Distinguish between Single Entry System and Double Entry System of Accounting.

What is the difference between Receipts and Payment Account and Income and Expenditure Account? Explain.

Explain the concepts of 'Conservatism' and 'Consistency' with examples.

State the difference between Capital Expenditure and Revenue Expenditure.

What is 'Net Worth'? How is it computed? Explain with an example.

What do you understand by Self-Balancing System? State its advantages.

3. On 1st April 2013 a firm of Sportswear, Delhi sent a consignment of 500 swimming suits to Mis Ram Niwas and Sons of Kanpur (consignee) valuing RS 1,25,000. The consignor incurred an amount of RS 1500 in sending the goods to the consignee. At the end of the month, the consignee sent a statement of sales showing that 400 suits were sold RS 350 per suit and his selling expenses amounted to RS 8000. The consignee is entitled for a commission of RS 25 per suit sold. The unsold stock is to be valued at cost plus proportionate expenses. The consignee had also spent RS 500 on consignment received.
You are required to show necessary ledger accounts in the books of the consignor.

4. From the following Ledger Balances extracted from the books of a proprietor as on 31st March, 2013 prepare the Trading and Profit and Loss Account for the year ending on 31-03-2013 and also the Balance Sheet after taking into account the following additional information:

Name of Ledger Account Debit Balance Credit Balance

Capital 8,00,000
Sales 15,00,000
Return inward 35000
Purchases 7,65,000
Return outward 22000
Stock 80000
Land and Building 8,00,000
Plant and Machinery 4,00,000
Furniture and Fixtures 1,50,000
Wages 70000
Carriage inward 15000
Salaries 48000
Rent 35000
Interest on loan 15000
Discount 5000
Bad debts 5000
Interest on Investment 9500
Cash in hand 21500
Cash at Bank 55000
Investments 75000
Debtors 1,52,000
Creditors 2,00,000
Goodwill 50000
Bills Receivable and Payable 20000 15000
Loan 2,50,000
Total 27,96,500 27,96,500

Additional Information

Unsold stock on 31-3-2013, RS 1,75,000.

Depreciate: Plant and Machinery 15% Furniture and Fixtures 15%.

Provide Bad debt Reserve 5%.

Outstanding Rent, 13,000.

5. On January 2010, a firm purchased a Machine 12 for RS 75,000 and spent RS 5,000 on its erection. On 1st July, the same year, a second machine was purchased for RS 40,000. On 1st July 2011, the firm sold the machine which had been purchased on 1-1-2010, for RS 55,000.
On July 2012, a new plant costing RS 60,000 was added and the machinery purchased on pt July 2010 was disposed off for RS 30,000.
Firm charges depreciation annually 10% on fixed instalment basis. Prepare Machinery Account for 3-years showing balance as it would appear on 1-1-2013.

6. Write short notes on any two of the following:

Joint Venture as a temporary partnership.

Secret reserves.

Selection of a method of charging depreciation.

Types of Assets.