B.M. DEGREE EXAMINATION, APRIL/MAY 2018.
Second Semester
Paper IV FINANCIAL ACCOUNTING
2 90424
Time 2.30 Hours Max. Marks 60
PART — A
Answer any TWO of the following. 5 10 Marks)
1. Classification of accounts.
2. What is a Scrap?
3. Define Depreciation.
4. Distinguish between gross profit and net profit.
PART — B
Answer any THREE of the following. 10 30 Marks)
5. What is Financial Accounting? Explain in detail accounting concepts and
conventions.
6. What is nature of accounting? In what ways accounting information is useful to
creditors, investors and employees of a business enterprise?
7. A firm purchased certain mill machinery for Rs.40,000 on 1.1.1980. An additional
machinery costing Rs.20,000 was acquired on 1.7.1980 on 1.9.1982 the machinery
acquired on 1.1.1980 was sold for Rs. 25,000. Assuming that 10% depreciation is
charged on diminishing balance method. Show machinery account upto 31.12.1981.
Accounts are closed on 31st December of every year.
8. Journalise the following transaction and post them into ledger of 2014 Accounts.
Date Particulars Amount
2014 May 1 Ali commenced business with cash 20,000
2 Paid into bank 16,000
3 Bought goods for cash 1,000
4 Bought furniture for office 800
5 Withdraw from bank cash for office 2,000
6 Goods sold to Khan 1,200

Date Particulars Amount
2014 May 7 Bought good from Ali 800
8 Paid trade expenses 200
9 Paid to Ali an account 800
10 Received cash from Khan 1,200
15 Paid rent 400
20 Cash sales 24,000
9. From the following information prepare three column cash book
Date Particulars Amount (Rs.
2014 April 1 Cash in hand 5,374
Bank balance 15,490
3 Cash sales 6,400
5 Paid into bank 7,000
6 Cheque received from Sneha 700
8 Deposited Sneha's cheque into bank 700
10 Paid to Anurag through cheque 980
and discount allowed by him 20
12 Cash purchase 2,500
14 With draw from bank for office use 5,000
15 Cheque received from Lucky Co. 950
18 Cash sales 7,500
19 Deposited Lucky Co., cheque int
bank cash deposited into the bank 4,000
21 Paid for stationary 120
23 Commission paid through cheque 500
25 Received cheque from Chandra
same day the cheque deposited 1,000
27 Lucky Co. cheque was dishoned 1,000
29 Withdraw from bank for personal use 800
30 Paid salaries through cheque 1,500
30 Insurance premium paid through bank 500
PART — C
90424
3
Answer the following. 20 20 Marks)
10. Following is the trail balance of M/S ABC Company as on 31.3.2015. Prepare
trading and profit and loss account for the year ended 31.3.2015 and also prepare a
balance sheet on that date.
Particulars Debit Credit
Rs. Rs.
Capital 2,00,000
Drawings 36,000
Buildings 30,000
Furniture 15,000
Motor van 50,000
Loan from Hari 12% interest 30,000
Interest paid on Hari's loan 1,800
Sales 2,00,000
Purchases 1,50,000
Opening stock 50,000
Establishment expenses 30,000
Wages 4,000
Insurance 2,000
Commission 9,000
Debtors 56,200
Cash at bank 40,000
Creditors 20,000
Interest 6,000
4,65,000 4,65,000
Adjustments
The value of stock on 31.3.2015 was Rs. 64,000
Outstanding wages Rs.1,000
Prepaid insurance Rs. 600
Commission received in advance Rs.2,600
Allow interest on capital 10%
Depreciation on buildings furniture 20% and motor van 20%
Charge interest on drawings Rs.1,000
Accrued interest Rs.3,000.
———————