Question 1) Answer all the questions:
(i) Explain accounting. Give the major objectives of accounting.
(ii) What do you understand by depreciation? Give reasons of decrease in the value of assets.
(iii) What is income and expenditure account? How is it differentiate for receipt and payment account?
(iv) Define share. Describe the various type of shares.
(v) What do you understand by redemption of debenture?
Question2) What do you understand by accounting concepts and conventions? Describe briefly important accounting concept.
Question3) What are redeemable reference shares? Describe the different methods of redeeming the redeemable preference shares.
Question4) From the following Trial Balance and other information of Hari Lal, create Trading Account and Profit & Loss Account for the year ended 31st March, 2012 and a Balance Sheet as on that date:
Trial Balance as on 31st March, 2012
Name of Accounts Debit Rs. Credit Rs.
Drawing and Capital 24,000 1,00,000
Purchase and Sales 1,50,000 3,12,000
Debtors and Creditors 2,00,000 1,20,000
Opening Stock 50,000
Returned Inwards/ Outwards 10,000 5,000
Bad Debts 7,000
Salaries 30,000
Office expenses 12,000
Provision for depreciation 2,000
Interest 4,000
Printing and Stationary 8,000
Furniture 20,000
Provision for doubtful debts 6,000
Wages 20,000
Insurance 12,000
Rent 15,000
5,58,000 5,58,000
Adjustment:
1) Closing Stock Rs. 60,000
2) Depreciate furniture by 10% on original cost.
3) Salaries for the month of March, 2012 amounting to Rs. 3,000 were unpaid which must be provided for. However salaries included Rs. 2,000 is prepaid.
4) Insurance amounting to Rs. 2,000 is prepaid.
5) Outstanding office expenses Rs. 8,000.