Collecting and summarizing financial data to prepare financial reports like balance sheet, income statement which will help in management of the organization and providing information to the investors, lenders, suppliers, tax authorities and other stakeholders is known as Financial Accounting.
Here we present Financial Accounting Practice Question Paper Set 1:
Q.1) What is Accounting Concept? Explain different accounting concepts.
Q.2) What is Accounting Convention? Explain different accounting convention.
Q.3) From the following classify with reasons – capital, revenue and deferred revenue:
1) Cost of replacing costly spare parts of a machine
2) Repainting of building
3) Compensation from local authority for acquisition of land
4) Commission on issue of debentures
5) Import duty on raw material imported from Germany
6) Goodwill of another business acquired.
Q.4) Prepare the necessary ledger accounts for the following:
a) 1 Commenced business with cash Rs. 2 lakh
b) 5 Purchased goods from Sunil on credit worth Rs. 5000/-
c) 7 Cash sales Rs. 6500
d) 9 Received rs. 5000 from Ajay in cash
e) 15 Paid brokerage to Vijay Rs.700.
Q.5) Prepare machinery and provision for Depreciation account. A second hand machinery was purchased on 1st January 2004 for Rs. 30,000 and Rs. 6000 and Rs. 4000 were spent on its repairs and erection immediately. On 1st July 2005 another machinery was purchased for Rs. 26000 and 1st July 2006 1st machinery become obsolete was sold for Rs. 30,000. On the same date another machinery was purchased for Rs. 25,000. On 1st July 2007, the second machinery was sold for Rs.23,000. Depreciation @ 10% on original cost on December 31st.
Q.6) Give journal entries for the following transactions:
15 Mahendra commenced business with cash 50,000.
18 Amount deposited in Dena Bank 3000.
23 Machinery purchased for business in cash 1,00,000.
25 An order received from Mehta & Co. for goods worth Rs. 5000.
26 Repairs in Machinery worth Rs.3000.
Q.7) From the following transactions, prepare Bank Reconciliation statement as on 31st March 2008.
1) Overdraft balance of Rs. 5000 as per cash book
2) Cheque worth Rs. 4000 were deposited in the bank on 20th June, but out of these, cheques worth Rs. 3750 only were collected by the bank.
3) Cheque issued but not presented to the bank Rs. 100.
4) Collection expenses charged by the bank but not entered in cash book Rs.25.
5) Interest collected by bank but not recorded in cash book Rs. 25
6) Cheque entered on the receipt side of the cash book but not yet sent to bank rs. 50
7) Cheque deposited in the bank and credited in the pass book but not entered in the cash book Rs. 100.
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