Finding Cash Balance

Q. Show the effect of the following transactions on the Accounting Equation:
(i) Started business with cash ₹ 50, 000.
(ii) Salaries paid ₹ 2, 000.
(iii) Wages Outstanding ₹ 200.
(iv) Interest due but not paid ₹ 100.
(v) Rent paid in advance ₹ 150.

Q. Show the Accounting Equation on the basis of the following transactions and present a Balance Sheet on the last new equation balance:

		₹
(i)	Raj commenced business with cash	70, 000
(ii)	Purchased goods on credit	14, 000
(iii)	Withdrew for Private use	1, 700
(iv)	Goods purchased for cash	10, 000
(v)	Paid wages	300
(vi) (vii) (viii) (ix)	Paid to creditors Sold goods on credit for Sold goods for cash (cost price was Purchased motorcycle for cash ₹ 3, 000) Purchased furniture for	10, 000 15, 000 4, 000 ​ ​500

Q.

What are preliminary expenses?

Q.

What is the entry for creating the provision for doubtful debts?

1. No Entry

2. Provision for doubtful debts A/c Dr

   To Profit or loss A/c

3. None of these

4. Profit or loss A/c Dr

   To Provision for doubtful debts A/c

Q.

What is the correct formula for finding the closing cash balance?

1. Opening balance + Receipts

2. Opening balance + Receipts + Payments

3. Opening balance - Receipts - Payments

4. Opening balance + Receipts - Payments

Q. Show the accounting equation on the basis of following transactions:
(a) Ram started business with ₹ 25, 000.
(b) Purchased goods from Shyam ₹ 10, 000.
(c) Sold goods to Sohan costing ₹ 1, 500 for ₹ 1, 800.

Q. Following Trial Balance is extracted from the books of a merchant on 31st March, 2018:

	₹		₹
Debit Balances:		Debit Balances (Contd.):
Furniture and Fittings	6, 400	Insurance	12, 500
Motor Vehicles	62, 500	General Charges	7, 820
Building	75, 900	Salaries	33, 000
Bad Debts	1, 250	Credit Balances:
Sundry Debtors	38, 000	Capital	1, 28, 900
Stock on 1st April, 2017	34, 600	Bills Payable	2, 000
Purchases	55, 750	Sundry Creditors	25, 000
Sales Return	2, 000	Sales	1, 54, 500
Advertising	4, 500	Bank Overdraft	28, 500
Interest	1, 180	Purchases Return	1, 250
Cash in Hand	6, 500	Commission	1, 750

Stock in Hand on 31st March, 2018 was valued at ₹ 32, 500.
From the above, prepare Trading and Profit and Loss Account for the year ended 31st March, 2018 and Balance Sheet as at that date.

Q. Draw an Accounting Equation on the basis of the following transactions:
​(i) Commenced business with cash ₹ 50, 000, cheque ₹ 1, 00, 000, goods ₹ 30, 000 and furniture ₹ 20, 000.
(ii) Car, personal asset of the proprietor, was sold for ₹ 1, 00, 000 against cheque which he deposited in his Savings Account.
(iii) An amount of ₹ 50, 000 was transferred from his Savings Account to the firm's Bank Account.
(iv) A new car was purchased for ₹ 6, 00, 000 for office use. It was paid by taking loan from Bank of ₹ 5, 00, 000 and balance by issue of cheque from firm's Bank Account .
(v) Sold goods to Ajay on credit costing ₹ 4, 000 for ₹ 5, 000.
(vi) Sold goods for cash costing ₹ 12, 000 for ₹ 16, 000
(vii) Purchased good for cash ₹ 40, 000
(viii) Purchased goods on credit for ₹ 20, 000.
(ix) Paid rent ₹ 3, 000 including ₹ 2, 000 in advance .
(x) Paid salaries ₹ 2, 000.
(xi) Sold goods costing ₹ 8, 000 for ₹ 10, 000.
(xii) Salaries outstanding ₹ 1, 000.
(xiii) Charge depreciation on furniture ₹500.

Q. Rectify the following errors:
(i) Sale of old furniture worth ₹ 3, 000 treated as sales of goods.
(ii) Sales Book added ₹ 5, 000 short.
(iii) Rent of proprietor’s residence, ₹ 6, 500 debited to Rent Account.
(iv) Goods worth ₹ 11, 970 returned by Manav posted to his debit as ₹ 11, 790.

