Easy2Siksha Sample Paper
GNDU Most Repeated (Important) Quesons
B.Com 1st Semester
FINANCIAL ACCOUNTING
(Based on 4-Year GNDU Queson Paper Trend Analysis: 2021–2024)
Must-Prepare Quesons (80–100% Probability)
SECTION–A (Final Accounts & Adjustments)
1. Prepare Final Accounts with Adjustments (Trading, P&L, Balance Sheet) (4
mes)
2021 (Q1), 2022 (Q1), 2023 (Q1), 2024 (Q1)
Every year the paper begins with a complete Final Accounts problem including
adjustments like closing stock, depreciaon, bad debts, prepaid expenses,
outstanding expenses, etc.
2. Adjustments in Final Accounts (Bad Debts, Depreciaon, Manager’s
Commission, Prepaid/Outstanding Expenses) (4 mes)
2021–2024 (Appears inside the same Q1 each year)
Understanding how each adjustment aects Trading, P&L, and Balance Sheet is
crucial — 100% chance of repeon.
2025 Smart Predicon Table
(Based on 4-Year GNDU Paper Trend: 2021–2024)
Secon
Queson Topic
Years
Appeared
Priority
A
Final Accounts with Adjustments
2021–24
Very High
(100%)
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Secon
Queson Topic
Years
Appeared
Priority
A
Adjustments – Bad Debts, Depreciaon, Prepaid,
Outstanding, Manager’s Commission
2021–24
Very High
(100%)
B
Consignment Account (With Loss / Commission)
2021–24
Very High
(100%)
2025 GUARANTEED QUESTIONS (100% Appearance Trend)
Top 6 Must-Prepare Quesons (Appear All 4 Years)
1. Prepare Final Accounts (Trading, P&L, and Balance Sheet) with Adjustments.
2. Prepare Consignment Account (with del-credere commission or re loss).
BONUS HIGH-PRIORITY QUESTIONS (80–90%)
7. Voyage Account – To ascertain prot or loss of a voyage.
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GNDU Most Repeated (Important) Answers
B.Com 1st Semester
FINANCIAL ACCOUNTING
(Based on 4-Year GNDU Queson Paper Trend Analysis: 2021–2024)
Must-Prepare Quesons (80–100% Probability)
SECTION–A (Final Accounts & Adjustments)
Prepare Final Accounts with Adjustments (Trading, P&L, Balance Sheet) (4 mes)
2021 (Q1), 2022 (Q1), 2023 (Q1), 2024 (Q1)
Every year the paper begins with a complete Final Accounts problem including
adjustments like closing stock, depreciaon, bad debts, prepaid expenses, outstanding
expenses, etc.
Ans: A Simple Story to Begin With
Imagine you are the owner of a small bakery in your town. You’ve been keeping track of
all sales, purchases, expenses, and payments throughout the year in your ledger. Now,
at the end of the year, you need to find out how much profit you earned and how much
your bakery is worth.
This is exactly what Final Accounts in Accounting do — they tell the financial story of
your business. They summarize all your business transactions, adjustments, and
balances to give a clear picture of your financial performance and position.
In simpler terms: Final Accounts = The storybook of your business for the year, showing
how much money came in, went out, and what remains.
Meaning of Final Accounts
Final Accounts are the financial statements prepared at the end of an accounting
period to show the:
1. Profit or Loss earned (Trading Account and Profit & Loss Account)
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2. Financial position (Balance Sheet)
They are prepared using trial balance as the base, after making necessary adjustments.
Components of Final Accounts
There are three main components:
1. Trading Account
o Purpose: To find Gross Profit or Gross Loss
o Focuses on: Direct income and direct expenses (related to buying and
selling goods)
2. Profit & Loss Account
o Purpose: To find Net Profit or Net Loss
o Focuses on: Indirect income and indirect expenses (like rent, salaries,
interest)
3. Balance Sheet
o Purpose: To show financial position on a particular date
o Focuses on: Assets (what you own) and Liabilities (what you owe)
Step-by-Step Explanation of Final Accounts Preparation
Let’s break it down as if you’re preparing them step by step for your bakery.
