11th Accountancy Monthly Test - 1 ( Final accounts of sole proprietorship - II )

MABS Institution

11th Accountancy Monthly Test - 1 ( Final accounts of sole proprietorship - II )-Aug 2020

Time : 2.30 Hours

Part - A

Multiple Choice Question - Answer All Question

______ is provided because the proprietor is separate from the business.

Capital
Drawing
Income
Interest

_______ is a loss for the business and should be adjusted against profit.

Interest on Capital
Depreciation
Debtors
Bad debts

Debts which cannot be recovered or irrecoverable are called _________.

Bad debts
Depreciation
Closing stock
Capital

__________represents the amount or goods withdrawn by the proprietor from the business for his personal use.

Drawings
Purchase
Sales
Capital

The income which has been earned during the current accounting year but .not received till the end of that accounting year is called as _____

Outstanding expenses
Prepaid expenses
accrued income
Received income

As per Trial balance, capital as on 31.03.2018 is Rs. 5,00,000. Provide 6% Interest on capital Rs.____________.

10,000
20,000
30,000
40,000

The Trial Balance shows bank loan Rs.5,00,000 at 12% on 01-01-2015. Interest paid Rs.40,000. Interest outstanding is ______ as on 31-12-2015.

Rs.60,000
Rs.40,000
Rs.27,600
Rs.20,000

Prepaid insurance is _______

an asset
a liability
an income
an expense

Expenses which have been incurred in the accounting period but not paid till the end of the accounting period are called______.

Outstanding expenses
Prepaid expenses
Accrued income
Income received in advance

The unsold goods in stock at the end of the accounting period Is termed as ______

Opening stock
Average stock
Closing stock
None of these

Part - B

Generic 2 - Answer All Question

On 31st March, 2017, Net profit before charging commission is Rs 11,000. Adjustment: Provide manager’s commission at 10% on the profit after charging such Manager’s commission.

Insurance premium of Rs 6,000 for one year is paid on 1st January 2016 and the accounting year closes on 31^st March 2016.In this example, insurance premium has been paid in advance or prepaid for nine months, Pass adjusting entry.

Accrued income is credited to the profit and loss account and shown in the balance sheet a current asset. Why

What is Bad debts?
Pass Adjusting entries for the following adjustments.
a) Provide 6% Interest on Capital of Rs. 16,00,000
b) Rent received in advance Rs.5,000
c) Interest accrued on investments Rs. 2,000

What are adjusting entries?

What is prepaid expense?

What is depreciation?

What is outstanding expense?

What are accrued incomes?

Part - C

Generic 3 - Answer All Question

The following are the extracts from the trial balance.

Particulars Debit Rs. Credit Rs.

Sundry Creditors 30,000

Discount received 1,000

You are required to show how these items will appear in the profit and loss account and balance sheet.

Particulars	Debit Rs.	Credit Rs.
Sundry Creditors		30,000
Discount received		1,000

Explain the concept of Matching Principle.

What is the need for preparing final accounts?

Explain how closing stock is treated in final accounts.

Show necessary entries to adjust the following on 31st December, 2017.
(i) Outstanding salaries Rs 1,200
(ii) Outstanding rent Rs 300
(iii) Prepaid insurance premium Rs 450
(iv) Interest on investments accrued Rs 400
(v) Bad debts written off Rs 200
Sundry debtors as per trial balance as on 31^st March, 2016 is Rs 10,000.
Adjustment: Write off bad debts amounting to Rs 300.
Give adjusting entry and show how these appear in the final accounts as on 31st March, 2016.

Sundry debtors as per trial balance Rs 26,000
Bad debts as per trial balance Rs 1,000
Adjustment: Additional bad debts amounted to Rs 2,500
Give adjusting entry and show how these appear in the final accounts on 31st March, 2016

The Trial balance shows the followings:
Capital as on 31-03-2013 Rs.6,00,000 .
Drawings as on 31-03-2013 Rs.50,000
Charge interest on drawings @ 5% pass adjusting entry. Show how this item appear in the final accounts.

What is Credit balance?

