Model Question Paper Solutions
Answers to the model question paper in the appendix. Each answer is written to the marks shown against its question: one sentence for each 1-mark question in Group A, five marks’ worth of points, tables or working in Group B, and full working for each 8-mark question in Group C. Where a question offers a choice (OR), both options are answered.
Group A: Very Short Answer Questions (11 × 1 = 11 Marks)
1. What is Book-keeping?
Book-keeping is the art and science of identifying, classifying and recording financial transactions systematically and chronologically in the books of original entry and the ledger.
2. State the Dual Aspect Concept of accounting.
Every business transaction has a two-fold effect of equal value, a benefit received (debit) and a benefit given (credit), so that Assets = Capital + Liabilities always holds.
3. What is a Debit Note?
A Debit Note is a source document prepared by a buyer and sent to a supplier when returning goods bought on credit, informing the supplier that their account has been debited.
4. Why is a Bank Reconciliation Statement prepared?
It is prepared to find and explain the causes of difference between the bank balance shown by the Cash Book and the balance shown by the Passbook (Bank Statement) on a given date.
5. Define Errors of Principle with an example.
Errors of Principle are errors made by violating a fundamental accounting principle, usually by confusing capital and revenue items; for example, debiting machinery purchased to Purchase Account instead of Machinery Account.
6. A machine costing Rs. 2,50,000 has an estimated scrap value of Rs. 30,000 and a useful life of 10 years. Calculate annual depreciation under the Straight Line Method.
Annual Depreciation = (Cost - Scrap Value) ÷ Useful Life = (2,50,000 - 30,000) ÷ 10 = Rs. 22,000 per annum.
7. Give any two examples of Capital Reserve.
(1) Profit on sale of fixed assets above their original cost, and (2) premium received on the issue of shares or debentures.
8. Distinguish between Capital Receipt and Revenue Receipt in one point.
A capital receipt is a non-recurring inflow such as owner’s capital, a loan or the sale proceeds of a fixed asset and is shown in the Balance Sheet, whereas a revenue receipt is a recurring inflow from ordinary operations such as sales, commission or interest and is credited to the Income Statement.
9. How is Endowment Fund treated in the final accounts of a Non-Profit Organization?
An Endowment Fund is a capital receipt whose principal must be kept intact, so it is shown permanently on the Liabilities side of the Balance Sheet; only the income from its investment goes to the Income and Expenditure Account.
10. Write the formula for determining Unadjusted Profit under the Single Entry System.
Unadjusted Profit = Closing Capital + Drawings - Additional Capital - Opening Capital.
11. Write the 5-digit Budget Head Numbers for (a) Remuneration and (b) Machinery and Equipment in Nepal Government Accounting.
(a) Remuneration = 21111; (b) Machinery and Equipment = 31122.
Group B: Short Answer & Practical Questions (8 × 5 = 40 Marks)
12. Define Accounting and explain any four major functions of accounting.
Accounting is the art of recording, classifying and summarizing, in a significant manner and in terms of money, transactions and events which are at least partly of a financial character, and interpreting the results (AICPA). It begins where book-keeping ends: it summarizes the records into financial statements, analyzes them, and communicates the results to users for decision-making.
Four major functions:
- Stewardship function: Accounting records, classifies and safeguards the business’s assets, so the owner can see how the resources entrusted to managers have been used.
- Managerial function: It gives management budgets, ratios and variance data for planning, controlling and decision-making.
- Legal and compliance function: It provides the records needed to file VAT and income tax returns under the Income Tax Act, 2058, and the returns required by the Company Registrar.
- Communication function: It publishes audited financial statements for shareholders, banks, creditors and regulators, who rely on them to judge the business.
OR: Explain the Business Entity Concept, Going Concern Concept, and Conservatism Convention with examples.
- Business Entity Concept: The business and its owner are treated as two separate accounting entities. Money the owner invests is recorded as Capital, a liability of the business towards the owner, and anything the owner takes out is recorded as Drawings. Example: if the owner of Bagmati Traders pays a family electricity bill of Rs. 3,000 from the shop’s cash, it is debited to Drawings, not to the shop’s electricity expense.
- Going Concern Concept: The business is assumed to continue operating for the foreseeable future, with no intention or need to close down. That is why fixed assets are shown at cost less depreciation rather than at what they would fetch if sold today. Example: a machine bought for Rs. 2,00,000 and depreciated by Rs. 20,000 is shown at Rs. 1,80,000, even if it would sell for only Rs. 1,20,000 now.
