ELEMENTS OF BOOK-KEEPING AND ACCOUNTANCY (254)
MARKING SCHEME 2020-21
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CLASS X
QUESTIONS
Marks
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1 | c. Deferred Revenue Expenditure
2 | b. 34,48,000
3 | d. Crossed cheque
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b. Drawer
OR
4 | c. Plant and Machinery
c. Fluctuation in prices
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OR
b. Cash Book
c. 323,675
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c. Bank Book
d. 349,000
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5
6
7 | a. Sales — Gross Profit
8
9
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. 33,28,000
. 14 August, 2019
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. 324,900
. Closing statement of Affairs
. Trial Balance
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. 70,000
. 32,20,000
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b. Non-cash expenditure
18 | c. Trading Account
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19 | Deferred Revenue Expenditure is that expenditure that is revenue in nature but the benefit of which extends beyond the accounting year in which it is incurred.
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Example of Deferred Revenue Expenditure: Renovation of cinema mall
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(a) Framework for relationships:
A bill of exchange represents an instrument, which provides a framework for
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OR
(a) Purchase of a fixed asset 1
(b) Construction of building 1
(c) Custom duty paid on import of a machinery 1
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20 | Causes of differences between balance as per the Cash book and as per Pass book:
(a) Cheques issued but not yet presented for payment. 1
(b) Interest received by the bank 1
(c) Cheque deposited into the bank but not yet collected by the bank. 1
21 Books of Hemant
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Journal
Date Particulars LF | Dr. Cr.
2019
March,25 | Purchases A/c 10,000 1
Dr. 10,000
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March,25 | To Samarth
( Being goods purchased from: Samarth) 10,000
Samarth’s A/c 10,000 1
Dr.
To Bills Payable A/c
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(Being acceptance given to Samarth) 1
May, Bills Payable A/c 10,000
28 Dr. 10,000
To Bank A/c
(Being acceptance met on maturity)
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OR
The bills of exchange as instruments of credit are used frequently in business because of the following advantages:
1x3
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enabling the credit transaction between the seller/creditor and buyer/debtor on an agreed basis.
(b) Certainty of terms and conditions:
The creditor knows the time when (s)he would receive the money so also debtor is fully aware of the date by which (s)he has to pay the money. This is due to the fact that terms and conditions of the relationships between debtor and creditor such as amount required to be paid; date of payment; interest to be paid, if any, place of payment are clearly mentioned in the bill of exchange.
(c) Convenient means of credit:
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A bill of exchange enables the buyer to buy the goods on credit and pay after the period of credit. However, the seller of goods even after extension of credit can get payment immediately either by discounting the bill with the bank or by endorsing it in favour of a third party.
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(Kartik’s acceptance discounted with the bank @12% p.a.)
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22 | Following are the limitations of incomplete records:
a) As double entry system is not followed, a trial balance cannot be prepared. 1½
b) Correct ascertainment and evaluation of financial result of business operations | 1½ cannot be made.
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23 Books of Suraj
Journal
Date | Particulars L.F | Dr Cr
2019
July 1 | Bills Receivable A/c Dr 60,000 1
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To Kartik’s A/c 60,000
(Received Kartik’s acceptance payable after three months)
July 1 | Bank A/c Dr 58,200
Discount A/c Dr 1,800
To Bills Receivable A/c 60,000 1
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Books of Kartik
Journal
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Date | Particulars LF | Dr Cr
July Suraj’s A/c Dr 60,000
1, To Bills Payable A/c 60,000
2019 | (Accepted Suraj’s bill )
Oct 4, | Bills Payable A/c Dr 60,000
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2019 To Bank A/c 60,000
( Met acceptance of Suraj’s bill)
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24 Following points of distinction between capital expenditure and revenue expenditure :
(a) Capital expenditure increases earning capacity of business whereas revenue expenditure is incurred to maintain the earning capacity.
(b) Capital expenditure is incurred to acquire fixed assets for operation of business whereas revenue expenditure is incurred on day-to-day conduct of business.
(c) Revenue expenditure is generally recurring expenditure and capital expenditure is non-recurring by nature.
(d) Capital expenditure benefits more than one accounting year whereas revenue expenditure normally benefits one accounting year.
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25
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Basis of Difference | Straight Line | Written Down
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Method Value Method
Basis of charging | Original Cost Book Value i.e.
depreciation original cost less
depreciation charged
till date. In this
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method, depreciation
declines year after
year
Annual depreciation | Fixed (Constant) | Declines year after
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charge year year
Total charge against | Unequal year after | Almost equal every
profit and loss | year. It increases in | year
account respect of | later years.
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depreciation and
repairs
Recognition by | Not recognised Recognised
Income Tax law
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Or
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Written down value method has the following advantages:
(a) This method is based on a more realistic assumption that the benefits from asset go on diminishing (reducing) with the passage of time. Hence, it calls for proper allocation of cost because higher depreciation is charged in earlier years when asset’s utility is higher as compared to later years when it becomes less effective.
