G.C.E. A/L Examination July - 2019

Grade - 12 (2020) July – 2019 F.W.C 1 Accounting

Part I

Answer all the questions in the relevant papers itself.

01. Select the correct input for a financial accounting,

1) Historical information.

2) Predictive information.

3) Transaction, events.

4) Financial statements.

5) Marginal cost information. (……....)

02. Stake holders of a business and their reasons of interest towards the business are given below.

Stakeholders Reasons for their interest

1) Employees A. Does the business have a good ability for fulfiling

limitation by guarantee?

2) Government B. Decision making regarding future production.

3) Manager C. Do the required reports are being submitted properly?

4) Customers D. Have returns applicable for the investment?

5) Owners E. Is there job security?

Select correct combinations of interest with the stakeholders?

1) E, C, B, A, D 2) A, B, C, D, E 3) E, D, C, B, A

4) B, C, D, E, A 5) E, D, B, A, C (……....)

03. Information relating to a business which earned a less of Rs. 75000/= for the year ended 31.03.2019

are given below.

Rs. 000

Increase in the total liabilities for the year 900

Drawings 50

Additional capital 225

Find out the increase / decrease in the assets of the business for the year ended 31.03.2019.

1) Increased by Rs. 825 000/= 2) Degreased by Rs. 975 000/=

3) Increased by Rs. 975 000/= 4) Increased by Rs. 1 000 000/=

5) Increased by Rs. 1 150 000/= (…….... )

Time :- 3.00 Hours Grade :- 12 (2020) Accounting

FWC

G.C.E. A/L Examination July - 2019

Conducted by Field Work Centre, Thondaimanaru

In Collaboration with

Provincial Department of Education, Northern Province.


04. Column X represents prime entry books and column Y represents source documents.

Column X Column Y

1) Cash payment journal A – Sales invoice

2) Sales daybook B – Journal voucher

3) General journal C – Debit note

4) Return inwards journal D – Payment voucher

5) Return outwards journal E – Credit note

The correct answer which joins the source documents in column Y with the relevant prime entry books

in column X is,

1) A, D, B, E, C 2) B, A, D, E, C 3) C, A, B, E, D

4) D, A, B, C, E 5) D, A, B, E, C (……....)

05. Petty cash balance for a business as at 1st May 2019 is Rs. 700/=. The total of analytical columns for

the month of April are given below.

Postage Rs. 360/=

Stationary Rs. 240/=

Travelling Rs. 285/=

Sunday expenses Rs. 615/=

The petty cash imprest amount was increased by Rs. 500/= for the month of May, 2019. Accounting

to this, what will be the amount of reimbursement as at 1st May 2019

1) Rs.1500/= 2) Rs. 2 000/= 3) Rs.460/= 4) Rs. 500/= 5) Rs. 2 460/= (……....)

06. The impacts of transactions on the accounting equation of Ilanthalir business from 2019.01.02 to

2019.01.05 are given below. The transaction took place on 2019.01.04 will net affect the profit or

loss.

Date

Balance on

Assets Equity Liabilities

2019.01.01 500 000 350 000 150 000

2019.01.02 60 000

– 75 000

- – 15 000

2019.01.03 – 8 000 – 12 000 4 000

2019.01.04 9 000 – 9 000

2019.01.05 – 18 000 2 000 – 20 000

Calculate the net profit or not loss carried forward and equity on the transactions taken place from

02.01.2019 to 05.01.2019

Profit carried forward Equity

1) – 25 000 334 000

2) 16 000 334 000

3) – 25 000 464 000

4) – 16 000 464 000

5) 25 000 225 000

(…….... )


07. The double entry for cheque of Rs. 25 000.= which is received from a debtor then deposited to the

bank and get dishonoured.

1) Dishonoured cheque A/C Dr. 25 000

Cash control A/C Cr. 25 000

2) Cheque A/C Dr. 25 000


3) Debtors A/C Dr. 25 000


4) Cash control A/C Dr. 25 000

Creditors control A/C Cr. 25 000

5) Bank A/C Dr. 25 000

Dishonoured cheque A/C Cr. 25 000 (…….... )

08. The transactions of Ilamaran business which is registered for VAT for the month of the March 2019

are given below.

Sales Rs176 000/= inclusive of VAT 10%

Perchase Rs. 90 000/= 10% VAT should be calculated

Return outwards Rs. 5500/= inclusive of VAT 10%

VAT paid by cash Rs. 3500/=

Find out the VAT balance to be shown in the statement of financial position as at 31st. March 2019,

1) Liability Rs. 7 500/= 2) Asset Rs. 4 000/= 3) Liability Rs. 4 000/=

4) Asset Rs. 5 650/= 5) Liability Rs. 5 650 (…….... )

09. The transactions and additional information taken place for the month of January 2019 of kadalarasan

business are given below.

