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ASSIGNMENTS

THEORETICAL QUESTIONS

A. Objective Type Questions :

I. Indicate the correct alternative : 

1. Posting is made at the …… side of the account appearing at the debit side of the Cash Book.

(a) Debit                                  (b) Credit

(c) Either debit or credit         (d) Neither debit nor credit.

2. Posting is made at the …… side of accounts appearing at the credit side of Cash book.

(a) Debit                                  (b) Credit

(c) Either debit or credit         (d) Neither debit nor credit.

3. While preparing parties Ale on the basis of Purchases book posting is made at the …… side of Parties Ale

(a) Debit                                  (b) Credit

(c) Either debit or credit         (d) Neither debit nor credit.

4. The ledger is a book of…

(a) Original entry                    (b) Secondary entry

(c) All cash transactions          (d) Petty cash transactions.

5. Writing of transaction in the ledger is called….

(a) Costing                              (b) Balancing

(c) Journalizing                        (d) Posting.

6. When a firm maintains a cash book, it need not maintain……..

(a) Sales journal                      (b) Purchases journal

(c) ·General journal                 (d) Cash account in the ledger.

7. Balancing of account means………

(a) Total of debit side                                                 (b) Total of credit side.

(c) Difference in Total of debit and credit     (d) None of these.

Ans: 1. (b) 2. (a) 3. (b) 4. (b) 5. (d) 6. (d) 7. (c).

II. Point out whether the following statements are true or false:

1. Posting is made at the debit side of an account credited in the Journal Entry.

2. Posting is made at the debit side of the account, which has been debited in the Journal entry.

3. Cash Account need not be prepared, if cash book is maintained.

4. Personal Accounts may have both the debit and credit balance.

5. If drawings exceed the capital introduced in the business, capital accounts may have debit balance.

6. While preparing Capital Accounts of the current year, the balance of the previous year is shown as ‘By Balance b/d’.

7. While preparing a particular account, we do not use the name of the same Account whether at the debit or credit side.

8. An account is a formal record of changes in items of similar nature.

9. The left side of an account is known as debit and the right side as credit.

10. The debit and credit both may represent either increase or decrease in an account balance.

11. When cash book is maintained, the transactions of cash are not recorded in journal.

12. The process of transferring entries from books of original entry to the ledger is called journalizing.

 

Ans. 1. False 2. True 3. True 4. True 5. True 6. True 7. True 8. True 9. True

10. True 11. True 12. False.

 

B.     Very Short Answer Type Questions :

1. Mention the balance of Sales Ale and Purchases A/c. How are these accounts closed?

2. What is meant by ‘Net Purchases’?

3. What is the balance of Sales Ale and where its balance is transferred?

 

C.    Short Answer Type Questions :

1. Why do accounts have two sides?

2. What is meant by the debit and credit balance of an account? Explain briefly.

3. Prepare the format of an account.

4. Is the balance of Nominal Accounts calculated, if not? How is it closed?

5. “Ledger is the principal book of business?” Explain.

6. What is the meaning of an account?

7. What is the purpose of a ledger?

 

D.    Long Answer Type Questions : 

1. What is meant by Ledger Posting? Explain its importance in Accounting.

2. Explain the procedure for preparing Ledger Accounts through Journal entry.

3. How are Ledger Accounts of items appearing at the credit side of Cash Book prepared?

4. Why is it necessary to prepare Ledger Accounts, when there are Subsidiary Books and Journal?

5. Which accounts can be prepared on the basis of Purchases book and Sales book? Explain the process of preparing these accounts.

 

PRACTICAL QUESTIONS 

1. On 1st January, 2005 ……. the following were the ledger balances of Rajan & Co.:

Cash in hand $ 900: Cash at Bank $ 21,000; Jimmy (Cr.) $ 3,000; Ajit (Dr.) $ 2,400; Stock $ 12,000; Adi (Cr.) $ 6,000; Adish (Dr.) $ 4.500, David (Cr.) $ 2,700.

Ascertain Capital.

Transactions during the month were :

2005                                                                                                                            $

Jan. 2   bought goods from Adi……………………………….                                             2,700

Jan. 3   Sold to Adish………………………………………….                                                 3,000

Jan. 5   Sold to David goods for cash…………………                                                    3,600

Jan. 7   Took goods for personal use……………………………..                                        200

Jan. 13 Received from Ajit in full settlement……………………………..                          2,350

Jan. 17 Paid to Jimmy in full settlement………………..                                                 2,920

Jan. 22 Paid cash for stationery………………….                                                                        50

Jan. 29 Paid to Adi by cheque………………………………………….                                   2,650

Discount al lowed…………………………………………………………                         50

Jan. 30 Provide interest on capital………………………………..                                        100

Rent due to landlord………………………………………………                                 200

Journalize the above transactions and post them to ledger.

