Principles and Practice of Accounting - January 2025

1. (a). State with reasons, whether the following statements are True or False : 62 (i) Matching concept is based on accrual concept. = (ii) Customers of business should not be considered as users of accounts prepared by business. They are not interested in knowing the performance of the business. (iii) Under inflationary conditions, FIFO will not show lowest value of cost of goods sold. (iv) For redemption of preference shares, proceeds from fresh issue of equity shares and debentures…

2. (a) A firm purchased a second-hand machinery on April 1, 2021 for 10 % 15,00,000 subsequent to which & 2,00,000 were spent on its repairs and installation. On October 1, 2021 another machinery was purchased for = 9,00,000 and cost of installing the machine in a new plant is & 20,000. The firm also shifted the machinery purchased on April 1, 2021 to the new plant and incurred freight of ₹ 10,000. They adopted a policy of charging depreciation…

3. (a) From the following schedule of balances extracted from the books of 15 Mr. Piyush, prepare Trading and Profit and Loss Account for the year ended 31 March, 2024 and the Balance Sheet as on that date after making the necessary adjustments : Particulars Dr. (®) Cr.) Capital Account 8,85,000 Stock on 1.4.2023 3,86,000 Cash in hand 18,500 Cash at Bank 73,500 Investments (at 9%) as on 1.4.2023 50,000 Deposits (at 10%) as on 1.4.2023 3,00,000 Drawings 78,000 Purchases…

5. (a) From the following income and expenditure account of a Club for the 10 year ending 31" March, 2024, you are required to prepare receipt and payment account for the year ending 31% March, 2024 and Balance Sheet as on 1‘ April, 2023. INCOME AND EXPENDITURE ACCOUNT For the year ending 31° March, 2024 Expenditure Amount Income Amount | g zg To Lawn Maintenance | 42,000 | By Subscription 1,05,000 To General Expenses 13,000 | By Admission fees 12,000…

(a) Arpit Ltd., with an authorized capital of % 20,00,000 divided into 15 Equity shares of % 10 each, on 1‘ June, 2023, invited applications for issuing 3,00,000 Equity shares at a premium of ₹ 5 per share. The amount was payable as follows : On Application % 2 per share On Allotment (1% July, 2023) % 7 (including premium) per share On First call (1% Nov., 2023) % 3 per share On Final call (1* Jan., 2024) % 3…