Principles and Practice of Accounting - 7 mtp MTP

1. (a) State with reasons whether the following statements are True or False: (i) Aclaim that an enterprise is pursuing through legal process, where the outcome is uncertain, is a contingent liability. (ii) If the effect of errors committed cancel out, the errors will be called compensating errors and the trial balance will disagree. (iii) Stock at the end, if appears in the trial balance, is taken only to the Balance Sheet. (iv) Re-issue of forfeited shares is allotment of…

2. (a) Before preparation of the trial balance, the following errors were found in the books of Saraswat & Sons. Give the necessary entries to correct them. (i) | Furniture purchased for office use amounting to 20,000 has been entered in the purchase day book. (ii) An amount of = 3,000 due from Satyam, which had been written off as bad debts in the previous year, recovered in the current year, and had been posted to the personal Account of…

Q, R and S had been carrying on business in partnership sharing profits & losses in the ratio of 4:3:2:1. They decided to dissolve the partnership on the basis of following Balance Sheet as on 30th April, 2024: Liabilities Amount | Assets Amount () Capital Accounts Land & building 2,46,000 P 2,16,000 Furniture & fixtures 65,000 Q 1.44.000 | 3,60,000 | Stock 1,00,000 Debtors 72,500 49 Cash in hand 15,500 Sundry creditors 36,000 | Capital overdrawn: Mortgage loan 1,10,000|R 1,000…

5. (a) Ali draws a bill for 745,000 on Akbar on 15'* April, 2024 for 3 months, which is returned by Akbar to Ali after accepting the same. Ali gets it discounted with the bank for = 44,100 on 18" April, 2024 and remits onethird amount to Akbar. On the due date Ali fails to remit the amount due to Akbar, but he accepts bill of 52,500 for 3 months, which Akbar discounts for ₹51,300 and remits = 8,475 to…

Limited issued 2,00,000 Equity shares of, 10 each at a premium of 10%, payable = 2 on application; = 4 on allotment (including premium); % 2 on first call and balance on the final call. All the shares were fully subscribed. Mr. P who held 20,000 shares paid full remaining amount on first call itself. The final call which was made after 4 months from the first call was fully paid except a shareholder having 2,000 shares and one another…