JAYA ENGINEERING COLLEGE

Thiruninravur-602024

Question Bank
Department : Department of Computer Application Subject Code : MC4104
Year/ Sem : I/ 01 Subject : Fundamentals of Accounting
Regulation : 2021 Staff Incharge: Sweetlin Jenisha. E, Asst Prof-MBA

UNIT I INTRODUCTION TO ACCOUNTING 9

Introduction to Financial, Cost and Management Accounting - Objectives of Financial Accounting –
Accounting Principles, Concepts and Conventions – Book keeping and Accounting.

PART A (2 marks)
1 Define what is balance sheet.
2 What does tally accounting mean?
3 What is the difference between capital and revenue transaction?
4 What is the meaning of working capital?
5 What is the meaning of management accounting?
6 What is VAT?
7 What is the basic accounting equation?
8 How are accounting and auditing different?
9 What is financial accounting?
10 What are cost accounting?
11 What is double entry book keeping and what are its rules?
12 What is debit and credit note?
13 Can you name the different branches of accounting?
14 What does the term dual aspect mean in terms of accounting?
15 Name the accounting events that are a part of compound entries?
16 What is inactive and dormant account?
17 What are fictitious assets?
18 What is the meaning of the general ledger account?
19 What are balance sheet accounts?
20 What is marginal cost?
21 What is the meaning of the term overhead in accounting?
22 How many accounting standards are there in India and are you familiar with each?
23 What does deferred tax liability stand for?
24 What are the accounting applications you have used?
25 What is GST?

PART B (13 marks)

1 Discuss briefly the branches of accounting.
2 The following is the Trial Balance of B.Govind as on 31-3-2020:
Particulars Debit Credit
₹ ₹
Cash at Bank 2,630
Purchases 40,675
Sales 98,780
Return Inwards 680
Return Outwards 500
Wages 10,480
Fuel and Power 4,730
Carriage on Sales 3,200
 Carriage on Purchases 2,040
Stock(1-4-97) 5,760
Buildings 30,000
Free hold Land 10,000
Machinery 20,000
Patents 7,500
Salaries 15,000
General Expenses 3,000
Insurance 600
Drawings 5,245
Capital 71,000
Sundry Debtors 14,500
Sundry Creditors 6,300
Total 1,76,580 1,76,580
3 Discuss the role of an accountant in the modern business world.
4 What is matching concept? Why should a business concern follow this concept?
5 “Only monetary transactions are recorded in accounting”. Explain the statement.
6 Explain GAAP.
7 Write a brief note on Accounting Standards.
8 What is an Account? Classify the accounts with suitable examples.
9 What are the three different types of personal accounts?
10 What is the difference between accounting and book keeping?
11 State the accounting concepts.
12 Briefly explain about steps in journalizing.
13 What is double entry system? State its advantages.
14 Distinguish between journal and ledger.
15 What is ledger? Explain its utilities.

PART C (15 marks)

1 How is posting made from the journal to the ledger?
2 Explain the accounting conventions.
3 Prepare Trial Balance:
Opening stock 10,600 Debtors 3,000
Wages 2,200 Income Tax 500
Carriage 200 Drawings 700
Commission (Dr) 300 Return Outwards 150
Purchases 12,000 Sales 25,200
Return inward 440 Discount received 400
Trade Expenses 580 Capital 7,000
Rent 200 Creditors (cr.) 830
Plant 2,600 Loan (cr.) 1,400
Repairs to Plant 460
Cash in hand 200
Cash at Bank 1,000
4 Rules relating to different types of Accounts.
5 Classify the accounts into personal, real and nominal accounts:
A).Machinery B).Goodwill C).Unexpired insurance D).Outstanding wages E).Freight F).Depreciation
Prepare Ramesh account
6
1-1-2020 Amount due from Ramesh 12000
6-1-2020 Sold goods to Ramesh 16000
12-1-2020 Purchased goods from Ramesh 8000
21-1-2020 Cash paid to Ramesh 5000
 26-1-2020 Cash received from Ramesh 6000
7 Write an opening entry:
Sundry creditors ₹7,000, bills payable ₹5,000, Cash at bank ₹6,000, sundry debtors ₹11,000,
land and buildings ₹14,000 stock in trade ₹10,000