- Conservatism (Prudence) Convention: “Anticipate no profit, but provide for all possible losses.” Expected losses are recorded, while unrealized gains are ignored. Examples: closing stock is valued at the lower of cost and net realizable value, and a provision is made for doubtful debts even though the loss has not yet happened.
13. From the following transactions of Lumbini Mart, prepare a Double Column Cash Book (with Cash and Bank Columns):
- Baishakh 1: Cash in hand Rs. 30,000 and Cash at bank Rs. 50,000.
- Baishakh 6: Purchased goods for Rs. 25,000 and paid by cheque.
- Baishakh 12: Cash sales Rs. 40,000, out of which Rs. 25,000 was deposited into the bank immediately.
- Baishakh 19: Withdrew Rs. 10,000 from bank for office use and Rs. 4,000 for personal use.
- Baishakh 28: Paid salary Rs. 12,000 in cash.
Lumbini Mart
Double Column Cash Book
| Dr. Date | Particulars (Receipts) | L.F. | Cash (Rs.) | Bank (Rs.) | Cr. Date | Particulars (Payments) | L.F. | Cash (Rs.) | Bank (Rs.) |
|---|---|---|---|---|---|---|---|---|---|
| Baishakh 1 | To Balance b/d | 30,000 | 50,000 | Baishakh 6 | By Purchase A/c | — | 25,000 | ||
| Baishakh 12 | To Sales A/c | 40,000 | — | Baishakh 12 | By Bank A/c | C | 25,000 | — | |
| Baishakh 12 | To Cash A/c | C | — | 25,000 | Baishakh 19 | By Cash A/c | C | — | 10,000 |
| Baishakh 19 | To Bank A/c | C | 10,000 | — | Baishakh 19 | By Drawings A/c | — | 4,000 | |
| Baishakh 28 | By Salary A/c | 12,000 | — | ||||||
| Baishakh 31 | By Balance c/d | 43,000 | 36,000 | ||||||
| Total | 80,000 | 75,000 | Total | 80,000 | 75,000 | ||||
| Jestha 1 | To Balance b/d | 43,000 | 36,000 |
The deposit of Baishakh 12 and the withdrawal for office use on Baishakh 19 are contra entries (C). The Rs. 4,000 withdrawn for personal use is not a contra entry: it is drawings, entered only on the payments side in the Bank column.
14. On the last day of Ashadh, the Cash Book of Everest Traders showed a debit bank balance of Rs. 64,000. Prepare a Bank Reconciliation Statement from the following particulars:
- Cheques issued for Rs. 28,000, out of which cheques of Rs. 18,000 only were presented for payment.
- Cheques of Rs. 20,000 were sent for collection, but a cheque of Rs. 7,000 was credited only in Shrawan.
- Bank collected dividend of Rs. 4,000 directly and debited bank charges of Rs. 500.
- A customer directly deposited Rs. 9,500 into the bank account.
We start from the Cash Book balance, so the Passbook is the target book: add the items that make the Passbook balance higher and deduct those that make it lower.
Everest Traders
Bank Reconciliation Statement
As on the Last Day of Ashadh
| S.N. | Particulars | Details (Rs.) | Amount (Rs.) |
|---|---|---|---|
| Debit Balance as per Cash Book | 64,000 | ||
| Add: | |||
| 1. | Cheques issued but not yet presented (28,000 - 18,000) | 10,000 | |
| 3. | Dividend collected directly by the bank | 4,000 | |
| 4. | Direct deposit by a customer | 9,500 | 23,500 |
| Sub-total | 87,500 | ||
| Less: | |||
| 2. | Cheque sent for collection but not yet credited | 7,000 | |
| 3. | Bank charges debited by the bank | 500 | (7,500) |
| Credit Balance as per Passbook | 80,000 |
15. Rectify the following errors discovered after preparing the Trial Balance:
- Credit sale of goods to Ramesh Rs. 8,500 was recorded in the Sales Book as Rs. 5,800.
- Repair of machinery Rs. 4,000 was debited to Machinery Account.
- Purchase Return Book was undercast by Rs. 2,000.
- Cash paid to creditor Sita Rs. 5,000 was credited to her account.
- Goods costing Rs. 3,000 taken by proprietor for personal use were not recorded at all.
