Accommodation of Bill

Q.

Prepare a trading account for the year ended 31st March, 2016 from the following balances.

$\begin{array}{cccc}\text{Account Title}& \text{Amt. (Rs.)}& \text{Account Title}& \text{Amt. (Rs.)}\\ \text{Opening stock}& 80,000& \text{Purchases return}& 24,000\\ \text{Purchases}& 4,00,000& \text{Sales return}& 40,000\\ \text{Sales}& 10,00,000& \text{Carriage on purchases}& 16,000\\ \text{Freight and octroi}& 13,000& \text{Carriage on sales}& 20,000\\ \text{Wages}& 60,000& \text{Factory rent}& 24,000\\ \text{Factory lighting}& 21,600& \text{Office rent}& 15,000\\ \text{Coal, gas and water}& 4,400& \text{Import duty}& 64,000\end{array}$

Closing stock is valued at Rs. 1, 20, 000.

Q.

Enter the following transactions in a simple cash book for December 2010

$\begin{array}{ccc}& & \text{Rs.}\\ 1& \text{Cash in hand}& \text{12, 000}\\ 5& \text{Cash received from Bhanu}& \text{4, 000}\\ 7& \text{Rent paid}& \text{2, 000}\\ 10& \text{Purchased goods from Murari for cash}& \text{6, 000}\\ 15& \text{Sold goods for cash}& \text{9, 000}\\ 18& \text{Purchase stationery}& \text{300}\\ 22& \text{Cash paid to Rahul on account}& \text{2, 000}\\ 28& \text{Paid salary}& \text{1, 000}\\ 30& \text{Paid rent}& \text{500}\end{array}$

Q.

Give the journal entries for the following adjustments-

(a)Outstanding salary Rs. 3, 500.

(b)Rent unpaid for one month at Rs. 6, 000 per annum.

(c)Insurance prepaid for a quarter at Rs. 16, 000 per annum.

(d)Purchase of furniture costing Rs. 7, 000 entered in the purchase book.

Q.

The purpose of accommodation bill is-

1. To raise finance.

2. None of the above

3. To finance actual purchase or sale of goods.

4. To facilitate trade transmission

Q.

Agra Club has 300 members each paying annual subscription of Rs 150 each. In the year 2012 it received Rs 42, 500 on account of subscription which included Rs 5, 000 for the year 2013 and Rs 2, 500 for the year 2011. Find the amount of Subscription outstanding at the end of the year 2012

Q.

Enter the following transactions in purchase book of M/s Ram Singh and pass the journal entry showing effect of all the transactions.

$\begin{array}{cc}2016& \\ \text{Jan 1}& \text{Purchased goods from Vansh Brothers on credit vide Invoice No.210;}\\ & \text{10 Philips tubelights @ Rs 40 each, paid GST @ 10 \%}\\ & \text{50 Crompton bulbs @ Rs 10 each, paid GST @ 10 \%}\\ \text{Jan 10}& \text{Purchased goods from Mayur Electric Store vide Invoice No.18;}\\ & \text{25 Heaters @ Rs 160 each, paid GST @ 10\%}\\ & \text{15 Sunny fans @ Rs 600 each, paid GST @ 10\%, 10\% trade discount,}\\ \text{Jan 16}& \text{Purchased goods from Ganpat Electric Store vide Invoice No. 125};\\ & \text{5 Dozen Philips bulbs @ Rs 10 each, paid GGST @ 10\%}\\ & \text{20 power plugs @ Rs 25 each, paid GST @ 10\%}\\ & \text{The trade discount is 10\% and feight charges are Rs 75.}\end{array}$

Note Here, we have taken the assumed rate of GST.

Q.

A drew a bill on B for Rs. 50, 000 for 3 months. Proceeds are to be shared equally. A got the bill discounted at 12% p.a. and remits required proceeds to B. The amount of such remittance for A & B will be:

1. Rs. 25, 000 each

2. Rs. 24, 250 each

3. Rs. 16, 167 each

4. Rs. 32, 333 each

Q.

A draws a bill on B for Rs. 4, 500 for mutual accommodation in the ratio 2:1. A got it discounted at Rs. 4, 230 and remitted 1/3rd of the proceeds to B. At the time of maturity, how much amount A should remit to B such that B can pay off bill?