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UNIT II MANAGEMENT ACCOUNTING AND BOOKKEEPING 9

Meaning-Objectives of Management Accounting-Accounting System – Preparation of Journal,
Ledger, Cash Book and Trial Balance – Errors disclosed and not disclosed by Trial Balance –Final
Accounts - Ratio Analysis
PART A (2 marks)
1 What is Management accounting?
2 What are different financial constraints that can have an impact on the company’s financial
statements?
3 What is the meaning of GAAP?
4 What is cost objective and why is it done?
5 What is a liability account?
6 Define Trial Balance.
7 Mention all the branches of Accounting.
8 State all the Golden Rules of Accounting
9 Journalize the below transaction:
June 1 Withdrew from bank for office use 5,000
June 2 Withdrew for personal use 1,000
10 What is a Journal Proper?
11 Define accounting.
12 Who are the parties interested in accounting information?
13 What are the steps involved in the process of accounting?
14 Give the golden rules of double entry accounting system.
15 What are the different types of cash book- Explain?
16 Give the formula to find out the amount and rate of depreciation under straight line method of depreciation.
17 a)Paid freight on machine purchased Rs.XXX
b)Drawings for personal use Rs.XXX? Give journal entries
18 Mention any two differences between trial balance and balance sheet.
19 What are adjusting entries?
20 Define journal.
21 Mention about ledger.
22 State any 4 causes of Depreciation.
23 Write any 2 objectives of preparing the final accounts?
24 Classify the below accounts to Trading Account/ Profit and Loss Account/ Balance Sheet.
1. Sales
2. Interest Received
3. Plant & Machinery
4. Rent
25 What is an Accounting Information Systems?

PART B (13 marks)

1 What are the errors disclosed and not disclosed trial balance?
2 ‘A trial balance is only a prima facie evidence of the arithmetical accuracy of records’. Do you
agree with this statement? Give reasons.
3 What are the objectives of management accounting?
4 Briefly explain about contra entry with examples.
5 What is the accounting system?
6 Jeyaseeli is a sole proprietor having a provisions store. Following are the transactions during the month
of January, 2018. Prepare ledger Account:
1 Commenced business with cash 80,000
2 Deposited cash with bank 40,000
3 Purchased goods by paying cash 5,000
4 Purchased goods from Lipton & Co. on credit 10,000
5 Sold goods to Joy and received cash 11,000
6 Paid salaries by cash 5,000
7 Paid Lipton & Co. by cheque for the purchases made on 4th Jan.
8 Bought furniture by cash 4,000
9 Paid electricity charges by cash 1,000
7 State ratio analysis formulae.
8 The following balances were extracted from the books of Thomas as on 31st March, 2018

