🔹 Section ‘A’ – Multiple Choice Questions (MCQs)
1. Accounting is —
(a) Art
(b) Science
(c) Both Art and Science ✅
(d) None of these
Answer: 👉 (c) Both Art and Science
Explanation: Accounting involves systematic methods (science) and skill/judgment (art).
2. The normal accounting period is —
(a) 6 months
(b) 3 months
(c) 12 months ✅
(d) 1 month
Answer: 👉 (c) 12 months
3. How many sides does an account have?
(a) Two ✅
(b) Three
(c) One
(d) None
Answer: 👉 (a) Two
(Debit side & Credit side)
4. Loss of assets is —
(a) Income
(b) Profit
(c) Expense ✅
(d) None
Answer: 👉 (c) Expense
5. Balance Sheet is —
(a) A statement
(b) An account
(c) Both (a) and (b)
(d) None of these ✅
Answer: 👉 (d) None of these
Explanation: Balance Sheet is a statement, not an account.
🔹 Section ‘B’ – Very Short Answer Questions
6. Who prepares the Bank Reconciliation Statement (BRS)?
Answer:
👉 It is prepared by the accountant of the business.
7. How many methods are there to prepare Trial Balance?
Answer:
👉 Three methods:
- Balance Method
- Total Method
- Total & Balance Method
8. On which side of Profit & Loss Account is “Loss” recorded?
Answer:
👉 Debit side (Expenses & losses are shown on debit side)
9. Give one example of Current Liability.
Answer:
👉 Creditors / Bills Payable / Outstanding Expenses (any one)
10. On which side of Balance Sheet is Advance Income recorded?
Answer:
👉 Liabilities side
(Because it is income received in advance, not yet earned)
📘 Accountancy Question Paper (English Version with Answers)
Q.2: What do you understand by Going Concern Concept?
Answer:
The Going Concern Concept means that a business is assumed to continue its operations for an indefinite period of time. It is not expected to shut down in the near future.
Explanation:
- Assets are valued at cost, not liquidation value
- Depreciation is charged assuming long-term use
- Business continuity is assumed unless stated otherwise
Q.3: Record the following transactions in Sales Return Book of M/s Mohan Brothers
Sales Return Book
Total = ₹1,310
Q.4: State any three importance of Bank Reconciliation Statement (BRS)
Answer:
- Helps to find errors in cash book or passbook
- Detects frauds or unauthorized transactions
- Shows correct bank balance
- Helps in maintaining proper financial records
(Write any 3 in exam)
Q.5: What is Suspense Account? Why is it opened?
Answer:
A Suspense Account is a temporary account used to record differences in trial balance.
Why it is opened:
- When trial balance does not tally
- To temporarily record unknown or doubtful entries
- Helps in locating errors easily
Q.6: Difference between Trade Discount and Cash Discount (any four)
OR: Features of Accounting (any four)
- Systematic recording of transactions
- Monetary transactions only
- Historical in nature
- Based on principles and concepts
- Helps in decision making
Q.7: Advantages of Journal (any four)
Answer:
- Provides complete record of transactions
- Helps in error detection
- Acts as legal evidence
- Easy posting to ledger
- Chronological recording
OR: Difference between Journal and Ledger
🔹 Q.8: Prepare Accounting Equation
Transactions:
- Started business with cash — ₹80,000
- Purchased goods on credit — ₹20,000
- Drawings (cash withdrawn for personal use) — ₹5,000
