FACULTY OF COMMERCE

Department of Accountancy & Law

VAC: 101-Fundamental of Accounting & Finance
B.Voc Programme
QUESTION BANK (Session 2018-19)

Syllabus:

Unit – I

Meaning, Objects and Importance of Accounting, Accounting Concepts & Conventions, Double
Entry System, Types of Accounting- Financial Accounting, Cost Accounting and Management
Accounting etc.

Unit – II

Journal, Ledger, Trial Balance and Subsidiary Books-Concept and Preparations, Bank
reconciliation system, Income and expenses- Capital and Revenue, Provisions and Reserves,
Deprecaitaion( Fixed installment and written down value method)

Unit – III

Trading Account, Profit & Loss Account and Balance Sheet, cash flow statement and fund flow
statement, Introduction to tally software

Unit –IV: Budget and Budgeting process

Meaning of Budget, Budgetary process, Types of preparations of financial and operational budgets

Unit – V: Sources of Finance

Short, Medium and long term business finance and their use, sources of finance, Institutional
financing, special financial assistance available to industries in rural and backward areas.

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UNIT –I

1. What do you mean by the term ‘accounting’? Explain the process of accounting.
2. Explain the importance of accounting.Discuss the classifications of accounts.
3. What is book-keeping? Explain.
4. Define Double entry system and explain its merits.
5.Explain the merits and demerits of double entry system.
6. Explain the meaning and objectives of accounting.
7. What is accounting? Explain its merit and demerits.
8.What do you mean by accounting concepts? Explain different concepts of accounting with the help
of examples.
9.Discuss the various accounting conventions with the help of examples.
10. Write short note on any two:
 Conservatism Convention of accounting
 Disclosure Conventions of accounting

11. Explain the following

 Accounting period concept of accounting
 Separate entity concept of accounting

UNIT –II
1 What do you mean by Journal? Explain the rules of recording transactions in journal.
2 Explain the rules of journalizing.
3 Define Ledger? Explain how posting of trasanctions from journal to ledger is done?
4 What is Journal proper? What records are made in it?
5 What is cash book? States its various types.
6 Explain the Subsidiary books and their advantages.
7 What do you mean by trial balance? Explain the objectives and methods of trial balance.
8 Why trial balance is prepared? Why is it necessary to prepare?
9 What do you mean by Bank Reconciliation Statement? Why and when it is prepared?
10 What do you mean by Bank Reconciliation Statement? What are the causes for disagreement of
balances of Cash Book and Pass Book?
11 What is the meaning of Reserve? Explain the different kinds of Reserve.
12 State the meaning of capital expenditure and revenue expenditure. What is the difference between
them?
13 Differentiate the capital receipts and revenue receipts. Explain with examples.
14. What is Depreciation? What are the causes of depreciation?
15. What is straight line depreciation in accounting?
16. What is the diminishing method of depreciation?
17. What is difference etween straight line and diminishing method of depriciation

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18. Record the following transactions in the Journal

1 Oct. 2017 Started business with cash Rs. 12000

2 " Cash Purchase Rs. 5000
6 " Cash Sales Rs. 500
10 " Purchase on Credit from SohanLal Rs. 600
15 " Sales on Credit to Kishan Rs. 3100
19 " Cash received from Kishan Rs. 2000
25 " Furniture Purchased Rs. 1150
31 " Salary Paid Rs. 350
31 " Rent Paid Rs. 250
19. Prepare the journal
On 1st January, 2018Rakesh started business by Rs. 5000, Following are transactions for the
month of January.

2018 Rs.
1 Jan Cash Purchases 2000
9 “ Sold to Murari 800
10 “ Purchased from Kewal Das 500
12 “ Cash Sales 700
18 “ Goods returned from Murari 50
20 “ Goods returned to Kewal Das 20
24 “ Cash purchases from Prem 1000
26 “ Total payment to Kewal Das 470
28 “ Received from Murari 730
28 “ Telephone Expenses Paid 20
31 “ Salaries paid 40
31 “ Shop Rent 30
31 “ Withdrawn for personal use 100

20. Prepare Journal with the help of following information:

2017 Particular Rs.

Dec. 1 Business started with cash 20000
“ 3 Open Bank account with cash 4000
“ 5 Purchase of goods for cash 2000
“ 8 Sale of goods for cash 5000
“ 10 Purchase furniture on credit from Mahesh 3000
“ 14 Salary paid to Mohan for the month of March 1000
“ 18 Cash withdrawn by owner for personal use 500
“ 20 Rent paid by cheque k 700
“ 21 Interest Paid 200
“ 30 Goods sold to Ramesh on credit 600

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21. Record following transactions in the Journal of M/s PremChanda& Co.