Pass adjusting entries for the following on 31st March, 2018.
(i) Charge interest on drawings at Rs 50
(ii) Write off bad debts by Rs 500
(iii) Depreciate furniture by Rs 1,000

Part - D

Generic 5 - Answer All Question

Prepare profit and loss account of Manoj for the year ending on 31st March 2016.

Particulars Rs. Particulars Rs.

  Gross profit 25,000   Travelling expenses 500

  Salaries 5,600   Stationery 75

  Insurance 200   Rent 650

  Discount allowed 400   Interest on loan 225

  Discount received    300   Repairs 125

  Commission received 100   Office expenses 55

  Advertisement 450   General expenses 875

  Printing charges 375   Postage 175

Adjustments:
(i) Salary outstanding Rs. 400
(ii) Rent paid in advance Rs. 50
(iii) Commission receivable Rs. 100.

Particulars	Rs.	Particulars	Rs.
Gross profit	25,000	Travelling expenses	500
Salaries	5,600	Stationery	75
Insurance	200	Rent	650
Discount allowed	400	Interest on loan	225
Discount received	300	Repairs	125
Commission received	100	Office expenses	55
Advertisement	450	General expenses	875
Printing charges	375	Postage	175

From the following trial balance of Mohan for the year ended 31st March, 2017 and additional information, prepare trading and profit and loss account and balance sheet.

Particulars Debit Rs Credtit Rs

Capital 1,00,194

Drawings 7,500

Purchases 8,28,890

Promotional expenses 58,405

Sales 9,17,600

Bad debts 4,925

Discount 7,745

Provision for doubtful debts 250

Wages 16,000

Plant and machinery 41,500

Land and building 26,450

Sundry creditors 20,000

Sundry debtors 32,500

Cash in hand 11,629

Opening stock 2,500

10,38,044 10,38,044

Additional information:
(a) Closing stock is valued at Rs 15,500
(b) Write off Rs 500 as bad debts and create a provision for bad debts @ 10% on debtors.
(c) Depreciation @ 10% required

Particulars	Debit Rs	Credtit Rs
Capital		1,00,194
Drawings	7,500
Purchases	8,28,890
Promotional expenses	58,405
Sales		9,17,600
Bad debts	4,925
Discount	7,745
Provision for doubtful debts		250
Wages	16,000
Plant and machinery	41,500
Land and building	26,450
Sundry creditors		20,000
Sundry debtors	32,500
Cash in hand	11,629
Opening stock	2,500
	10,38,044	10,38,044

The Balance sheet of Thapar on 1^st January 2011 was as follows:

Liabilities Amount Rs. Assets Amount Rs.

Trade payables 15,000 Plant & Machinery 30,000

Expenses payable 1,500 Furniture & Fixture 3,000

Capital 50,000 Inventories 13,000

Trade receivables 14,000

Cash at Bank 6,500

66,500 66,500

During 2011, his Profit and loss account revealed a net profit of Rs.15,300. This was after allowing for the following:
(a) Interest on Capital @ 6% p.a.
(b) Depreciation on Plant and Machinery @ 10% and on Furniture and Fixtures @ 5%.
(c) A provision for doubtful debts @ 5% of the trade receivables as at 3pt December 2011.
But while preparing the Profit and loss account he had forgotten to provide for (1) outstanding expenses totalling Rs.1,800 and (2) Prepaid insurance to the extent of Rs.200.
His current assets and liabilities on 31^st December, 2011 were; Inventories Rs.14,500; Trade receivables Rs.20,000; cash at Bank Rs.10,530 and Trade payable Rs.11,400.
During the year he withdrew Rs.6,000 for domestic use, Draw up his balance sheet at the end of the year.

Liabilities	Amount Rs.	Assets	Amount Rs.
Trade payables	15,000	Plant & Machinery	30,000
Expenses payable	1,500	Furniture & Fixture	3,000
Capital	50,000	Inventories	13,000
		Trade receivables	14,000
		Cash at Bank	6,500
	66,500		66,500

From the trial balance of Sumathi and the adjustments prepare the trading and profit and loss account for the year ended 31st March, 2016, and a balance sheet as on that date.

Particulars Debit Rs. Credit Rs.