Q. From the following Ledger account balances extracted from the books of R.J. Gupta, prepare a Trial Balance as on 31st March, 2018:

	₹		₹
Purchases	1, 04, 000	Drawings	7, 950
Sundry Debtors	18, 550	Sundry Creditors	8, 300
Premises	62, 000	Returns Inward	5, 360
Sales	1, 49, 000	Furniture	15, 600
Returns Outward	8, 900	Cash in Hand	390
Rates and Taxes	780	Capital	85, 000
Cash at Bank	1, 560	Factory wages	5, 830
Carriage Inwards	650	Carriage Outwards	260
Salaries	3, 900	Rent Received	2, 990
Stock (1st April, 2017)	25, 000	Insurance	2, 100
Input IGST A/c	5, 000	Bad Debts	260
Input CGST A/c	2, 500	Output IGST A/c	10, 000
Input SGST A/c	2, 500

Q. Rectify the following errors by passing Journal entries:
(i) Old furniture sold for ₹ 500 has been credited to Sales Account.
(ii) Machinery purchased on credit from Raman for ₹ 2, 000 recorded through Purchases Book as ₹ 16, 000.
(iii) Cash received from Rajat ₹ 5, 000 was posted to the debit of Bhagat as ₹ 6, 000.
(iv) Depreciation provided on machinery ₹ 3, 000 was posted to Machinery Account as ₹ 300.

Q.

During the financial year, Rajan had cash sales of Rs.4, 50, 000 and credit sales of Rs.3, 00, 000.Expenses incurred for the year were Rs.3, 50, 000 out of which Rs.1, 50, 000 are still to be paid.

Find out Rajan's income following

(i) Cash Basis of Accounting

(ii) Accrual Basis of Accounting.

Q. From the following balances, as on 31st March, 2018, prepare Trading and Profit and Loss Account and Balance Sheet:

	₹		₹
Capital Account	1, 00, 000	Returns Outward	5, 000
Plant and Machinery	40, 000	Rent	4, 000
Sundry Debtors	24, 000	Sales	1, 64, 000
Sundry Creditors	12, 000	Manufacturing Expenses	8, 000
Life Insurance Premium	12, 000	Trade Expenses	7, 000
Purchases	1, 05, 000	Bad Debts	2, 000
Wages	50, 000	Carriage	1, 500
Bank	10, 000	Bills Payable	7, 000
Repairs	500	Returns Inward	4, 000
Stock (1st April, 2017)	20, 000

Q.

What is an imprest amount?

Q. On 30th June, 2017, bank column of the Cash Book showed balance of ₹ 12, 000 but the Pass Book showed a different balance due to the following reasons:
(i) Cheques paid into the bank ₹ 8, 000 but out of these only cheques of ₹ 6, 500 credited by bankers.
(ii) The receipt column of the Cash Book undercast by ₹ 200.
(iii) On 29th June, a customer deposited ₹ 3, 000 directly in the Bank Account but it was entered in the Pass Book only.
(iv) Cheques of ₹ 9, 200 were issued of which ₹ 2, 200 were presented for payment on 15th July.
(v) Pass Book shows a credit of ₹ 330 as interest and a debit of ₹ 60 as bank charges.

Prepare Bank Reconciliation Statement as on 30th June, 2017.

Q.

A firm earns a revenue of Rs.21, 000 and the expenses to earn this revenue are Rs.15, 000.Calculate its income.

Q. Prepare Trading and Profit and Loss Account and Balance Sheet of Jagat Shah as at 31st March, 2018 from the following balances:

	₹		₹
Capital (Cr.)	3, 60, 000	Salaries	60, 000
Machinery	70, 000	General Expenses	20, 000
Sales	8, 20, 000	Rent	50, 000
Purchases	4, 00, 000	Purchases Return	5, 000
Sales Return	10, 000	Debtors	3, 00, 000
Stock on 1st April, 2017	1, 00, 000	Cash	40, 000
Drawing	40, 000	Carriage Outwards	20, 000
Wages	1, 00, 000	Advertising	20, 000
Carriage Inwards	5, 000	Creditros	50, 000

The Closing Stock was valued at ₹ 2, 00, 000.

Q. From the following information, prepare a Trial Balance of M/s. Prayag for the year ended 31st March, 2018:

	₹			₹
Capital Accounts	1, 25, 000	Sales		1, 54, 500
Furniture and Fittings	6, 400	Bank (Cr. Balance)		28, 500
Motor Car	62.500	Purchase Returns		1, 250
Buildings	75, 000	Commission (Cr.)		3, 750
Total Debtors	38, 000	Sales Return		2, 000
Total Creditors	25, 000	Advertisement		2, 500
Bad Debts	1, 250	Interset Account (Dr.)		1, 180
Stock (1st April 2017)	34, 600	Cash Balance		6, 500
Purchases	54, 750	Insurance and Tax		12, 500
Input IGST A/c	3, 000	Salaries		40, 820
Input IGST A/c	1, 500	Output SGST A/c		1, 500

Q. Mukesh found that the Trial Balance did not agree. He found the following errors:
(i) In the Sales Book for the month of January, total of Page No. 3 was carried forward to Page No. 4 as ₹ 1, 000 instead of ₹ 1, 200 and total of Page No. 7 was carried forward to Page No. 8 as ₹ 5, 600 instead of ₹ 5, 000.
(ii) Goods returned to Anshuka ₹ 10, 000 were recorded in the Sales Book.
(iii) Bill Receivable for ₹ 800 from Riya was dishonoured and posted to the debit of Allowances Account.