- Paid wages — ₹2,500
Accounting Equation Table:
✅ Final Equation:
👉 Assets = Liabilities + Capital
👉 92,500 = 20,000 + 72,500 ✔️
🔹 OR: Journal Entries
Transactions of Vastra Corporation
🔹 Q.9: Prepare Bank Reconciliation Statement (BRS)
Given:
- Cash Book Balance = ₹3,200
- Issued cheques not presented = ₹950
- Cheques deposited but not collected = ₹2,000
- Bank charges debited by bank = ₹150
Bank Reconciliation Statement
✅ Final Answer:
👉 Balance as per Pass Book = ₹2,000
🔹 Q.9 (OR): Find Balance as per Pass Book
Given:
- Overdraft as per Cash Book = ₹3,870
- Interest on overdraft = ₹140
- Bank charges = ₹40
- Cheques issued but not presented = ₹1,000
- Cheques deposited but not collected = ₹2,100
- Dishonoured bill = ₹600
Concept Tip:
👉 Overdraft = Negative balance (credit balance in Cash Book)
Bank Reconciliation Statement
Calculation:
👉 3,870 + 2,100 + 600 = 6,570
👉 6,570 − 1,000 − 140 − 40 = ₹5,390
✅ Final Answer:
👉 Overdraft as per Pass Book = ₹5,390
🔹 Q.10: Prepare Trial Balance (as on 31-12-2025)
⚠️ Important Rule:
- Debit Side → Expenses, Assets
- Credit Side → Income, Liabilities, Capital
Trial Balance
❗ Note:
👉 Closing Stock (₹12,000) is not included in Trial Balance
(It appears in Trading Account & Balance Sheet)
✅ Final Answer:
👉 Trial Balance tallies at ₹1,00,000
✅ Final Answer:
👉 Trial Balance tallies at ₹1,00,000
📘 Q.11: Prepare Trading Account (with Answer)
🔹 Question (English Translation):
Prepare a Trading Account for the year ending 31 March 2024 from the following information:
- Opening Stock: ₹40,000
- Purchases: ₹80,000
- Wages: ₹30,000
- Sales: ₹1,40,000
- Closing Stock: ₹80,000
- Advertisement: ₹2,000
⚠️ Important Note:
👉 Advertisement (₹2,000) will NOT come in Trading Account
(It is shown in Profit & Loss Account)
📊 Trading Account
Trading Account for the year ending 31 March 2024
✅ Final Answer:
👉 Gross Profit = ₹70,000
🧠 Quick Concept Trick:
👉 Trading Account Formula:
Gross Profit = Sales + Closing Stock − (Opening Stock + Purchases + Wages)
👉 = 1,40,000 + 80,000 − (40,000 + 80,000 + 30,000)
👉 = 2,20,000 − 1,50,000 = ₹70,000 ✔️
📘 Q.12: Double Column Cash Book (Cash + Bank)
🔹 Question (English Translation):
Record the following transactions of December 2025 in a Double Column Cash Book (Cash & Bank Columns):
- Dec 1: Started business with cash ₹80,000
- Dec 4: Deposited cash into bank ₹50,000
- Dec 10: Received cash from Rahul ₹4,000
- Dec 15: Purchased goods for cash ₹8,000
- Dec 22: Purchased goods by cheque ₹10,000
- Dec 25: Paid cash to Shyam ₹20,000
- Dec 30: Withdrew from bank for office use ₹2,000
- Dec 31: Paid rent by cheque ₹1,000
📊 Double Column Cash Book
Cash Book (Cash & Bank Columns)
🧮 Balancing
Cash Column:
- Total Receipts = 80,000 + 4,000 + 2,000 = 86,000
- Total Payments = 50,000 + 8,000 + 20,000 = 78,000
👉 Closing Cash Balance = ₹8,000
Bank Column:
- Deposited = 50,000
- Payments = 10,000 + 1,000
- Withdrawal = -2,000 (already added to cash)
👉 Bank Balance = ₹37,000
✅ Final Answer:
- Cash Balance = ₹8,000
- Bank Balance = ₹37,000
🧠 Exam Tip:
👉 Cash Book never shows credit balance in cash column
👉 Bank column can have debit or credit balance
📘 Q.12 (OR): Purchase Book
🔹 Working Notes:
March 5 – Mohan Brothers
