CSEET FUNDAMENTALS OF ACCOUNTING - PRACTICE QUESTIONS
CSEET
PAPER 2 – FUNDAMENTALS OF ACCOUNTING
MODEL QUESTION PAPER – SET 1
Time Allowed: 3 HoursMaximum Marks: 100
Instructions
Question No. 1 is compulsory.
Answer any FIVE questions from Questions 2 to 8.
All workings should be clearly shown.
Working notes will form part of the answer.
Use proper formats wherever applicable.
Unless otherwise stated, assume that the accounting year ends on 31 March.
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QUESTION 1 – COMPULSORY
20 Marks
(a) Answer the following: 5 Marks
Identify the accounting concept/principle applicable in each of the following cases and give a brief reason:
(i) The proprietor of a business purchased a personal car for ₹8,00,000 from his personal funds. The car was not recorded in the books of the business.
(ii) A business continues to use the same method of depreciation year after year.
(iii) Goods worth ₹50,000 are sold on credit on 25 March, although payment will be received in April.
(iv) A provision is made for an expected loss even though the exact amount is not yet known.
(v) The owner invested ₹5,00,000 into the business. It is treated as a liability of the business towards the owner.
(b) Journal Entries – 5 Marks
Pass journal entries for the following transactions:
Commenced business with cash ₹3,00,000.
Purchased goods for cash ₹50,000.
Purchased goods from Ravi on credit ₹80,000.
Sold goods to Mohan on credit ₹1,20,000.
Paid Ravi ₹75,000 in full settlement of his account.
(c) Accounting Equation – 5 Marks
Show the effect of the following transactions on the Accounting Equation:
Started business with cash ₹5,00,000.
Purchased furniture for cash ₹80,000.
Purchased goods on credit ₹1,00,000.
Sold goods costing ₹40,000 for ₹60,000 for cash.
Paid creditors ₹50,000.
Calculate the resulting Assets, Liabilities and Capital.
(d) Rectification of Errors – 5 Marks
The following errors were discovered after preparation of the Trial Balance:
Purchase of furniture ₹20,000 was debited to Purchases Account.
Sales to Arun ₹15,000 were completely omitted from the books.
Salary paid ₹10,000 was debited to Rent Account.
Purchase Returns ₹5,000 were posted to the debit of Purchase Account.
Pass the rectification entries.
QUESTION 2
16 Marks
(a) Three Column Cash Book – 10 Marks
Prepare a Three Column Cash Book of Raj Traders for April 2026:
Date | Transaction |
April 1 | Cash ₹40,000; Bank ₹60,000 |
April 3 | Received ₹18,000 from A and allowed discount ₹500 |
April 5 | Paid B by cheque ₹24,000 and received discount ₹1,000 |
April 8 | Cash sales ₹30,000 |
April 10 | Deposited cash into bank ₹25,000 |
April 15 | Withdrew from bank for office use ₹10,000 |
April 20 | Paid wages ₹8,000 |
April 25 | Received cheque from C ₹15,000 and allowed discount ₹500 |
April 28 | Paid electricity charges by cheque ₹6,000 |
(b) Ledger – 6 Marks
From the following transactions, prepare Mohan's Account:
Purchased goods from Mohan ₹80,000.
Returned goods to Mohan ₹10,000.
Paid Mohan ₹50,000 by cheque.
Mohan allowed discount ₹2,000.
Purchased further goods from Mohan ₹30,000.
Balance the account.
QUESTION 3
16 Marks
Bank Reconciliation Statement
The Cash Book of ABC Traders showed a favourable bank balance of ₹85,000 on 31 March 2026.
On comparing the Cash Book with the Bank Statement, the following differences were found:
Cheques issued but not yet presented for payment ₹18,000.
Cheques deposited but not yet credited by bank ₹25,000.
Bank charges ₹1,500 were not entered in the Cash Book.
Interest credited by bank ₹2,500 was not entered in the Cash Book.
A cheque of ₹6,000 deposited into the bank was dishonoured.
The bank wrongly debited ₹4,000 to the company's account.
Prepare a Bank Reconciliation Statement starting with the balance as per Cash Book.
QUESTION 4
16 Marks
Depreciation – Straight Line Method
On 1 April 2023, XYZ Ltd. purchased machinery for ₹6,00,000.
