Q1. Analyze the following transaction under traditional approach.
18.1.2011 Received a cheque from a customer, Sanjay at 5 p.m. Rs.20,000
19.1.2011 Paid Ramu by cheque Rs.1,50,000
20.1.2011 Paid salary Rs. 30,000
20.1.2011 Paid rent by cheque Rs. 8,000
21.1.2011 Goods withdrawn for personal use Rs. 5,000
25.1.2011 Paid an advance to suppliers of goods Rs. 1,00,000
26.1.2011 Received an advance from customers Rs. 3,00,000
31.1.2011 Paid interest on loan Rs. 5,000
31.1.2011 Paid instalment of loan Rs. 25,000
31.1.2011 Interest allowed by bank Rs. 8,000
Analysis of transaction –with accounts involved-nature of accountaffects
and debit/credit.
Q2. The trial balance of Nilgiris Co Ltd., as taken on 31st December, 2002 did not tally and the difference was carried to suspense account. The following errors were detected subsequently.
a) Sales book total for November was under cast by Rs. 1200.
b) Purchase of new equipment costing Rs. 9475 has been posted to Purchases a/c.
c) Discount received Rs.1250 and discount allowed Rs. 850 in September 2002 have been posted to wrong sides of discount account.
d) A cheque received from Mr. Longford for Rs. 1500 for goods sold to him on credit earlier, though entered correctly in the cash book has been posted in his account as Rs. 1050.
e) Stocks worth Rs. 255 taken for use by Mr Dayananda, the Managing Director, have been entered in sales day book.
f) While carrying forward, the total in Returns Inwards Book has been taken as Rs. 674
instead of Rs. 647.
g) An amount paid to cashier, Mr. Ramachandra, Rs. 775 as salary for the month of November has been debited to his personal account as Rs. 757.
Pass journal entries and draw up the suspense account.
Journal entries of all the transactions
Suspense account with Conclusion
Q3. From the given trial balance draft an Adjusted Trial Balance.
Trial Balance as on 31.03.2011.
1. Charge depreciation at 10% on Buildings and Furniture and fittings.
2. Write off further bad debts 1000
3. Taxes and Insurance prepaid 2000
4. Outstanding salaries 5000
5. Commission received in advance1000
Q4. Compute trend ratios and comment on the financial performance of Infosys Technologies Ltd. from the following extract of its income statements of five years.
(Source: Infosys Technologies Ltd. – Annual Report)
Preparation of trend analysis
Preparation of trend ratios
Q5. Give the meaning of cash flow analysis and put down the objectives of cash flow analysis. Explain the preparation of cash flow statement.
Meaning of cash flow analysis
Objectives of cash flow analysis
Explanation of preparation of cash flow analysis
Q6. Write the assumptions of marginal costing. Differentiate between absorption costing
and marginal costing.
Assumptions of marginal costing (all 7 points)
Differences of marginal and absorption costing (Includes all 8

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