Credit purchase of goods Rs. 20 000/=, among this Rs. 15 000/= was sold for credit.

Bad debt written off Rs. 3000/=. The bad debt recovered which is written off last year Rs. 1000/=.

Electicity bill for the month of January Rs. 5 000/= It is paid on 10th of February.

Salary of Rs. 10 000/= for the month of January 2019 has not been paid in that month. But salary

for the month of December 2018 has been paid.

Calculate the total expenses incurred against the total income during the month of January 2019 for

the above business?

(Bad debt recovered will be adjusted through bad debt A/C)

1) Rs. 24 000/= 2) Rs. 25 000/= 3) Rs. 32 000/=

4) Rs. 36 000/= 5) Rs. 41 000/= (…….... )

10. Realized but receivable incomes need to be considered as liability. The concept / concepts related to

this statement is / are,

A – Consistency B – Accrual

C – Matching D – Realization

1) A only 2) B only; 3) C only

4) B and C 5) B and D (…….... )


11. Cash control A/C balance for a business as at 31.03.2018 is Rs. 52 000/= (Debit balance). Bank

statement balance on that date was Rs. 90 000/=. The reasons for its difference are given below.

Fixed deposit interest in come received which is not adjusted in the cash A/C is Rs. 18 000/=

Unrealized cheques Rs. 48 000/=

Deposited cheque dishonored Rs. 8 000/= which is not adjusted in the cash book.

What is the amount of unpresented cheque as at 31.03.2018?

1) Rs. 60 000/= 2) Rs. 76 000/= 3) Rs.62 000/=

4) Rs. 54 000/= 5) Rs. 138 000/= (…….... )

12. The trial balance of Mullai business didn’t tally as at 31.03.2019 and the difference was entered in the

suspense A/C. Then the net profit was calculated as Rs. 300 000/= and the suspense A/C was entered

in the balance sheet. Thereafter the following errors and omission were detected.

Return inwards Rs. 20 000/= was only entered in the debtors control A/C.

Rent payment Rs. 8000/= was credited on both rent A/C and cash control A/C.

Bad debt written off Rs. 5000 was entered in the debit side of debtors control A/C.

Select the correct answer which shows the correct net profit and the balance which was in the suspense

A/C.

Correct net profit (Rs.) Suspense A/C balance (Rs.)

1) Rs. 264 000 Rs. 26 000 (credit)

2) Rs. 264 000 Rs. 26 000 (debit)

3) Rs. 284 000 Rs. 20 000 (credit)

4) Rs. 320 000 Rs. 36 000 (debit)

5) Rs. 336 000 Rs. 36 000 (credit) (…….... )

13. Select the correct statement / statements in relation to the accounting practices of partnership?

A. By adjusting goodwill through capital A/C total equity will increses.

B. By changing the capital amount of a partner who is retiring from the partnership to a loan A/C,

total equity will decrease.

C. By making payment for the partnership by the partner, total equity will not change.

1) B only 2) A and B only 3) A and C only

4) B and C only 5) A, B and C (…….... )

14. Which of the following statement / statements is / are correct in rebating to the calculation production

cost for a production firm.

A. Cost of sales + Increase in closing stock of finished goods.

B. Prime cost + Increase in the working progress of the production firm + production overheads.

C. Prime cost - Production overheads – Increase in the work - in - progress of the production firm.

D. Prime cost + Decrease in the work – in progress + production overheads.

1) C, D 2) B, D 3) A, D 4) A, B, C 5) A, C, D (…….... )


15. The following information were extracted from Malaravan sports club statement of financial position

as at 31.03.2017.

Accumulated fund 60 000

(+) Income surplus. 18 000 78 000

Total assets as at 31.03.2018 is Rs. 212 000/=.

Liabilities accept accumulated fund Rs. 62 000/=.

The following errors were discovered for the financial year ended 31.03.2018.

Donation obtained for building renovation Rs. 20 000/= was shown in the income and expenditure

A/C.

The subscription paid by the members for the year ended 31.03.2019 of Rs. 6000/= was calculated

as income.

Income surplus of the club as at 31.03.2018 after rectification of errors,

1) Rs. 46 000/= 2) Rs 124 000/= 3) Rs 64 000/=

4) Rs 78 000/= 5) Rs 44 000/= (…….... )

Write short answer for the questions from 16 – 25.

