CBSE Sample Papers Class 11 Accountancy 2024

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We have updated CBSE Sample Papers for class 11 Accountancy as per the new exam pattern for the session 2023-24. These are based on the new marking scheme and blueprint released by CBSE for Class 11 students. We are providing Accountancy sample papers for Class 11 that are very helpful to success in CBSE exams. These Sample Papers are available for free download on the myCBSEguide app and website in PDF format. You can download CBSE marking scheme and blueprint along with the Sample Papers.

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CBSE Sample Papers Class 11 Accountancy 2023-24

We at myCBSEguide provide CBSE Class 11 Sample Papers of Accountancy for the year 2024 with solutions in PDF format for free download. This CBSE model question paper follows NCERT textbooks and the CBSE syllabus. All students must check the latest syllabus and marking scheme. Sample papers for Class 11 Accountancy and other subjects are available for download as PDFs on the mobile app too. myCBSEguide provides sample papers with solutions for the academic session 2023-24.

Class 11 – Accountancy Sample Paper – 01 (2023-24)

Maximum Marks: 80
Time Allowed: : 3 hours

General Instructions:

1. This question paper contains 34 questions. All questions are compulsory.
2. This question paper is divided into two parts, Part A and B.
3. Question 1 to 17 and 27 to 29 carries 1 mark each.
4. Questions 18 to 20 and 30 to 32 carries 3 marks each.
5. Questions from 21 to 23 carries 4 marks each.
6. Questions from 24 to 26, 33 and 34 carries 6 marks each.

1. 1. Class 11 Accountancy Sample Paper Part A

   2. The vouchers which are prepared for transactions not involving cash, i.e. non-cash transactions, are known as ________ vouchers.
      a) Token
      b) Credit
      c) Transfer
      d) Unilateral
   3. Assertion (A): Statements prepared through management account are helpful in decision making process.
      Reason (R): The information provided by management accounts is financial and non-financial as well.
      a) Both A and R are true and R is the correct explanation of A.
      b) Both A and R are true but R is not the correct explanation of A.
      c) A is true but R is false.
      d) A is false but R is true.
   4. Goodwill account is a:
      a) Nominal Account
      b) Real Account
      c) None of these
      d) Personal Account
   5. What shall be the amount of Capital if Cash is ₹ 5,000; Furniture ₹ 12,000; Stock ₹ 30,000 and Creditors ₹ 6,000?
      a) ₹ 41,000
      b) 43,000
      c) ₹ 53,000
      d) ₹ 47,000

      OR

      Purchase of machine by cash means:

      a) increase in asset and decrease in the asset
      b) none of these
      c) the decrease in asset and increase in capital
      d) increase in asset and decrease in liability
   6. Source of documents are
      a) Cash Memo
      b) Both Cash Memo and Invoice
      c) Neither Cash Memo Nor Invoice
      d) Invoice
   7. Income statement include
      a) Profit and loss account only
      b) Trial Balance only
      c) Balance sheet only
      d) Statement of profit and loss

      OR

      Which of the following is not a limitation of accounting?

      a) Evidence in Legal Matters
      b) Based on accounting conventions
      c) Incomplete Information
      d) Omission of Qualitative Informations

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   8. Which of the following correctly differentiates between provision and reserves?
      1. A provision is a charge against profit whereas reserve is an appropriation of profit.
      2. Provision is made for a known liability or expense the amount of which is not certain whereas reserve is created for strengthening the financial position of the business.
      3. Provision is deducted before calculating taxable profits whereas a reserve is created from profit after tax and therefore it has no effect on taxable profit.
      4. All of these
      a) Option (ii)
      b) Option (i)
      c) Option (iii)
      d) Option (iv)
   9. Rule of Debit and Credit for Impersonal account is
      a) Dr. the receiver and Cr the giver
      b) Dr. what goes out and Cr what comes in
      c) Dr. all expenses and Cr all gains & Dr. what goes out and Cr what comes in
      d) Dr. all expenses and Cr all gains

      OR

      When a total of the debit side of an account exceeds the total of its credit side, the account is said to have ________.

      a) Debit Balance
      b) None of these
      c) Debit as well as credit balance
      d) Credit Balance

1. Question No. 9 to 10 are based on the given text. Read the text carefully and answer the questions:A business purchased goods for ₹ 2,00,000 and sold 75% of such goods during accounting year ended 31st March 2020. The market value of remaining goods was ₹ 43,000. Accountant valued closing stod at cost. According to him,
   1. Owner of the business is treated as creditor to the extent of his capital;
   2. All expenses incurred to earn revenue or a particular period should be charged against that revenue to determine the net income:
      Financial statements are prepared on 31st March every year.
2. A business purchased goods for ₹ 200,000 and sold 75% of such goods during the accounting year ended 31st March, 2020. The market value of the remaining goody was ₹ 43,000 Accountant valued closing stock it cost: Identify the concept violated in the above situation.
   a) Matching
   b) Conservatism
   c) Business entity
   d) Accounting period
3. Under which concept owner of the business is treated as creditor to the extent of his capital.
   a) Conservatism
   b) Business entity
   c) Matching
   d) Accounting period
4. Match the following. Options are
   

   a. General reserve	i. reserve are created for specific purpose
   b. Specific reserve	ii. reserve may or may not involve any receipts of cash
   c. Capital reserve	iii. created in business for rainy day

   a) a – (ii), b – (iii), c – (ii)
   b) a – (iii), b – (i), c – (ii)
   c) a – (iii), b – (ii), c – (i)
   d) a – (ii), b – (i), c – (iii)
5. Which of the following is not a fixed asset?
   a) Computers
   b) Furniture
   c) Building
   d) Cash in hand
6. Return of goods purchased on credit to the suppliers will be entered in ____ Book.
   a) Purchase
   b) Sales
   c) Sales Return
   d) Purchase Return
7. When goods are returned to supplier assets and ________ are ________ by same amount.
   a) liabilities, increased
   b) assets, decreased
   c) liabilities, decreased
   d) assets, increased
8. Which of the following is not a fixed asset?
   1. Balance with bank
   2. Plant and Machinery
   3. Building
   4. Goodwill
   a) B only
   b) C only
   c) A only
   d) D only

   OR

   Out of the following assets, which one is not an intangible asset?

   a) Patents
   b) Trade Mark
   c) Machinery
   d) Goodwill
9. Goods sold for Cash Rs 25,000 plus 12% IGST. Sales A/c will be credited by:
   a) Rs 28,000
   b) Rs 22,000
   c) Rs 25,000
   d) None of these
10. How secret reserve can be created
    a) All of these
    b) By charging capital expenditure to revenue
    c) Under valuating stock
    d) By making excessive provisions
11. When an account is said to have a debit balance and credit balance?

    OR

    Pass Journal entry for purchase of goods by Amrit, Delhi from Add Gel Pens, Delhi for ₹ 15,000 less Trade Discount 10% and Cash Discount 3%. CGST and SGST is levied @ 6% each. Assume payment is made at the time of purchase.

12. Why is the consistency principle important?

    OR

    What is meant by Accounting Standard? State any two benefits of it.