(b) It results into almost equal-burden of depreciation and repair expenses taken together every year on profit-and loss account.
(c) Income Tax Act accepts this method for tax purposes.
(d) As a large portion of cost is written-off in earlier years, loss due to obsolescence gets reduced.
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26
Bank Reconciliation Statement of Misha Ice Cream Parlours
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as on 31 March 2019
PARTICULARS PLUS ITEMS | MINUS ITEMS
Debit balance as per Cash Book 40,000
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Cheque deposited but not cleared 10,000
Cheques issued but not cleared 700
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Balance as per pass book 30,700
40,700 40,700
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27
Balance Sheet of M/s Shreya
as at 31.03.2020
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28
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Liabilities Amount (%) Assets Amount (%)
Capital 16,50,000 Land and Building | 4,80,000
+ Net profit 1,00,000 | 17,50,000 Investment 1,20,000
Bank overdraft 2,50,000 Debtors 1,00,000
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Stock 7,00,000
Cash in hand 2,00,000
Cash at bank 4,00,000
0,00,000] 0,00,000,
Bank Reconciliation statement of Vansh Brothers, as on March 31, 2019
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Particulars PLUS ITEMS MINUS ITEMS
Overdraft as per passbook 25,200
Insurance premium paid by the bank | 2,500
Interest on overdraft 1,500
Cheque deposited but not yet cleared | 8,100
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Amount wrongly debited by bank 2,000
Overdraft as per cash book 11,100
25,200 25,200
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Dr Machinery Account Cr
29 [ | Date Particulars Amt }) Date Particulars Amt })
1.1.10 | To Bank A/c 1,60,000 31.12.10 By Depreciation A/c 16,000
31.12.10 By Balance c¢/d 1,44,000 1½
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1,60,000 1,60,000
1.1.11 | To Balance b/d 1,44000 | 31.12.11 | By Depreciation 16,000
31.12.11 | By Balance c/d 1,28,000 1½
1,44,000 144,000
1.1.12 | To Balance b/d 128000 | 31.12.12 | By Depreciation 16,000 ½
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31.12.12 | By Balance c¢/d 1,12,000
1,28,000 1,28,000 ½
30 Statement of Affairs (as on 31-03-19)
LIABILITIES Amount ASSETS Amount
Sundry Creditors 29,000 Cash 20,000 1½
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Bills Payable 5,000 Sundry Debtors 78,000
Opening Capital
(Bal. Figure) 2,72,000 Stock 68,000
Machinery 1,40,000
3,06,000 3,06,000
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Statement of Affairs (as on 31-03-20)
LIABILITIES Amount ASSETS Amount
Sundry Creditors 29,000 Cash 18,000
Bills Payable 10,000 Sundry Debtors | 90,000
Closing Capital
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(Bal. Figure) 2,63,000 | Stock 64,000
1½
Machinery 1,30,000
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3,02,000 3,02,000
Statement of Profit and Loss
As on 31-03-2020
Particulars Amount
Closing Capital 2,63,000
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add: Drawings (4,000x12) 48,000
less: Additional Capital 15,000
less: Opening Capital 2,72,000
Profit Earned During The Year 24,000
OR
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BASIS FOR | SINGLE ENTRY SYSTEM DOUBLE ENTRY SYSTEM
COMPARISON
Meaning The system of accounting in'| The accounting system, in which every
which only one sided entry | transaction affects two accounts
is required to record simultaneously, is known as the Double
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financial transactions is Entry System.
Single Entry System.
Nature Simple Complex
Type of recording Incomplete Complete
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Errors
Hard to identify
Easy to locate
Ledger
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Personal and Cash Account
Personal, Real and Nominal Account
Preferable for
Small Enterprises
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Big Enterprises
Suitable for
purposes
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tax
No
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Yes
1x5
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31 Trading A/c
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Dr. as on 31.03.2018 Cr.
Particulars Amount () Particulars Amount (%)
Opening Inventory 50,000 Sales 12,03,700 12,03,000
(-) Return (700)
Purchase 8,15,000 8,10,000 Closing Stock 20,000
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Less Returns (5,000)
1½
Gross profit transferred to Profit 3,63,000
and loss account
12,23,000 12,23,000
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Profit and Loss A/c
Dr as on 31.03.2018 Cr
Particulars Amount %).| Particulars Amount (%)
Salaries 35,000 Gross Profit 363,000
and Wages transferred from
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Trading Account
Bad Debt 7,800 | Rent received 13,400
Net Profit transferred to 3,33,600
Capital account 1½
3,76,400 3,76,400
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Balance Sheet
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as on 31.03.2018
Liabilities Amount (X) | Assets Amount (%)
Capital 2,40,000 573,600 | Debtors 1,28,000
Net Profit+333,600
Creditors 3,44,800 | Patents 35,000
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Bank Loan 2,00,000 | Machinery 4,50,000
Cash at Bank 4,85,400
Closing Stock 20,000
11,18,400 11,18,400
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