Model Question Paper Solutions

Answers to the full-length 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 (split as the paper shows, such as 1 + 4), and a complete draft or full working for each 8-mark question in Group C.

Group ‘A’ — Very Short Answer Questions (11 × 1 = 11 Marks)

1. Define an office according to the modern functional view.

According to the modern functional view, an office is not merely a room or building but the set of functions of collecting, recording, processing, storing and communicating information, wherever they are performed; as Edward Roche put it, “An office exists anywhere, where certain kinds of work are performed.”

2. Who is a Receptionist?

A Receptionist (Front Desk Officer) is an office assistant stationed at the main entrance or inquiry desk who welcomes visitors, answers incoming telephone calls, keeps the visitor logbook and directs guests to the concerned section.

3. Under which regulation are dead records disposed of in government offices of Nepal?

Dead (expired or useless) records in government offices of Nepal are disposed of under the Record Disposal Regulation, 2027 B.S., by shredding or burning them under the supervision of an official committee.

4. When did Nepal become a member of the Universal Postal Union (UPU)?

Nepal became a full member of the Universal Postal Union (UPU) on 11 October 1956 A.D.

5. What is meant by Entrepôt Trade?

Entrepôt (re-export) trade is the import of goods from one country, not for home consumption, but for processing or re-packing and exporting them to a third country, as trading hubs such as Singapore and Dubai do.

6. State the minimum and maximum number of shareholders in a Private Limited Company in Nepal.

Under the Companies Act, 2063 B.S., a Private Limited Company in Nepal must have a minimum of 1 and a maximum of 101 shareholders.

7. What is meant by Quorum of a meeting?

Quorum is the minimum number or percentage of eligible members (usually more than half, such as 51% or two-thirds) who must be present before a meeting can legally begin and pass valid resolutions.

8. Who propounded the Double Entry System of bookkeeping, and in which year?

The Double Entry System was propounded by the Italian mathematician Fra Luca Pacioli in 1494 A.D., in his book Summa de Arithmetica, Geometria, Proportioni et Proportionalita, published in Venice.

9. State the Fundamental Accounting Equation.

The Fundamental Accounting Equation is Assets = Capital + Liabilities.

10. In which two situations does a Contra Entry (‘C’) occur in a Cash Book?

A contra entry occurs when (1) cash is deposited into the bank and (2) cash is withdrawn from the bank for office use; cash withdrawn for personal use is Drawings, not a contra entry.

11. Define Daily Sub-Total and Cumulative Grand Total under the Traditional Bookkeeping System.

Under Chief Clerk Gunwant’s Traditional Bookkeeping System (1936 B.S.), the Daily Sub-Total was the total of each day’s receipts or payments in the Primary Daily Record, closed with a single line. The Cumulative Grand Total was the running total of all the days so far, closed with double lines.

Group ‘B’ — Short Answer and Practical Questions (8 × 5 = 40 Marks)

12. What is an office? Explain any four basic functions of an office. (1 + 4 = 5)

Meaning (1 mark): An office is the administrative centre of an organization where information is collected, recorded, processed, stored and communicated so that management can plan and control its activities. In the modern view, the word refers to these functions rather than to the four walls of a room; as Mills and Standingford say, “The office is the administrative center of a business.”

Four basic functions (4 marks):

1. Collecting and receiving information: The office gathers internal information (departmental reports, staff attendance, stock levels, cash balances) and external information (letters, invoices, circulars, emails, government directives and customer inquiries).
2. Recording information: The information collected is written down systematically in entry books, journals, ledgers, minutes and personnel registers, so that it can be checked later and produced as legal evidence.
3. Processing and arranging information: Raw data is sorted, classified, calculated and summarized into a useful form; for example, hundreds of daily sales bills are turned into a monthly sales summary, a Trial Balance or an Income Statement.
4. Communicating information: The office supplies processed reports upward to top management for decisions, and passes orders, budgets and guidelines downward to departments and outward to customers, creditors and regulators.

The fifth basic function is storing and preserving information through scientific filing and indexing, so that records can be found again when needed.