16. Stale ‘true’ if the following statements are related to financial accounting else state ‘false’

17. Petty cash balance of a business as at 2018 June 1st are Rs 640/=. The total of petty expenses for the

month of May 2018 are given below,

Postage Rs. 390/=

Refreshment Rs. 450/=

Transport Rs. 385/=

Stationery Rs. 415/=

Sundry expenses Rs. 370/=

Creditors (Amuthavizhi) Rs?

According to the increase of imprest amount by Rs. 500 on June 01st 2018, the reimbursement amount

is Rs. 3460/= calculate the following?

a) What is the petty cash imprest amount at the beginning of 2018 May?

……………………………………………………………………………………………………

b Give the journal entry for the cash payment to Amuthavizhi on May 2018?

……………………………………………………………………………………………………

……………………………………………………………………………………………………

True / false

A – It provides business past and future information.

……………

B – It is prepared based on standards and laws. ……………

C – It provides information to organizations managers for decision making ……………

D – It coo be used for the purpose of internal and external parties. ……………


18. Give the relevant accounting concepts for the following events.

a) Showing drawings ………………..………...…..….….

b) Identifying receivable incomes ………………………..…......…….

c) Showing debtors as assets and creditors as liabilities in the balance sheet.

……………………………………

d) Represent the stock valve at low value by comparing ‘cost’ and ‘net realizable value.

……..………………………….…

19. Financial accounting information of Ilanthirai business for the financial year ended 2019.03.31 are

given below.

Other income shown in the

Income statement Rs. 15 000/=

Gross profit Rs 60 000/=

Cost of sales Rs. 115 000/=

Increase in net assets. Rs. 85 000/=

Drawings Rs. 25 000/=

Additional capital Rs. 80 000/=

According to the above information, find out the following for the financial year ended 31.03.2019,

a) Expenses againts income? ……….…………………………………………………………….

b) Sales income? ……………………………………………………………………..

20. Debtors control A/C balance of business as at 2019.03.31 was Rs. 80 000 /=. Erenthough the debtors

list balance showed a difference balance on that date. The reasons for the difference are given below,

1) Total of sales day books was understated byRs. 2000/=

2) Credit sale of Rs. 20 000/= was recorded in the sales daybook as Rs. 2 000/=.

3) Credit sale of Rs. 4500/= was recorded in the individual A/C as Rs. 5400/=.

4) Discount allowed Rs. 500/= was not recorded in the debtors individual A/C.

The balance of debtors to be shown the financial statement is?...................................................

21. Ezhukathir business sells its product by adding 25% on cost. The information are related to the

financial year ended 31.03.2019.

Purchasing price inclusive of 10%. VAT Rs. 132 000/=

Sales price inclusive of VAT 10% is Rs. 220 000/=

Stock value as at 31.03.2019 is Rs. 33 000/=

Calculate the following

a) Cost of the goods sold during the year? ………….………………………………………………

b) Value of stock as at 01.04.2018?................. ……………………………………………………..


22. Thanihai and Pothihai runs a partnership business with an agreement of sharing profit & loss equally.

On this business, Mallihai was admitted as a new partner on 01.04.2019. On this date Thainihai,

Pothihai and Mallihai decided to share profit & loss in the ratio of 3 : 2 : 1 on that date, after adjusting

of goodwill, capital balance of Mallihai was reduced by Rs. 50 000/= and capital balance of Pothihai

was increased by Rs. 50 000/=.

Find out the amount of goodwill of the partners hip on 2019.04.01?……………………………………

23. Puhalenthi business which was started on 2018.04.01 by investing Rs. 600 000/= as capital doesn’t

maintain accounting records properly. The following information ware extracted from the accounting

boots,

Total assets and total liabilities on 2019.03.31 was Rs. 800 000/= and 350 000/= respectively.

Owner has given his motor vehicle worth of Rs. 450 000/= to the business during the financial

year.

Was on the above information, find out the correct financial result of the business?

…………………………………………………………………………………………..……………..

24. Classify the following costs as direct cost’ and ‘indirect cost’ in related to shoe manufacturing

business.

a) Wages to machine operators …………………………………………………….

b) Machinery depreciation …………………………………………………….

c) Cost of protected skin …………………………………………………….

d) Factory manager salary …………………………………………………….

25. Give the correct classification of accounts for anon-profit motive organization.

a) Subscription received in advance …………………………………………………….

b) Subscription receivable …………………………………………………….

c) Life subscription balance …………………………………………………….

d) Admission fees …………………………………………………….

(25X4=100 marks)


Part II

First question will be compulsory. Answer four question totally including first question.

01. Inthiran and Chanthiran are partrers of a partnership business. Their partnership agreement is as

follows.