Additional information:
i. Closing stock Rs. 9,000
ii. Provide depreciation @ 10% on machinery
iii. Interest accrued on investment Rs. 2,000
Prepare trading account, profit and loss account and balance sheet.
9 Explain ratio analysis structure.
10 What are final accounts? What are its constituents?
11 The following is the Trial Balance of B.Govind as on 31-3-2020:
Particulars Debit Credit
₹ ₹
Cash at Bank 2,630
Purchases 40,675
Sales 98,780
Return Inwards 680
Return Outwards 500
Wages 10,480
Fuel and Power 4,730
Carriage on Sales 3,200
Carriage on Purchases 2,040
Stock(1-4-97) 5,760
Buildings 30,000
Free hold Land 10,000
Machinery 20,000
Patents 7,500
Salaries 15,000
General Expenses 3,000
Insurance 600
Drawings 5,245
 Capital 71,000
Sundry Debtors 14,500
Sundry Creditors 6,300
Total 1,76,580 1,76,580
12
Rectify the following errors:
a. The purchases book was over cast by ₹1000
b. Paid salaries to Mr.Raju has been debited to his account ₹5000
13 Enter the following transactions in suitable subsidiary books.
Jan. 1 Purchased goods from Rekha 7,500
4 Sold goods to Midhun 8,000
5 Returned gods to Rekha 500
6 Goods returned by Midhun 400
10 Sold goods to Kishore 3,000
15 Bought goods from naresh 6,000
16 Kishore returns goods 500
Explain difference between Journal and Ledger.
14
Journalise the following transactions of Archana Ltd:
A) Commenced business with cash Rs. 1,00,000
B) Purchased goods for cash Rs.15,000
C) Purchased furniture for cash Rs. 8,000
D) Sold goods for cash Rs. 12,000
E) Sold goods to Ram for cash Rs. 3,000
F) Paid Rent Rs. 5,000
G) Received cash from Raju Rs. 900
I)Cash withdrawn from bank for personal use Rs. 6,250
15 Enter the following transactions in a simple cash book of shri. Subramanian.
Apr 1995: 1 commenced business with cash 24,000
5 Bought goods for cash 6,000
10 Goods sold for cash 11,200
13 Paid into bank 2,500
14 Sold goods to ganesan on credit 9,000
15 Bought goods from mohan on credit 13,600
20 Purchased furniture 9,600
21 Purchased stationery 160
23 Received cheque from ganesan 9,000
25 Paid mohan 13,600
26 Received commission 740
27 Paid telephone charges 300
30 Drawn from bank 3,800
PART C (15 marks)
1 What are the different concepts and conventions of accounting?
2
Journalize the following transactions:
1-1-2020 X started a business with the amount of stock ₹3000 and Cash ₹5000
2-1-2020 Purchased goods from Raju for cash₹ 6000
3-1-2020 Cash sales ₹ 10000
5-1-2020 Purchased machinery from Ravi on credit ₹9000
8-1-2020 Sold furniture for cash ₹5000
12-1-2020 Cash paid to Ravi₹ 5500 in full settlement of claim of₹6000
19-1-2020 Depreciation on machinery ₹4000
27-1-2020 Interest on drawings ₹ 1000
 The following trial balance was prepared by a clerk appointed newly by Rao & Company. Some errors were
3 found in the Trial Balance due to lack of experience in preparing accounts. Prepare Trial Balance by
rectifying these mistakes.
S.No Particulars Debit Credit
₹ Rs
1. Opening Stock 5,000
2. Capital 60,000
3. Discount allowed 500
Discount received
4. Fixed Assets 700
5. Sales 60,000
6. Purchases 85,000
7. Purchase returns 45,000
Sales returns
8. Carriage inwards 1,000
9. Carriage outwards 2,000
10. Wages, Salaries 600
11. Bills receivable 700
Debtors
12. Bills Payable 25,000
13. Rent 7,000
14. Interest Paid 9,000
15. Cash 7,000
Creditors
16. Closing Stock 3,000
17. 2,000
18. 800
19. 6,900
20. 33,800
1,77,500 1,77,500
4 Enter the following transactions in a three column cash book.
Started business with cash 40,000
Opened savings bank account with Vijaya Bank 16,000
Bought goods by cheque 350
Received cheque from Suhas Allowed him discount 400, 20
Sold goods for cash 80
Paid into bank 60
Cash Cheque 400
Paid Sateesh by cheque 690
Discount received 10
Paid Carriage 300
Drew from bank for office 400
Paid Salaries by cheque 200
Write adjusting entries:
5 Outstanding wages ₹1,000
Prepaid Insurance ₹2000
Commission received in advance ₹1500
Accruedinterest ₹1300
Provide interest on capital @ 10% on ₹1,00,000
Provide interest on drawings @ 5% on ₹10,000
The following is the Trial Balance of B.Govind as on 31-3-2020:
6 Debit Credit
Particulars
₹ ₹
Cash at Bank 2,630
Purchases 40,675
Sales 98,780
ReturnInwards 680
 ReturnOutwards 500
Wages 10,480
FuelandPower 4,730
CarriageonSales 3,200
CarriageonPurchases 2,040
Stock(1-4-97) 5,760
Buildings 30,000
FreeholdLand 10,000
Machinery 20,000
Patents 7,500
Salaries 15,000
GeneralExpenses 3,000
Insurance 600
Drawings 5,245
Capital 71,000
SundryDebtors 14,500
SundryCreditors 6,300
Total 1,76,580 1,76,580
Prepare Trading , Profit & Loss A/C and Balance Sheet from the following Trial Balance of Mr. M. Madan
7 Rs. Rs.
Sundry Debtors 92,000 Discount 600
Plant & Machinery 20,000 Bad Debts 800

Rent, Taxes 430 Business Premises 12,000

Conveyance Charges 5,600 Furniture & Fittings 10,000
Wages 1,320 Cash in Hand 2,060
Sales Returns 7,000 Madan’s Capital 70,000
Purchases 5,400 Purchase Returns 2,600
Opening Stock 1,50,000 Sales 2,50,000
Madan’s Drawings 22,000 Sundry Creditors 60,000
Trade Expenses 1,350 Bank Overdraft 20,000
Salaries 11,200
Advertising 840
ADJUSTMENTS:
H) Stock on hand on 31.12.96 Rs. 90,000
Ii) Provide Depreciation on premises at 2.5%, Plant & Machinery at 7.5% and Furniture & fixtures at 10%.
Iii) Write off Rs. 800 as further bad debts.
Iv) Provide for doubtful debts at 5% on Sundry Debtors.
V) Outstanding rent was Rs. 500 and outstanding wages Rs. 400
Vi) Prepaid Insurance Rs. 300 and Prepaid salaries Rs. 700.
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UNIT III BUDGETS AND BUDGETARY CONTROL 9
Budgets and Budgetary Control-Meaning-Types-Sales Budget-Production Budget Cost of Production
Budget-Flexible Budgeting-Cash Budget-Master Budget-Zero Base Budgeting- Computerized
Accounting – with adjustments
PART A (2 marks)
1 Explain any 7 Users of Accounting.
2 Explain the different types of Subsidiary books.
3 Explain any 3 advantages and disadvantages of Accounting.
4 Explain the advantages and limitations of accounting?
5 What do you mean by subsidiary books? Explain different types of subsidiary books.
6 Briefly explain about contra entry with examples.
 7 Discuss the role of an accountant in the modern business world.
8 Explain meaning of accounting.
9 List any two functions of accounting.
10 What are the steps involved in the process of accounting?
11 Who are the parties interested in accounting information?
12 Define book-keeping.
13 What is meant by accounting concepts?
14 Briefly explain about revenue recognition concept.
15 What is “Full Disclosure Principle” of accounting?
16 Write a brief note on ‘Consistency’ assumption.
17 What is meant by journalizing?
18 What is real account?
19 How are personal accounts classified?
20 State the accounting rule for nominal account.
21 Give the golden rules of double entry.
22 What is a ledger?
23 What is meant by posting?
24 What is trial balance?
25 Give the format of trial balance.