13. Define Office Resources and explain any four types of office resources used in a modern organization. (1 + 4 = 5)

Meaning (1 mark): Office resources are all the productive inputs an office uses to carry out its administrative and operational work, commonly summed up as the 5 Ms (Men/Manpower, Money, Materials, Machines and Methods/Information) plus transport and communication facilities.

Four types of office resources (4 marks):

1. Human resources (manpower): These are the administrative staff (chiefs, managers, officers and clerks) and technical staff (engineers, IT specialists and chartered accountants). Manpower is the only active, living resource: it thinks, plans and decides, and it puts every other resource to use. It needs scientific recruitment, training, fair pay and motivation.
2. Financial resources: Money is the lifeblood of an office, used to pay salaries, rent and utilities and to buy assets. A government office gets it from taxes, customs, royalties and grants; a business from capital, sales revenue and bank loans; a service-motive office from donations and subscriptions. It is controlled through budgeting, double-entry accounting and audit.
3. Physical and material resources: These include durable items used for more than a year (land, building, furniture, computers, vehicles) and consumable stationery used up in daily work (paper, pens, files, ink, stamps). They are bought through proper procurement, recorded in the store ledger (Inventory Register), maintained and insured.
4. Communication resources: Telephone, mobile, email, internet, website, fax, postal service and notice boards allow quick internal and external exchange of messages, orders, reports and invoices. The choice of medium depends on urgency, cost, confidentiality and the need for written proof.

The other types are transportation resources (land, air and water transport for staff, mail and supplies) and intellectual and informational resources (software, databases, patents and operating manuals).

14. Differentiate between an Ordinary Letter and a Registered Letter, and draw a neat specimen of an Entry Book (Incoming Mail Register). (3 + 2 = 5)

(a) Ordinary Letter and Registered Letter (3 marks):

(b) Specimen of an Entry Book (2 marks):

Entry Book (Incoming Mail Register) of Shree Janajyoti Secondary School, Itahari, Sunsari

15. Define a Partnership Firm and differentiate between a Private Limited Company and a Public Limited Company on any four bases. (1 + 4 = 5)

Partnership Firm (1 mark): A Partnership Firm is an association of two or more persons who pool their capital, labour and skill under a written agreement called the Partnership Deed to carry on a lawful business and share its profits and losses in an agreed ratio; in Nepal it is governed by the Partnership Act, 2020 B.S.

Private Limited Company and Public Limited Company (4 marks):

16. Differentiate between Bookkeeping and Accounting, and explain the Business Entity Concept and Money Measurement Concept. (3 + 2 = 5)

(a) Bookkeeping and Accounting (3 marks): Bookkeeping is the foundation on which accounting is built, which is why it is said that “Accounting begins where bookkeeping ends.”

(b) Accounting concepts (2 marks):

• Business Entity Concept: The business is treated as a unit separate and distinct from its owner. So when the proprietor invests Rs. 5,00,000, the business records it as Capital owed to the owner, and when the owner takes Rs. 10,000 for domestic expenses, it is recorded as Drawings, not as a business expense.
• Money Measurement Concept: Only those transactions and events that can be expressed in money (Nepalese Rupees) are recorded in the books. Events that cannot be measured in money, such as a quarrel between two managers or the high skill of a worker, are not recorded, however important they may be.

17. From the following transactions of Bagmati Garment House, Kathmandu, prepare a Purchase Book. (5)

• Shrawan 3: Purchased from Hetauda Textile Mills (Invoice No. 45): 40 shirts @ Rs. 800 each and 30 trousers @ Rs. 1,200 each, less 10% trade discount.
• Shrawan 10: Purchased from Biratnagar Cotton Suppliers (Invoice No. 78): 25 jackets @ Rs. 2,000 each and 20 sweaters @ Rs. 1,000 each.
• Shrawan 18: Purchased a sewing machine and office table for office use from Patan Furniture on credit for Rs. 25,000.
• Shrawan 25: Purchased 15 T-shirts @ Rs. 500 each for cash from New Road Store.

Purchase Book of Bagmati Garment House, Kathmandu

Answer: Total of the Purchase Book (Purchase A/c Dr.) = Rs. 1,31,200.

