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CA foundation MOCK test paper 1 may 2019: Accounts

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Justie
Institute of Chartered Accountants of India (ICAI)

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Test Series: March, 2019 FOUNDATION COURSE MOCK TEST PAPER PAPER 1: PRINCIPLES AND PRACTICE OF ACCOUNTING Question No. 1 is compulsory. Answer any four questions from the remaining five questions. Wherever necessary, suitable assumptions should be made and disclosed by way of note forming part of the answer. Working Notes should form part of the answer. (Time allowed: 3 Hours) 1. (100 Marks) (a) State with reasons whether the following statements are True or False: (i) When shares are forfeited, the share capital account is debited with c alled up capital of shares forfeited and the share forfeiture account is credited with calls in arrear of shares forfeited. (iii) Accrual concept implies accounting on cash basis. (iii) Finished goods are normally valued at cost or market price whichever is higher. (iv) Discount at the time of retirement of a bill is a gain for the drawee. (v) Partners can share profits or losses in their capital ratio, when there is no agreement. (vi) Receipts and Payments Account highlights total income and expenditure. (6 Statements x 2 Marks = 12 Marks) (b) Explain Cash and Mercantile system of accounting. (4 Marks) (c) Prepare Journal Entries for the following transactions in the books of Gamma Bros. (i) Employees had taken stock worth Rs. 10,000 (Cost price Rs. 7,500) on the eve of Deepawali and the same was deducted from their salaries in the subsequent month. (ii) Wages paid for erection of Machinery Rs. 8,000. (iii) Income tax liability of proprietor Rs. 1,700 was paid out of petty cash. (iv) Purchase of goods from Naveen of the list price of Rs. 2,000. He allowed 10% trade discount, Rs. 50 cash discount was also allowed for quick payment. (4 Marks) 2. (a) M/s Kedar, Profit and loss account showed a net profit of Rs. 8,00,000, after considering the closing stock of Rs. 7,50,000 on 31st March, 2017. Subsequently the following information was obtained from scrutiny of the books: (i) Purchases for the year included Rs. 30,000 paid for new electric fittings for the shop. (ii) M/s Kedar gave away goods valued at Rs. 80,000 as free samples for which no entry was made in the books of accounts. (iii) Invoices for goods amounting to Rs. 5,00,000 have been entered on 27 th March, 2017, but the goods were not included in stock. (iv) In March, 2017 goods of Rs. 4,00,000 sold and delivered were taken in the sales for April, 2017. (v) Goods costing Rs. 1,50,000 were sent on sale or return in March, 2017 at a margin of profit of 33-1/3% on cost. Though approval was given in April, 2017 these were taken as sales for March, 2017. 1 The Institute of Chartered Accountants of India

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