1) Fixed capital interest 10%

2) Every partner is entitled to 1 monthly salary of Rs. 1000/=

3) Porefit & loss are shared among partners as follows; Inthiran - 3

5 Chanthiran -

2

5

4) Trial balance as at 31.03.2019

Particulars Debit credit

Capital - Inthiran

- Chanthiran

200 000

100 000

Current A/C - ,Inthiran

- Chanthiran

36 000

45 000

Purchases, sales 260 000 550 000

Debtors, creditors. 40 000 30 000

Returns 5 000 6 000

Discounts 3 000 4 000

Property plant equipment (cost, Accumulated depreciation) 400 000 60 000

Salary 42 000

Insurance city tax. 5 000

Electricity. 2 000

EPF expense.

Distribution expense.

investment

12 000

28 000

50 000

Investment income 5 000

Impairment loss on trade receivable 3 000

Allowances of expected lossesin trade receivable 3 000

Carriage inwards..

Opening stock.

8 000

18 500

Cash and cash equivalents. 90 500

1 003 000 1 003 000

Additional Information

1) Stock as at 31.03.2019 Rs. 30 000/=

2) Property, plant & equipment are depreciated of reducing balance method and distributed as

follows.

Administrative - 2

5 share

Sales & distribution - 3

5 share


3) Insurance paid in advance on 31.03.2019 Rs. 500/=

4) Payable distribution expenses on 31.03.2019 Rs. 2000/=

5) Allowances on losses of expected trade receivable has to be adjusted as 10%

6) Receivable investment income on 31.03.2019 is Rs. 2500/=

7) Goods costing Rs. 10 000/= was damaged during the year due to fire. Out of this insurance

company agreed to pay 75% of the lass. No entries were made regarding this transaction on the

books.

8) As the partnership business is functioning on the building which is a property of Inthiran

Partnership has to pay a monthly rent of Rs. 500/= to him.

9) Chanthiran spent Rs. 3000/= as traveling experses for the purpose of sales development for the

partnership. It is not recorded in the books of accounts.

10) Salary withdrawn by the partners also included under salary as follows :

Inthiran - Rs 3 000/=

Chenthiran - Rs. 2 000/=

Required;

1) Income statement of the partnership for the year ended 31.03.2019. (Including appropriation).

2) Partners current A/C.

3) Statement of finical position

(20 marks)

02. A) The following details were extracted from the statement of financial position of Sivan business on

01.01.2019.

The following transaction were taken place during the month of January,

1) Purchase of goods Rs. 65 000/=

2) Rs. 80 000/= cost of goods were sold for Rs. 115 000/= among this Rs. 75 000/= was received as

cash and the balance was on credit.

3) Building rent paid on January Rs. 20 000/=

4) Cash received from a debtors balance of Rs. 100 000/= after deduction a discount of 5%

5) Sivan paid his house electricity bill of Rs. 5000/= from the business fund.

6) Bank loan resettled amount Rs. 6000/= which includes an interest of Rs. 1000/=

Rs. (000)

Land 1 400

Motervechile 1 000

Furniture & fittings 500

Stock 165

Receivables for the business 135

Cash balance 550

12% Bank loan 100

Payable to the business 450


Required;

1. Show the above accounting transactions of the business for the month ended 31.01.2019 on the

following equation.

Transaction

on Balance

Assets Liabilities

Equity

Pro

per

ty p

lan

t

equ

ipm

ent

Deb

tors

Sto

ck

Cas

h

Cre

dit

ors

Ban

k l

oan

2. Find out the profit for the month of January on net asset basis?

(10 marks)

B) Vinayagar is the owner of a solepropreitorship. The following statement of financial position was

prepared by a trainee accountant at his business.

Statement of financial position as at 31.12.2018.

Property, plant & equipment 600 000

Stock 240 000

Debtors. 110 000

Cash 280 000

Suspense A/C 100 000 730 000

1 330 000

Capital 800 000

(+) Net profit 300 000

1 100 000

Creditors 230 000

1 330 000

The following errors were identified later.

1) Bad debt of Rs. 3500/= was recorded as Rs. 5300/= in the accounting books.

2) Cash sales Rs. 2000/= was credited twice in the sales A/C.

3) Cash paid to creditors Rs. 65 000/= and salary Rs. 15 000/= wore recorded in the cash book but

have not been recorded in the creditors A/C and salary A/C

Required;

1. Journal entries to rectify the above errors and profit reconciliation statement.

2. Statement of financial position as at 31.12.2018 after correction of errors.

(10 marks)


03. The sole tradership carriedout by Vettiyarasan business makes all the payment except petty expenses

through current A/C. All the receipts are directly deposited to the bank A/C. Other information related

to the transactions are given below.