Notes on Excluded Transactions:

1. Shrawan 18: The sewing machine and office table from Patan Furniture (Rs. 25,000) are excluded because they are fixed assets bought for office use, not goods for resale (a credit purchase of an asset goes to the Journal Proper).
2. Shrawan 25: The 15 T-shirts from New Road Store (15 × 500 = 7,500) are excluded because it is a cash purchase (recorded in the Cash Book).

Working notes:

• Year: the paper gives no year, so 2082 is used.
• Credit purchases: The Shrawan 3 and Shrawan 10 purchases name the supplier and do not say “for cash”, so they are credit purchases and belong in the Purchase Book.
• Trade discount: 10% of 68,000 = 6,800 is deducted on the face of the invoice, so only the net amount of Rs. 61,200 is carried to the Total column.

18. Prepare a Trial Balance of Pokhara Traders as on the last day of Ashadh 2082 from the following ledger balances. (5)

• Capital: Rs. 2,00,000 | Opening Stock: Rs. 30,000 | Purchases: Rs. 1,40,000 | Sales: Rs. 2,50,000 | Debtors: Rs. 50,000 | Creditors: Rs. 35,000 | Machinery: Rs. 1,50,000 | Cash at Bank: Rs. 40,000 | Bank Overdraft: Rs. 20,000 | Salaries: Rs. 45,000 | Rent Paid: Rs. 25,000 | Purchase Return: Rs. 6,000 | Sales Return: Rs. 8,000 | Drawings: Rs. 15,000 | Discount Allowed: Rs. 5,000 | Commission Received: Rs. 7,000 | Bad Debts: Rs. 10,000.

Trial Balance of Pokhara Traders
As on the last day of Ashadh 2082

Answer: The Trial Balance agrees at Rs. 5,18,000 on both the Debit and Credit sides.

Working notes:

• Bank balances: Cash at Bank (Rs. 40,000) is an asset and goes on the Debit side; Bank Overdraft (Rs. 20,000) is money owed to a bank, a liability, so it goes on the Credit side. Both are given, so both are shown (the firm can hold a current account in one bank and an overdraft in another).
• Returns: Purchase Return reduces purchases and is a Credit item; Sales Return reduces sales and is a Debit item.
• Losses and incomes: Discount Allowed and Bad Debts are losses (Debit); Commission Received is an income (Credit). Drawings reduce capital and go on the Debit side.

19. Differentiate between Government Accounting and Commercial Accounting on any five bases. (5)

Group ‘C’ — Long Analytical and Numerical Questions (3 × 8 = 24 Marks)

20. Draft an imaginary Order Letter from Koshi Educational Suppliers, Biratnagar to CDC Textbook Distributors, Bhaktapur ordering textbooks for Grade 9, OR draft a complete Minute of a Meeting of your School Management Committee regarding the establishment of a Science and Accounting Library. (8)

In the examination you answer only one option; both are drafted here.

Option 1: Order Letter

KOSHI EDUCATIONAL SUPPLIERS
Main Road, Biratnagar, Morang, Nepal
Phone: 021-52XXXX

Ref. No.: 082/83-17
Date: 2082-01-08

The Sales Manager,
CDC Textbook Distributors,
Sanothimi, Bhaktapur.

Subject: Order for Grade 9 Textbooks

Dear Sir,
We thank you for your quotation letter Ref. No. CTD/082/29 dated 2082-01-02 and the price list of Grade 9 textbooks for the academic session 2082. We accept your terms of a 20% trade discount on the printed price and free delivery up to our godown at Main Road, Biratnagar. Please supply the following textbooks at the earliest:

S.N.	Title of the Book	Grade	Edition	Quantity (Copies)	Unit Price (Rs.)	Amount (Rs.)
1.	Compulsory English	Grade 9	2082 Edition	300	180	54,000
2.	Compulsory Nepali	Grade 9	2082 Edition	300	160	48,000
3.	Compulsory Mathematics	Grade 9	2082 Edition	300	220	66,000
4.	Science and Technology	Grade 9	2082 Edition	300	250	75,000
5.	Social Studies	Grade 9	2082 Edition	300	200	60,000
6.	Office Operations and Accounting	Grade 9	2082 Edition	150	190	28,500
	Total at printed price			1,650		3,31,500
	Less: 20% Trade Discount					(66,300)
	Net Amount					2,65,200

