Self balancing ledger and icds test PDF

Preview

Summary

Financial accounting ...

Description

Choose the correct alternative: 1. Which of the following transactions will not appear under Control/Adjustments Accounts under self-balancing system? a) Credit sales

b) Amount paid to creditors

c) Provision for doubtful debt

d) B/R dishonoured

2. Which of the following transactions will appear under Control/Adjustments Accounts under selfbalancing system? a) Cash sales

b) B/R as endorsed dishonoured

c) Bad debt recovery

d) B/R discounted

3. Total Debtor Account and Total Creditors Account are maintained under a) Self-balancing system

b) Sectional balancing system

c) Both the system

d) None of the above

4. Which of the following is true? a) Under self-balancing system all the ledger are self-balanced. b) Under self-balancing system only General Ledger is self-balanced. c) Under Sectional Balancing system only Debtors’ Ledger is self-balanced. d) Under Sectional Balancing system only Creditors’ Ledger is self-balanced. 5. Which of the following is true? a) Self-balancing system is based on double entry system of book keeping. b) Self-balancing system is not based on double entry system of book keeping. c) Sectional balancing system is based on double entry system of book keeping. d) Sectional balancing system is not based on double entry system of book keeping. 6. Which of the following transactions will not appear under Control/Adjustments Accounts under self-balancing system? a) Cash collected from debtors

b) Credit purchase

c) Bills discounted

d) Bills Receivable as endorsed dishonoured

7. Noting charges on bills receivable dishonoured will appear on the __________side of General Ledger Adjustment Account under __________ Ledger. a) Debit side, Debtors’ Ledger

b) Credit side, Debtors’ Ledger

c) Debit side, Creditors’ Ledger

d) Credit side, Creditors’ Ledger

8. Bills receivable dishonoured will appear on the __________side of General Ledger Adjustment Account under __________ Ledger. a) Debit side, Debtors’ Ledger

b) Credit side, Debtors’ Ledger

c) Debit side, Creditors’ Ledger

d) Credit side, Creditors’ Ledger

9. Discount received will appear on the __________side of General Ledger Adjustment Account under __________ Ledger. a) Debit side, Debtors’ Ledger

b) Credit side, Debtors’ Ledger

c) Debit side, Creditors’ Ledger

d) Credit side, Creditors’ Ledger

10. Rebate allowed will appear on the __________side of General Ledger Adjustment Account under __________ Ledger. a) Debit side, Debtors’ Ledger

b) Credit side, Debtors’ Ledger

c) Debit side, Creditors’ Ledger

d) Credit side, Creditors’ Ledger

PROBLEMS: 1. The following information is available from the books of the trader for the period 1st January to 31st March 2017. a) Total sales amounted to `76000 including the sale of old furniture for `10000 (book value is `12300). The total cash sales were 80% less than total credit sales. b) Cash collection from Debtors amounted to 60% of the aggregate of the opening Debtors and Credit safes for the period. Discount allowed to them amounted to ` 2,600 c) Bills receivable drawn during the period totaled ` 7,000 of which bills amounting to ` 3,000 were endorsed in favour of suppliers. Out of these endorsed bills, a Bill receivable for `1,500 was dishonoured for non-payment, as the party became insolvent and his estate realized nothing. d) Cheques received from customer of ` 5,000 were dishonoured; a sum of `500 is irrecoverable. e) Bad Debts written-off in the earlier year realized `2,500. f) Sundry debtors on 1st January stood at `40,000. You are required to show the Debtors’ Ledger Adjustment Account in the General Ledger. 2.

3.

4.

5.

During the month some goods amounting to `2000 were sold to Mr. J was wrongly posted to Mr. G Account. Cash received from Mr. Ishan `3000 was wrongly posted to Mr. Shaan Account. Prepare General Ledger Adjustment Account in Debtors Ledger. 6.

7. Rectification Entry under Self Balancing System The following errors were detected on 31.12.2017 after preparation of Trial Balance but before preparation of Final Accounts. (i) Purchases day book was undercast by `5000

(ii) Sales day book was overcast by `2000

(iii) A cheque of `20000 issued to Mr. M was recorded as having been issued to Mr. K (iv) Goods worth `3000 were returned by Mr. D, recorded in the Day Book as `30000 Prepare necessary Journal entries assuming that the ledgers are kept under self-balancing system. 8. The balance on the Sales Ledger Control Account of Q Ltd, on Sept, 30, 2012 amounted to `9,600 which did not agree with the net total of the list of Sales Ledger Balance on that date. Errors were found and the appropriation adjustments when made balanced the books.