Step 1: Trading Account
The Trading Account is prepared to calculate gross profit or gross loss.
Format:
TRADING ACCOUNT
For the Year Ending 31st March 20XX
Debit Side (Expenses) | Credit Side (Income)
-----------------------------|------------------------
Opening Stock | Sales
Purchases | Closing Stock
Direct Expenses (e.g., carriage, wages) |
-----------------------------|------------------------
| Gross Profit (if Credit Side > Debit
Side)
Gross Loss (if Debit Side > Credit Side) |
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Explanation in Simple Terms:
1. Opening Stock: The stock of goods at the beginning of the year.
2. Purchases: Goods bought for resale.
3. Direct Expenses: Expenses directly related to production or buying of goods, e.g.,
wages of workers, freight, carriage.
4. Sales: Total goods sold.
5. Closing Stock: Stock remaining unsold at year-end (added on credit side).
6. Gross Profit: If total income > total expenses, the difference is Gross Profit.
7. Gross Loss: If total expenses > total income, the difference is Gross Loss.
Example Story:
• Your bakery had Opening Stock = ₹50,000
• You purchased Flour, Sugar, Ingredients = ₹1,00,000
• Paid Wages to workers = ₹30,000
• Sold goods worth ₹2,00,000
• Remaining stock (Closing Stock) = ₹20,000
Trading Account Calculation:
Expenses (Debit) | Income (Credit)
---------------------------|----------------
Opening Stock 50,000 | Sales 2,00,000
Purchases 1,00,000 |
Wages 30,000 | Closing Stock 20,000
---------------------------|----------------
Total 1,80,000 | Total 2,20,000
Gross Profit = 2,20,000 - 1,80,000 = 40,000
Gross Profit = ₹40,000
Step 2: Profit & Loss Account
Once the Gross Profit is known, we move on to Profit & Loss Account to calculate Net
Profit or Net Loss.
Format:
PROFIT & LOSS ACCOUNT
For the Year Ending 31st March 20XX
Debit Side (Expenses) | Credit Side (Income)
--------------------------------|-------------------
Indirect Expenses: | Indirect Income:
- Rent, Salaries, Utilities, etc.| - Discount Received, Commission
- Depreciation |
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- Bad Debts |
--------------------------------|-------------------
| Net Profit (Credit Side > Debit
Side)
| Net Loss (Debit Side > Credit
Side)
Explanation in Simple Terms:
1. Indirect Expenses: Expenses not directly related to buying or making goods (e.g.,
office rent, electricity).
2. Indirect Income: Income not from main business, e.g., rent received, interest
earned.
3. Net Profit/Net Loss: Difference between indirect income and indirect expenses,
adjusted with gross profit.
Example Story:
• Gross Profit brought down from Trading Account = ₹40,000
• Rent of bakery = ₹10,000
• Electricity = ₹5,000
• Interest received = ₹2,000
Profit & Loss Account Calculation:
Expenses (Debit) | Income (Credit)
------------------|----------------
Rent 10,000 | Gross Profit b/d 40,000
Electricity 5,000 | Interest 2,000
------------------|----------------
Total 15,000 | Total 42,000
Net Profit = 42,000 - 15,000 = 27,000
Net Profit = ₹27,000
Step 3: Balance Sheet
Balance Sheet shows financial position — what the business owns (Assets) and owes
(Liabilities) at year-end.
Format (Simplified):
BALANCE SHEET
As on 31st March 20XX
Liabilities (Owe) | Assets (Own)
------------------------|----------------
Capital | Cash in Hand
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Add: Net Profit | Bank Balance
Add: Additional Capital | Stock
Loan from Bank | Accounts Receivable
Creditors | Machinery, Furniture
Accrued Expenses | Prepaid Expenses
------------------------|----------------
Total Liabilities | Total Assets
Explanation in Simple Terms:
1. Assets: What your bakery owns — cash, stock, machinery, furniture, debtors.
2. Liabilities: What your bakery owes — bank loans, creditors, unpaid expenses.
3. Capital: Owner’s investment + Net Profit (or minus Net Loss).
Example Story:
• Capital invested = ₹1,00,000
• Net Profit = ₹27,000
• Stock = ₹20,000
• Cash in Hand = ₹15,000
• Debtors = ₹10,000
• Creditors = ₹30,000
• Bank Loan = ₹20,000
Balance Sheet:
Liabilities | Assets
----------------------|----------------
Capital 1,00,000 + Net Profit 27,000 = 1,27,000 | Cash 15,000
Bank Loan 20,000 | Stock 20,000
Creditors 30,000 | Debtors 10,000
| Machinery/Furniture 32,000
----------------------|----------------
Total 1,77,000 | Total 1,77,000
Total Liabilities = Total Assets (Balanced)
Adjustments in Final Accounts
Before finalizing, certain adjustments are needed for accuracy:
1. Closing Stock – Must be added to Trading Account and subtracted from
purchases if already included.
2. Outstanding Expenses – Expenses incurred but not yet paid (e.g., electricity).
3. Prepaid Expenses – Expenses paid in advance (e.g., insurance).
4. Accrued Income – Income earned but not yet received (e.g., interest on
investment).
5. Depreciation – Reduce asset value (e.g., machinery, furniture).
6. Bad Debts – Reduce debtors if some debts cannot be recovered.
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Example:
• Electricity due but not paid = ₹2,000 → Add to expenses in P&L
• Insurance paid in advance = ₹1,000 → Deduct from P&L
• Depreciation on machinery = ₹3,000 → Deduct in P&L and reduce asset in
Balance Sheet
These adjustments ensure the accounts show a true and fair view.
Flow Diagram of Final Accounts Preparation
Key Points to Remember
1. Trading Account → Gross Profit / Gross Loss
2. Profit & Loss Account → Net Profit / Net Loss
3. Balance Sheet → Financial Position
4. Adjustments → Closing Stock, Outstanding Expenses, Prepaid Expenses,
Depreciation, Accrued Income, Bad Debts
5. Final Accounts → Provide complete financial picture of the business
Conclusion: The Moral of the Story
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Think of final accounts like a photo album of your business for the year. It captures:
• What you started with (Opening Stock & Capital)
• What came in (Sales, Income)
• What went out (Purchases, Expenses)
• How much you earned (Gross & Net Profit)
• What your business owns and owes at the end (Balance Sheet)
By preparing Final Accounts with adjustments, you are telling the true story of your
business, making it clear, reliable, and useful for decisions, investors, and tax purposes.
2. Adjustments in Final Accounts (Bad Debts, Depreciaon, Manager’s Commission,
Prepaid/Outstanding Expenses) (4 mes)
2021–2024 (Appears inside the same Q1 each year)
Understanding how each adjustment aects Trading, P&L, and Balance Sheet is
crucial — 100% chance of repeon.
Ans: It’s the end of the financial year. A shopkeeper named Ramesh sits at his desk with
a big ledger book. He has recorded every sale, every purchase, and every expense. He
feels proud—“Now my accounts are complete!” But when his accountant, Meena,
arrives, she shakes her head and says:
“Ramesh ji, the accounts are not complete yet. You’ve written down the transactions,
yes, but to prepare the Final Accounts—the Trading Account, Profit & Loss Account, and
Balance Sheet—we must make some adjustments. Otherwise, your accounts won’t show
the true and fair picture of your business.”
And that’s how we step into the world of Adjustments in Final Accounts. These
adjustments are like the finishing touches on a painting—without them, the picture is
incomplete.
Let’s walk through the most important adjustments—Bad Debts, Depreciation,
Manager’s Commission, Prepaid Expenses, and Outstanding Expenses—as a story, so
that it feels alive, simple, and examiner-friendly.
Why Adjustments Are Needed
Accounting follows the accrual concept: incomes and expenses must be recorded in the
period to which they relate, not just when cash changes hands.
• If we forget adjustments, profits may look higher or lower than reality.
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• Assets and liabilities may be misstated.
• Investors, managers, and tax authorities may be misled.
Story Analogy: Imagine a cricket scoreboard that shows only runs scored but ignores
wickets lost. Without adjustments, accounts are like that scoreboard—half the truth.
