MITTAL COMMERCE CLASSES CA FOUNDATION– MOCK TEST

(GCF-9, 11, 12, 13, 14, 15, VCF-VDCF-SCF-3, VTW-1+Fnd,

VDTW-1+Fnd, GTW-1+Fnd, STW-1+Fnd, JCC 12th+Foundation)
DATE: 27.04.2022 MAXIMUM MARKS: 100 TIMING: 3 Hours

PRINCIPLES & PRACTICE OF ACCOUNTING

Question No. 1 is compulsory.
Candidates are required to answer any four questions from the remaining five questions .

Question 1:
(a) State with reasons weather the following statements are true or false:
(i) The method of rectification of errors depends on the stage at which the errors
are detected.
(ii) The bank charges charged by the bank should be deducted when bank
reconciliation statement is being prepared starting from a credit balance of
pass book.
(iii) Management has daily information about the quantity and valuation of closing
stock under Physical Inventory System.
(iv) Providing for depreciation also helps in providing for accumulation of funds to
facilitate the replacement at the end of its useful life.
(v) Promissory note is different from that of a bill of exchange where the amount
is paid by the maker in case of former and by the acceptor in the latter.
(vi) The customer retains the goods even after the expiry of the mentioned term,
but this act does not confirm to sale of goods as there is no express consent
given.
(6×2 = 12 Marks)

(b) Distinguish between the following.

(1) Errors of omission and errors of commission.
(2) Money measurement concept and matching concept.
(2×2 = 4 Marks)

(c) The following are some of the transaction of M/s. Kishore & Sons of the year 2020 as
per their Waste Book. Make out their Sales Book.
Sold to M/s. Gupta & Verma on credit:
30 shirts @ Rs. 800 per shirt.
20 trousers @ Rs. 1,000 per trouser.
Less : Trade Discount @ 10%
Sold furniture to M/s. Sehgal & Co. on credit Rs. 8,000.
Sold 50 shirts of M/s. Jain & Sons @ Rs. 800 per shirt.
Sold 13 shirts to Cheap Stores @ Rs. 750 each for cash.
Sold on credit to M/s. Mathur & Jain.
100 shirts @ Rs. 750 per shirt
10 overcoats @ Rs. 5,000 per overcoat.
Less: Trade Discount @ 10%
(4 Marks)
(Total 20 Marks)

Question 2:
(a) Mr. Joy was unable to agree the Trial Balance last year and wrote off the difference
to the Profit and Loss Account of that year. Next Year, he appointed a Chartered
Accountant who examined the old books and found the following mistakes:

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MITTAL COMMERCE CLASSES CA FOUNDATION– MOCK TEST
(1) Purchase of a scooter was debited to conveyance account Rs. 3,000.
(2) Purchase account was over-cast by Rs. 10,000.
(3) A credit purchase of goods from Mr. D for Rs. 2,000 entered as a sale.
(4) Receipt of cash from Mr. X was posted to the account of Mr. Y Rs. 1,000.
(5) Receipt of cash from Mr. C was posted to the debit of his account, Rs. 500.
(6) Rs. 500 due by Mr. Z was omitted to be taken to the trial balance.
(7) Sale of goods to Mr. R for Rs. 2,000 was omitted to be recorded.
(8) Amount of Rs. 2,395 of purchase was wrongly posted as Rs. 2,593.
Mr. Joy used 10% depreciation on vehicles. Suggest the necessary rectification
entries & prepare suspense account & P & L adjustment a/c.
(10 Marks)

(b) Mr. Kapoor had the following Bills receivable and Bills payable against Mr. Khan, the
details of which has been given as follows-
Bills receivable Bills payable
Date Amount Tenure Date Amount Tenure
1.5.2020 400 3 months 11.5.2020 800 60 days
19.6.2020 750 2 months 21.6.2020 950 30 days
25.6.2020 1,000 1 month 28.6.2020 1,150 45 days
7.7.2020 1,250 2 months 10.7.2020 1,800 50 days
14.7.2020 800 2 month 16.7.2020 1,250 55 days
Gazetted holidays in the intervening period
15th August (Independence day), 24th July (Emergency holiday), 10th September
(Sunday). Calculate Average Due Date.
(10 Marks)

Question 3:
(a) Summary of receipts and payments of Bombay Medical Aid society for the year
ended 31.12.2020 are as follows:
Opening cash balance in hand Rs. 8,000, subscription Rs. 50,000, donation Rs.
15,000 (raised for meeting revenue expenditure), interest on investments @ 9% p.a.
Rs. 9000, payments for medicine supply Rs. 30,000 Honorarium to doctor Rs.
10,000, salaries Rs. 28,000, sundry expenses Rs. 1,000, equipment purchase Rs.
15,000, charity show expenses Rs. 1,500, charity show collections Rs. 12,500.
Additional information:
01.01.2020 31.12.2020
Subscription due 1,500 2,200
Subscription received in advance 1,200 700
Stock of medicine 10,000 15,000
Amount due for medicine supply 9,000 13,000
Value of equipment 21,000 30,000
Value of building 50,000 48,000

You are required to prepare receipts and payments account and income and
expenditure account for the year ended 31.12.2020 and balance sheet as on
31.12.2020.
(10 Marks)

(b) Aarav, Nirav and Purav are partners sharing profits and losses in the ratio of 3:2:1
Their Balance Sheet as on 31st March 2020 was as follows:

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MITTAL COMMERCE CLASSES CA FOUNDATION– MOCK TEST
BALANCE SHEET AS ON 31st March 2020
Liabilities Rs. Assets Rs.
Capital : Aarav 80,000 Building 50,000
Nirav 50,000 Machinery 67,500
Purav 35,000 Debtors 65,000
General Reserve 60,000 Stock 80,000
Trade Creditors 50,000 Cash in hand 12,500
2,75,000 2,75,000

