AHSEC| CLASS 11| ACCOUNTANCY| SOLVED PAPER - 2019| H.S. 1ST YEAR
2019
ACCOUNTANCY
Full Marks: 100
Pass Marks: 30
Times: 3 hours
The figures in the margin indicate full marks for the questions
1.(a) Fill in the blanks: 1x2=2
(i) Assets - Capital = Liabilities.
(i) Recognize all losses, anticipate no Gain.
(ii) Credit purchases of goods are recorded in Purchase Book.
(iv) The full form of CPU is Central
Processing Unit.
Ans: Central Processing Unit
(b) State whether the following statements are true or false: 1X4=4
(i) Accounting is both a Science and an Art. True
(ii) Assets account always show credit balance. False
(iii) Accounting software is an integral part of the Computerised
Accounting system. True
(iv) Salary outstanding account show debit balance. False
2. Mention two causes of depreciation. 2
Ans:- Two
reasons for depreciation are wear and tear and obsolescence. Wear and tear
refers to the gradual deterioration of an asset due to use over time, while
obsolescence refers to the reduction in the value of an asset due to
technological advancements or changes in market demand.
3. Give two functions of Trial Balance.
2
Ans:- Trial
balance has two functions, to ensure the arithmetical accuracy of the entries
made and to act as a quick reference to find out the balance in any ledger
without having to refer to the ledger.
4. Write two types of source documents.
2
Ans:- Two
types of source documents are sales invoice and purchase order. Sales invoices
are used to record sales transactions, while purchase orders are used to record
purchases of goods or services from suppliers.
5. Write the name of four parties who
are interested in Accounting information. 2
Ans:- The
four parties interested in accounting information are business owners,
investors, creditors and regulatory authorities.
6. What is Bills of Exchange? 2
Ans:- Bills
of exchange are negotiable instruments that enable a business to obtain loans
from a bank or financial institution. They are used to facilitate payment for
goods and services and are often used in international trade.
7. Mention three features of Petty Cash
Book. 3
Ans: The
three characteristics of petty cash book are that it is a subsidiary ledger, it
is used to record petty cash transactions, and it is maintained on a cash basis
of accounting.
Or
What is Journalising? 3
Ans:- Journalizing transactions is a
fundamental process in accounting that involves recording all business
transactions in chronological order. The process involves noting down the date,
accounts being debited or credited and a brief description of the transaction.
Journal entries serve as the basis for financial records, making it important
to maintain accurate and up-to-date entries. The primary purpose of
journalizing is to ensure accurate financial statements, facilitate error
detection, and provide transparency to stakeholders and third parties
Steps to Journalize Transactions:-
(i) Identify transactions: Examine each
transaction to determine its nature and effect on the accounts
(ii) Identify affected accounts:
Determine which general ledger accounts will be changed due to the transaction.
(iii) Prepare a journal entry: Document the
transaction in the accounting system with sufficient detail for clarity and
future reference.
8. Distinguish between Bills of Exchange
and Promissory Note. 3
Ans:- Bill
of exchange is a negotiable instrument that contains an order to pay a specific
amount to a person within a predetermined time frame or on demand. This
requires the acceptance by the debtor to be valid and involves three parties:
the drawer, the drawee and the payee. On the other hand, Promissory Note is a
negotiable instrument containing a written promise by a person or institution
to pay a certain amount of money to its holder on demand or on a specified
date. It does not require approval by the lender and involves two parties: the
drawer/maker and the payee.
Main differences:-
(i) Definition: A bill of exchange is an
order for payment, whereas a promissory note is a simple written promise.
(ii) Parties involved: A bill of
exchange involves three parties, whereas a promissory note involves two
parties.
(iii) Acceptance: A bill of exchange
requires acceptance by the drawee, but this is not the case for a promissory
note.
Or
What is dishonour of a bill? 3
Ans:- Dishonor of a bill refers to a
situation when a bill, such as a bill of exchange or a cheque, is not paid or
accepted on the due date. This may be due to various reasons, such as
insufficient funds, late payment, or refusal to accept the bill. In the case of
a bill of exchange, dishonor occurs when the drawee fails to make payment on
the date of maturity. In the context of checks, dishonor usually occurs when
there are insufficient funds for the bank draft or cheque. Dishonor of a bill
may have legal consequences, such as termination of obligations by the other
party, charging fees, or damage to credit.
9. What is capital Expenditure? 3
Ans:-
Capital expenditure, also known as capital expenditure or Cap. Ex, is the
amount of money used to acquire or upgrade a company's fixed assets, such as
property, plant or equipment (PP&E). Refers. These expenses are considered
long-term investments and are not expensed directly on the company's income
statement. Instead, they are capitalized on the balance sheet and considered investments
by the company. Capital expenditures are important for companies to grow and
maintain their businesses by investing in new property, plant, equipment,
products, and technology. They can have a significant impact on a company's
short-term and long-term financial position, and making wise capital
expenditure decisions is vital to a company's financial health.
Or
Write three objectives of preparing Trading Account. 3
Ans:- The objectives of preparing a trading account include:-
(i) To determine gross profit and loss:
Trading account helps to calculate the gross profit or loss of a business by
comparing sales and cost of goods sold.
(ii) To show net purchases and sales: It
provides information about net purchases and sales made during a specific
accounting period, thereby helping in understanding the financial transactions
of the business.
(iii) To show cost of goods sold:
Trading account calculates the cost of goods sold by considering factors like
opening stock, purchases and closing stock, which is necessary to assess the
profitability of the business.
10. What is incomplete record? Give two
reasons for incomplete record. 3
Ans:- Incomplete
records refers to the situation where some information is missing or has not
been entered in the accounting system. This can happen due to various
reasons, such as:-
(i) Lack of proper accounting procedures: If a business does not have well-defined accounting procedures, it
may result in incomplete records.
(ii) Inadequate training: If the person
responsible for maintaining accounts lacks proper training or knowledge, they
will not be able to record all the necessary information, leaving records incomplete.
Or
Mention three disadvantages of single-entry system. 3
Ans:- Single-entry system, also known as
incomplete record system, has several disadvantages:-
(i) Limited information: The
single-entry system provides limited financial information compared to the
double-entry system, because it does not record non-cash transactions, such as
depreciation or inventory.
(ii) Limited auditability: The
single-entry system is less auditable than the double-entry system, because it
does not provide a complete financial picture, making it difficult for auditors
to verify the accuracy of the financial statements.
(iii) Limited scalability: Single-entry
system is not suitable for large or growing businesses, as it cannot handle the
complexity of their financial transactions.
11. Mention three limitations of computer.
3
***
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