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Home /  Accounting Solution | NEB Solution | Class 11
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  • Estimated reading time : 855 Minutes
  • 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.

     

     

    Click on the photo for FREE eBooks

     

     

     

    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.

    (c) Cheques were issued of $90,000 but a cheque of $10,000 was not presented for payment till the date.

    (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.

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

    [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

     

    Or

    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 1st January 2018 ABC Company purchased a motor van for $6,00,000. On 1st July 2019, the company purchased another van worth $8,00,000. On 1st 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 31st 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 31st 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 31st 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 31st 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 31st 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 31st 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 31st 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 31st 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 31st 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 1st 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.

     

     

    SN

    Code

    Activities

    Particulars

    LF

    Sources

    Debit

    Credit

     

    Sub-head

    Program

     

     

    Level

    Bearer 

    Type

    Payment

    Amount

    Amount

     

    No.

    Code No.

     

     

     

    Orgn

     

    mode

     

     

    a

     

     

    Dr House owner Sailesh

     

     

     

     

     

    24,000

     

     

     

     

    (advance for rent)

     

     

     

     

     

     

     

     

     

     

    Cr DTCO single account

     

     

     

     

     

     

    24,000

     

     

     

     

     

     

     

     

     

     

     

    Total

    24,000

    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

     

    Or

    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

    VN

    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

    1

     

     

    Furniture purchased

    10,000

    –

    –

    –

    10,000

     

    5

     

     

    Vehicle purchased

    1,00,000

    –

    –

    –

    –

    100,000

    10

     

     

    Advance rent paid

    10,000

    –

    –

    10,000

    –

    –

    28

     

     

    Salary paid

    44,000

    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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    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

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    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

    (c) Goods sold in cash $18,000

    (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

     

     

     

     

     

     

     

     

     

    Discount Received Account

    Date

    Particulars

    LF

    Amount