Rectifying Journal Entries
| S.N. | Particulars | L.F. | Debit (Rs.) | Credit (Rs.) |
|---|---|---|---|---|
| 1. | Ramesh’s A/c …………………………………. Dr. To Sales A/c (Being credit sale of Rs. 8,500 recorded as Rs. 5,800, now rectified) | 2,700 | 2,700 | |
| 2. | Repair A/c ……………………………………. Dr. To Machinery A/c (Being repair of machinery wrongly debited to Machinery A/c, now rectified) | 4,000 | 4,000 | |
| 3. | Suspense A/c …………………………………. Dr. To Purchase Return A/c (Being undercasting of the Purchase Return Book rectified) | 2,000 | 2,000 | |
| 4. | Sita’s A/c …………………………………….. Dr. To Suspense A/c (Being cash paid Rs. 5,000 wrongly credited to Sita’s A/c instead of debited, now rectified: 5,000 to cancel the wrong credit + 5,000 for the correct debit) | 10,000 | 10,000 | |
| 5. | Drawings A/c ………………………………….. Dr. To Purchase A/c (Being goods taken by the proprietor for personal use, previously unrecorded) | 3,000 | 3,000 |
Errors 1, 2 and 5 affect both sides equally, so the Trial Balance was not disturbed and Suspense Account is not used. Errors 3 and 4 are one-sided, so they are rectified through Suspense Account. Error 1 is an error of commission, error 2 an error of principle, and error 5 an error of complete omission.
16. Distinguish between Reserve and Provision on any five bases.
| Basis of Difference | Provision | Reserve |
|---|---|---|
| 1. Nature | A charge against profit (an expense or loss). | An appropriation of profit (retained earnings). |
| 2. Purpose | Created for a known liability or a fall in the value of an asset whose exact amount is uncertain, such as doubtful debts. | Created for unknown future contingencies and to strengthen the financial position. |
| 3. Compulsion | Must be created even when there is a net loss. | Created only when there is sufficient net profit. |
| 4. Accounting stage | Debited to the Profit and Loss Account. | Debited to the Profit and Loss Appropriation Account. |
| 5. Presentation in Balance Sheet | Deducted from the asset concerned, or shown under current liabilities. | Shown under Reserves and Surplus on the equity and liabilities side. |
OR: On 1st Shrawan 2081, the Provision for Doubtful Debts of Gandaki Traders stood at Rs. 8,000. Bad debts of Rs. 5,500 were written off during 2081/82. On the last day of Ashadh 2082, Sundry Debtors stood at Rs. 1,26,000, out of which a further Rs. 6,000 proved bad. The firm keeps a provision of 5% on good debtors. Prepare the Bad Debts Account and the Provision for Doubtful Debts Account.
Working Notes:
- Total bad debts = 5,500 (during the year) + 6,000 (further) = Rs. 11,500.
- Good debtors = 1,26,000 - 6,000 = Rs. 1,20,000; new provision = 5% of 1,20,000 = Rs. 6,000.
- Charge to Profit & Loss A/c = 11,500 + 6,000 - 8,000 = Rs. 9,500.
Bad Debts Account
| Dr. Date | Particulars | Amount (Rs.) | Cr. Date | Particulars | Amount (Rs.) |
|---|---|---|---|---|---|
| 2081/82 | To Sundry Debtors A/c (during the year) | 5,500 | 2082 Ashadh end | By Provision for Doubtful Debts A/c | 11,500 |
| 2082 Ashadh end | To Sundry Debtors A/c (further) | 6,000 | |||
| Total | 11,500 | Total | 11,500 |
Provision for Doubtful Debts Account
| Dr. Date | Particulars | Amount (Rs.) | Cr. Date | Particulars | Amount (Rs.) |
|---|---|---|---|---|---|
| 2082 Ashadh end | To Bad Debts A/c | 11,500 | 2081-04-01 | By Balance b/d | 8,000 |
| 2082 Ashadh end | To Balance c/d (5% of 1,20,000) | 6,000 | 2082 Ashadh end | By Profit & Loss A/c (balancing figure) | 9,500 |
| Total | 17,500 | Total | 17,500 | ||
| 2082-04-01 | By Balance b/d | 6,000 |
17. From the following Receipts and Payments Account and adjustments of Gyanodaya Library, prepare an Income and Expenditure Account for the year ended the last day of Ashadh 2082:
- Receipts: Balance b/d Rs. 25,000; Subscription Rs. 90,000; Membership Admission Fees Rs. 14,000; Government Operational Grant Rs. 30,000; Endowment Fund Rs. 80,000; Sale of Old Magazines Rs. 2,000.