PART B (13 marks)

1 What is meant by gross profit and net profit?
2 “Balance sheet is not an account”- Explain.
3 What are the advantages of preparing a balance sheet?
4 What is meant by grouping and marshalling of assets and liabilities?
5 What is the need for preparing final accounts?
6 What is meant by provision for doubtful debts? Why is it created?
7 Explain how closing stock is treated in final accounts.
8 Rectify the following errors by using Journal Entries and prepare Suspense A/c
9 Sales Day book was over cast by ₹100.
A sale of ₹50 to X was wrongly debited to Y account.
General expenses ₹180 was posted in the account as ₹810.
A bill receivable for ₹155 was written in bills payable book. The bill was given by P
Legal expenses ₹119 paid to James was debited to his personal account
Cash received from C. Dass was debited to G. Dass ₹150.
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PART C (15 marks)

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UNIT IV FINANCIAL MANAGEMENT 9

Objectives of Financial Management- preparation of Suspense Account –Depreciation – Meaning and
Types – Methods of Charging and Providing depreciation –Inventory
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PART B (13 marks)

1 Give the adjusting entries for interest on capital and interest on drawings.
2 Explain the accounting treatment of bad debts, provision for doubtful debts and provision for
discount on debtors.
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PART C (15 marks)

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UNIT V BANK RECONCILIATION STATEMENT AND REPORTING

9
Preparing Bank Reconciliation Statement (simple problems) – Insurance Claim – Average Clause -
Export and Import of Data, Data Security.
PART A (2 marks)
1 What are the methods of preparation of trial balance?
2 Mention four types of subsidiary books.
3 What is purchases book?
4 What is purchases returns book?
5 What is journal proper?
6 What is cash book?
7 What are the different types of cash book?
8 What is meant by depreciation?
9 List out the various methods of depreciation.
10 Give the formula to find out the amount and rate of depreciation under straight line
method of depreciation.
11 What is annuity method?
12 What is sinking fund method?
13 Write a note on trading account.
14 What are fixed assets?
15 Mention any two differences between trial balance and balance sheet.
16 What are the objectives of preparing trading account?
17 What is the need for preparing profit and loss account?
18 What are adjusting entries?
19 Explain the meaning of accounting.
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PART B (13 marks)

1 Write any three causes for preparation of Bank Reconciliation Statement.
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PART C (15 marks)

1 Prepare Bank Reconciliation Statement from the following Balance as per pass book on 31-march
2020
₹12, 000 Cheques issued but not presented for payment
₹4,000 Cheques deposited but not collected ₹6,000
Bank charges debited in pass book ₹1,000
Interest credited in pass book ₹800
2 Prepare Trial balance
Purchase returns ₹5000; Sales ₹20,000; Purchases ₹15,000; Sales returns ₹4,000
Capital ₹25,000 Cash at Bank ₹11,000 Plant and Machinery ₹20,000
3
Write short notes on Cash Discount and Trade Discount.
4 The Cash Book (Bank Columns) and the Pass book of Dr. Uma sankar are given below.
Prepare Bank Reconciliation Statement as on31st December, 2015.
Cash Book (Bankcolumn)
₹
2015Dec.24 2015Dec.29
To balance b/d 360 By Mahesh 15
Dec.27 To Prasad 60 Dec.29 By Ganesh 145
Dec.28 To Giridhar 120 Dec.29 By Viswanadh 35
Dec.28 To Sankar 42 Dec.31 By balance c/d 387

582 582
Jan.1 To Balance b/d 387
BankPassBook Cr.
₹
 2015 2015
Dec.31 To Ganesh 145 Dec.25 By balance b/d 360
Dec.31 To balancec /d 400 Dec.28 By Prasad 60
Dec.29 By Giridhar 120
Dec.31 5
By Interest
545 545
2016
Jan.1 By balance b/d 400
From the following transactions prepare bank reconciliation statement.
5 Overdraft balance as per cash book ₹10,000
Cheques issued ₹3500 but not presented for payment.
Cheques deposited but not collected ₹4000
Bank charges₹200 not recorded in the cash book.
Interest on investments ₹350 not recorded in cash book
Insurance premium paid by the bank ₹600
A customer directly paid into the bank ₹1000

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