1. Rs. 2, 880

2. Rs. 3, 000

3. Rs. 2, 920

4. None of the above

Q.

Calculate the amount which will be posted to income and expenditure account for the year ending 31st March, 2012.

$\begin{array}{cc}& \text{(Rs)}\\ \text{Opening stock of medicines on 1.4.2011}& 62,000\\ \text{Opening creditors of medicines on 1.4.2011}& 25,000\\ \text{Amount of advance payment for medicines on 1.4.2011}& 11,500\\ \text{Cash purchase of medicines during the year}& 3,70,000\\ \text{Closing stock of medicines on 31.3.2012}& 54,000\\ \text{Closing creditors of medicines on 31.3.2012}& 17,000\\ \text{Amount of advance payment for medicines on 31.3.2012}& 18,200\end{array}$

Q.

The purpose of accommodation bill is :

1. To finance actual purchase or sale of goods

2. To facilitate trade transmission

3. When any one or both parties are in need of funds

4. None of the above

Q.

Rectify the following errors.

(i) A credit purchases of Rs. 3, 120 from Vihan was passed in the books as Rs. 4, 200.

(ii) Goods (cost Rs. 2, 500 sales price Rs. 3, 000) distributed as free samples among prospective customers were not recorded.

(iii) Wages paid to the firm's workmen for making additions to machinery to Rs. 1, 050 were debited to the wages account.

Q.

On 1st January, 2016 A sold goods for Rs. 60, 000 to S. $50\%$ of the payment was made immediately by S on which A allowed a cash discount of $2\%$. For the balance, S drew a promissory note in favour of A payable after 20 days. Since, the date of maturity of bill was a public holiday, A presented the bill on a day, as per the provisions of Negotiable Instrument Act which was met by S. State the date on which the bill was presented by A for payment and journalise the above transactions in the books of A.

Q.

Accomodation bills are drawn, accepted & endorsed …

1. None of the above

2. For some consideration

3. Without any consideration

4. For half consideration

Q.

Calculate amount of medicine consumed for the year 2012.

Opening Stock of Medicines 10, 000 Rs

Opening Creditors of Medicines 9, 000 Rs

Cash Purchase of Medicines during the year 30, 000 Rs

Closing Stock of Medicines 15, 000 Rs

Closing Creditors of Medicines 3, 000 Rs

Q.

Enter the following transactions in sales (journal) book of M/s. Bansal electronics :

01 Sold to Amit Traders as per bill no. 4321
20 Pocket Radio @ 70 per Radio
2 T.V. sets, B & W @ 800 per T.V.

10 Sold to Arun Electronics as per bill no. 4351
5 T.V. sets B & W @ Rs. 3, 000 per T.V.
2 T.V. sets Colour @ Rs. 4, 800 per T.V.

22 Sold to Handa Electronics as per bill no. 4399
10 Tape recorders @ Rs 600 each
5 Walkman @ Rs 300 each

28 Sold to Harish Traders as per bill no. 4430
10 Mixer Juicer Grinder @ Rs 800 each.

Q.

TU Limited purchased a crane for Rs. 11, 75, 000 and spend Rs. 50, 000 for its registration on 1st January, 2013. Depreciation is charged @ 10 % per annum, WDV method. The crane is sold for Rs. 7, 00, 000 on 31st March, 2016. Assuming that TU Limited follows the financial year, prepare crane account for the relevant period.

Q.

Lara draws an accommodation bill on Sachin. The proceeds are to be borne between Sachin and Lara in the ratio of 3:1. The amount of bill Rs. 6, 000, discounting charges Rs. 120. Discount borne by Sachin will be:

1. Rs. 90

2. Rs.120

3. Rs. 100

4. None of the above

Q.

Cash book of XYZ Ltd. shows a payment called 'Travel Expense'. However, this travel was a personal travel of the managing director with no relation to business. Do you think this is right?

Q. The proceeds of the accommodation bill is shared among the drawer and drawee in the agreed ratio.

1. True
2. False

Q. Accommodation bills are drawn, accepted and endorsed without any consideration.

1. False
2. True

Q. The purpose of accommodation bill is to raise finance.

1. True
2. False

Q.

Who gets the proceeds of the accomodation bill ?

1. Drawer of the bill

2. Drawee of the bill

3. Drawer & drawee in the agreed ratio

4. None of the above