The estimated useful life of the machinery is 10 years and its estimated residual value is ₹60,000.
On 1 October 2024, additional machinery costing ₹2,40,000 was purchased. Its useful life is estimated at 8 years with no residual value.
Calculate:
Depreciation for 2023–24.
Depreciation for 2024–25.
Depreciation for 2025–26.
Book value of both machines as at 31 March 2026.
Pass necessary journal entries for depreciation for 2025–26.
QUESTION 5
16 Marks
Depreciation – Written Down Value Method
A machine was purchased on 1 April 2023 for ₹5,00,000.
Depreciation is charged at 20% per annum under the Written Down Value Method.
On 1 October 2025, the machine was sold for ₹2,80,000.
Calculate:
Depreciation for 2023–24.
Book value on 31 March 2024.
Depreciation for 2024–25.
Depreciation up to the date of sale in 2025–26.
Profit or loss on sale of machinery.
Pass the necessary journal entries.
QUESTION 6
16 Marks
Final Accounts of Sole Proprietor
From the following Trial Balance of Ravi Traders, prepare:
(a) Trading Account(b) Profit and Loss Account(c) Balance Sheet
as at 31 March 2026.
Particulars | Debit ₹ | Credit ₹ |
Capital | — | 4,00,000 |
Drawings | 50,000 | — |
Opening Stock | 1,20,000 | — |
Purchases | 5,00,000 | — |
Sales | — | 8,00,000 |
Purchase Returns | — | 20,000 |
Sales Returns | 30,000 | — |
Wages | 60,000 | — |
Salaries | 70,000 | — |
Rent | 36,000 | — |
Carriage Inward | 20,000 | — |
Insurance | 15,000 | — |
Debtors | 2,00,000 | — |
Creditors | — | 1,30,000 |
Furniture | 1,00,000 | — |
Machinery | 2,00,000 | — |
Cash | 35,000 | — |
Bank | 70,000 | — |
Discount Allowed | 8,000 | — |
Discount Received | — | 4,000 |
Adjustments:
Closing stock ₹1,80,000.
Wages outstanding ₹10,000.
Salaries outstanding ₹5,000.
Insurance prepaid ₹3,000.
Depreciate furniture by 10%.
Depreciate machinery by 10%.
Further bad debts ₹5,000.
Create provision for doubtful debts at 5% on debtors after further bad debts.
QUESTION 7
16 Marks
Partnership Accounts
A and B are partners sharing profits and losses in the ratio of 3 : 2.
Their capitals are:
A – ₹4,00,000
B – ₹3,00,000
The partnership deed provides:
Interest on capital @ 10% p.a.
Interest on drawings @ 6% p.a.
A is entitled to salary of ₹36,000 p.a.
B is entitled to commission of ₹24,000.
Profit before appropriation is ₹2,50,000.
During the year:
A withdrew ₹60,000 evenly throughout the year.
B withdrew ₹48,000 evenly throughout the year.
Calculate:
Interest on Capital.
Interest on Drawings.
A's salary.
B's commission.
Profit available for distribution.
Share of profit of A and B.
Amount credited to each partner's account.
QUESTION 8
16 Marks
Comprehensive Problem – Final Accounts
From the following information, prepare the Trading Account, Profit and Loss Account and Balance Sheet of Suresh for the year ended 31 March 2026:
Opening Stock – ₹1,00,000
Purchases – ₹4,50,000
Sales – ₹7,50,000
Wages – ₹50,000
Salaries – ₹60,000
Rent – ₹36,000
Carriage Inward – ₹15,000
Insurance – ₹12,000
Advertisement – ₹15,000
Debtors – ₹1,80,000
Creditors – ₹1,00,000
Furniture – ₹80,000
Machinery – ₹2,50,000
Cash – ₹40,000
Bank – ₹50,000
Drawings – ₹40,000
Capital – ₹3,50,000
Adjustments:
Closing stock ₹1,40,000.
Wages outstanding ₹5,000.
Salaries outstanding ₹10,000.
Rent prepaid ₹3,000.
Insurance prepaid ₹2,000.
Depreciate furniture by 10%.
Depreciate machinery by 10%.
Further bad debts ₹4,000.
Create provision for doubtful debts at 5% on the remaining debtors.
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