- Payments: Librarian’s Salary Rs. 48,000; Rent Rs. 18,000; Purchase of Books Rs. 60,000; Purchase of Furniture Rs. 40,000; Newspapers & Journals Rs. 8,000; Printing & Stationery Rs. 5,000; Balance c/d Rs. 62,000.
- Adjustments: (a) Subscription outstanding for current year Rs. 10,000 and received in advance for next year Rs. 4,000; (b) Salary outstanding Rs. 4,000; (c) Depreciate Furniture @ 10% and Books @ 10%; (d) Capitalize 50% of Admission Fees.
The Endowment Fund (Rs. 80,000) and the capitalized half of the admission fees are capital receipts, and the purchases of books and furniture are capital payments, so none of them enters the Income and Expenditure Account; only the depreciation on the books and furniture does.
Gyanodaya Library
Income and Expenditure Account
For the Year Ended on the Last Day of Ashadh 2082
| Dr. Expenditure | Details (Rs.) | Amount (Rs.) | Cr. Income | Details (Rs.) | Amount (Rs.) |
|---|---|---|---|---|---|
| To Librarian’s Salary | 48,000 | By Subscription | 90,000 | ||
| Add: Outstanding Salary | 4,000 | 52,000 | Add: Outstanding (current year) | 10,000 | |
| To Rent | 18,000 | Less: Received in advance | (4,000) | 96,000 | |
| To Newspapers & Journals | 8,000 | By Admission Fees (50% of 14,000) | 7,000 | ||
| To Printing & Stationery | 5,000 | By Government Operational Grant | 30,000 | ||
| To Depreciation on Furniture (10% of 40,000) | 4,000 | By Sale of Old Magazines | 2,000 | ||
| To Depreciation on Books (10% of 60,000) | 6,000 | ||||
| To Surplus (Excess of Income over Expenditure) | 42,000 | ||||
| Total | 1,35,000 | Total | 1,35,000 |
18. Ms. Sunita started a business on 1st Shrawan 2081 with a capital of Rs. 2,00,000. On the last day of Ashadh 2082, her position was: Cash Rs. 30,000, Debtors Rs. 80,000, Stock Rs. 95,000, Machinery Rs. 1,20,000, Furniture Rs. 40,000, Creditors Rs. 55,000, and Bills Payable Rs. 20,000. During the year she withdrew Rs. 25,000 for personal use and introduced Rs. 15,000 as further capital. Depreciate Machinery and Furniture @ 10% p.a. and provide 5% on Debtors for doubtful debts. Prepare (a) Closing Statement of Affairs and (b) Statement of Profit or Loss.
(a) Statement of Affairs of Ms. Sunita
As on the Last Day of Ashadh 2082
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
|---|---|---|---|
| Creditors | 55,000 | Cash | 30,000 |
| Bills Payable | 20,000 | Debtors | 80,000 |
| Closing Capital (balancing figure) | 2,90,000 | Stock | 95,000 |
| Machinery | 1,20,000 | ||
| Furniture | 40,000 | ||
| Total | 3,65,000 | Total | 3,65,000 |
(b) Statement of Profit or Loss of Ms. Sunita
For the Year Ended on the Last Day of Ashadh 2082
| Particulars | Details (Rs.) | Amount (Rs.) |
|---|---|---|
| Closing Capital | 2,90,000 | |
| Add: Drawings during the year | 25,000 | |
| Sub-total | 3,15,000 | |
| Less: Additional Capital introduced | (15,000) | |
| Adjusted Closing Capital | 3,00,000 | |
| Less: Opening Capital | (2,00,000) | |
| Profit before Adjustments | 1,00,000 | |
| Less: Depreciation on Machinery (10% of 1,20,000) | 12,000 | |
| Less: Depreciation on Furniture (10% of 40,000) | 4,000 | |
| Less: Provision for Doubtful Debts (5% of 80,000) | 4,000 | (20,000) |
| Net Profit for the Year | 80,000 |
19. Prepare a Statement of Expenditure (AGF No. 210) for the month of Chaitra from the following data:
| Budget Head | Annual Budget (Rs.) | Expenditure up to Falgun (Rs.) | Expenditure of Chaitra (Rs.) |
|---|---|---|---|
| Remuneration (21111) | 12,00,000 | 8,00,000 | 1,00,000 |
| House Rent (28142) | 2,40,000 | 1,60,000 | 20,000 |
| Office Materials (22311) | 1,00,000 | 60,000 | 10,000 |
| Furniture (31123) | 2,00,000 | 1,20,000 | 30,000 |
An advance of Rs. 20,000 given to Mr. Hari in Falgun for furniture (included in the expenditure up to Falgun) is still uncleared.