13. Distinguish between debtors and creditors.
14. Following balances were extracted from the books of Ravinder Associates as at 31st March, 2017:
    

    	(₹)		(₹)
    Sundry Debtors	4,10,000	Stock (April 1, 2016)	2,30,000
    Sundry Creditors	80,000	Premises	12,00,000
    Rent and Taxes	48,000	Fixtures & Fittings	3,10,000
    Purchases	34,00,000	Bad Debts written off	8,000
    Sales	56,00,000	Rent received from sub-let of part of premises	30,000
    Trade Expenses	12,000	Loan from Mukul	1,50,000
    Returns Outwards	80,000	Interest on Mukul’s Loan	15,000
    Returns Inwards	1,20,000	Drawings	40,000
    Expenses	4,000	Cash in hand	75,000
    Motor Vehicles	6,50,000	Stock on 31st March, 2017
    Electricity	25,000	(not adjusted)	3,80,000

    You are required to prepare the trial balance treating the difference as his capital.

15. Record the following transactions in a cash book with cash and bank columns:
    

    2017		₹
    Jan. 1	Bank overdraft	12,000
    	Cash in hand	2,300
    Jan. 7	Cheque received from Ram ₹ 4,000 and discount allowed ₹ 200
    Jan. 8	Deposited the above cheque into Bank	4,000
    Jan. 12	Banked	200
    Jan. 15	Received a money order from Gopal	500
    Jan. 16	Money is withdrawn from Bank for office use	300
    Jan. 18	Bank Charges	20
    Jan. 20	Interest on bank overdraft	1,000

16. From the following particulars ascertain the balance that would appear in the Bank Pass Book of A at 31st December 2013:
    1. The bank overdraft as per Cash Book on 31st December 2013 ₹ 63,400.
    2. Interest on overdraft for 6 months ending 31st December 2013, ₹ 1,600 is entered in the Pass Book.
    3. Bank charges of ₹ 300 for the above period are debited in the Pass Book.
    4. Cheques issued but not cashed prior to 31st December 2013 amounted to ₹ 11,680.
    5. Cheques paid into bank but not cleared before 31st December 2013 were for ₹ 21,700.
    6. Interest on investments collected by the bank is credited in the Pass Book ₹ 12,000.

    OR

    On 31st March 2018, the Bank Pass Book of Naresh & Co. showed an overdraft of Rs.10,700. From the following particulars prepare Bank Reconciliation Statement

    1. Cheques issued before 31-03-2018 but presented for payment after that date amounted to Rs.900.
    2. Cheques paid into the Bank but not collected and credited until 31-03- 2018 amounted to Rs.2,200.
    3. Interest on overdraft amounting to Rs.1,200 did not appear in the Cash Book.
    4. Rs.5,000 being interest on investments collected by the Bank and credited in the Pass Book were not shown in the Cash Book.
    5. Bank charges of Rs.50 were not entered in the Cash Book.
    6. Rs.800 in respect of dishonoured cheque were entered in the Pass Book but not in the Cash Book.
17. On the basis of the narrations, fill in the missing values:

    Journal Entries

    Date	Particulars		L.F.	Amount (Rs)	Amount Cr. (Rs)
    (i)	________	Dr.		________
    	________			________
    	To ________				________
    	(Being the bank draft of Rs 10,000 issued to Suman, bank charges Rs 100)
    (ii)	________	Dr.		10,000
    	To ________				10,000
    	(Being the cheque of Ranjan dishonoured)
    (iii)	________	Dr.		________
    	To ________				________
    	To ________				________
    	(Being the purchase of goods of Rs 30,000; received cash discount @ 2%)
    (iv)	________	Dr.		________
    	________			________
    	To ________				________
    	(Being the sale of goods of Rs 30,000 allowed cash discount @ 3% )
    (v)	________	Dr.		________
    	To ________				________
    	(Being the goods costing Rs 15,000 lost in the fire)
    (vi)	________	Dr.		________
    	________			________
    	To ________				10,000
    	(Being the rent paid, {tex}\frac{1}{4}{/tex}th of the premises used for residence)
    (vii)	________	Dr.		________
    	To ________				________
    	To ________				________
    	To ________				________
    	(Being the machinery (cost Rs 2,00,000) recorded, adjusting advance (Rs 20,000), old machine (Rs 10,000 cost) and balance by payment by cheque)
    (viii)	________	Dr.		20,000
    	To ________				20,000
    	(Being a computer out of stock used for office purposes)
    (ix)	________	Dr.		________
    	To ________				________
    	(Being the computer (stock) costing Rs 15,000 taken for domestic use)
    (x)	________	Dr.		________
    	________			________
    	To ________				________
    	To ________				________
    	(Being the salaries (Rs 40,000) and rent (Rs 15,000) outstanding)

    OR

    Journalise the following transactions:

    2017		Amount (₹)
    Dec.01	Hema started business with cash	1,00,000
    Dec.02	Open a bank account with SBI	30,000
    Dec.04	Purchased goods from Ashu	20,000
    Dec.06	Sold goods to Rahul for cash	15,000
    Dec.10	Bought goods from Tara for cash	40,000
    Dec.13	Sold goods to Suman	20,000
    Dec.16	Received cheque from Suman	19,500
    	Discount allowed	500
    Dec.20	Cheque given to Ashu on account	10,000
    Dec.22	Rent paid by cheque	2,000
    Dec.23	Deposited into bank	16,000
    Dec.25	Machine purchased from Parigya	10,000
    Dec.26	Trade expenses	2,000
    Dec.28	Cheque issued to Parigya	10,000
    Dec.29	Paid telephone expenses by cheque	1,200
    Dec.31	Paid salary	4,500

18. Trial Balance of Rahul did not agree. Rahul put the difference to Suspense Account. Subsequently, he located the following errors:
    1. Wages paid for the installation of Machinery Rs 600 was posted to Wages A/c.
    2. Repairs to Machinery Rs 400 debited to Machinery A/c.
    3. Repairs paid for the overhauling of second-hand machinery purchased Rs 1,000 was debited to Repairs A/c.
    4. Own business material 8,000 and wages Rs 2,000 were used for the construction of the building. No adjustment was made in the books.
    5. Furniture purchased for Rs 5,000 was posted to Purchases A/c as Rs 500.
    6. Old machinery sold to Karim at its Book value of Rs 2,000 was recorded through sales book.
    7. Total of Sales Returns Book Rs 3,000 was not posted to the ledger.
       Rectify the above errors and prepare Suspense Account to ascertain the original difference in Trial Balance.

    OR

    There was a difference of Rs. 8,595 in a trial balance. It has been transferred to debit side of suspense account. Later on following errors were discovered. Pass the rectifying entries and prepare the suspense account.

    1. Rs 283 discount received from a creditor had been duly entered in his account but not posted to discount account.
    2. Goods bought from a merchant for Rs 770 had been posted to the credit of his account as Rs. 7,700.
    3. Rs 6,000 owing by a customer had been omitted from the schedule of sundry debtors.
    4. An item of Rs 2,026 entered in the sales return book had been posted to the debit of the customer who returned the goods.
19. On 1st April, 2016 a firm purchased machinery for ₹ 3,00,000. On 1st October, 2016, additional machinery costing ₹ 1,50,000 was purchased On 1st October, 2017, the machinery purchased on 1st April, 2016 having become obsolete, was sold for ₹ 1,35,000. On 1st October, 2018, new machinery was purchased for ₹ 3,75,000 while the machinery purchased on 1st October, 2016 was sold for ₹ 1,27,500 on the same day. The firm provides depreciation on its machinery @ 10% per annum on original cost on 31st March every year.
    Show Machinery Account, Provision for Depreciation Account and Depreciation Account for the period of three accounting years ending 31st March, 2019.

