DISTANCE EDUCATION
B.C.A. DEGREE EXAMINATION, MAY 2016.
ACCOUNTING FUNDAMENTALS
(2003 onwards)
Time Three hours Maximum 100 marks
Answer any FIVE questions.
All questions carry equal marks.
20 100)
1. What is Accounting? Explain the objectives of accounting.
2. What is Accounting Equation? Explain the which
help in understanding accounting equation.
3. What are subsidiary books? Explain the purpose of each
one of them.
4. Examine the relationship between solvency, liquidity and
profitability.
5. Enter the following transaction in cash book with
discount and cash columns
2012
Nov. 1 Cash in hand Rs. 390
5 Sale of goods for cash Rs. 6,420
6 Credit purchases from Ravi Rs. 4,350
10 Received from Mohan Rs. 4,240
Discount allowed to him Rs. 40
14 Paid for electricity charges Rs. 250
16 Bought stationery Rs. 336
Sub. Code
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2012
Nov. 19 Drew from bank for office use Rs. 2,800
24 Paid cash to Arul Rs. 4,300 in full settlement
29 Received cash from Velavan Rs. 770
Discount allowed to him Rs. 30
30 Paid salaries Rs. 2,000
6. From the following Trial Balance, prepare Trading,
Profit and Loss A/c for the year ended 31.12.2013 and a
Balance sheet as on that date
Trial Balance
Debit Balances Rs. Credit Balances Rs.
Purchases 11,870 Capital 8,000
Debtors 7,580 Bad debts recovered 250
Return outwards 450 Creditors 1,250
Bank deposit 2,750 Return outwards 350
Rent 360 Bank overdraft 1,570
Salaries 850 Sales 14,690
Travel expenses 300 Bills payable 1,350
Cash 210
Stock 2,450
Discount allowed 40
Drawings 600
Adjustments
Closing stock on 31.12.2013 was Rs. 4,200.
Write off Rs. 80 as bad debts and create a reserve
for bad debts at on Sundry debtors
Three months rent is outstanding.
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7. Mr. Sivam keeps his on the single entry system and the
following information are available
Assets and Liabilities 1.1.2012
Rs.
31.12.2012
Rs.
Furniture 200 200
Stock 2,800 3,050
Sundry debtors 2,100 3,400
Cash 150 200
Sundry creditors 1,750 1,900
Bills payable 300
Loan 500
Investments 1,000
He has drawn out of business Rs. 500 during the year.
Prepare a statement showing his profit for the year ended
31.12.2012 after writing off 10% depreciation on furniture
and making a provision for bad debts of 10% of Sundry
debtors.
8. Prepare the balance sheet from the following ratios
Current ratio 2.5
Total sales/net worth 3.5
Sales/Fixed assets 6
Sales/Current assets 8
Sales/Inventory 15
Sales/Debtors 18
Annual sales Rs. 25,00,000.