Statement of Expenditure for the Month of Chaitra (AGF No. 210)
| Budget Head No. | Budget Head Title | Annual Budget (Rs.) | Exp. up to Falgun (Rs.) | Exp. of Chaitra (Rs.) | Total Exp. up to Chaitra (Rs.) | Remaining Budget (Rs.) |
|---|---|---|---|---|---|---|
| 21111 | Remuneration | 12,00,000 | 8,00,000 | 1,00,000 | 9,00,000 | 3,00,000 |
| 22311 | Office Materials | 1,00,000 | 60,000 | 10,000 | 70,000 | 30,000 |
| 28142 | House Rent | 2,40,000 | 1,60,000 | 20,000 | 1,80,000 | 60,000 |
| 31123 | Furniture and Fixtures | 2,00,000 | 1,20,000 | 30,000 | 1,50,000 | 50,000 |
| Total | 17,40,000 | 11,40,000 | 1,60,000 | 13,00,000 | 4,40,000 |
- Total expenditure up to Chaitra (including advance): Rs. 13,00,000
- Less: Uncleared advance (Mr. Hari, furniture): (Rs. 20,000)
- Net expenditure up to Chaitra (excluding advance): Rs. 12,80,000
Group C: Long Numerical Questions (3 × 8 = 24 Marks)
20. On 1st Shrawan 2079, Dhaulagiri Udyog purchased a machine for Rs. 3,60,000 and spent Rs. 40,000 on its installation. On 1st Poush 2080, it purchased another machine for Rs. 2,40,000. On 1st Ashwin 2081, the first machine was sold for Rs. 2,80,000. Depreciation is charged @ 10% p.a. under the Diminishing Balance Method, and the books are closed on the last day of Ashadh every year. Prepare the Machinery Account for 2079/80, 2080/81 and 2081/82.
Working Notes:
- Machine I (cost 3,60,000 + installation 40,000 = Rs. 4,00,000):
- 2079/80: 10% of 4,00,000 = Rs. 40,000; WDV = Rs. 3,60,000.
- 2080/81: 10% of 3,60,000 = Rs. 36,000; WDV = Rs. 3,24,000.
- 2081/82, up to the sale on 1st Ashwin 2081 (Shrawan and Bhadra, 2 months): 3,24,000 × 10% × 2/12 = Rs. 5,400; book value on sale = 3,24,000 - 5,400 = Rs. 3,18,600.
- Loss on sale = 3,18,600 - 2,80,000 = Rs. 38,600.
- Machine II (Rs. 2,40,000, bought 1st Poush 2080):
- 2080/81 (Poush to Ashadh, 7 months): 2,40,000 × 10% × 7/12 = Rs. 14,000; WDV = Rs. 2,26,000.
- 2081/82: 10% of 2,26,000 = Rs. 22,600; WDV = Rs. 2,03,400.
In the Books of Dhaulagiri Udyog
Machinery Account
| Dr. Date | Particulars | Amount (Rs.) | Cr. Date | Particulars | Amount (Rs.) |
|---|---|---|---|---|---|
| 2079-04-01 | To Bank A/c (M-I: 3,60,000 + 40,000) | 4,00,000 | 2080 Ashadh end | By Depreciation A/c (M-I) | 40,000 |
| 2080 Ashadh end | By Balance c/d | 3,60,000 | |||
| Total | 4,00,000 | Total | 4,00,000 | ||
| 2080-04-01 | To Balance b/d | 3,60,000 | 2081 Ashadh end | By Depreciation A/c (M-I 36,000 + M-II 14,000) | 50,000 |
| 2080-09-01 | To Bank A/c (M-II) | 2,40,000 | 2081 Ashadh end | By Balance c/d (M-I 3,24,000 + M-II 2,26,000) | 5,50,000 |
| Total | 6,00,000 | Total | 6,00,000 | ||
| 2081-04-01 | To Balance b/d | 5,50,000 | 2081-06-01 | By Depreciation A/c (M-I, 2 months) | 5,400 |
| 2081-06-01 | By Bank A/c (sale of M-I) | 2,80,000 | |||
| 2081-06-01 | By Profit & Loss A/c (loss on sale of M-I) | 38,600 | |||
| 2082 Ashadh end | By Depreciation A/c (M-II) | 22,600 | |||
| 2082 Ashadh end | By Balance c/d (M-II) | 2,03,400 | |||
| Total | 5,50,000 | Total | 5,50,000 | ||
| 2082-04-01 | To Balance b/d | 2,03,400 |
21. From the following Trial Balance of Kanchenjunga Stores as on the last day of Ashadh 2082 and the adjustments below, prepare the Trading Account, Profit and Loss Account for the year, and the Balance Sheet as on that date.