    OR

    You are given following balances as on 1st April 2014:
    Plant & Machinery A/c Rs 25,00,000
    Provision for Depreciation A/c Rs 5,80,000
    Depreciation is charged on the plant at 20% p.a. by the diminishing balance method. A piece of machinery purchased on 1st April 2012 for Rs 5,00,000 was sold on 1st October 2014 for Rs 3,00,000.
    Prepare the Plant & Machinery Account and Provision for Depreciation Account for the Year ended 31st March 2015.
    Also, prepare Machinery Disposal Account.

20. Class 11 Accountancy Sample Paper Part B

21. The time between the acquisition of an asset for processing and its conversion into cash and cash equivalent is called
    a) Production cycle
    b) Operating cycle
    c) None of these
    d) Time gap

    OR

    _____ is the arrangement of various assets and liabilities in a particular order

    a) Marshalling
    b) Grouping
    c) All of these
    d) Balancing
22. Loss on sale of an old car is debited to:
    a) Profit and Loss A/c
    b) Depreciation A/c
    c) None of these
    d) Car A/c
23. Closing Stock, if given outside the Trial Balance is shown in:
    a) Profit and Loss Account
    b) Trading Account and Balance Sheet
    c) Profit and Loss Account and Balance Sheet
    d) Balance Sheet

    OR

    Calculate provision for doubtful debt. If debtor closing balance is Rs.3,400 and provision for the reserve of doubtful debts at 10% on sundry debtors

    a) Rs.2,060
    b) Rs.3,400
    c) Rs.340
    d) Rs.3,060
24. Distinguish between Capital Receipts and Revenue Receipts.
25. From the following information, prepare the Trading Account for the year ended 31st March, 2017:
    Adjusted Purchases ₹ 15,00,000; Sales ₹ 21,40,000; Returns Inwards ₹ 40,000; Freight and Packing ₹ 15,000; Packing Expenses on Sales ₹ 20,000; Depreciation ₹ 36,000; Factory Expenses ₹ 60,000; Closing Stock ₹ 1,20,000.
26. Why is it necessary to create a provision for doubtful debts at the time of preparation of final accounts?
27. Following is the Trial Balance of Shamit on 31st March, 2019. Pass closing entries and prepare Trading and Profit and Loss Account for the year ended 31st March, 2019.

    TRIAL BALANCE as on 31st March, 2019

    Particulars	Dr.(₹)	Cr.(₹)
    Capital A/c	–	1,00,000
    Stock A/c (1st April, 2018)	20,000	–
    Cash at Bank	10,000	–
    Cash In Hand	4,400	–
    Machinery A/c	60,000	–
    Furniture and Fittings A/c	13,600	–
    Purchases A/c	1,50,000	–
    Wages A/c	1,00,000	–
    Power and Fuel A/c	30,000	–
    Factory Lighting A/c	2,000	–
    Salaries A/c	70,000	–
    Discount Allowed A/c	5,000	–
    Discount Received A/c	–	3,000
    Advertising A/c	50,000	–
    Sundry Office Expenses A/c	40,000	–
    Sales A/c	–	5,00,000
    Sundry Debtors	85,000	–
    Sundry Creditors	–	37,000
    Total	6,40,000	6,40,000

    Value of Closing Stock as on 31st March, 2019 was ₹ 27,000

    OR

    From the following trial balance, prepare the trading and profit and loss account for the year ended 31st March 2013 and the balance sheet as at that date

    Name of Account	Debit Amount (Rs.)	Name of Account	Credit Amount (Rs.)
    Debit Balances		Rent, Rates, and Taxes	800
    Sundry Debtors	1,500	Salaries	2,000
    Stock on 1 st April 2012	5,000	Drawings	2,000
    Land and building	10,000	Purchases	10,000
    Cash in hand	1,600	Office expenses	2,500
    Cash at bank	400	Plant and machinery	5,700
    Wages	3,000	Credit Balances
    Bills Receivable	2,000	Capital	25,000
    Interest	200	Interest	600
    Bad debts	500	Sundry creditors	7,000
    Repairs	300	Sales	17,000
    Furniture and fixtures	1,500	Bills payable	400
    Depreciation	1,000

    On 31st March 2013, the stock was valued at Rs. 10,000.

28. From the following Trial Balance of Mr. Alok, prepare Trading and Profit & Loss Account for the year ending 31st March, 2019, and a Balance Sheet as at that date:-
    

    Dr. Balances	₹	Cr. Balances	₹
    Drawings	5,275	Capital	59,700
    Bills Receivable	4,750	Loan at 8% p.a. (on 1.4.2018)	10,000
    Machinery	14,400	Commission Received	2,820
    Debtors (including X for dishonoured Bill of ₹1,000)	30,000	Creditors	29,815
    Wages	20,485	Sales	1,78,215
    Returns Inward	2,390
    Purchases	1,28,295
    Rent	2,810
    Stock (1.4.2018)	44,840
    Salaries	5,500
    Travelling Expenses	945
    Insurance	200
    Cash	9,750
    Repairs	1,685
    Interest on Loan	500
    Discount Allowed	2,435
    Bad-Debts	1,810
    Furniture	4,480
    	2,80,550		2,80,550

    The following adjustments are to be made :

    1. Stock in the shop on 31st March, 2019 was ₹ 64,480.
    2. Half the amount of X’s Bill is irrecoverable.
    3. Create a provision of 5% on other debtors.
    4. Wages include ₹ 600 for erection of new Machinery.
    5. Depreciate Machinery by 5% and Furniture by 10%.
    6. Commission includes ₹300 being Commission received in advance.

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    OR

    From the following trial balance extracted from the books of MMN, prepare the trading and profit and loss account for the year ended 31st December, 2013 and the balance sheet as at that date.

    Name of Accounts	Debit Balance(Rs)	Credit Balance(Rs)
    Capital		90,000
    Drawings	6,480
    Land and buiding	25,000
    Plant and machinery	14,270
    Furniture and fixtures	1,250
    Carriage inwards	4,370
    Wages	21,470
    Salaries	4,670
    Provision for bad debts		2,470
    Sales		91,230
    Sales return	1,760
    Bank charges	140
    Coal, gas and water	720
    Rates and taxes	840
    Discount		120
    Purchases	42,160
    Purchases return		8,460
    Bills receivable	1,270
    Trade expenses	1,990
    Sundry debtors	37,800
    Sundry creditors		12,170
    Stock (1st January, 2013)	26,420
    Apprentice premium		500
    Fire insurance	490
    Cash at bank	13,000
    Cash in hand	850
    Total	2,04,950	2,04,950

    Additional Adjustments
    Charge depreciation on land and building at 2{tex}\frac 12{/tex}%, on plant and machinery account at 10% and on furniture and fixtures at 10%. Make a provision of 5% on debtors for doubtful debts. Carry forward the following unexpired amounts.