Purav retired from the business on 1st April 2020 on the following terms:
1. Goodwill was to be valued at 2 years purchase of average profit of past 3
years.
31st March 2018 Rs. 39,000
31st March 2019 Rs. 50,000
31st March 2020 Rs. 55,000
2. Goodwill was not to be raised in the books of accounts.
3. RDD was to be created on debtors at 5%.
4. Machinery is to be depreciated by 10% and stock is revalued at Rs. 71,000.
5. Building to be appreciated by 20%.
6. Aarav and Nirav to bring in additional capital of Rs. 35,000 and Rs. 25,000
respectively.
7. Balance payable to Purav must be paid immediately. You are required to
prepare:
1. Revaluation account
2. Partners capital accounts.
3. Bank account.
4. Balance Sheet after retirement.
(10 Marks)

Question 4:
(a) The bank statement of Mukesh was balanced on 31st March, 2019. It showed an
overdraft of Rs. 5,000. This did not agree with the balance shown by the cash book
of Mukesh. You are required to prepare a bank reconciliation statement taking the
following into account :
(1) Cheques issued but not presented for payment till 31.3.2019 Rs. 12,00,000.
(2) Cheques deposited but not collected by bank till 31.3.2019 Rs. 20,00,000.
(3) Interest on term-loan Rs. 10,00,000 debited by bank on 31.3.2019 but not
accounted in Mukesh‟s book.
(4) Bank charges Rs. 2,500 was debited by bank during March, 2019 but
accounted in the books of Mukesh on 4.4.2019.
(5) An amount of Rs. 30,68,000 representing collection of Remesh‟s cheque was
wrongly credited to the account of Mukesh by the bank in their bank
statement.
(8 Marks)

(b) Following running transactions took place between Me and You during the month of
February, 2020. Prepare an account current to be sent by me to you upto 31 st March,
2020. Interest must be calculated @ 12% per annum. (1 Year = 365 Days)
Feb 2020 Particulars Rs.
1 Amount payable by You to Me 5,000
5 Sales made by Me to You (invoice dated 07.04.2020) 8,250

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8 Received acceptance of You by Me for 3 months 10,000
10 You sold goods to Me (invoice dated 10.3.2020) 11,000
12 Me received cheque from You dated (12.04.2020) 7,500
16 Cash paid by Me to You 2,500
24 Bills receivable accepted by Me from You on account of sale 5,000
(due date- 24.03.20)
28 Cash paid by you to me 2500
(12 Marks)

Question 5:
(a) The following are the details of a spare part of Sriram Mills:

1-1-2020 Opening Inventory Nil

1-1-2020 Purchases 100 units @ Rs. 30 per unit
15-1-2020 Issued for consumption 50 units
1-2-2020 Purchases 200 units @ Rs. 40 per unit
15-2-2020 Issued for consumption 100 units
20-2-2020 Issued for consumption 100 units
Find out the value of Inventory as on 31-3-2020 if the company follows Weighted
Average basis.
(10 Marks)

(b) X draws on Y a bill of exchange for Rs. 30,000 on 1st April, 2020 for 3 months. Y
accepts the bill and sends it to X who gets it discounted for Rs. 28,800. X
immediately remits Rs. 9,600 to Y. On the due date, X, being unable to remit the
amount due, accepts a bill for Rs. 42,000 for three months which is discounted by Y
for Rs. 40,110. Y sends Rs. 6,740 to X. Before the maturity of the bill X becomes
bankrupt, his estate paying fifty paise in the rupee. Give the journal entries in the
books of X and Y.
(10 Marks)

Question 6:
(a) X supplied goods on sale or return basis to customers, the particulars of which are as
under.
Date of Party’s Amount Remarks
dispatch name Rs.
10.12.2019 M/s. ABC 10,000 No information till 31.12.2019
12.12.2019 M/s. DEF 15,000 Returned on 16.12.2019
15.12.2019 M/s. GHI 12,000 Goods worth Rs. 2,000 returned on 20.12.2019
20.12.2019 M/s. DEF 16,000 Goods Retained on 24.12.2019
25.12.2019 M/s. ABC 11,000 Good Retained on 28.12.2019
30.12.2019 M/s. GHI 13,000 No information till 31.12.2019
Goods are to be returned within 15 days from the dispatch, failing which it will be
treated as sales. The books of „X‟ are closed on the 31st December, 2020.
Prepare the following accounts in the books of „X‟.
(a) Goods on “sales or return, sold and returned day books”.
(b) Goods on sales or return total account.
(10 Marks)

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(b) 1,000 toys consigned by Rosie & Co. of Calcutta to Sahoo of Srinagar at a cost of Rs.
150 each. Rosie & Co. paid freight Rs. 10,000 and insurance Rs. 1,500. During the
voyage 100 toys were totally damaged by fire and had to be thrown overboard.
Sahoo took delivery of the remaining toys and paid Rs. 14,400 as customs duty.
Sahoo sent a bank draft to Roy & Co. for Rs. 50,000 as advance payment and later
sent an account sales showing that 800 toys had been sold at Rs. 220 each.
Expenses incurred by Sahoo on go-down rent and advertisement, etc., amounted to
Rs. 2,000. Sahoo was entitled to commission of 5 per cent. One of the credit
customers could not pay for 5 toys.
You are required to prepare the Consignment Account, Goods sent on consignment,
Inventories on consignment account and Sahoo‟s a/c in the books of Rosie & Co.,
assuming that nothing has been recovered from the insurers due to a defect in the
policy. Sahoo settled his account immediately.
(10 Marks)

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