(The Trial Balance and the six adjustments are given in the question paper.)
Working Notes:
- Interest on the 12% Bank Loan: 12% of 50,000 = Rs. 6,000, all outstanding.
- Good debtors = 90,000 - 2,000 = Rs. 88,000; new provision = 5% of 88,000 = Rs. 4,400.
- Net charge for bad debts = 3,000 + 2,000 + 4,400 - 4,000 (old provision) = Rs. 5,400.
- Depreciation: Machinery 10% of 1,50,000 = Rs. 15,000; Furniture 10% of 50,000 = Rs. 5,000.
Kanchenjunga Stores
Trading and Profit & Loss Account
For the Year Ended on the Last Day of Ashadh 2082
| Dr. Particulars | Details (Rs.) | Amount (Rs.) | Cr. Particulars | Details (Rs.) | Amount (Rs.) |
|---|---|---|---|---|---|
| To Opening Stock | 60,000 | By Sales | 4,60,000 | ||
| To Purchases | 2,80,000 | Less: Sales Return | (10,000) | 4,50,000 | |
| To Wages | 25,000 | By Closing Stock | 72,000 | ||
| Add: Outstanding Wages | 3,000 | 28,000 | |||
| To Carriage Inward | 5,000 | ||||
| To Gross Profit c/d | 1,49,000 | ||||
| Total | 5,22,000 | Total | 5,22,000 | ||
| To Salaries | 48,000 | By Gross Profit b/d | 1,49,000 | ||
| To Rent | 18,000 | By Commission Received | 9,000 | ||
| To Insurance | 6,000 | Add: Commission Accrued | 1,000 | 10,000 | |
| Less: Prepaid Insurance | (1,500) | 4,500 | |||
| To Advertisement | 12,000 | ||||
| To Bad Debts | 3,000 | ||||
| Add: Further Bad Debts | 2,000 | ||||
| Add: New Provision (5% of 88,000) | 4,400 | ||||
| Less: Old Provision | (4,000) | 5,400 | |||
| To Interest on Bank Loan (outstanding) | 6,000 | ||||
| To Depreciation: Machinery | 15,000 | ||||
| To Depreciation: Furniture | 5,000 | 20,000 | |||
| To Net Profit (transferred to Capital) | 45,100 | ||||
| Total | 1,59,000 | Total | 1,59,000 |
Balance Sheet of Kanchenjunga Stores
As on the Last Day of Ashadh 2082
| Capital and Liabilities | Details (Rs.) | Amount (Rs.) | Assets and Properties | Details (Rs.) | Amount (Rs.) |
|---|---|---|---|---|---|
| Capital | 2,39,000 | Machinery | 1,50,000 | ||
| Add: Net Profit | 45,100 | Less: Depreciation @ 10% | (15,000) | 1,35,000 | |
| Less: Drawings | (15,000) | 2,69,100 | Furniture | 50,000 | |
| 12% Bank Loan | 50,000 | Less: Depreciation @ 10% | (5,000) | 45,000 | |
| Sundry Creditors | 55,000 | Closing Stock | 72,000 | ||
| Outstanding Wages | 3,000 | Sundry Debtors | 90,000 | ||
| Outstanding Interest on Loan | 6,000 | Less: Further Bad Debts | (2,000) | ||
| Less: New Provision @ 5% | (4,400) | 83,600 | |||
| Prepaid Insurance | 1,500 | ||||
| Accrued Commission | 1,000 | ||||
| Cash at Bank | 45,000 | ||||
| Total | 3,83,100 | Total | 3,83,100 |
22. Prepare Goswara Vouchers (AGF No. 203) for the transactions of the District Survey Office, Dhading for Shrawan 2082.
(The six transactions are given in the question paper.)