    1. Fire insurance Rs 125
    2. Rates and taxes Rs 240
    3. Apprentice premium Rs 400
    4. Closing stock Rs 29,390

Class 11 – Accountancy Sample Paper – 01 (Solution)

Solution

1. Class 11 Accountancy Sample Paper Part A Solution

2. (c) Transfer
   Explanation: Transfer
3. (a) Both A and R are true and R is the correct explanation of A.
   Explanation: Both A and R are true and R is the correct explanation of A.
4. (b) Real Account
   Explanation: Goodwill account is a Real Account, goodwill is an intangible asset and all assets are real.
5. (a) ₹ 41,000
   Explanation: Rs. (5000+12,000+30,000-6,000)=₹ 41,000

   OR

   (a) increase in asset and decrease in the asset
   Explanation: Purchase of machine by cash means an increase in asset and decrease in the asset. For example Machinery purchase at Rs. 10,000 so Machinery increase and Rs. 10,000 Cash decrease.

6. (b) Both Cash Memo and Invoice
   Explanation: yes. Cash memo are prepared on cash sale or cash purchase and Invoices are on credit transaction of sale and purchase.
   these both are source documents, on the basis of which we record transaction.
7. (d) Statement of profit and loss
   Explanation: The other name of Profit and loss account is the income statement.

   OR

   (a) Evidence in Legal Matters
   Explanation: Evidence in Legal Matters is not part of a limitation of accounting.
   To practice more questions & prepare well for exams, download myCBSEguide App. It provides complete study material for CBSE, NCERT, JEE (main), NEET-UG and NDA exams. Teachers can use Examin8 App to create similar papers with their own name and logo.

8. (d) Option (iv)
   Explanation: Option (iv)
9. (c) Dr. all expenses and Cr all gains & Dr. what goes out and Cr what comes in
   Explanation: Impersonal account means account other than personal.
   Rule of Personal account is debit the receiver credit the giver.
   So, option 3 and option 4 is other than personal means Impersonal.

   OR

   (a) Debit Balance
   Explanation: While preparing an account if the debit side is greater than the credit side, the difference is called “Debit Balance”. So, if Debit Side > Credit Side, it is a debit balance.

10. (b) Conservatism
    Explanation: Conservatism
11. (b) Business entity
    Explanation: Business entity
12. (b) a – (iii), b – (i), c – (ii)
    Explanation: General reserve is created for no specific purpose to meet any unforeseen contingency, specific reserve is created to meet a specific expense and capital reserves are created out of capital profits which may or may not involve cash receipt.
13. (d) Cash in hand
    Explanation: Cash in hand is a current asset, not a fixed asset.
14. (d) Purchase Return
    Explanation: We prepare seprate books of credit transaction for purchase, sale , purchase return or sale return. So, when we return goods to the which are purchase on credit from supplier it will be recorded in purchase return book.
15. (c) liabilities, decreased
    Explanation: Stock (assets) will reduce due to purchase return and creditors (liabilities) will also decrease by the same amount.
16. (c) A only
    Explanation: Balance with the bank is not a fixed asset. It is current asset.

    OR

    (c) Machinery
    Explanation: Machinery is not an intangible asset. It is tangible assets.

17. (c) Rs 25,000
    Explanation: Cash A/c … Dr. … 28,000
    To Sales A/c … 25,000
    To IGST A/c … 3,000
    So, Sales A/c will be credited by Rs 25,000.
18. (a) All of these
    Explanation: Secret Reserve :- A secret reserve is one whose existence is not disclosed in the balance sheet. It can be created by all the methods mentioned above by suppressing sales, by charging over depreciation etc. It is created without showing to public.
19. The difference between the sum of the two sides of an account is called the balance. This is the most important part of an account as it shows value or position of asset, liability, capital, income or expenses of which the account is a record. If the total of the debit side exceeds the total of credit side then this would be represented by a debit balance and opposite is true for a credit balance.

    OR

    Journal Entries
    In The Books Of Amrit, Delhi

    S.No.	Particulars		L.F.	Dr. (₹)	Cr. (₹)
    	Purchases A/c	Dr.		13,500
    	Input CGST A/c	Dr.		810
    	Input SGST A/c	Dr.		810
    	To Cash A/c				14,666
    	To Discount Received A/c				454
    	(Goods purchased for cash and discount received)

    Working Notes:

    List Price	15,000
    Less: Trade Discount @ 10%	1,500
    Value of Goods	13,500
    Add: CGST @ 6%	810
    Add: SGST @ 6%	810
    Invoice Value	15,120
    Less: Cash Discount @ 3%	454
    Amount Paid	14,666

20. It is assumed that accounting policies are consistent from one period to another. The consistency principle states that companies should use the same accounting treatment for similar events and transactions over time. In other words, companies shouldn’t use one accounting method today, use another tomorrow, and switch back the day after that. Similar transactions should be accounted for using the same accounting method over time. This creates consistency in the financial information given to creditors and investors.
    The realization concept states that no revenue should be recognized unless it has been realized. The prudence principle puts a further brake on it. It is not prudent to record unrealized gain but it is desirable to guard against all possible losses. Conservatism can be a useful tool in situations of uncertainty and doubt, but the abuse of this principle can definitely lead to misleading and incorrect financial statements.

    OR

    An accounting standard is a common set of principles, standards and procedures that define the basis of financial accounting policies and practices. Accounting standards improve the transparency of financial reporting in all countries. Accounting standards are principles that guide and standardizes the process of accounting and is notified by the Ministry of Corporate Affairs.
    The advantages are:

    1. Accounting practice is standardized and hence comparison of accounts of different companies is possible.
    2. Window dressing manipulation is not possible.

21. Basis of Difference	Debtors	Creditors
    (i) Meaning	Persons or organizations that are liable to pay money to a firm are called debtors.	Persons or organizations to whom the firm is liable to pay money are called creditors.
    (ii) Nature	They have debit balance in the firm’s books.	They have a credit balance in the firm’s books.
    (iii) Settlement	Amount due is received from them.	Payments are made to them.
    (iv) Treatment	They are shown as assets in the Balance Sheet under Current Assets.	They are shown as liabilities in the Balance Sheet under Current Liabilities.

22. Books of  Ravinder Associates
    Trial Balance
    as on March 31, 2017

    Name of Accounts	L.F.	Dr. (₹)	Cr. (₹)
    Sundry Debtors		4,10,000
    Sundry Creditors			80,000
    Rent & Taxes		48,000
    Purchases		34,00,000
    Sales			56,00,000
    Trade Expenses		12,000
    Return Outwards			80,000
    Return Inwards		1,20,000
    Expenses		4,000
    Motor Vehicles		6,50,000
    Electricity		25,000
    Opening Stock (on April 01, 2004)		2,30,000
    Premises		12,00,000
    Fixture & Fittings		3,10,000
    Bad Debts written off		8,000
    Loan from Mukul			1,50,000
    Interest on Mukul’s Loan		15,000
    Drawings		40,000
    Cash in Hand		75,000
    Rent received from Sub-let of part of Premises			30,000
    Capital (Balancing Figure)			6,07,000
    Total		65,47,000	65,47,000

    Note: Closing Stock of Rs 3,80,000 will not appear in Trial Balance, it will be shown after trial balance.
    Balance remains in trial balance is recorded as capital according to question.