The errors were: (i) Debit balance in the sales ledger amounting to `306 had been omitted from the list of balances. (ii) A Bad Debt amounting to `750 had been written-off in the sales ledger, but had not been posted to the Bad Debts Account, or entered in Control Account. (iii) An item of goods sold to Amar for `400 had been entered once in the Day Book but posted to his account twice. (iv) `70 Discount Allowed to Manoj had been correctly recorded and posted in the books. This sum had been subsequently disallowed, debited to Manoj's account, and entered in the discount received column of the Cash Book. (v) No entry had been made in the Control Account in respect of the transfer of a debit of 7260 from Kumar's Account in the Sales Ledger to his account in the purchase ledger. (vi) The Discount Allowed column in the Cash Book had been under cast by `280. You are required to give the journal entries, where necessary, to rectify these errors, indicating whether or not any control accounts is affected, and to make necessary adjustments in the Sales Ledger Control Account bringing down the balance. 9.

SET OFF AND CARRY FORWARD OF LOSSES Choose the correct alternative: 1. The maximum period for which speculation loss can be carried forward is – (a) 4 years

(b) 8 years

(c) Indefinitely

(d) Cannot be carried forward

2.Mr. A incurred short term capital loss of ` 10,000 on sale of land. Such loss can be set off: (a) Against Long Term Capital Gain Gain (c) Against any head of income

(b) Against both Short Term Capital Gain &Long Term Capital (d) Against Short Term Capital Gain

3.Which of the following loss cannot be carried forward? (a) Loss from speculative business

(b) Loss under the head Capital gain

(c) Loss under the head Income from Other Sources (d) Loss under the head Income from House Property 4 .Unabsorbed depreciation cannot be set off against – (a) Income under the head ‘Income from Other Sources’ (b) Income under the head ‘Income from House Property’ (c) Income under the head ‘Salaries’

(d) Capital Gains

5.Loss which cannot be set off against inter-head adjustment is – (a) Loss under the head Capital Gains

b) Non speculative Business Loss

(c) Loss under the head ‘Income from House Property’ (d) Loss under the head ‘Income from Other Sources’ 6.Accumulated losses of a firm which is converted into Limited Liability Partnership can be carried forward for – (a) 8 years

(b) 7 years

(c) 4 years

(d) Cannot be carried forward

7.The maximum period for which business loss can be carried forward is – (a) 8 years

(b) 4 years

(c) any number of years (d) Not carried forward

8. Loss from activity of owning and maintaining horse race can be carried forward for – (a) 8 Years

(b) 4 Years

(c) Indefinite years

(d) 2 Years

9. Long term capital loss can be set off from – (a) Short term capital gain only

(b) Long term capital gain only

(c) Income from business or profession

(d) Income from salary

10. Business loss of an amalgamating company shall be – (a) carried forward and set off in the hands of amalgamated company unconditionally

(b) carried forward and set off in the hands of amalgamated company subject to certain conditions (c) not be carried forward

(d) allowed to be carried forward only by amalgamating company

Fill in the blanks: (a) Accumulated losses of amalgamating company shall be allowed to be set off or carried forward by amalgamated company, if the amalgamated company holds continuously for a minimum period of ___years from date of amalgamation at least three-fourths of ____of the amalgamating company. (b) Loss from short term capital loss ____ (can/cannot) be set off against income under the head “Salaries”. (c) Indian income-tax law does not provide any exemption in case of amalgamation of an Indian company with a foreign company wherein the resultant amalgamated company is a _______ (d) Loss under the head “Income from House Property” can be carried forward for a maximum period of ____ assessment years. PROBLEMS: 1.

2.

3. P, Q and R are partners in a firm sharing profits and losses in the ratio of 1:1:2, provide the following information. Find firm’s net income assuming that salary and interest are not paid to partners: (i) Net income of the firm in earlier year is (-) ` 1,20,000, out of which unadjusted depreciation is `40,000. (ii) On 31.05.2018, R retires from the firm and the other partners carry on the same business. (iii) The firm’s income for the Assessment Year 2019-20 before adjusting the aforesaid loss and depreciation is ` 1,20,000. 4....