Net salary on Shrawan 31 = (1,20,000 + 12,000) - (24,000 + 1,200) = Rs. 1,06,800. The deductions are to be remitted later, so they stay as credits to the Provident Fund and Social Security Tax accounts.
Government of Nepal
District Survey Office, Dhading
Goswara Voucher (AGF No. 203)
| Date | S.N. | Particulars | Budget Head No. | Debit (Rs.) | Credit (Rs.) |
|---|---|---|---|---|---|
| 2082-04-01 | 1. | Dr. Nepal Rastra Bank / Bank A/c Cr. Budget Release A/c (Being budget release received for Shrawan) | — | 4,00,000 | 4,00,000 |
| 2082-04-05 | 2. | Dr. B.E. — Water and Electricity Dr. B.E. — House Rent Cr. DTCO - TSA (Bank) (Being water, electricity and house rent paid through TSA) | 22111 28142 | 12,000 30,000 | 42,000 |
| 2082-04-10 | 3. | Dr. Store Keeper Mr. Ram Thapa (Advance for Furniture) Cr. DTCO - TSA (Bank) (Being advance given for purchasing furniture) | 31123 | 50,000 | 50,000 |
| 2082-04-18 | 4. | Dr. B.E. — Office Materials Cr. DTCO - TSA (Bank) (Being stationery purchased through TSA) | 22311 | 9,000 | 9,000 |
| 2082-04-25 | 5. | Dr. B.E. — Furniture and Fixtures Cr. Store Keeper Mr. Ram Thapa — Advance Cleared Cr. DTCO - TSA (Bank) (Being furniture advance cleared on a bill of Rs. 56,000, the excess Rs. 6,000 paid through TSA) | 31123 | 56,000 | 50,000 6,000 |
| 2082-04-31 | 6. | Dr. B.E. — Remuneration (Employee Salary) Dr. B.E. — Contributory PF (Govt. 10% Addition) Cr. Employees Provident Fund (20%) Cr. Social Security Tax (1%) Cr. DTCO - TSA (Bank — net salary) (Being salary for Shrawan distributed after deducting PF and SST) | 21111 21212 | 1,20,000 12,000 | 24,000 1,200 1,06,800 |
OR: Prepare a Bank Cash Book (AGF No. 209) for the above transactions.
Following the chapter’s rules: the advance given goes in both the Budget Expenditure and the Advance Given columns; when it is cleared, the full advance goes in the Advance Cleared column and only the difference (56,000 - 50,000 = Rs. 6,000) in the Budget Expenditure column. The budget release and the salary deductions still to be remitted go in the Miscellaneous columns.
Government of Nepal
District Survey Office, Dhading
Bank Cash Book (AGF No. 209)
| Date | J.V. No. | Particulars | Bank Dr. | Bank Cr. | Bal. | B.E. Head | B.E. Amount | Adv. Given | Adv. Cleared | Misc. Dr. | Misc. Cr. |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Shrawan 1 | 1 | Budget Release | 4,00,000 | — | 4,00,000 | — | — | — | — | — | 4,00,000 |
| Shrawan 5 | 2 | Water & Electricity, House Rent | — | 42,000 | 3,58,000 | 22111 28142 | 12,000 30,000 | — | — | — | — |
| Shrawan 10 | 3 | Advance to Ram Thapa (Furniture) | — | 50,000 | 3,08,000 | 31123 | 50,000 | 50,000 | — | — | — |
| Shrawan 18 | 4 | Office Materials | — | 9,000 | 2,99,000 | 22311 | 9,000 | — | — | — | — |
| Shrawan 25 | 5 | Clearance of Ram Thapa’s Advance (Bill 56,000) | — | 6,000 | 2,93,000 | 31123 | 6,000 | — | 50,000 | — | — |
| Shrawan 31 | 6 | Salary for Shrawan (PF and SST payable) | — | 1,06,800 | 1,86,200 | 21111 21212 | 1,20,000 12,000 | — | — | — | 25,200 |
| Total | 4,00,000 | 2,13,800 | 1,86,200 | 2,39,000 | 50,000 | 50,000 | — | 4,25,200 |
The closing bank balance of Rs. 1,86,200 equals the release of Rs. 4,00,000 less total payments of Rs. 2,13,800. Budget expenditure for the month is Rs. 2,39,000, and the Rs. 25,200 of deductions remains payable until it is remitted.