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Mock Test Paper - Series I: August, 2025
Date of Paper: 11th August, 2025
Time of Paper: 2 P.M. to 5 P.M.
FOUNDATION COURSE
PAPER – 1: ACCOUNTING
Question No. 1 is compulsory.
Answer any four questions from the remaining five questions.
Wherever necessary, suitable assumptions should be made and disclosed
by way of note forming part of the answer.
Working Notes should form part of the answer.
(Time allowed: 3 Hours) (100 Marks)
1. (a) State with reasons whether the following statements are True or False:
(i) Trade Discount is a reduction granted by a supplier from the list price
of goods or services on business considerations for prompt
payment.
(ii) M/s. XYZ & Co. runs a cafe. They renovated. some of the old cabins.
Because of this renovation some space was made free and number of
cabins was increased from 15 to 18. The total expenditure incurred
was ` 45,000 and was treated as a revenue expenditure.
(iii) Reducing balance method of depreciation is followed to have a uniform
charge for depreciation and repairs and maintenance together.
(iv) In case of bill of exchange, the drawer and the payee may not be the
same person but in case of a promissory note, the maker and the payee
may be the same person.
(v) Business of partnership comes to an end on death of a partner.
(vi) Since company has existence independent of its members, it continues to
be in existence despite the death, insolvency or change of members.
(6 Statements x 2 Marks = 12 Marks)
(b) What services can a Chartered Accountant provide to the society? (4 Marks)
(c) A Machinery costing ` 60,00,000 is depreciated on straight line assuming 10
years working life and nil salvage value for four years. At the end of the fourth
1
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year, the machinery was revalued upwards by ` 2,40,000. The remaining useful
life of the machinery was also reassessed as 8 years at the end of the fourth
year. Calculate the depreciation for 5th Year. (4 Marks)
(12 + 4+ 4 = 20 Marks)
2. (a) Mr. Kamal’s trial balance as on 31st March, 2025 did not agree. The difference
was put to a Suspense Account.
During the next trading period, the following errors were discovered:
(i) The total of the Purchases Book of one page, ` 15,615 was carried
forward to the next page as ` 16,551.
(ii) A sale of ` 462 was entered in the Sales Book as ` 642 and posted to the
credit of the customer.
(iii) A return to creditor, ` 5,420 was entered in the Returns Inward Book;
however, the creditor's account was correctly posted.
(iv) Cash received from Sita, ` 1,420 was posted to debit of Geeta.
(v) Goods worth ` 1,400 were dispatched to a customer before the close of
the year but no invoice was made out.
(vi) Goods worth ` 3,200 were sent on sale or return basis to a customer and
entered in the Sales Book at the close of the year, the customer still had
the option to return the goods. The gross profit margin was 20% on Sale.
(vii) ` 500 due from Mr. Sam was omitted to be taken ·to the trial balance.
(viii) Sale of goods to Mr. Manoj for ` 16,000 was omitted to be recorded.
You are required to give journal entries to rectify the errors in a way so as to
show the current year's profit or loss correctly (10 Marks)
(b) On 30th June. 2025, Cash Book of Mr. Gaurav (Bank Column of Account No. 1)
shows a Bank Overdraft of ` 1,97,400. On going through the Bank Pass book for
reconciling the Balance, she found the following:
(a) Out of cheques drawn on 26th June, those for ` 14,800 were cashed by
the bankers on 2nd July.
(b) A crossed cheque for ` 3000 given to Abdul, was returned by him on 1st
July,2025 and a bearer cheque was issued to him on the same date.
(c) Cash and cheques amounting to ` 13,600 were deposited in the Bank on
29th June., but cheques worth ` 5,200 were cleared by the Bank on
2
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Mock Test Paper - Series I: August, 2025
Date of Paper: 11th August, 2025
Time of Paper: 2 P.M. to 5 P.M.
FOUNDATION COURSE
PAPER – 1: ACCOUNTING
Question No. 1 is compulsory.
Answer any four questions from the remaining five questions.
Wherever necessary, suitable assumptions should be made and disclosed
by way of note forming part of the answer.
Working Notes should form part of the answer.
(Time allowed: 3 Hours) (100 Marks)
1. (a) State with reasons whether the following statements are True or False:
(i) Trade Discount is a reduction granted by a supplier from the list price
of goods or services on business considerations for prompt
payment.
(ii) M/s. XYZ & Co. runs a cafe. They renovated. some of the old cabins.
Because of this renovation some space was made free and number of
cabins was increased from 15 to 18. The total expenditure incurred
was ` 45,000 and was treated as a revenue expenditure.
(iii) Reducing balance method of depreciation is followed to have a uniform
charge for depreciation and repairs and maintenance together.
(iv) In case of bill of exchange, the drawer and the payee may not be the
same person but in case of a promissory note, the maker and the payee
may be the same person.
(v) Business of partnership comes to an end on death of a partner.
(vi) Since company has existence independent of its members, it continues to
be in existence despite the death, insolvency or change of members.
(6 Statements x 2 Marks = 12 Marks)
(b) What services can a Chartered Accountant provide to the society? (4 Marks)
(c) A Machinery costing ` 60,00,000 is depreciated on straight line assuming 10
years working life and nil salvage value for four years. At the end of the fourth
1
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year, the machinery was revalued upwards by ` 2,40,000. The remaining useful
life of the machinery was also reassessed as 8 years at the end of the fourth
year. Calculate the depreciation for 5th Year. (4 Marks)
(12 + 4+ 4 = 20 Marks)
2. (a) Mr. Kamal’s trial balance as on 31st March, 2025 did not agree. The difference
was put to a Suspense Account.
During the next trading period, the following errors were discovered:
(i) The total of the Purchases Book of one page, ` 15,615 was carried
forward to the next page as ` 16,551.
(ii) A sale of ` 462 was entered in the Sales Book as ` 642 and posted to the
credit of the customer.
(iii) A return to creditor, ` 5,420 was entered in the Returns Inward Book;
however, the creditor's account was correctly posted.
(iv) Cash received from Sita, ` 1,420 was posted to debit of Geeta.
(v) Goods worth ` 1,400 were dispatched to a customer before the close of
the year but no invoice was made out.
(vi) Goods worth ` 3,200 were sent on sale or return basis to a customer and
entered in the Sales Book at the close of the year, the customer still had
the option to return the goods. The gross profit margin was 20% on Sale.
(vii) ` 500 due from Mr. Sam was omitted to be taken ·to the trial balance.
(viii) Sale of goods to Mr. Manoj for ` 16,000 was omitted to be recorded.
You are required to give journal entries to rectify the errors in a way so as to
show the current year's profit or loss correctly (10 Marks)
(b) On 30th June. 2025, Cash Book of Mr. Gaurav (Bank Column of Account No. 1)
shows a Bank Overdraft of ` 1,97,400. On going through the Bank Pass book for
reconciling the Balance, she found the following:
(a) Out of cheques drawn on 26th June, those for ` 14,800 were cashed by
the bankers on 2nd July.
(b) A crossed cheque for ` 3000 given to Abdul, was returned by him on 1st
July,2025 and a bearer cheque was issued to him on the same date.
(c) Cash and cheques amounting to ` 13,600 were deposited in the Bank on
29th June., but cheques worth ` 5,200 were cleared by the Bank on
2
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