23. Cash Book

    Dr.									Cr.
    Date	Particulars	L.F.	Cash (₹)	Bank (₹)	Date	Particulars	L.F.	Cash (₹)	Bank (₹)
    2020					2020
    Jan. 1	To Balance b/d		2,300		Jan. 1	By Balance b/d			12,000
    8	To Cheques-in-Hand A/c			4,000	12	By Bank A/c	C	200
    12	To Cash A/c	C		200	16	By Cash A/c	C		300
    15	To Gopal’s A/c		500		18	By Bank Charges A/c			20
    16	To Bank A/c	C	300		20	By Interest on O/D			1,000
    31	To Balance c/d			9,120	31	By Balance c/d		2,900
    			3,100	13,320				3,100	13,320
    Feb. 1	To Balance b/d		2,900		Feb. 1	By Balance b/d			9,120

    Journal Entry

    Date	Particulars		L.F.	Debit (₹)	Credit (₹)
    2017
    Feb 8	Cheques-in-hand A/c	Dr.		4,000
    	Discount allowed A/c	Dr.		200
    	To Ram’s A/c (Being cheque received from Ram)				4,200

24. Bank Reconciliation Statement
    as on 31st December 2013

    Particulars	Amount (₹)
    Bank Overdraft  Balance as per Cash Book	63,400
    Add: Interest debited in Pass Book but not yet entered in Cash Book	1,600
    Add: Bank charges debited in Pass Book but not yet entered in Cash Book	300
    Add: Cheques paid in bank but not yet credited by bank	21,700
    	87,000
    Less: Cheques issued but not yet presented in bank	11,680
    	75,320
    Less: Interest collected and credited by bank but not entered in Cash Book	12,000
    Bank Overdraft Balance as per Pass Book	63,320

    OR

    BANK RECONCILIATION STATEMENT
    as on March 31, 2018

    Particulars	(+)	(-)
    Unfavourable balance as per Pass Book (Dr.)		10,700
    Cheques not yet presented		900
    Cheques but not yet collected	2,200
    Interest on Investment		5,000
    Cheques dishonoured	800
    Interest on overdraft debited by bank	1,200
    Bank charges debited by bank	50
    Unfavourable balance as per Cash Book (Cr.) (Balancing figure)	12,350
    	16,600	16,600

25. Journal Entries

    Date	Particulars		L.F.	Amount Dr (Rs)	Amount Cr. (Rs)
    (i)	Suman’s A/c	Dr.		10,000
    	Bank Charges A/c	Dr.		100
    	To Bank Account				10,100
    	(Being the bank draft of Rs 10,000 issued to Suman, bank charges Rs 100 from the bank Account )
    (ii)	Ranjan’s A/c	Dr.		10,000
    	To Bank A/c				10,000
    	(Being the cheque Rs 10,000 already received from Ranjan now made dishonoured )
    (iii)	Purchases A/c	Dr.		30,000
    	To Cash A/c (30,000 – 600)				29,400
    	To Discount Received A/c (30,000 {tex}\times{/tex} {tex}\frac{2}{100}{/tex})				600
    	(Being the purchase of goods of Rs 30,000; received cash discount @ 2% from supplier )
    (iv)	Cash A/c (30,000 – 900)	Dr.		29,100
    	Discount Allowed A/c (30,000 {tex}\times{/tex} {tex}\frac{3}{100}{/tex})	Dr.		900
    	To Sales A/c				30,000
    	(Being the sale of goods of Rs 30,000 allowed cash discount @ 3%)
    (v)	Loss by Fire A/c	Dr.		15,000
    	To Purchases A/c				15,000
    	(Being the goods costing Rs 15,000 lost in the fire)
    (vi)	Rent A/c (10,000 {tex}\times{/tex} {tex}\frac{3}{4}{/tex})	Dr.		7,500
    	Drawings A/c(10,000 {tex}\times{/tex} {tex}\frac{1}{4}{/tex})	Dr.		2,500
    	To Bank A/c				10,000
    	(Being the rent paid and {tex}\frac{1}{4}{/tex}th of the premises used for residence of owner)
    (vii)	Machinery A/c (New Machine)	Dr.		2,00,000
    	To Advance for Machinery A/c				20,000
    	To Machinery A/c (old machinery)				10,000
    	To Bank A/c (Balancing Figure)				1,70,000
    	(Being the machinery (cost Rs 2,00,000) recorded in books by adjusting advance given to supplier  (Rs 20,000) and old machine (Rs 10,000 cost) and balance by payment made by cheque)
    (viii)	Computer A/c	Dr.		20,000
    	To Purchases A/c				20,000
    	(Being a computer out of stock of Rs 20,000 are used for office purposes for the company)
    (ix)	Drawings A/c	Dr.		15,000
    	To Purchases A/c				15,000
    	(Being the computer (stock) costing Rs 15,000 are taken for domestic use of owner recorded in the books)
    (x)	Salaries A/c	Dr.		40,000
    	Rent A/c	Dr.		15,000
    	To Salary Outstanding A/c				40,000
    	To Rent Outstanding A/c				15,000
    	(Being the salaries (Rs 40,000) and rent (Rs 15,000) are outstanding now recorded in the books )

    OR

    Journal of Hema

    Date	Particulars			L.F.	Debit (₹)	Credit (₹)
    2017
    Dec. 01	Cash A/c		Dr.		1,00,000
    	To Capital A/c					1,00,000
    	(Started business with cash)
    Dec. 02	Bank A/c		Dr.		30,000
    	To Cash A/c					30,000
    	(Bank account opened with SBI)
    Dec. 04	Purchases A/c		Dr.		20,000
    	To Ashu					20,000
    	(Goods purchased from Ashu)
    Dec. 06	Cash A/c		Dr.		15,000
    	To Sales A/c					15,000
    	(Goods sold for cash)
    Dec. 10	Purchases A/c		Dr.		40,000
    	To Cash A/c					40,000
    	(Goods purchased for cash)
    Dec. 13	Suman		Dr.		20,000
    	To Sales A/c					20,000
    	(Goods goods to Suman)
    Dec. 16	Bank A/c		Dr.		19,500
    	Discount Allowed A/c		Dr.		500
    	To Suman					20,000
    	(Cheque received from Suman and discount allowed)
    Dec. 20	Ashu		Dr.		10,000
    	To Bank A/c					10,000
    	(Cheque forwarded to Ashu)
    Dec.b22	Rent A/c		Dr.		2,000
    	To Bank A/c					2,000
    	(Rent paid by cheque)
    Dec.b23	Bank A/c		Dr.		16,000
    	To Cash A/c					16,000
    	(Cash deposited into bank)
    Dec. 25	Machinery A/c		Dr.		10,000
    	To Parigya					10,000
    	(Machinery purchased from Parigya)
    Dec. 26	Trade Expenses A/c		Dr.		2,000
    	To Cash A/c					2,000
    	(Trade expenses paid)
    Dec. 28	Parigya		Dr.		10,000
    	To Bank A/c					10,000
    	(Cheque issued to Parigya)
    Dec. 29	Telephone Expenses A/c		Dr.		1,200
    	To Bank A/c					1,200
    	(Telephone expenses paid through cheque)
    Dec. 30	Salaries A/c		Dr.		4,500
    	To Cash A/c					4,500
    	(Salary paid)
    	Total				3,00,700	3,00,700

