ECO-2

							         BACHELOR'S DEGREE PROGRAMME

                  .       Term-End Examination
                             December, 2OO7


                         COURSE: GOMMERCE
                  ELECTIVE
                          ECO-2 : ACCOUNTANCY-I

Time : 2 hours                                   Maximum Marks : 5A

Note :       Attempt any four quesffons,including question
             no. 7 which is compulsory. Giue working notes,
             whereuer necessary.
                                                        -

1.   Answer any turo questionsof the following :                   7+7

                 Explain Business Entity concept and state its
     ,   r   r    t   .
     (a)
                 accountingimplications.

     (b)         What is Joint Venture ? How does it differ from
                 partnership? Explain.

     (c)         Distinguish between capital reserves and revenue
                 reserves.

     (d)         What is depreciation What is the differencebetween
                                     ?
                 fixed instalment method and diminishing balance
                 method of depreciation?

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                                                                      .
 2.   (a)   Why do we prepareTrial Balance? Explain.

      (b)   Give necessary adjusting journal        entries for    the
            following items :                                            4+g
            (i)     Salary due but not paid Rs. 5,600

            (ii)    Bad debts to be written off Rs. 20,400

            (iii)   Unexpired insurance Rs. 6,000

            (iv) Commission received in advance Rs. 4,000

3.    (a)   Distinguish between Income and Expenditure Account
            and Receipts and Payments Account.

      (b)   Frorn the following information, preparelncome and
            Expenditure Account of National Nursing Home for
            the    r ended 30th J u n e ,2 0 0 6 :
                                         2
            Receipts                  Rs.    Payments               Rs.
            Bank balance
            (as on 7-7-2005)         4 020 Salaries                7,312
            Subscriptions            2 230 Laundry                   v60
            Fee from
            non-members                540 Rent & taxes              400
            Municipal grant          2 000 Cost of carpet          4.000
            Donations for                    Cleaning
            Building Fund            3,r20 expenses                1,690
                                             Drugs and
            Interest                    7 6 other expenses 1 , 3 4 0
                                             Balance c/d          2,494
                                    11,986                        rt,9g6


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           A donation of Rs. 20A receivedas Building Fund was
           wrongly included in the Subscriptionaccount. A bill
           of medicinespurchased  during the year amountingto
           Rs. 256 was outstanding.                              5+7



4.   (a)   What do you mean by Secretreserves How do you
                                             ?
           createSecret reserves
                               ?



     (b)   A     machine was purchased for Rs. 25,000 on
           1ti January, 2004. Depreciation is to be provided
           annually accordingto the straight line method. The
           useful life of the assetis 10 years and residualvalue
           is Rs. 5,000. You are requiredto find out its annual
           depreciation.Another machine was purchasedon
            -l

           1'' July, 2005 with a working life of      10 years
                                         value.Also ascertain
           for Rs. 50,000 with no residual
           the annualdepreciation this machineand prepare
                                for
           Machineryaccount {or 2QQ4,2005 and 2006,
           assumingthe firm closesaccountson 31tt December
           of every year.
                                                             2+2+B



5.   (a)   Explain different types of errors with suitable
           examples.


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                                                             P . TO .
     (b)   Prepare     Manufacturing Account         from the
           following information relating to the year ended on
           31tt December,  2005 :                              6+6
                                                        Rs.
           Purchaseof raw material                  4,00,000
           Stock of raw materialon 1.1.2005          40,000
           Work-in.progress 1.I.2005
                          on                         20,000
           Factory wages                             60,000
           Factory rent                              20,000
           Fuel and power                              9,000
           Carriage inward                             4,000
           Repairs of plant                            9,000
           Depreciationon plant                      20,000
           Sale of scrap                               2,000
           Stock of raw materials(31.12.2005)        80,000
           Stock of work-in-progress .12.2005)
                                   (31               30,000


6.   Write explanatorynotes on any two of the following :     6+6
     (a)   Bank ReconciliationStatement
     (b)   Petty Cash Book

     (c)   Normal loss and Abnormal loss

     (d)   Featuresof Consignment



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ECO-2                                              P.T.O..
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ECO-2                                                     9,000