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QUESTION PAPER

COMMERCE, PAPER – II

MARCH – 2007
Time: 3 Hours] [Max. Marks: 100

PART – A
(Marks: 50)

I. Answer any two questions from the following not exceeding 40 lines each
2 x 10 = 20
(a) Explain the services rendered by Retail Traders.
(b) What is Consumerism ? Explain the reasons for slow development of Consumer
movement in India.
(c) Define Stock Exchange. Explain the functions of Stock Exchange.

II. Answer any Four of the following questions, in not exceeding 20 lines each.
4 x 5 = 20
(a) Explain any five principles of Insurance.
(b) Mention the negative (adverse) effects of Advertisement.
(c) Explain the advantages of Foreign Trade.
(d) Explain the differences between Speculation and Gambling.
(e) Mention the functions of Managers.
(f) Explain the advantages of Computers.

III. Answer any Five of the following questions, in not exceeding 5 lines each
5 x 2 = 10
(a) Endowment policy.
(b) E- commerce
(c) Give any four names of advertising media.
(d) Mention the jurisdiction of National Commission.
(e) Bounty
(f) Ex-dividend
(g) Attitude
(h) Mention any 3 input devices of Computer.
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PART – B
(Marks – 50)

IV. Answer the following questions :

1 x 20 = 20
Pinky and Rinku both are partners in a partnership firm. Their profit sharing
ratio is 3 : 2. Their balance sheet as on 31-12-2006 is given below .
Liabilities Amount Rs. Assets Amount
Rs.
Creditors 50,000 Cash 5,000
Bills payable 1,60,000 Debtors 1,95,000
General Reserve 90,000 Stock 1,25,000
Capital Furniture 50,000
Pinky 1,50,000 Buildings 1,50,000
Rinku 75,000 2,25,000
5,25,000 5,25,000

They admitted Tinku as new partner into partnership by giving him ¼ share on the
following terms.
1. Tinku should bring in cash Rs.50,000 for Capital and Rs.50,000 for Goodwill.
2. Goodwill shall be withdrawn by old partners.
3. The value of buildings be appreciated by 10%.
4. Furniture and Stock is to be reduced by 5%.
5. Provision for doubtful debts to be provided by Rs.5,250.
Prepare necessary ledger accounts and show the opening balance sheet of the new
firm.

V. Answer any One of the following questions.

1 x 10 = 10
(a) Mahesh of Medak consigned 250 cases of medicines to Ameerkhan of Hyderabad. The
cost of each case is Rs.300. But the invoice price is Rs.400 per case. Mahesh paid
Rs.2,500 towards expenses. He received a bill of Rs.20,000 as advance from consignee.
Consignee sold 200 cases @ 400 for each case. Consignee expenses are Rs.1,000 and
his commission is 5%. Prepare necessary accounts in the books of Mahesh.
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(OR)
(b) From the following information, prepare income & expenditure account of
Vishakha Sports Club for the year ending 31-3-2006.
Receipts Amount Payments Amount
Rs. Rs.
To Balance b/d 2,400 By Salaries 13,000
To Subscription (including By Rent paid 2,400
Rs.800 for previous year) 12,800
To Interest on Investments 5,000 By Stationery 360
To Bank Interest 100 By Postage 100
To Furniture Sales 1,000 By Cycle purchased 1,600
By Govt. Bonds 2,000
By Balance c/d 1,840
21,300 21,300

Adjustments :
1. Subscription receivable for the current year Rs.200
2. Outstanding salaries Rs.500.
3. Rent paid included for previous year Rs.100
4. Book value of furniture sold is Rs.1,200

VI. Answer any Five of the following questions.

5 x 2 = 10
(a) Parties to Bill of exchange.
(b) Write the Principle of annual depreciation in Fixed Installment Method.
(c) Red-ink interest.
(d) Proforma invoice.
(e) Write the principle of calculating interest by product method.
(f) Rectify the following errors.
(i) Commission received Rs.75, credited as Rs.57 in commission account.
(ii) Purchase of furniture : Rs.5,000; debited to the Purchase account.
(g) Revenue Expenditure.
(h) X and Y are partners in a firm. Their profits sharing ratio is 4 :3. They admitted Z as new
partner by giving him 1/8 share. Calculate the new profit sharing ratio of X, Y and Z.

VII. Answer any Two of the following questions .

2 x 5 = 10
(a) Explain the various types of Errors.
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(b) X sold goods of worth Rs.10,000 to Y on 1-1-2006. Immediately he has drawn 3 months
bill on Y, and the Y accepted the Bill. On the same day, X discounted the bill for 6%
discount in the bank. On the due date, bill was dishonured by Y. Noting charges are
Rs.50. Pass journal entries in the books of X.
(c) A firm purchased machinery worth of Rs.50,000 on January 1, 95. Its installation and
transport charges are Rs.5,000. Calculate depreciation @ 10% per annum under Fixed
Installment method. Show the machinery account for first five years.
(d) From the following particulars, calculate Average Due Date.
Date of Bill Term of the bill Bill amount Rs.
Jan 5 2 months 1,000
Feb 15 1 month 2,000
March 20 2 months 500
April 25 1 month 1,500