26. In the Books of Rahul
    Journal Entries

    Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
    (i)	Machinery Account	Dr.		600
    	To Wages Account				600
    	(Being wages paid for the installation of machinery wrongly debited to wages account, now entry is rectified)
    (ii)	Repairs Account	Dr.		400
    	To Machinery Account				400
    	(Being Repairs paid wrongly debited to Machinery account now entry is rectified)
    (iii)	Machinery Account	Dr.		1,000
    	To Repairs Account				1,000
    	(Being Repairs for overhauling of second-hand machinery purchased, wrongly debited to Repairs account, now entry is rectified)
    (iv)	Building Account	Dr.		10,000
    	To Purchases Account				8,000
    	To Wages Account				2,000
    	(Being material and wages used for the construction of the building, not debited to building accounts, now entry is rectified)
    (v)	Furniture Account	Dr.		5,000
    	To Purchases Account				500
    	To Suspense Account				4,500
    	(Being Furniture purchased for Rs 5,000 wrongly debited to purchases account as Rs 500, now entry is rectified)
    (vi)	Sales Account	Dr.		2,000
    	To Machinery Account				2,000
    	(Being Sale of Machinery wrongly recorded in the sales book, now entry is rectified)
    (vii)	Sales Return Account	Dr.		3,000
    	To Suspense Account				3,000
    	(Being total of Sales Returns Book not posted to the ledger, now entry is rectified)

    Suspense Account

    Date	Particulars	L.F.	Amount (Rs)	Date	Particulars	L.F.	Amount (Rs)
    	To Difference as per Trial Balance		7,500		By Furniture A/c		4,500
    					By Sales Returns A/c		3,000
    			7,500				7,500

    OR

    Rectifying Entries

    S. No.	Particulars		L.F.	Dr.(Rs.)	Cr. (Rs.)
    1.	Suspense A/c	Dr.		283
    	To Discount Received A/c				283
    	(Being Discount received Rs.283, not posted in the books, now corrected.)
    2.	Supplier A/c	Dr.		6930
    	To Suspense A/c				6930
    	(Being brought goods for Rs.770, wrongly posted to supplier a/c as Rs.7700, now rectified.)
    3.	Debtors A/c	Dr.		6,000
    	To Suspense A/c				6,000
    	(Being owing by a customer, not included in the list of Sundry Debtors, now rectified.)
    4.	Suspense A/c	Dr.		4,052
    	To Customer A/c				4,052
    	(Being goods of Rs.2,026 returned by customer, wrongly debited to customer a/c now corrected.)

    Suspense A/c

    Particulars	Rs.	Particulars	Rs.
    To Balance b/d	8,595	By Supplier	6,930
    To Discount Received	283	By Debtors	6,000
    To Customer	4,052
    	12,930		12,930

27. MACHINERY ACCOUNT

    Dr.					Cr.
    Date	Particulars	₹	Date	Particulars	₹
    2016			2017
    April 1	To Bank A/c (Mach. I)	3,00,000	March 31	By Balance c/d	4,50,000
    Oct. 1	To Bank A/c (Mach. II)	1,50,000
    		4,50,000			4,50,000
    2017			2017
    April 1	To Balance b/d	4,50,000	Oct. 1	By Bank A/c (Mach. I) (Sale)	1,35,000
    			Oct. 1	By Provision for Depreciation A/c	45,000
    			Oct. 1	By Loss on Sale of Machinery A/c (Profit and Loss A/c) (WN 3)	1,20,000
    			2018
    			March 31	By Balance c/d	1,50,000
    		4,50,000			4,50,000
    2018			2018
    April 1	To Balance b/d	1,50,000	Oct. 1	By Bank A/c (Mach. II) (Sale)	1,27,500
    Oct. 1	To Bank A/c (Mach. III) (Sale)	3,75,000	Oct. 1	By Provision for Depreciation A/c	30,000
    			2019
    Oct. 1	To Gain on Sale of Machinery A/c (Profit and Loss A/c) (WN 3)	7,500	March 31	By Balance c/d	3,75,000
    		5,32,500			5,32,500

    PROVISION FOR DEPRECIATION ACCOUNT

    Dr.					Cr.
    Date	Particulars	₹	Date	Particulars	₹
    2017			2017
    March 31	To Balance c/d	37,500	March 31	By Depreciation A/c	37,500
    2017			2017
    Oct. 1	To machinery A/c (Mach. I)	45,000	April 1	By Balance b/d	37,500
    	(₹ 30,000 + ₹ 15,000)		Oct. 1	By Depreciation A/c (Mach. I)	15,000
    2018			2018
    March 31	To Balance c/d	22,500	March 31	By Depreciation A/c	15,000
    		67,500			67,500
    2018			2018
    Oct. 1	To Machinery A/c (Mach.II)	30,000	April 1	By Balance b/d	22,500
    	(₹ 7,500 + ₹ 15,000 + ₹ 7,500)		Oct. 1	By Depreciation A/c (Mach. II)	7,500
    2019			2019
    March 31	To Balance c/d	18,750	March 31	By Depreciation A/c	18,750
    		48,750			48,750
    			2019
    			April 1	By Balance b/d	18,750

    DEPRECIATION ACCOUNT

    Dr.					Cr.
    Date	Particulars	₹	Date	Particulars	₹
    2017			2017
    March 31	To Provision for Depreciation A/c	37,500	March 31	By Profit and Loss A/c	37,500
    2017			2018
    Oct. 1	To Provision for Depreciation A/c	15,000	March 31	By Profit and Loss A/c	30,000
    2018
    March 31	To Provision for Depreciation A/c	15,000
    		30,000			30,000
    2018			2019
    Oct. 1	To Provision for Depreciation A/c	7,500	March 31	By Profit and Loss A/c	26,250
    2019
    March 31	To Provision for Depreciation A/c	18,750
    		26,750			26,750

    Working Notes:

    1. Calculation of Accumulated Depreciation on Machine I:	₹
       Depreciation for 2016 – 17	30,000
       Depreciation for 2017 – 18 (Sold on 1st October, 2018)	15,000
       Accumulated Depreciation	45,000

    2. Calculation of Depreciation on Machine II:	₹
       Depreciation for 2016 – 17 (Purchased on 1st October, 2016)	7,500
       Depreciation for 2017 – 18	15,000
       Depreciation for 2018 – 19 (Sold on 1st October, 2018)	7,500
       Accumulated Depreciation	30,000

    3. Calculation of Gain/(Loss) on Sale of Machine I:	Machine I ₹	Machine II ₹
       Cost of Machinery	3,00,000	1,50,000
       Less: Accumulated Depreciation (till the date of sale)	45,000	30,000
       Book Value on Date of Sale (A)	2,55,000	1,20,000
       Sales Proceeds (B)	1,35,000	1,27,500
       Gain/(Loss) on sale (B – A)	1,20,000	7,500

    4. Depreciation under the straight-line method is calculated on original cost of asset after reducing salvage value. Each year same amount of depreciation is charged. When provision for depreciation account is prepared depreciation is charged through provision for depreciation account and not asset account.