We have enclosed an A/C Payee Cheque No. 0087415 drawn on Rastriya Banijya Bank Ltd., Biratnagar Branch, for Rs. 1,00,000 (Rupees One Lakh only) as an advance payment. The balance of Rs. 1,65,200 will be paid within 30 days of receiving the consignment and tax invoice. As schools in our area are about to open for the new session, please dispatch the books by 2082-01-20, packed title-wise in waterproof bundles. Any damaged or misprinted copies will be returned to you for replacement.

Yours faithfully,
(Signed)
Rajendra Prasad Koirala
Proprietor
Encl.: Rastriya Banijya Bank Ltd. Cheque No. 0087415 for Rs. 1,00,000.
C.C.: Accounts Section

Option 2: Minute of a Meeting

MINUTE OF THE MEETING OF THE SCHOOL MANAGEMENT COMMITTEE

Today, on 2082 Baisakh 21, Sunday, at 11:00 A.M., a meeting of the School Management Committee of Shree Janajyoti Secondary School, Itahari-5, Sunsari was held in the Principal’s Office under the chairpersonship of SMC Chairperson Mr. Dil Bahadur Limbu.

1. Attendance:

S.N.	Name of the Member	Designation	Signature
1.	Mr. Dil Bahadur Limbu	Chairperson	D.B. Limbu
2.	Mrs. Laxmi Devi Chaudhary	Ward Representative Member	L.D. Chaudhary
3.	Mr. Ram Kumar Mandal	Guardians’ Representative	R.K. Mandal
4.	Mrs. Sarita Karki	Guardians’ Representative	S. Karki
5.	Mr. Gopal Prasad Bhattarai	Local Educationist Member	G.P. Bhattarai
6.	Ms. Anita Shrestha	Teachers’ Representative	A. Shrestha
7.	Mr. Keshav Raj Dahal	Principal & Member-Secretary	K.R. Dahal

Invitees: Mr. Suresh Yadav (Science Teacher) and Mrs. Bimala Thapa (Accountancy Teacher).

2. Agendas for Discussion:

• Agenda No. 1: Regarding the establishment of a Science and Accounting Library.
• Agenda No. 2: Regarding the budget and sources of funds for the library.
• Agenda No. 3: Regarding the management and operation of the library.
• Agenda No. 4: Miscellaneous.

3. Decisions / Resolutions Passed:

• Decision No. 1: After detailed discussion of the Principal’s proposal on Agenda No. 1, it was unanimously decided to establish a Science and Accounting Library in Room No. 12 of the new building from the academic session 2082 B.S., stocked with reference books, practical manuals, journals and specimen account books for Grades 9 to 12, along with two computers for e-library use.
• Decision No. 2: Regarding Agenda No. 2, it was decided to approve a budget of Rs. 4,50,000 (Rs. 2,50,000 for books and journals, Rs. 1,20,000 for racks, tables and chairs, and Rs. 80,000 for two computers). Rs. 2,50,000 will be met from the school development fund, and a request for Rs. 2,00,000 will be sent to Itahari Sub-Metropolitan City and local donors. Books, furniture and computers will be bought by inviting sealed quotations as per the prevailing financial rules.
• Decision No. 3: Regarding Agenda No. 3, it was decided to form a five-member Library Management Sub-committee coordinated by Mr. Gopal Prasad Bhattarai, with Ms. Anita Shrestha, Mr. Suresh Yadav and Mrs. Bimala Thapa as members and Principal Mr. Keshav Raj Dahal as member-secretary. The library will open from 10:00 A.M. to 4:00 P.M. on school days, books will be issued to students for up to seven days, and the Sub-committee will report its progress to the next SMC meeting.
• Decision No. 4: As there were no other matters under Miscellaneous, the Chairperson thanked all members and invitees and declared the meeting adjourned at 1:00 P.M.

