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QUESTION PAPER

COMMERCE, PAPER – II

MARCH – 2005
Time: 3 Hours] [Max. Marks: 100

PART – A
(Marks: 50)

I. Answer any TWO of the following questions not exceeding 40

lines each:
2 x 10 = 20

(a) Explain the services rendered by wholesaler to manufacturers, retailer and

society.

(b) Explain the machinery established to protect the consumer rights at various
levels.

(c) What is “Listing”? What are the requirements of listing?

II. Answer any FOUR of the following questions not

exceeding 20 lines each:
4 x 5 = 20

(a) Explain the differences between Life Insurance & Fire Insurance.
(b) What are the advantages and disadvantages of Television advertising?
(c) Explain the differences between Customs duty and Excise duty.
(d) Explain any five functions of Stock Exchange.
(e) What are the characteristics of a successful entrepreneur?
(f) Explain the advantages of Computer.

III. Answer any FIVE of the following questions not exceeding

5 lines each:
5 x 2 = 10

(a) Voyage policy

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(b) Bonded warehouses

(c) Show any two demerits of Advertising
(d) What are the reasons for the backwardness of Consumer movement in India?
(e) Bill of lading
(f) Ex-dividend
(g) Personality
(h) E- Commerce

PART – B
(Marks: 50)

IV. Answer the following question: 1 X 20 = 20

Rao, Reddy & Naidu are the partners in a firm sharing profits f& losses in the
ratio of 3:2:1. Their Balance Sheet as on 31-12-2006:

Balance Sheet as on 31-12-2006

Liabilities Rs. Assets Rs.
Creditors 34,000 Cash in hand 24,000
Reserve Fund 6,000 Cash at Bank 16,000
Capitals: Debtors 40,000
Rao 1,60,000 Stock of goods 80,000
Reddy 1,20,000 Machinery 60,000
Naidu 80,000 3,60,000 Buildings 1,80,000
4,00,000 4,00,000

Naidu retired from the firm on the following conditions:

(a) Goodwill of the firm be valued at Rs.30, 000

(b) Buildings will be appreciated by 20%
(c) Machinery is depreciated by 10%, and stock is depreciated by 5%
(d) Create 5% provision for doubtful debts on debtors.
Pass necessary entries, necessary ledger accounts and prepare New Balance
Sheet of the firm as on 1-1-2006.

V. Answer any ONE of the following questions: 1 X 10 = 10

(a) Baswaraj of Bhadrachalam consigned 200 calculators costing Rs.400 each to

Vijayender Reddy of Vidyanagar at an invoice price of Rs.500 each. He paid
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carriage Rs.600 and insurance Rs.400, Vijayender Reddy sent an Account

sales showing that he sold 150 claculators for Rs.600 each and his expenses
are Rs.800 and commission 5%. He deducted them and sent the Bank Draft
for the balance. Show the necessary ledger accounts in the books of
Baswaraj.

(b) From the following Receipts and Payments a/c. of Tendulkar Sports Club of
Hyderabad, prepare Income and Expenditure account for the year ended on
31-12-2006.

Receipts and Payments a/c for the year ended on 31-12-2006

Receipts Rs. Payments Rs.
To Subscriptions 10,500 By Tournament Expenses 6,800
(including Rs.500 for 2007)
To Tournament receipts 8,000 By Staff Salaries 4,400
To Entrance fees 2,000 By Rent 1,200
To Interest on investment 800 By Gardening 500
To Sale of grass 400 By Investments 4,000
By Balance c/d 4,800
21,700 21,700

Adjustments:
(1) Subscriptions receivable for 2006 Rs.1, 000
(2) Outstanding salaries Rs.600
(3) ½ of the entrance fees to be capitalized.

VI.Answer any FIVE of the following questions:

5 X 2 = 10

(a) Renewal of Bill

(b) Cost of the Machine Rs.18,000, Installation charges Rs.3,000, Scrap value
Rs.1, 000, Life Period of Machinery 10 years. Calculate Annual Depreciation.

(c) What is Average due date?

(d) Balance of Products 2,16,500. Rate of interest 5%. Calculate interest in

products method.

(e) Write the differences between Consignment & Sale.

(f) Write any two errors disclosed by Trial Balance.

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(g) Calculate the capital fund of Udatabhanu Trust from the following balances as
on 31-3-2006:

Buildings Rs.35, 000

Outstanding subscriptions Rs.800
Prepaid Insurance Rs.400
Reserve Fund Rs.3, 000
Outstanding Salaries Rs.1, 800

(h) Swetha & Swathi are the partners sharing the profits in the ratio of 3:2. They
admitted Sneha for ¼ share in the business. Calculate new profit sharing
ratio of the partners.

VII. Answer any TWO of the following

2 x 5 = 10

(a) Rectify the following errors:

(i) Amount received from Mamatha Rs.1, 500, entered in Samatha Account.
(ii) Purchase book is undercast by Rs.400
(iii) Goods purchased from Gopikrishna on credit Rs.2, 400 was entered in
the books as Rs.4, 200.

(iv) Amount paid for repairs to machinery Rs.600 was entered in Salaries
Account.

(v) Salaries paid to Shriya Rs.4, 000 entered in her personal account.

(b) Pavithra sold goods to Sandhya on credit worth Rs.6,000 on 1-7-2006 and
draws a 3 months bill on her. After one month she discounted the bill with her
bank @ 5%. On the due date the bill was dishonoured. Pass the entries in
the books of both parties.

(c) What is depreciation? Explain the causes for depreciation.

(d) From the following transactions calculate the Average due date.

Due Date Amount Rs.

10-2-2006 500
16-3-2006 400
2-4-2006 600
28-4-2006 800
5-5-2006 700
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