    OR

    Machinery Account

    Dr.				Cr.
    Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
    2014 April 1	To Balance b/d		25,00,000	2014 Oct. 1	By Machinery Disposal Account		5,00,000
    				2015 March 31	By Balance c/d		20,00,000
    			25,00,000				25,00,000
    2015 April 1	To Balance b/d		20,00,000	2016 March 31	By Balance c/d		20,00,000
    			20,00,000				20,00,000

    Provision for Depreciation Account

    Dr.				Cr.
    Date	Particulars	J.F.	Amount (Rs)	Date	Particulars		J.F.	Amount (Rs)
    2013 March 31	To Machinery Disposal Account (WN1)		2,12,000	2014 April 1	By Balance b/d			5,80,000
    				2014 Oct. 1	By Depreciation Account (WN 1)			32,000
    2015 March 1	To Balance b/d		7,20,000	2015 March 31	By Depreciation Account (WN 2)			3,20,000
    			9,32,000					9,32,000
    				2016 April 1	By Balance b/d			7,20,000

    Machinery Disposal Account

    Dr.				Cr.
    Date	Particulars	J.F.	Amount (Rs)	Date	Particulars		J.F.	Amount (Rs)
    2014 Oct. 1	To Machinery Disposal Account		5,00,000	2014 Oct. 1	By Bank Account (Sale of machinery)			3,00,000
    2014 Oct. 1	To Profit  & Loss Account (Gain on sale of machinery)		12,000	2014 Oct. 1	By Provision for Depreciation Account			2,12,000
    			5,12,000					5,12,000

    Working Note:

    S.No.	Particular	Amount (Rs)
    1.	Depreciation Provided on Machinery sold till 31st Oct. 2014:
    	For 2012-2013 (5,00,000 {tex}\times{/tex} {tex}\frac{20}{100}{/tex})	1,00,000
    	For 2013-2014  (400000 {tex}\times{/tex} {tex}\frac{20}{100}{/tex})	80,000
    	For 2014-2015   (320000 {tex}\times{/tex} {tex}\frac{20}{100}{/tex} {tex}\times{/tex} {tex}\frac{6}{12}{/tex})	32,000
    	Total Depreciation on Machinery sold	2,12,000
    2.	Calculation of Depreciation on machinery provided for 2014-15:
    	Balance of provision for Depreciation on 1st April 2014	5,80,000
    	Add: Depreciation Provided on Sold Machinery	32,000
    		6,12,000
    	Less: Accumulated Depreciation on Machinery sold (WN 1)	2,12,000
    	Depreciation on the Remaining Machinery	4,00,000
    	Cost of Remaining Machinery	20,00,000
    	Less: Depreciation on Remaining Machinery	4,00,000
    	WDV of Remaining Machinery	16,00,000
    	Depreciation on machinery provided during 2014 – 15: 16,00,000 {tex}\times{/tex} {tex}\frac{20}{100}{/tex} = Rs 3,20,000

28. Class 11 Accountancy Sample Paper Part B Solution

29. (b) Operating cycle
    Explanation: it included all the steps from purchasing the raw material and converting it in to finished goods and then selling it.

    OR

    (a) Marshalling
    Explanation: marshalling refers to the arrangement of assets and liabilities in particular order. it can be done in two ways- on the basis of permanence and on the basis of liquidity.

30. (a) Profit and Loss A/c
    Explanation: Loss on sale of the car will be transferred to Profit and Loss A/c.
31. (b) Trading Account and Balance Sheet
    Explanation: Closing stock will be shown in the Trading Account and Balance Sheet if given outside the Trial balance.

    OR

    (c) Rs.340
    Explanation: Amount of Provision for doubtful debts = 10% of 3,400 = 340

32. Capital Receipts	Revenue Receipts
    Amount received from the sale of fixed assets or investments i.e., non-current assets.	Money obtained from the sale of goods or services.
    Capital contributed by proprietors, partners or money obtained from the issue of shares and debentures in case of the company.	Commission and fees received for services rendered.

33. Trading Account
    for the year ended 31st March, 2017

    Dr.				Cr.
    Particulars	Amount (₹)	Particulars		Amount (₹)
    To Adjusted Purchases	15,00,000	By Sales	21,40,000
    To Freight and Packing	15,000	Less: Return Inwards	40,000	21,00,000
    To Factory Expenses	60,000
    To Gross Profit (Balancing Figure)	5,25,000
    	21,00,000			21,00,000

    Working Notes:
    Calculation of Adjusted Purchases = Opening Stock + Net Purchases – Closing Stock
    Point of Knowledge:
    Closing stock is not showing separately in the trading account as it is already subtracted in adjusted purchases.
    Packing Expenses on Sales’ and ‘Depreciation’ are indirect expenses and hence not debited to the Trading A/c.

34. For recording business transactions, the convention of conservatism is followed which states that provision should be made for expected profit and gains should not be accounted for. As it is not possible to accurately know the amount of bad debts. Therefore, in order to bring an element of certainty in the amount of bad debts from debtors a provision for doubtful debts is created to cover the loss of possible bad debts.  A firm must be convinced with the amount of net debtors which it is going to realize by the end of the financial year and for this purpose, provision for doubtful debts certainly provides a helping hand.

35. JOURNAL OF SHAMIT

    Date	Particulars	L.F.	Dr.(₹)	Cr.(₹)
    2019
    March 31	Trading A/c		3,02,000
    	To Stock A/c			20,000
    	To Purchases A/c			1,50,000
    	To Wages A/c			1,00,000
    	To Power and Fuel A/c			30,000
    	To Factory Lighting A/c (Bein the direct expenses debited to Trading Account)			2,000
    March 31	Sales A/c		5,00,000
    	To Trading A/c (Bein the amount of Sales transferred to the credit of the Trading Account)			5,00,000
    March 31	Stock (Closing) A/c		27,000
    	To Trading A/c			27,000
    	(Being the value of stock on hand on 31 st March, 2019)
    March 31	Trading A/c		2,25,000
    	To Profit and Loss A/c (Being the transfer of gross profit)			2,25,000
    March 31	Profit and Loss A/c		1,65,000
    	To Discount Allowed A/c			5,000
    	To Salaries A/c			70,000
    	To Advertising A/c			50,000
    	To Sundry Office Expenses A/c (Being the various indirect expenses accounts transferred to the debit of the Profit and Loss Account)			40,000
    March 31	Discount Received A/c		3,000
    	To Profit and Loss A/c (Being the credit balance of discount received transferred to the profit and Loss Account)			3,000
    March 31	Profit and Loss A/c		63,000
    	To Capital A/c (Being the transfer of Net Proft to the Capital Account)			63,000

    TRADING ACCOUNT OF SHAMIT for the year ended 31st March, 2019

    Dr.			Cr.
    Particulars		₹	Particulars	₹
    To Stock		20,000	By Sales	5,00,000
    To Purchases		1,50,000	By Closing Stock	27,000
    To Wages		1,00,000
    To Power and Fuel		30,000
    To Factory Lighting		2,000
    To Gross  Profit c/d		2,25,000
    (Transferred to Profit and Loss A/c)
    		5,27,000		5,27,000