Signatures Confirming the Decisions:
(Signed by all 7 attending members, including the Chairperson)

21. Journalize the following transactions in the books of Manakamana Enterprises for Chaitra 2082 and also prepare Cash Account and Ramesh’s Account. (5 + 3 = 8)

• Chaitra 1: Started business with cash Rs. 2,50,000 and furniture Rs. 50,000.
• Chaitra 5: Purchased goods on credit from Ramesh for Rs. 60,000.
• Chaitra 10: Sold goods for cash Rs. 45,000.
• Chaitra 15: Returned defective goods worth Rs. 5,000 to Ramesh.
• Chaitra 20: Paid cash Rs. 53,500 to Ramesh in full settlement of his account.
• Chaitra 25: Withdrew cash Rs. 8,000 by the proprietor for personal use.
• Chaitra 30: Paid staff salary Rs. 20,000 in cash.

(a) Journal Entries (5 marks)

Journal Entries in the Books of Manakamana Enterprises

(b) Ledger Accounts (3 marks)

1. Dr. ……………………………………………… Cash Account ……………………………………………… Cr.

2. Dr. …………………………………………….. Ramesh’s Account …………………………………………….. Cr.

(Note: Both sides of Ramesh’s Account total Rs. 60,000, so his account is fully settled and closed with no balance.)

Answer: Journal Grand Total = Rs. 4,93,000; closing debit balance of Cash A/c = Rs. 2,13,500; Ramesh’s A/c is closed (Cr. Rs. 60,000 = Dr. Rs. 5,000 + Rs. 53,500 + Rs. 1,500).

Working notes:

• Chaitra 1: Cash and furniture are both brought in by the owner, so one compound entry debits both and credits Capital with Rs. 3,00,000.
• Chaitra 20: After the return, Ramesh is owed 60,000 - 5,000 = 55,000; paying Rs. 53,500 in full settlement gives a discount received of 55,000 - 53,500 = 1,500. Only Rs. 53,500 is posted to the Cash Account.
• Chaitra 25: Cash taken for personal use is Drawings, not a business expense.
• Cash Account: 2,50,000 + 45,000 - 53,500 - 8,000 - 20,000 = 2,13,500.

22. Prepare a Triple Column Cash Book from the following transactions for the month of Falgun 2082. (8)

• Falgun 1: Cash in hand Rs. 40,000 and Cash at bank Rs. 75,000.
• Falgun 4: Goods purchased for Rs. 25,000; paid Rs. 10,000 in cash and Rs. 15,000 by cheque.
• Falgun 8: Cash deposited into bank Rs. 20,000.
• Falgun 12: Received a cheque of Rs. 28,500 from Sita in full settlement of her account of Rs. 30,000.
• Falgun 17: Paid cash Rs. 19,200 to Gopal in full settlement of his account of Rs. 20,000.
• Falgun 22: Cash withdrawn from bank Rs. 12,000 for office use and Rs. 4,000 for domestic use.
• Falgun 28: Paid rent Rs. 10,000 by cheque and stationery Rs. 2,000 in cash.

Dr. ………………………………… Triple Column Cash Book ………………………………… Cr.

Answer: Closing Cash Balance = Rs. 800; Closing Bank Balance = Rs. 82,500; Discount Allowed = Rs. 1,500; Discount Received = Rs. 800.

Working notes:

• Contra entries (C): The Falgun 8 deposit (Rs. 20,000) and the Falgun 22 withdrawal for office use (Rs. 12,000) affect both cash and bank, so each is entered on both sides.
• Falgun 4: The purchase of Rs. 25,000 is split: Rs. 10,000 in the Cash column and Rs. 15,000 in the Bank column.
• Falgun 12: The cheque from Sita is treated as deposited the same day, so Rs. 28,500 goes in the Bank column; discount allowed is 30,000 - 28,500 = 1,500.
• Falgun 17: Discount received from Gopal is 20,000 - 19,200 = 800.
• Falgun 22: The Rs. 4,000 withdrawn for domestic use is Drawings from the Bank column, not a contra entry.
• Balances: Cash 52,000 - 51,200 = 800; Bank 1,23,500 - 41,000 = 82,500. The discount columns are only totalled, never balanced.