[Ans. Opening balance of capital $ 29,100 ; Closing balance of cash $ 3,880)

 

2. Pass the journal entries from the following transactions and post them into ledger:

2004                                                                                                                $

Oct. 1  Started business with cash………………………………………. 12,000

Oct. 3  Opened a current account…………………………………………4,000

Oct. 5  Purchased goods………………………………………………….3,000

Oct. 7  Sold goods to ames……………………..…………………………2,900

Oct. 9  Amount received from David………………………………………100

Oct. 14            Discount al lowed………………………………………………..1,000

Oct. 17            Goods purchased from Anshu………………………………………980

Oct. 25            Paid to Anshu in full settlement………………………………….1,200

Oct. 31 Interest on capital…………………………………………………….15

Oct. 31 Amount withdrew for office use…………………………….. 2,000

[Ans. Closing balance of cash Rs. 6,720)

 

3. Post the following transactions in the simple cash book and post them, into ledger:

2004                                                                                                                            $

Nov. 1             Cash in hand………………………………………………………………………… 2.000

 

Nov. 8                         Paid for wages…………………………………………………………………….. 200

 

Nov. 12           Outstanding salaries……………………………………………………………….. 100

 

Nov. 15           Cash purchases………………………………………………………………………. 700

 

Nov. 28           Cash sales………………………………………………………………………………. 400

 

Nov. 30           Interest on capital……………………………………………………………………… 20

[Ans. Closing balance of cash $ 1 ,500]

 

4. Write up purchases and sales books from the following transactions and post them to Ledger :

2001

April 1 Purchased goods from Akash, New Delhi

100 meters Silk @ $4.50 per metre

75 meters Velvet @ $  8.00 per metre

April 10 Sold goods to Rajesh, Daryaganj

60 meters Silk @ $ 5.00 per meter

SO meters Velvet @ $ 8.2S per meter

April 12 Sold goods to Prakash, New Delhi

30 meters Silk @ $  5.2S per meter

20 meters Velvet @ $ 8.50 per meter

April 18 Jack and Sons purchased from us :

10 meters Silk @ $  6.00 per meter

S meters Velvet @ $  8.75 per meter

April 20 purchased goods from David and Sons, Lajpat Nagar

SO pieces Prints @ $ 13.00 per piece

80 pieces Calico @ $  6.SO per piece

April 22 Purchased from Adish, New Delhi

Shirting Cloth $  1 ,000

Saris $ 6,000

April 23 Sold to Miss Ankit & Bros., Daryaganj

Shirting Cloth $ 700

Saris $  2,500

April 28 Naren & Bros., New Delhi, Sold to us

Long Cloth I 0 pieces @ $ 102.00 per piece

Dhoties 100 pairs @ $  25.00 per pair.

[Ans. Total of purchases book= $ 12,740, Total of sales book= $ 4343.75]

 

5. From the following transactions, prepare purchases book and sales book of Paresh Mehra, cloth merchant and post them co Ledger:

2002

June 1 Bought of Chatterjee & Co. Kolkata

50 meters of Coating No. 116 at $ 40 per meter.

2 pieces of 50 meters each shifting superfine Poplin, grey color at $ 30 per meter.

10 pieces of25 meters each, medium quality Poplin No. 510 at $ 12 per meter.

June I 0 A mar & Sons Sold to us

25 meters of Coating No. 116 at $ 40 per meter.

5 pieces of Voile fine quality No. 39 at $ 60 per piece.

2 piece of 25 meters each medium quality Poplin No. 510 at $ 12 per meter.

Less 2%.

Packing and forwarding charges $ 20.

June 15 Kapoor & Co., Longleng bought from the firm

20 pieces of 25 meters each fine quality Poplin shirting No. 50l at $ 12.50 per meter.

SO meters Artificial Silk No. 1031 at $ 40 per meter.

Less 10%.

June 28 Sold to Cheap Cloth House, New Delhi

16 pieces of 2S meters each Poplin No. 501 at $ 12.50 per meter.

40 meters Artificial Silk No. 1031 at $ 40 per meter.

Less: 5%.

[Ans. Total of purchases book = $ 9,882. Total of sales book= $ 13.695 ]