Stock on April 1, 2015 900

Purchases 2,000

Sales 4,000

10% Loan 2,000

Carriage on purchases 200

Rent from tenant 250

Interest on loan 100

Machinery 400

Cash in hand 75

Furniture 4,000

Capital 1,975

Postage and telegram 100

Salaries 425

Commision 200

Repairs 75

General expenses 150

8,425 8,425

Adjustments
(a) Six months interest on loan is outstanding.
(b) Two months rent is due from tenant, the monthly rent being Rs. 25.
(c) Salary for the month of March 2016, Rs. 75 is unpaid.
(d) Stock in hand on March 31, 2016 was valued at Rs. 1,030.

Particulars	Debit Rs.	Credit Rs.
Stock on April 1, 2015	900
Purchases	2,000
Sales		4,000
10% Loan		2,000
Carriage on purchases	200
Rent from tenant		250
Interest on loan	100
Machinery	400
Cash in hand	75
Furniture	4,000
Capital		1,975
Postage and telegram	100
Salaries	425
Commision		200
Repairs	75
General expenses	150
	8,425	8,425

Prepare trading and profit and loss account and balance sheet from the following trial balance of Madan as on 31st March, 2018.

Debit balance Rs Credit balance Rs

Sundry debtors 61,000 Capital 70,000

Plant and machinery 80,000 Purchases return 2,000

Bank charges 4,200 Sales 2,55,000

Wages 7,000 Bank overdraft 77,000

Sales return 5,000

Purchases 1,52,000

Opening stock 30,000

Drawings 22,000

Establishment expenses 20,000

Bad debts 800

Business premises 22,000

4,04,000 4,04,000

Adjustments:
(a) The closing stock was Rs 80,000
(b) Provide depreciation on plant and machinery @ 20%
(c) Write off Rs 800 as further bad debts
(d) Provide the doubtful debts @ 5% on sundry debtors

An abstract of the trial balance as on 31st December, 2016 is as follows:
Particulars
Sundry Debtors 20,000
Bad debts 500
Adjustment: Create a provision for bad and doubtful debts @ 5% on sundry debtors. Pass the adjusting entry and show how these items will appear in final accounts.

Debit balance	Rs	Credit balance	Rs
Sundry debtors	61,000	Capital	70,000
Plant and machinery	80,000	Purchases return	2,000
Bank charges	4,200	Sales	2,55,000
Wages	7,000	Bank overdraft	77,000
Sales return	5,000
Purchases	1,52,000
Opening stock	30,000
Drawings	22,000
Establishment expenses	20,000
Bad debts	800
Business premises	22,000
	4,04,000		4,04,000

From the following particulars presented by Thilak for the year ended 31st March 2017, prepare profit and loss account.

Particulars Rs. Particulars Rs.

  Gross profit    1,00,000   Interest received 6,000

  Rent paid 22,000   Bad debts 2,000

  Salaries 10,000   Provision for bad debts (1-4-2016) 4,000

  Commission (Cr.) 12,000   Sundry debtors 40,000

  Discount received 2,000   Buildings 80,000

  Insurance premium paid 8,000

Adjustments:
(a) Outstanding salaries amounted to Rs. 4,000
(b) Rent paid for 11 months
(c) Interest due but not received amounted to Rs. 2,000
(d) Prepaid insurance amounted to Rs. 2,000
(e) Depreciate buildings by 10%
(f) Further bad debts amounted to Rs. 3,000 and make a provision for bad debts @ 5% on sundry debtors
(g) Commission received in advance amounted to Rs. 2,000.

Particulars	Rs.	Particulars	Rs.
Gross profit	1,00,000	Interest received	6,000
Rent paid	22,000	Bad debts	2,000
Salaries	10,000	Provision for bad debts (1-4-2016)	4,000
Commission (Cr.)	12,000	Sundry debtors	40,000
Discount received	2,000	Buildings	80,000
Insurance premium paid	8,000

The trial balance on March 31, 2016, shows the following:
Sundry debtors Rs. 30,000;
Bad debts Rs. 1,200
It is found that 3% of sundry debtors is doubtful of recovery and is to be provided for. Pass journal entry for the amount of provision and also show how it would appear in the profit and loss account and balance sheet.

