Part-I:

1. What is outstanding expense?
2. What is prepaid expense?
3. What is accrued income?
4. What is income received in advance?
5. What is bad debt?
6. Write notes on Provision for bad and Doubtful debts.
7. Write notes on Provision for discount on Debtors.
8. Write notes on Provision for discount on Creditors.
9. What is adjusting entry?
10. Write notes on
a) Trading Account b) Profit and loss account and c) Balance sheet.

Part-II. Problems:

1. Pass necessary adjusting entries for the following adjustments:
a) Closing stock Rs. 6,00,000.
b) Provide 6% interest on capital of Rs. 16,00,000
c) Rent received in advance Rs. 5,000
d) Interest accrued on investments Rs. 2,000
e) Insurance premium prepaid Rs. 1,000
f) Wages outstanding Rs. 15,000.

2. Pass necessary adjusting entries for the following adjustments:
a) Interest on drawings Rs. 10,000.
b) Interest on loan outstanding Rs.5,000.
c) Depreciation at 5% on furniture Rs.50,000.
d) Write off bad and doubtful debts Rs.3,000.

e) Provide provision for bad and doubtful debts at 5% on Sundry debtors Rs.4,00,000.
f) Provide provision for discount on creditors at 2% on Sundry creditors Rs. 3,50,000.

3. Give adjusting entry and transfer entry for the following adjustments:
a) Interest on drawings Rs. 5,000.
b) Depreciation on machinery Rs.4,000.
c) Write off bad debts Rs.2,000.

4. The value of closing stock shown outside the Trial Balance (31.3.05) is Rs.2,50,000. Pass adjusting entry. Show how this item will appear in the Final accounts as on 31.3.05.

5. Trial Balance (31.3.05) shows salaries paid Rs.1,50,000. Salary for March 2005 Rs.4,000 not yet paid. Pass adjusting entry and show how this item will appear in the Final accounts.

6. Trial Balance as on 31.3.05 shows Rs.40,000 as Insurance premium paid. Unexpired insurance premium Rs.5,000. Pass adjusting entry and show how this item will appear in the Final accounts.

7. Credit side of Trial Balance as on 31.4.05 shows ‘Commission received Rs.10,000.' Commission accrued but not yet received Rs.4,000. Pass adjusting entry and show how this item will appear in the Final accounts.

8. Trial balance as on 31.3.05 shows ‘Rent received Rs.30,000.' Rent received in advance Rs.6,000. Pass adjusting entry and show how this item will appear in the Final accounts.

9. As per Trial Balance (31.3.05) capital is Rs. 6,00,000. Provide 6% interest on capital. Pass adjusting and transfer entries. Show how this item will appear in the Final accounts.

10. The Trial Balance shows the followings Capital as on 31.3.03 - Rs.6,00,000

Drawing as on 31.3.03 - Rs.50,000

Charge interest on drawings @ 5%. Pass adjusting and transfer entry. Show how this item will appear in the Final accounts.

11. The Trial Balance (31.3.04) shows the following:

                                            Dr.            Cr.
Bank loan @ 10% (1.4.03)         ----    Rs. 10,00,000
Interest paid Rs.                      60,000

Provide interest outstanding. Pass adjusting entry and show how this item will appear in the Final accounts.

12. The trial balance shows the following as on 31.3.98.

Capital Rs. 5,00,000
Drawings (1.7.97) Rs. 50,000

Charge interest on drawings @ 5% . Pass adjusting and transfer entry. Show how this item will appear in the Final accounts.

13. Rent received shown in the Trial Balance as on 31st March 2001, Rs.10,000. Rent received in advance is Rs.1,000. You are required to show how it appears in the Profit and Loss account and Balance sheet.

14. How will the following adjustment appear in the Balance sheet as on 31.3.2000.

Sundry debtors R 21,000
Bad debts to be written off Rs. 1,000
Adjustment: Provide @ 5% provision for Bad and Doubtful debts and @2% Provision for discount on Debtors.

15. Commission received given in Trial Balance is Rs.1,000 as on 31st March 1994. Commission accrued but not yet received Rs.150. Show the adjusting entry.

16. The Trial Balance shows the value of machinery on 31.3.04 as Rs.50,000. Machinery is to be depreciated at 10%. Pass adjustment entry and show how this item will appear in the Final accounts.

17. The Trial Balance as on 31st March 2003 show Sundry debtors Rs.60,000. Write off bad debts Rs.4,000. Pass adjusting and transfer entry. Show how this item will appear in the Final accounts.

18. The Trial Balance shows on 31.3.2002, Sundry debtors Rs.1,50,000. Provide 5% provision for bad and doubtful debts on Sundry debtors.

Pass adjusting entry and how this item will appear in the Final accounts.

19. The Trial Balance shows on 31.3.2002, Sundry debtors Rs.1,25,000.

Adjustment:

1. Bad debts to be written off Rs.5,000.

2. Provide @ 5% Provision for bad and doubtful debts and

3. Provide @ 2% Provision for discount on debtors.

Pass entries and show how these items will appear in the Final accounts.

20. The Trial Balance as on 31st March 2003 shows. Sundry debtors 90,000 ---

Adjustment: Create 2% Provision for discount on Debtors.

Pass Journal entry and show how this item will appear in the Final accounts.

21. The Trial Balance shows sundry creditors at Rs.10,000 on 31.3.2000.

Adjustment: It is desired to make a provision for discount on Sundry creditors at 2½ %.

You are required to show how it appears in Profit and Loss account and Balance sheet.

Attachment:- ACCOUNTANCY.zip