2017 Particular Rs.

Aug. 1 Commenced business in Cash 15000
3 Purchased goods in credit from Gopal 5000
“ 5 Purchased goods in cash 2000
“ 8 Goods sold to Ramesh 1500
“ 10 Paid for Stationery 700
“ 14 Paid salaries 2500
“ 18 Drew cash for personal use 500
“ 20 Paid rent 200
“ 21 Goods sold for cash 450
“ 30 Bought goods for cash 600

Unit – III

1. What is a trading account in accounting? Discuss its item of debits side and credit side with
specimen.
2. What is meant by profit and loss account? When and why is it prepared?
3. What is the purpose of the trading and profit and loss account?
4. What is a balance sheet? State its significance
5. What are the items included in profit and loss account?
6. What is difference between P&L and balance sheet?
7. What is an asset? Explain its types (Classification).
8. What do you mean by liability? Explain its different types.
9. What is profit and loss account? Explain the items of debit side and items of credit si
10. From the following balances extracted from the books of X & Co., prepare a trading and profit
and loss account and balance sheet on 31st December, 2017. Stock on 1st January 11,000 Returns
outwards 500 Bills receivables 4,500 Trade expenses 200 Purchases 39,000 Office fixtures 1,000
Wages 2,800 Cash in hand 500 Insurance 700 Cash at bank 4,750 Sundry debtors 30,000 Tent and
taxes 1,100 Carriage inwards 800 Carriage outwards 1,450 Commission (Dr.) 800 Sales 60,000
Interest on capital 700 Bills payable 3,000 Stationary 450 Creditors 19,650 Returns inwards 1,300
Capital 17,900

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11. From the following information, prepare a Trading Account of M/s. ABC Traders for the year
ended March 31, 2017:
Opening Stock 100000
Purchases 6,72,000
Carriage Inwards 30,000
Wages 50,000
Sales 11,00,000
Returns inward 1,00,000
Returns outward 72,000
Closing stock 2,00,000
Ans: Gross Profit 4,20,000
12. Revenue expenses and gross profit balances of M/s ABC Traders for the year ended on March
31, 2015 were as follows: Gross Profit Rs. 4,20,000, Salaries Rs. 1,10,000, Discount (Cr.), Rs.
18,000,Discount (Dr.) Rs. 19,000, Bad Debts Rs. 17,000, Depreciation Rs. 65,000, Legal Charges Rs.
25,000, Consultancy Fees Rs. 32,000, Audit Fees Rs. 1,000, Electricity Charges Rs. 17,000,
Telephone, Postage and Telegrams Rs. 12,000, Stationery Rs. 27,000, Interest paid on Loans Rs.
70,000. Prepare Profit and Loss Account of M/s ABC Traders for the year ended on March 31,
2015.Ans: Net Profit -43,000
13. Prepare Trading and Profit and Loss a/c from the following figures which were taken from the
books of Ratan Chand & Bros. as on 31st March 2016:
Particular Rs.
Opening Stock 3,000
Salaries 575
Wages 125
Purchases 7,825
Trade Expenses 345
Advertisement 250
Bad debts 115
Rent, Rates & Insurance 400
Postage 25
Gas & Water 215
Sales 12,850
Purchase Returns 1,650
Rent Received 50
Repairs 65
Interest Paid 160
Closing Stock 2,835