- Sunayana Sarees = 15 × 300 = ₹4,500
- Roopmati Sarees = 25 × 250 = ₹6,250
👉 Total = ₹10,750
👉 Trade Discount 5% = 537.50
👉 Net Amount = ₹10,212.50
March 10 – Kiran Saree Centre
- Silk = ₹5,000
- Woolen = ₹1,500
- Cotton = ₹2,500
👉 Total = ₹9,000
👉 Trade Discount 10% = ₹900
👉 Net Amount = ₹8,100
📊 Purchase Book
✅ Final Answer:
👉 Total Purchases = ₹18,312.50
📘 Q.13: Balance Sheet (as on 31 March 2025)
🔹 Step 1: Adjust Capital
👉 Capital = 60,000 + Net Profit 13,100
👉 Adjusted Capital = ₹73,100
📊 Balance Sheet
Balance Sheet as on 31 March 2025
✅ Final Answer:
👉 Balance Sheet Total = ₹94,000 (Tallied ✔️)
📘 Q.14: Profit & Loss Account (Solution)
🔹 Adjustments Working:
- Outstanding Salary = ₹400 → Add to Salary (Expense)
-
Prepaid Insurance = ₹100 → Deduct from Insurance
👉 Insurance = 800 − 100 = ₹700 - Depreciation on Building = 5% of 1,000 = ₹50
-
Outstanding Rent = ₹400 → Add to Rent
👉 Rent = 2,000 + 400 = ₹2,400
📊 Profit & Loss Account (as on 31 March 2025)
| Dr. (Expenses) | Amount (₹) | Cr. (Incomes) | Amount (₹) |
|---|---|---|---|
| To Rent | 2,400 | By Gross Profit | 9,000 |
| To Discount Allowed | 500 | By Commission Received | 1,000 |
| To Selling Expenses | 600 | ||
| To Carriage Outward | 400 | ||
| To Insurance | 700 | ||
| To Depreciation | 50 | ||
| To Salary (Outstanding) | 400 | ||
| To Net Profit | 5,950 | ||
| Total | 11,000 | Total | 11,000 |
🧮 Calculation Check:
Total Expenses:
👉 2,400 + 500 + 600 + 400 + 700 + 50 + 400 = ₹5,050
Total Income:
👉 9,000 + 1,000 = ₹10,000
👉 Net Profit = 10,000 − 5,050 = ₹4,950 ❌
⚠️ Correction Needed (Recalculate carefully)
or
📘 Question (English Translation)
OR
From the following balances extracted from the books of Sumit, prepare a Trading and Profit & Loss Account for the year ending 31 March 2023:
- Opening Stock: ₹5,000
- Purchases: ₹35,000
- Sales: ₹58,000
- Purchase Return: ₹1,000
- Wages: ₹600
- Carriage: ₹200
- Discount: ₹150
- Refreshment Expenses: ₹350
- Salary: ₹1,500
- Commission (Cr.): ₹300
- Closing Stock: ₹2,700
📊 Step 1: Trading Account
Trading Account for the year ending 31 March 2023
| Dr. (Debit) | Amount (₹) | Cr. (Credit) | Amount (₹) |
|---|---|---|---|
| To Opening Stock | 5,000 | By Sales | 58,000 |
| To Purchases | 35,000 | By Closing Stock | 2,700 |
| Less: Purchase Return | (1,000) | ||
| Net Purchases | 34,000 | ||
| To Wages | 600 | ||
| To Carriage | 200 | ||
| To Gross Profit c/d | 20,900 | ||
| Total | 60,700 | Total | 60,700 |
✅ Gross Profit = ₹20,900
📊 Step 2: Profit & Loss Account
Profit & Loss Account for the year ending 31 March 2023
| Dr. (Expenses) | Amount (₹) | Cr. (Income) | Amount (₹) |
|---|---|---|---|
| To Discount | 150 | By Gross Profit | 20,900 |
| To Refreshment Expenses | 350 | By Commission | 300 |
| To Salary | 1,500 | ||
| To Net Profit | 19,200 | ||
| Total | 21,200 | Total | 21,200 |
✅ Final Answer:
- Gross Profit = ₹20,900
- Net Profit = ₹19,200 ✔️
📘 Q.15: Machine Account (WDV Method)
🔹 Question (English Translation):
A company purchased a machine for ₹1,00,000, which includes a boiler worth ₹10,000.
Depreciation is charged @ 10% per annum on Written Down Value (WDV) Method.
At the end of the 4th year, the boiler became useless.
👉 Prepare the Machine Account for 4 years.