The following trial balance has been extracted from the books of Rajesh on 31st December 2016.

Debit balance Rs. Credit balance Rs.

  Drawings 44,000   Capital 1,76,000

  Plant and machinery 1,00,000   Cash sales 1,72,000

  Opening stock 20,000   Provision for bad and doubtful debts   2,000

  Purchases 2,70,000   Bank overdraft 20,000

  Wages 62,000   Discount received 6,000

  Salaries 70,000   Credit sales 3,00,000

  Insurance 45,000   Sundry creditors 24,000

  Rent and taxes 17,000

  Sundry debtors 50,000

  Suspense A/c 22,000

7,00,000 7,00,000

The following adjustments are to be made:
(a) Stock on 31st December 2016 was Rs. 28,000
(b) Unexpired insurance was Rs. 15,000
(c) Provision for doubtful debts is to be maintained at 5% on sundry debtors.
(d) Depreciate plant and machinery at 20%.
You are required to prepare trading and profit and loss account for the year ended 31st December 2016 and a balance sheet as on that date.

Debit balance	Rs.	Credit balance	Rs.
Drawings	44,000	Capital	1,76,000
Plant and machinery	1,00,000	Cash sales	1,72,000
Opening stock	20,000	Provision for bad and doubtful debts	2,000
Purchases	2,70,000	Bank overdraft	20,000
Wages	62,000	Discount received	6,000
Salaries	70,000	Credit sales	3,00,000
Insurance	45,000	Sundry creditors	24,000
Rent and taxes	17,000
Sundry debtors	50,000
Suspense A/c	22,000
	7,00,000		7,00,000

Abstracts from trial balance as on 31st December 2016 are as follows:

Particulars Debit Rs. Credit Rs.

  Bad debts written off    1,800

  Discount allowed 600

  Sundry debtors 20,000

  Provision for bad and doubtful debts 1,500

  Provision for discount on debtors 500

A provision for doubtful debts @ 5% and a provision for discount @ 2% on sundry debtors are to be maintained by the trader. Show how these items would appear in the final accounts.

Particulars	Debit Rs.	Credit Rs.
Bad debts written off	1,800
Discount allowed	600
Sundry debtors	20,000
Provision for bad and doubtful debts		1,500
Provision for discount on debtors		500

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11th Accountancy Monthly Test - 1 ( Final accounts of sole proprietorship - II )

MABS Institution

11th Accountancy Monthly Test - 1 ( Final accounts of sole proprietorship - II )-Aug 2020

Part - A

Multiple Choice Question - Answer All Question

______ is provided because the proprietor is separate from the business.

_______ is a loss for the business and should be adjusted against profit.

Debts which cannot be recovered or irrecoverable are called _________.

__________represents the amount or goods withdrawn by the proprietor from the business for his personal use.

The income which has been earned during the current accounting year but .not received till the end of that accounting year is called as _____

As per Trial balance, capital as on 31.03.2018 is Rs. 5,00,000. Provide 6% Interest on capital Rs.____________.

The Trial Balance shows bank loan Rs.5,00,000 at 12% on 01-01-2015. Interest paid Rs.40,000. Interest outstanding is ______ as on 31-12-2015.

Prepaid insurance is _______

Expenses which have been incurred in the accounting period but not paid till the end of the accounting period are called______.

The unsold goods in stock at the end of the accounting period Is termed as ______

Part - B

Generic 2 - Answer All Question

On 31st March, 2017, Net profit before charging commission is Rs 11,000. Adjustment: Provide manager’s commission at 10% on the profit after charging such Manager’s commission.

Insurance premium of Rs 6,000 for one year is paid on 1st January 2016 and the accounting year closes on 31st March 2016.In this example, insurance premium has been paid in advance or prepaid for nine months, Pass adjusting entry.

Accrued income is credited to the profit and loss account and shown in the balance sheet a current asset. Why

What is Bad debts?

Pass Adjusting entries for the following adjustments. a) Provide 6% Interest on Capital of Rs. 16,00,000 b) Rent received in advance Rs.5,000 c) Interest accrued on investments Rs. 2,000

What are adjusting entries?