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14. Following is the trial balance of M/s Gyanchand& Sons as on 31st March 2016. Prepare their
final accounts:
Credit
Name of Accounts
Debit (Rs.) (Rs.)
Purchases 16,000
Discount Received 1,000
Wages 6,500
Sales 30,000
Returns 200 300
Salaries 2,000
Travelling Expenses 500
Carriage Inward 300
Insurance 100
Commission 300
Rent and Taxes 500
Cash in Hand 100
Cash at Bank 2,700
Bad debts 300
Building 4,000
Machinery 2,000
Opening Stock 5,800
Capital 12,000
Debtors and Creditors 4,000 2,000
45,300 45300
Closing Stock as on 31st March 2016 was Rs. 6,000
15. Prepare final accounts from the trial balance of Anis Trading Co. as on 31st March 2016. Their
trial balance is as follow:
Credit
Name of Accounts
Debit (Rs.) (Rs.)
Sales 15,000
Purchases 10,000
Machinery 5,000
Tools 2,000
Building 7,000
Loan 5,000
Cash in hand 500
Cash at Bank 10,000
Opening Stock 7,000
Printing Expenses 50
Wages 100
Repairs 70
Salaries 230
Sundry Debtors 4,000
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 Discount 100 150
Rent and Taxes 50
Carriage on Purchases 50
General Expenses 100
Coal and Gas 200
Capital 22,300
Sundry Creditors 4,000
Total 46,450 46,450
Closing stock Rs. 5,000
16. What is a cash flow statement? What are the objectives of preparing cash flow statement?
17. What is the main purpose of cash flow statements?
18. What are the different components of cash flows?
19. What items are included in operating activities?
20. What are investment activities in cash flow statement?
21. What is a fund flow statement? Why should a business prepare it?
22. What is a Cash Flow Statement? How is it different from a funds flow statement?

Unit - IV
1 ExplainBudget? What are its Characteristics?
2. Discuss the meaning and purpose of Budget?
3 What are the steps involved in formulation of the budget ?
4. What are the various types of Budget? Explain any three in detail7
5. What is cash budgetand how is it prepared?
6. Discuss fixed and flexible budget. How is flexible budget prepared?
7. What is flexible budget? How is it useful for an industry?
8. Explain fixed budget, Flexible and Operational budget?
9. Write short notes on
 Production Budegt
 Sales Budget
 Cash Budget

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10. Prepare a budget for production of 600 units and 800 units assuming administrative expenses are
rigid for all level of production

The expenses budgeted for production of 1,000 units in a factory is furnished below:
Particulars Per Unit
Material Cost 700
Labour Cost 250
Variable overheads 200
Selling expenses (20% fixed) 130
Administrative expenses (Rs. 2,00,000) 200
Total Cost 1,480

11. S. K. Brothers wish to approach the bankers for temporary overdraft facility for the period from
October 2017 to December 2017. During the period of this period of these three months, the firm
will be manufacturing mostly for stock. You are required to prepare a cash budget for the above
period
Month Sales (Rs.) Purchases (Rs.) Wages (Rs.)

August 3,60,000 2,49,600 24,000

September 3,84,000 2,88,000 28,000
October 2,16,000 4,86,000 22,000
November 3,48,000 4,92,000 20,000
December 2,52,000 5,36,000 30,000

 50% of credit sales are realized in the month following the sales and remaining 50% in
the second following.
 Creditors are paid in the month following the month of purchase
 Estimated cash as on 1‐10‐2017 is Rs.50,000.

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Unit – V
1 What do you mean by the term ‘businessfinance’? Explain its types.
2 Whatis short term, medium term and long term business financing?
3. What are the different sources of finance in business?
4. Discuss the importance of finance in business?
5. Explain the various long term sources of finance?
6. Explain the various short term sources of finance?
7. Discuss the various uses of business finance by large corportations.
8. What do you mean by financial institutions? Discuss about any three financial institutions which
provide business finance.
9.What measures have the Government taken to providefinancial assistance available to industries in
rural and backward areas?
10. What do you mean by share and debentures? Explain different types of shares?

Suggested Readings:
 Batiliboi JR: ADVANCED ACCOUNTS  ShuklaMC &Grewal TS: ADVANCED
 Gupta SP &Arjun Das: ADVANCED ACCOUNTS
ACCOUNTANCY  Gupta RL: ADVANCED ACCOUNT
 Shukla SM: ADVANCED  Gupta S.P: MANAGEMENT
ACCOUNTANCY ACCOUNTING
 Gupta RR: ADVANCED  Shukla S.M: FINANCIAL
ACCOUNTANCY ACCOUNTING
 Kishore & Ravi: COST AND MANAGEMENT ACCOUNTING
 Arora M.N.: COST AND MANAGEMENT ACCOUNTING
 Gupta SP: FINANCIAL MANAGEMENT
 Prasan Chandra: FINANCIAL MANAGEMENT
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