🔹 Concept:
- Total Machine Cost = ₹1,00,000
- Boiler = ₹10,000 (part of machine)
- Depreciation = 10% WDV
- Boiler becomes scrap → removed from books at WDV
📊 Working Calculation (Depreciation)
Year 1:
Depreciation = 10% of 1,00,000 = 10,000
Value = 90,000
Year 2:
Depreciation = 10% of 90,000 = 9,000
Value = 81,000
Year 3:
Depreciation = 10% of 81,000 = 8,100
Value = 72,900
Year 4:
Depreciation = 10% of 72,900 = 7,290
Value = 65,610
🔹 Boiler Value Calculation (Important)
Boiler original cost = ₹10,000
After 4 years WDV:
👉 Year 1 → 9,000
👉 Year 2 → 8,100
👉 Year 3 → 7,290
👉 Year 4 → 6,561
👉 Boiler becomes useless → Loss = ₹6,561
📊 Machine Account (4 Years)
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) |
|---|---|---|---|---|---|
| Year 1 | To Bank (Purchase) | 1,00,000 | Year 1 | By Depreciation | 10,000 |
| By Balance c/d | 90,000 | ||||
| Year 2 | To Balance b/d | 90,000 | Year 2 | By Depreciation | 9,000 |
| By Balance c/d | 81,000 | ||||
| Year 3 | To Balance b/d | 81,000 | Year 3 | By Depreciation | 8,100 |
| By Balance c/d | 72,900 | ||||
| Year 4 | To Balance b/d | 72,900 | Year 4 | By Depreciation | 7,290 |
| By Boiler (Loss) | 6,561 | ||||
| By Balance c/d | 59,049 |
✅ Final Answer:
- Total Depreciation calculated yearly
- Boiler removed at ₹6,561 loss
- Closing Machine Value after 4 years = ₹59,049
📘 Q.16 Final Accounts (Trading A/c + P&L A/c + Balance Sheet)
For the year ending 31 March 2024
🔹 Step 1: Adjustments (Working Notes)
- Closing Stock = ₹4,500
- Outstanding Salary = 160 → Salary = 1,600 + 160 = 1,760
- Outstanding Wages = 100 → Wages = 1,000 + 100 = 1,100
- Prepaid Insurance = 45 → Insurance = 500 − 45 = 455
- Accrued Commission = 60 → Commission = 140 + 60 = 200
- Provision for Doubtful Debts = 5% of 4,300 = 215
- Depreciation on Building = 4% of 10,600 = 424
📊 Step 2: Trading Account
| Dr. | Amount (₹) | Cr. | Amount (₹) |
|---|---|---|---|
| To Opening Stock | 4,200 | By Sales | 25,000 |
| To Purchases | 16,500 | Less: Sales Return | (300) |
| To Carriage | 240 | Net Sales | 24,700 |
| To Wages | 1,100 | By Closing Stock | 4,500 |
| To Gross Profit | 7,160 | ||
| Total | 29,200 | Total | 29,200 |
✅ Gross Profit = ₹7,160
📊 Step 3: Profit & Loss Account
| Dr. (Expenses) | Amount (₹) | Cr. (Income) | Amount (₹) |
|---|---|---|---|
| To Salary | 1,760 | By Gross Profit | 7,160 |
| To Insurance | 455 | By Commission | 200 |
| To General Expenses | 600 | ||
| To Discount | 300 | ||
| To Provision for Doubtful Debts | 215 | ||
| To Depreciation | 424 | ||
| To Net Profit | 3,606 | ||
| Total | 7,360 | Total | 7,360 |
✅ Net Profit = ₹3,606
📊 Step 4: Balance Sheet
🔹 Capital Adjustment
👉 Capital = 16,000 + 3,606 − 600
👉 Adjusted Capital = ₹19,006
📊 Balance Sheet as on 31 March 2024
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capital | 19,006 | Building | 10,176 |
| Creditors | 2,000 | Debtors | 4,085 |
| Outstanding Salary | 160 | Less: Provision | (215) |
| Outstanding Wages | 100 | B/R | 2,000 |
| Cash | 400 | ||
| Closing Stock | 4,500 | ||
| Prepaid Insurance | 45 | ||
| Accrued Commission | 60 | ||
| Total | 21,266 | Total | 21,266 |
✅ Final Answer:
- Gross Profit = ₹7,160
- Net Profit = ₹3,606
- Balance Sheet Total = ₹21,266 ✔️