    PROFIT AND LOSS ACCOUNT OF SHAMIT
    for the year ended 31st March, 2019

    Dr.				Cr.
    Particulars		₹	Particulars	₹
    To Salaries		70,000	By Gross Profit	2,25,000
    To Discount Allowed		5,000	By Discount Received	3,000
    To Advertising		50,000
    To Sundry Office Expenses		40,000
    To Net Profit		63,000
    (Transferred to Capital A/c)
    		2,28,000		2,28,000

    OR

    Trading & Profit and Loss A/c 

    Particulars	Amount (Rs)	Particulars	Amount (Rs)
    To Opening Stock	5,000	By Sales	17,000
    To Purchase	10,000	By Closing Stock	10,000
    To Wages	3,000
    To Gross Profit c/d	9,000
    	27,000 =======		27,000 ======
    To Interest	200	By Gross Profit b/d	9,000
    To Office Expense	2,500	By Interest	600
    To Salaries	2,000
    To Rent, rates and taxes	800
    To Depreciation	1,000
    To Repairs	300
    To Bad Debts	500
    To Net Profit	2,300
    	9,600 ======		9,600 ======

    Balance Sheet 

    Liabilities		Amount (Rs)	Assets	Amount (Rs)
    Capital	25,000		Debtors	1,500
    Add Net Profit	2,300		Stock	10,000
    Less Drawings	2,000	25,300	Plant & Machinery	5,700
    			Furniture & Fixture	1,500
    Creditors		7,000	Bills Receivables	2,000
    Bills Payable		400	Land & Building	10,000
    			Cash	1,600
    			Bank	400
    		32,700 =======		32,700 ======

    In order to arrive at the balance sheet of a business, one needs to prepare the trading account and profit and loss account first. This account is prepared to arrive at the figure of revenue earned or loss incurred during a period.

36. Trading Account of Mr. Alok
    for the year ended March 31, 2019

    Dr.			Cr.
    Particulars		Amount (₹)	Particulars		Amount (₹)
    To Opening Stock		44,840	By Sales	1,78,215
    To Purchases		1,28,295	Less: Return Inwards	2,390	1,75,825
    To Wages	20,485		By Closing Stock		64,480
    Less: Erection Charges of New Machinery	600	19,885
    To Gross Profit (Balancing Figure)		47,285
    		2,40,305			2,40,305

    Profit and Loss Account of Mr. Alok
    for the year ended March 31, 2019

    Dr.			Cr.
    Particulars		Amount (₹)	Particulars		Amount (₹)
    To Depreciation:			By Gross Profit		47,285
    Machinery	750		By Commission	2,820
    Furniture	448	1,198	Less: Comm. Received in advance	300	2,520
    To Old Bad Debts	1,810
    Add: Further Bad Debts	500
    Add: New Provision	1,450	3,760
    To Rent		2,810
    To Interest on Loan	500
    Add: Outstanding	300	800
    To Salaries		5,500
    To Travelling Expenses		945
    To Insurance		200
    To Repairs		1,685
    To Discount Allowed		2,435
    To Net Profit (Balancing Figure)		30,472
    		49,805			49,805

    Balance Sheet of Mr. Alok
    as at March 31, 2019

    Liabilities		Amount (₹)	Assets		Amount (₹)
    Capital	59,700		Fixed Assets
    Add: Net Profit	30,472		Machinery	14,400
    Less: Drawings	5,275	84,897	Add: Erection charges	600
    8% Loan		10,000	Less: Depreciation	750	14,250
    Current Liabilities			Furniture	4,480
    Creditors		29,815	Less: Depreciation	448	4,032
    Outstanding Interest		300	Current Assets
    Commission received in advance		300	Closing Stock		64,480
    			Bills receivables		4,750
    			Debtors	30,000
    			Less: Bad Debts	500
    			Less: Pro. for Doubtful Debts	1,450	28,050
    			Cash in Hand		9,750
    		1,25,312			1,25,312

    Working Note:-
    Calculation of Depreciation:-
    Depreciation of Machinery = ₹14,400 + ₹600 {tex}\times {/tex} 5% = ₹  750
    Calculation of Provision for Doubtful debts:-
    Provision for doubtful debts = Sundry Debtors – Further Bad debts – Amount recovered {tex}\times {/tex} Rate
    Provision for doubtful debts = (₹30,000 – ₹500 – ₹500) {tex}\times{/tex} 5%
    Provision for doubtful debts = ₹1,450
    When adjustments are given in trial balance all the adjustments will be taken in the balance sheet only. Adjustments that are given after trial balance will be shown both in trading and profit and loss account and balance sheet.
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    OR

    The Trading and Profit and Loss account & Balance Sheet of MMN will be prepared in the following manner :

    Trading and Profit and loss Account
    for the year ended 31st December, 2013

    Dr					Cr
    Particulars		Amt(Rs)	Particulars		Amt(Rs)
    To Opening Stock		26,420	By Sales	91,230
    To purchases	42,160		Less : Sales Return	(1,760)	89,470
    Less : Purchases Return	(8,460)	33,700	By Closing Stock		29,390
    To Wages		21,470
    To Carriage Inwards		4,370
    To Coal, Gas and Water		720
    To Gross Profit transferred to Profit & Loss A/c		32,180
    		1,18,860			1,18,860
    To Salaries		4,670	By Gross Profit b/d		32,180
    To Bank Charges		140	By Discount		120
    To Rates and Taxes	840		By Apprentice Premium(note 1)	500
    (-)Prepaid rates & taxes	(240)	600	(-)Unexpired Premium	(400)	100
    To Trade Expenses		1,990	By Old Provision for Doubtful Debts		2,470
    To Fire Insurance	490
    (-)Prepaid insurance	(125)	365
    To Provision for Doubtful Debts
    To Depreciation on
    Land and Building	625
    Plant and Machinery	1,427
    Furniture and fixtures	125	2,177
    To Net Profit Transferred to Capital A/c		23,038
    		34,870			34,870

    Balance Sheet
    as at 31st December,2013

    Liabilities		Amt(Rs)	Assets		Amt(Rs)
    Sundry Creditors		12,170	Land and Building	25,000
    Apprentice Premium Received in Advance		400	(-)Depreciation	(625)	24,375
    Capital	90,000		Plant and Machinery	14,270
    (+)Net Profit	23,038		(-)Depreciation	(1,427)	12,843
    	1,13,038		Furniture and Fixtures	1,250
    (-)Drawings	6,480	1,06,558	(-)Depreciation	(125)	1,125
    Opening Balance	10,000		Debtors	37,800
    (-)Drawings	4,452		(-)Provision for Doubtful Debts	(1,890)	25,910
    	5,548		Bills Receivable		1,270
    (+)Net Profit gtransferred from Profit & Loss A/c	37,666	43,214	Closing Stock		29,390
    			Cash at Bank		13,000
    			Cash in Hand		850
    			Prepaid fire insurance		125
    			Prepaid Rates and Taxes		240
    		1,19,128			1,19,128

    Note :
    1. Apprenticeship premium is a revenue income of the business. Unearned premium means, premium received in advance. Thus, it has been deducted from the income received. The amount of unearned premium will be shown in the liability side of Balance sheet.

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