿ

mode

Dr House owner Sailesh

24,000

(advance for rent)

Cr DTCO single account

24,000

Total

24,000

Amount in words: twenty-four thousand

Brief narration of transaction: advance house rent paid $8,000 per month for 3 months.

Attach documents:

Journal Voucher

SN	Code	Activities	Particulars	LF	Sources				Debit	Credit
	Sub-head	Program			Level	Bearer	Type	Payment	Amount	Amount
	No.	Code No.				Orgⁿ		mode
b	29311		Dr BE Furniture						6,000
			Cr DTCO single account							1,000
			Cr NaSu Ram Chandra							5,000
			(advance cleared)
Total									6,000	6,000
Amount in words: six thousand.
Brief narration of transaction: advance cleared by Ram Chandra

Journal Voucher

SN	Code	Activities	Particulars	LF	Sources				Debit	Credit
	Sub-head	Program			Level	Bearer	Type	Payment	Amount	Amount
	No.	Code No.				Orgⁿ		mode
c	21111		Dr BE Salary						33,000
			Cr Provident fund							6,000
			Cr Social security							300
			Cr Income tax							1,500
			Cr DTCO single account (b/f)							25,200

Total									33,000	33,000
Amount in words: thirty thousand
Brief narration of transaction: salary paid after deducting provident fund, social security and income tax

Following information are given by the Local Level Office:

Budget sub-head	Annual budget	Expenses upto November (Falgunj)
Employee remuneration	800,000	400,000
Office materials	120,000	60,000
House rent	140,000	80,000
Furniture and fitting	80,000	35,000
Vehicles	500,000	350,000

Expenditure for the month of December (Chaitra):

Dec 1: Purchase furniture $10,000

Dec 5: Purchase vehicles for $100,000

Dec 10: Advance rent paid for $10,000

Dec 28 Distributed $35,000 for employee’s remuneration after deducting income tax $1,000 and PF $8,000.

Required: Budget sheet [5]

[Answer: Balance of budget: $551,000]

SOLUTION

Central/Province/Local Level

AGF No. 208

Stamp of

Government of Nepal

Stamp of

Nepal Govt

Office Code No. 235

State Govt

Budget Sheet

For December 2020

Budget Sub-head No.

Name of office: Local Level Office

Part I: Budget

Budget sub-head

21111

21112

22311

29311

29511

Salary

Office

Rent

Furniture

Vehicle

Total

Materials

Expenses

Appropriation of approved annual budget for the fiscal year

16,40,000

800,000

120,000

140,000

80,000

500,000

Additional appropriation of the budget approved for FY

Add or subtract the amount of budget transfer

Add or subtract the amount of fund

The accumulated budget

Part II: Receipt

Date

Ref.

Particulars

Budget release upto LM

Budget release for CM

Budget release upto CM

Part III: Expenses

Dec

Expenditure upto LM

9,25,000

400,000

60,000

80,000

35,000

350,000

Furniture purchased

10,000

–

10,000

Vehicle purchased

1,00,000

–

100,000

Advance rent paid

10,000

–

10,000

–

Salary paid

44,000

–

Total expenditures

10,89,000

444,000

60,000

90,000

45,000

450,000

Balance of budget

551,000

356,000

60,000

50,000

35,000

50,000

Given and working note:

Dr BE Salary (b/f) 44,000

Cr IT 1,000

Cr PF 8,000

Cr DTCO 35,000

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Click on the link for YouTube videos:
Accounting Equation	http://tiny.cc/c89jkz
Basic Journal Entries in Nepali	http://tiny.cc/uaakkz
Basic Journal Entries	http://tiny.cc/8aakkz
Journal Entry and Ledger	http://tiny.cc/caakkz
Ledger	http://tiny.cc/haakkz
Subsidiary Book	http://tiny.cc/399jkz
Cash Book	http://tiny.cc/889jkz
Trial Balance & Adjusted Trial Balance	http://tiny.cc/c59jkz
Bank Reconciliation Statement (BRS)	http://tiny.cc/q59jkz
Depreciation	http://tiny.cc/ugakkz
Final Accounts: Class 11	http://tiny.cc/y89jkz
Adjustment in Final Accounts	http://tiny.cc/keakkz
Capital and Revenue	http://tiny.cc/peakkz
Single Entry System	http://tiny.cc/n19jkz
Non-Trading Concern	http://tiny.cc/j09jkz
Government Accounting	http://tiny.cc/hcakkz
Goswara Voucher (Journal Voucher)	http://tiny.cc/hcakkz

###########

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Section C: Long Answer Questions

Attempt All Questions [3 x 8 marks = 24 marks]

Q: 20. Information of Samriyan Enterprises is given below:

(a) Started a business with $200,000

(b) Purchase goods of $15,000 from Ram

(d) Cash paid to Ram $10,000

(e) Again goods purchase from Ram of $20,000

(f) Paid to Ram $24,000 in full settlement of his account.

Required: (i) Journal Entries; (ii) Necessary Ledger; (iii) (Trail Balance [3+4+1]

[Answer: Trial balance = $219,000]

SOLUTION

Journal Entries

In the book of Samriyan Enterprises

Date	Particulars		LF	Amount Dr	Amount Cr
a.	Cash account	Dr		200,000
	To Capital account				200,000
	(Being: business started with cash)

b.	Purchase account	Dr		15,000
	To Ram’s account				15,000
	(Being: goods or inventories purchase on credit)

c.	Cash account	Dr		18,000
	To Sales account				18,000
	(Being: goods or inventories sold in cash)

d.	Ram’s account	Dr		10,000
	To Cash account				10,000
	(Being: cash paid to him partially)

e.	Purchase account	Dr		20,000
	To Ram’s account				20,000
	(Being: goods or inventories purchase on credit)

f.	Ram’s account	Dr		25,000
	To Cash account				24,000
	To Discount received account				1,000
	(Being: cash paid and discount received )

Cash Account

Date	Particulars	LF	Amount	Date	Particulars	LF	Amount
a.	To Capital		200,000	d.	By Bam		10,000
c.	To Sales		18,000	f.	By Ram		24,000
					By Balance c/d		184,000
			218,000				218,000
	To Balance c/d		184,000

Capital Account

Date	Particulars	LF	Amount	Date	Particulars	LF	Amount
	To Balance c/d		200,000	a.	By Cash		200,000

			200,000				200,000
					By Balance b/d		200,000

Purchase Account

Date	Particulars	LF	Amount	Date	Particulars	LF	Amount
b.	To Ram		15,000		By Balance c/d		35,000
e.	To Ram		20,000
			35,000				35,000
	To Balance b/d		35,000

Ram’s Account

Date	Particulars	LF	Amount	Date	Particulars	LF	Amount
d.	To Cash		10,000	b.	By Purchase		15,000
f.	To Cash		24,000	e.	By Purchase		20,000
f.	To Discount received		1,000
			35,000				35,000

Sales Account

Date	Particulars	LF	Amount	Date	Particulars	LF	Amount
	To Balance c/d		18,000	c.	By Cash		18,000

			18,000				18,000
					By Balance b/d		18,000