Q. From the following particular, prepare Balance Sheet as at 31st March, 2018:

	Dr. (₹)	Cr. (₹)
Capital	…	4, 00, 000
Drawings	44, 000	…
Debtors and Creditors	64, 000	42, 000
Cash in Hand	3, 600	…
Cash at Bank	72, 000	…
Plant	1, 00, 000	…
Furniture	37, 000	…
Net Profit	…	16, 600
General Reserve	…	10, 000
Closing Stock	1, 48, 000	…
Total	4, 68, 600	4, 68, 600

Q. ​Prepare the Trial Balance of Ankit as on 31st March, 2018. He has omitted to open a Capital Account:

	₹			₹
Bank Overdraft	85, 000	Purchases		4, 45, 000
Sales	8, 10, 000	Cash in Hand		8, 500
Purchases Return	22, 500	Creditors		2, 15, 000
Debtors	4, 00, 500	Sales Return		15, 750
Wages	96, 000	Equipment		25, 000
Capital	?	Opening Stock		3, 00, 500

Q.

Personal Accounts Are Related To _______ .

Q.

A firm earns a revenue of Rs.50, 000 and the expenses to earn this revenue are Rs.30, 000. Calculate its income.

Q.

Opening balance of cash account Rs 2, 00, 000, Expenditure Incurred Rs. 50, 000, Cash sales amounting to Rs. 1, 00, 000. What is the closing cash balance.

1. Rs. 2, 50, 000

2. Rs. 3, 00, 000

3. Rs. 2, 00, 000

4. Rs. 3, 50, 000

Q. Sharma & Co. whose books are closed on 31st March, purchased a machinery for ₹ 1, 50, 000 on 1st April, 2015, Additional machinery was acquired for ₹ 50, 000 on 1st October, 2015. Certain machinery which was purchased for ₹ 50, 000 on 1st October, 2015 was sold for ₹ 40, 000 on 30th September, 2017.

Prepare the Machinery Account and Accumulated Depreciation Account for all the years up to the year ended 31st March, 2018. Depreciation is charged @ 10% p.a. on Straight Line Method. Also, show the Machinery Disposal Account.

Q.

Opening balance of cash account Rs. 1, 00, 000. Expenditure paid Rs. 30, 000. Amount received from debtors Rs. 80, 000. What is the closing cash balance.

1. Rs. 1, 30, 000

2. Rs. 1, 10, 000

3. Rs. 1, 50, 000

4. Rs. 80, 000

Q.

Opening balance of cash account is Rs. 2, 00, 000. Expenditure payable is Rs. 70, 000. Amount of cash sales is Rs. 80, 000 & Amount of credit sales is Rs. 1, 00, 000. What is the closing cash balance?

1. Rs. 2, 80, 000

2. Rs. 3, 50, 000

3. None of the above

4. Rs. 2, 10, 000

Q. While trying to close his books for the year ended 31^st March, 2014, Mahesh found that the Trial Balance did not agree. He traced the following errors:
(i) In the Sales Book for the month of January total of Page No. 2 was carried forward to Page No. 3 as ₹ 1, 000 instead of ₹ 1, 200 and total of Page No. 6 was carried forward to Page No. 7 as ₹ 5, 600 instead of ₹ 5, 000.
(ii) Goods returned to Ram ₹ 1, 000 were recorded in the Sales Book.
(iii) Bills Receivable for ₹ 1, 600 from Noor was dishonoured and posted to debit of Allowances Account.
Rectify the above errors.

Q.

Cash in hand can be obtained by preparing:

1. Cash account

2. Creditors account

3. Debtors account

4. Statement of affairs

Q. Pass the Journal entries rectifying the following errors:
(i) Purchases for ₹ 10, 000 was omitted to be recorded.
(ii) Purchases of office furniture of ₹ 10, 000 was recorded in Purchases Book.
(iii) Office Rent of ₹ 15, 000 was debited to the Personal Account of the landlord.
(iv) Old machine was sold for ₹ 5, 000 was credited to Sales Account.