1) The transactions take place during the month of March 2019

Receipts Rs. (000’ )

Cash sales 560

Sales of equipments in use 200

Received from debtors – Ameer 320

Interest income received 60

Received from debtors-kathar 150

Payments Rs. (000’)

Cash purchases 220

Payment to creditors – Imaam 300

Expenses paid 240

Drawings. 40

Cash purchases 200

2) Cash control A/C balance of the business as at 01.03.2019 is Rs. 10 000/=. It tallies with the bank

statement balance on that date.

3) Discount allowed to debtor – Ameer Rs. 4000/= and discount received from creditor-Imaam

Rs. 3000/=

4) Summary of bank statement for the month of March 2019 is given below.

Rs. (000’)

Cheques credited 1 000

Cheques debited 7 00

Direct deposit by debtor 100

Bank charges 20

Lease installment paid understanding order 15

Deposited cheque dishonoured 90

Required

1. Prepare cash receipt and cash payment journals for the month of March 2019 using the information

given above in the number (1) set.

2. Adjust the cash balance and prepare bank reconciliation statement as at 31.03.2019.

(10 marks)

04. The information related to a teachers’ welfare society named “Guru Sevana” formed by school teachers

for the year ending 31.03.2019 are given below.

The society had a cash balance Rs. 80 000/= at 01.04.2018 and accumulated fund on that date was

Rs. 320 000/=.


There were 124 members at the society. on 31.03.2019 and their monthly subscription is Rs. 200/=.

The following information related to admitted and leftout members during the financial year are

given below.

Date Number of Number of

Admitted members leftout members

2018.07.01 02 05

2018.10.01 02 −

Eventhough the subscriptions from admitted members were received properly, the subscriptions

from the leftout members didn’t pay their annual membership fees.

For the purpose of raising aid for the teachers’ welfare society, an event named “Guru Pratheepa”

was organized and income of Rs. 300 000/= was received from the sale of tickets and

memorandums. The expenses incurred for this were, ticket printing expenses Rs. 15 000/=

Refreshment expenses Rs. 50 000/= and other expenses related to the event were paid in cash.

On 2018.04.01 A computer was received Rs. 200 000 as donation for the society. It is depreciated

25% per anum and it is decided to consider this donation as an income for a period of 4 years

equally.

Scholorship of Rs. 15 000/= need to be provided for 12 children of members for the financial year.

But it was paid in cash only for 8 children.

Required :

For the financial year ended 31.03.2019,

1. Annual membership fees income.

2. Receipts & payments A/C

3. Income & expenditure statement.

4. Accumulated fund as at 31.03.2019

(10 marks)

05. Kannan started a production business on 01.04.2019 by investing Rs. 900 000 taken from his own

savings. Summary of transaction taken place during the month of April 2019 are given below.

1) Summary of transactions entered in the cash receipt and cash payment journals.

Receipts Rs. (000)

Sales Rs. 6 000

Received from debtors Rs 2 000

Payments

Purchase of raw materials Rs. 1 200

Payment to creditors Rs. 800


Prepaid advances for rawmaterial purchase Rs. 300

Wages to machine operators Rs. 400

Salaries to production supervisors. Rs. 700

Factory electricity Rs. 60

Factory rent Rs. 600

Administrative expenses Rs. 200

Purchase of machinery (on 01.04.2019) Rs. 4 000

2) Other total balances of prime entry books.

Rs. (000’)

Sales daybook 12 000

Purchase daybook (rawmaterial) 8 000

Return inwards journal 500

3) Among the prepaid advances for raw material purchase, only Rs. 100 000/= worth of raw materials

were received on 27.04.2019. This is not recorded in the accounting books.

4) Monthly factory rent is Rs. 200 000/=. Rent for the first quarter year was paid.

5) Electricity bill of Rs. 50 000/= for the month of April / 2019 was received on 10.05.2019.

6) The useful life years of the machinery is 10 years. Its residual value is Rs. 400 000/= Machinery is

depreciated on straight line basis.

7) Stock balance sat the month end were as follows,

Rs. (000’)

Rawmaterials 300

Working-progress (Valued at productions) 80

Finished stock 100

Required :-

1. The following accounts in the general ledger for the month of April 2019. (Use T format)

i) Sales A/C

ii) Debtors control A/C.

iii) Rawmaterials purchase A/C

iv) Creditors control A/C

v) Prepaid A/C

2. Production cost statement for the month of April 2019.

3. Income statement for the month of April 2019.

(10 marks)

G.C.E. A/L Examination July - 2019

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Transcript of G.C.E. A/L Examination July - 2019