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Accounting Practice Guide

This document contains summaries and examples of accounting concepts and financial statements including: 1) Accounting equations, journal entries, cash books, and subsidiary books. 2) Examples of trial balance errors and bank reconciliation statements with adjustments. 3) Depreciation examples calculating machinery accounts over multiple years with purchases and sales. 4) Practice questions for financial statements with adjustments from given illustrations. 5) Introduction to accounting from incomplete records.

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Anish Kantheti
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94 views8 pages

Accounting Practice Guide

This document contains summaries and examples of accounting concepts and financial statements including: 1) Accounting equations, journal entries, cash books, and subsidiary books. 2) Examples of trial balance errors and bank reconciliation statements with adjustments. 3) Depreciation examples calculating machinery accounts over multiple years with purchases and sales. 4) Practice questions for financial statements with adjustments from given illustrations. 5) Introduction to accounting from incomplete records.

Uploaded by

Anish Kantheti
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Accounting Revision

Numericals

Accounting Equations
Journal Entry
Cash Book
Subsidiary Books

Trial Balance and Errors

A book-keeper extracted the following Trial Balance as at 31st March, 2017:

You are required to redraft the trial balance correctly.


Bank Reconciliation Statement

Show only C/B work for the following transactions:

Bank Reconciliation Statement as at 31st May 2020


1. Balance as per cash book ₹17,600
2. Cash and cheque totaling ₹36,000 were sent to the bank. During may, but one
cheque of ₹11,800 was shown in the pass book on 2nd June.
3. Three cheques of ₹10,000, ₹12,000 and ₹4800 respectively were drawn on 27th
May. But the cheque ₹4800 were encashed on 1st June.
4. ₹16,200 was withdrawn from the bank on 25th May. But there is no entry in the
cash book.
5. Cheques were issued of ₹15,000, out of them cheque ₹7700 have not yet been
presented for payment.
6. It was found that the total of 1 page on the payment side of the cash book was
₹4520 but was recorded on the other page as ₹5420.
7. The payment side of the cash book has been undercast by ₹500.
8. A bill of exchange ₹6200 which was discounted with the bank returned
dishonored but no entry was made in the cash book.
9. ₹40 for bank charges were recorded two times in cash book and bank expenses
₹35 not recorded at all in cash book.
10. Cheques of ₹10,000 were sent to the bank for collection. Out of these cheques,
₹2000 and ₹1000 were credited on 8th June and 10th June respectively. The
remaining cheque was credited before 31st May 2020.
11. Bank charges entered twice in the pass book of ₹1000.
12. A bill of ₹4000 retired by the bank under a rebate of ₹120. The full amount of the
bill was credited in the cash book.
13. Fees of ₹250 paid directly by bank, but not recorded in cash book.
14. Cheque ₹78,000 issued in favour of “Mr. A” but cheque ₹50,000 only presented
for payment upto 31st May 2020.
15. Cash deposited into bank ₹5000 but recorded in pass book as ₹5500.
Depreciation
1. Birla cotton Mills purchased machinery on 1st August 2017 for ₹90,000. On 1st
October 2018 it purchased another machine for ₹40,000.

On 30th June 2019, it sold off the first machine purchased in 2017 for ₹58,000
and on the same date purchased a new machinery for ₹1,00,000. Depreciation is
provided at 20% p.a. on the original cost each year. Accounts are closed each
year on 31st March .

Show the Machinery Account for three years. CGST and SGST are charged @
6% each on purchase and sale of machinery.

2. A company whose accounting year is the calendar year, purchased on 1st April,
2017, machinery costing ₹30,000. It further purchased machinery on 1st Oct.
2017 costing ₹20,000 and on 1st July, 2018 costing ₹10,000.

On 1st Jan, 2019, one third of the machinery installed, on 1st April, 2017 became
obsolete and was sold for ₹3,000.

Show how the Machinery Account would appear in the books of the company, it
being given that machinery was depreciated by Fixed Instalment at 10 per cent
p.a.

Financial statements and with Adjustments


1) Practice formula based questions from illustrations 2-10 (pages 20.8-20.12)
2) Revise all the 21 adjustments
3) Attempt illustration 2 (Page 21.10), illustration 14 (Page 21.43) and illustration 16
(Page 21.48)

Accounts from Incomplete Records


1)
2)

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