What is prepaid expense?

What is depreciation?

What is outstanding expense?

What are accrued incomes?

Part - C

Generic 3 - Answer All Question

The following are the extracts from the trial balance. Particulars Debit Rs. Credit Rs. Sundry Creditors 30,000 Discount received 1,000 You are required to show how these items will appear in the profit and loss account and balance sheet.

Explain the concept of Matching Principle.

What is the need for preparing final accounts?

Explain how closing stock is treated in final accounts.

Show necessary entries to adjust the following on 31st December, 2017. (i) Outstanding salaries Rs 1,200 (ii) Outstanding rent Rs 300 (iii) Prepaid insurance premium Rs 450 (iv) Interest on investments accrued Rs 400 (v) Bad debts written off Rs 200

Sundry debtors as per trial balance as on 31st March, 2016 is Rs 10,000. Adjustment: Write off bad debts amounting to Rs 300. Give adjusting entry and show how these appear in the final accounts as on 31st March, 2016.

Sundry debtors as per trial balance Rs 26,000 Bad debts as per trial balance Rs 1,000 Adjustment: Additional bad debts amounted to Rs 2,500 Give adjusting entry and show how these appear in the final accounts on 31st March, 2016

The Trial balance shows the followings: Capital as on 31-03-2013 Rs.6,00,000 . Drawings as on 31-03-2013 Rs.50,000 Charge interest on drawings @ 5% pass adjusting entry. Show how this item appear in the final accounts.

What is Credit balance?

Pass adjusting entries for the following on 31st March, 2018. (i) Charge interest on drawings at Rs 50 (ii) Write off bad debts by Rs 500 (iii) Depreciate furniture by Rs 1,000

Part - D

Generic 5 - Answer All Question

An abstract of the trial balance as on 31st December, 2016 is as follows: Particulars Sundry Debtors 20,000 Bad debts 500 Adjustment: Create a provision for bad and doubtful debts @ 5% on sundry debtors. Pass the adjusting entry and show how these items will appear in final accounts.

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Insurance premium of Rs 6,000 for one year is paid on 1st January 2016 and the accounting year closes on 31^st March 2016.In this example, insurance premium has been paid in advance or prepaid for nine months, Pass adjusting entry.

Pass Adjusting entries for the following adjustments.
a) Provide 6% Interest on Capital of Rs. 16,00,000
b) Rent received in advance Rs.5,000
c) Interest accrued on investments Rs. 2,000

The following are the extracts from the trial balance.

Particulars Debit Rs. Credit Rs.

Sundry Creditors 30,000

Discount received 1,000

You are required to show how these items will appear in the profit and loss account and balance sheet.

Show necessary entries to adjust the following on 31st December, 2017.
(i) Outstanding salaries Rs 1,200
(ii) Outstanding rent Rs 300
(iii) Prepaid insurance premium Rs 450
(iv) Interest on investments accrued Rs 400
(v) Bad debts written off Rs 200

Sundry debtors as per trial balance as on 31^st March, 2016 is Rs 10,000.
Adjustment: Write off bad debts amounting to Rs 300.
Give adjusting entry and show how these appear in the final accounts as on 31st March, 2016.

Sundry debtors as per trial balance Rs 26,000
Bad debts as per trial balance Rs 1,000
Adjustment: Additional bad debts amounted to Rs 2,500
Give adjusting entry and show how these appear in the final accounts on 31st March, 2016

The Trial balance shows the followings:
Capital as on 31-03-2013 Rs.6,00,000 .
Drawings as on 31-03-2013 Rs.50,000
Charge interest on drawings @ 5% pass adjusting entry. Show how this item appear in the final accounts.

Pass adjusting entries for the following on 31st March, 2018.
(i) Charge interest on drawings at Rs 50
(ii) Write off bad debts by Rs 500
(iii) Depreciate furniture by Rs 1,000

An abstract of the trial balance as on 31st December, 2016 is as follows:
Particulars
Sundry Debtors 20,000
Bad debts 500
Adjustment: Create a provision for bad and doubtful debts @ 5% on sundry debtors. Pass the adjusting entry and show how these items will appear in final accounts.