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Standard XI
Accountancy
Trading & Profit or Loss Account
A cash budget...
Question

A cash budget can be prepared by ______________.

A
Receipts and Payments Method
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B
The Adjusted Profit and Loss Account Method
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C
The Balance Sheet Method
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D
Any of the above methods
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Solution

The correct option is D Any of the above methods

The following are three methods of preparing cash budget:

(i) Receipt and Payment Method
(ii) Adjusted Project and Loss Method
(iii) Balance Sheet Method


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Q. Steps of preparing Final Accounts is -
(a) Trading Account
(b) Profit and Loss Account
(c) Balance Sheet
Q.

Following Receipt and Payment Account was prepared from the cash book of Delhi Charitable Trust for the year ending December 31, 2007

Receipt and Payment Account for the year ending December 31, 2007

Receipts

Amount Rs

Payments

Amount Rs

Balance b/d

Charity

11,500

Cash in Hand

11,500

Rent and taxes

3,200

Cash at Bank

12,600

Salary

6,000

Donation

9,000

Printing

600

Subscription

42,800

Postage

300

Legacies

18,000

Advertisements

4,500

Interest on investment

4,500

Insurances

2,000

Sale of old newspapers

200

Furniture

21,600

Investment

23,000

Balance c/d:

Cash in Hand

9,900

Cash at Bank

16,000

98,600

98,600

Prepare Income and expenditure account for the year ended December 31, 2006, and a balance sheet as on that date after the following adjustments:

(a)

It was decided to treat one-third of the amount received on account of donation as income.

(b)

Insurance premium was paid in advance for three months.

(c)

Interest on investment Rs1,100 accrued was not received.

(d)

Rent Rs600: salary Rs900 and advertisement expenses Rs1,000 outstanding as on December 31, 2007.
Q. From the following Trial Balance extracted from the books of Sh. Pawan Kumar, prepare a Trading Account, Profit & Loss Account for the year ended 31st March, 2014 and a Balance Sheet as at that date :
Dr. Balances (₹) Cr. Balances (₹)
Drawings 1,20,000 Capital 16,00,000
Plant and Machinery 12,00,000 Creditors 2,60,000
Horses and Carts 2,60,000 Sales 8,20,000
Debtors 3,40,000 Bills Payable 2,21,200
Purchases 2,00,000 Interest on Ram's Loan 1,800
Wages 80,000 Rent Received 12,000
Cash at Bank 2,60,000
Salaries 80,000
Repairs 5,000
Stock (1-4-2013) 7,000
Stock (31-3-2014) 92,000
Rent 45,000
Manufacturing expenses 15,000
Bad-Debts 50,000
Carriage 15,000
Income Tax 20,000
Life Insurance Premium 30,000
Loan to Ram at 12% p.a. 20,000
Insurance 12,000
Insurance Prepaid 1,000
29,15,000 29,15,000

Adjustments:-
1. Plant and Machinery includes a new machinery purchased on 1st October, 2013 for ₹ 2,00,000.
2. Depreciate Plant and Machinery by 10% p.a. and Horses and Carts by 20% p.a.
3. Salaries for the month of February and March 2014 are outstanding.
4. Goods worth ₹ 15,000 were sold and dispatched on 27th March but no entry was passed to this effect.
5. Make a provision for Doubtful Debts at 5% on Debtors.
Q. (I) In Receipt & Payment A/c all receipts and payments are shown irrespective of the year to which they pertain.
(II) The difference at Dr. side of Receipt & Payment A/c account is known as surplus or deficit and deducted from capital fund.
(III) Income & Expenditure A/c is always accompained by balance sheet.
Select the correct answer.

Q. Following Receipts and Payments Account was prepared from the Cash Book of Delhi Charitable Trust for the year ending 31st March, 2019:
RECEIPTS AND PAYMENTS ACCOUNT
for the year ending 31st March, 2019
Dr. Cr.
Receipts ₹ Payments ₹
To Balance b/d: By Charity 1,15,000
Cash in Hand 1,15,000 By Rent and Taxes 32,000
Cash at Bank 1,26,000 By Salary 60,000
To Donations 90,000 By Printing 6,000
To Subscriptions 4,28,000 By Postage 3,000
To Legacies Donations 1,80,000 By Advertisements 45,000
To Interest on Investment 45,000 By Insurance 20,000
To Sale of old Newspaper 2,000 By Furniture 2,16,000
By Investment 2,30,000
By Balance c/d:
Cash in Hand 99,000
Cash at Bank 1,60,000

9,86,000

 9,86,000

Prepare Income and Expenditure Account for the year ended 31st March, 2019, and Balance Sheet as on that date after the following adjustments:
(i) Insurance premium was paid for insurance taken w.e.f. 1st July, 2018.
(ii) Interest on investment ₹ 11,000 accrued was not received.
(iii) Rent ₹ 6,000; Salary ₹ 9,000 and advertisement expenses ₹ 10,000 outstanding as on 31st March, 2019.
(iv) Legacy Donation is towards construction of Library Block.
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