Adjustment 1: Bad Debts
Ramesh sells goods on credit. Some customers pay, but some vanish without paying.
That unpaid money is called Bad Debts—a loss to the business.
Treatment:
1. Profit & Loss A/c: Bad debts are shown on the debit side (as a loss).
2. Balance Sheet: Debtors are reduced by the amount of bad debts.
Example:
• Debtors = ₹50,000
• Bad Debts = ₹5,000
→ P&L A/c: Debit ₹5,000 → Balance Sheet: Debtors = ₹45,000
Story Note: Bad debts are like rotten fruits in a basket—you must throw them out, or
they’ll spoil the whole basket.
Adjustment 2: Depreciation
Ramesh has a delivery van. Each year, its value decreases due to wear and tear. This fall
in value is called Depreciation.
Treatment:
1. Profit & Loss A/c: Depreciation is shown on the debit side (as an expense).
2. Balance Sheet: Asset value is reduced by depreciation.
Example:
• Van = ₹1,00,000
• Depreciation = 10% = ₹10,000
→ P&L A/c: Debit ₹10,000 → Balance Sheet: Van = ₹90,000
Story Analogy: Depreciation is like aging. Just as people grow older and lose energy,
machines and assets lose value over time.
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Adjustment 3: Manager’s Commission
Ramesh promises his manager a commission of 10% on net profit. But here’s the twist:
commission is calculated after charging commission itself.
Formula:
Commission =
Net Profit before Commission × Rate
100 + Rate
Example:
• Net Profit before Commission = ₹1,10,000
• Rate = 10%
Commission =
1,10,000 × 10
110
= ₹10,000
→ P&L A/c: Debit ₹10,000 → Balance Sheet: Shown as liability (if unpaid).
Story Note: Manager’s commission is like sharing sweets—before declaring the final
profit, you must give the manager his promised share.
Adjustment 4: Prepaid Expenses
Ramesh pays ₹12,000 for insurance in January, covering January to December. But his
accounting year ends in March. That means ₹9,000 (April–December) is prepaid—it
belongs to the next year.
Treatment:
1. Profit & Loss A/c: Only ₹3,000 (Jan–Mar) is charged as expense.
2. Balance Sheet: Prepaid ₹9,000 is shown as an asset.
Story Analogy: Prepaid expenses are like buying a train ticket in advance. You’ve paid
now, but the journey (benefit) is in the future.
Adjustment 5: Outstanding Expenses
Ramesh’s electricity bill for March (₹5,000) hasn’t been paid yet. This is an outstanding
expense—it belongs to this year, even if cash is unpaid.
Treatment:
1. Profit & Loss A/c: Add ₹5,000 to expenses.
2. Balance Sheet: Show ₹5,000 as a liability.
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Story Note: Outstanding expenses are like borrowing sugar from a neighbor—you’ve
consumed it, but you still owe it.
Putting It All Together
When Meena prepares Ramesh’s Final Accounts, she carefully adjusts:
• Bad Debts → reduce profits and debtors.
• Depreciation → reduce profits and asset values.
• Manager’s Commission → reduce profits and create liability.
• Prepaid Expenses → reduce current year’s expenses, show as asset.
• Outstanding Expenses → increase current year’s expenses, show as liability.
Only after these adjustments do the accounts show the true and fair view of the
business.
Recap in a Narrative Table
Adjustment
Profit & Loss A/c
Balance Sheet
Bad Debts
Debit (loss)
Reduce Debtors
Depreciation
Debit (expense)
Reduce Asset value
Manager’s Commission
Debit (expense)
Liability (if unpaid)
Prepaid Expenses
Deduct from expense
Asset
Outstanding Expenses
Add to expense
Liability
Real-Life Analogy
Think of Final Accounts as a movie. The trial balance is the raw footage. Adjustments are
the editing—cutting out mistakes (bad debts), showing aging effects (depreciation),
giving actors their dues (commission), and ensuring continuity (prepaid/outstanding).
Only after editing does the movie make sense.
Wrapping the Story
So, Adjustments in Final Accounts are not just technical entries—they are the soul of
accurate accounting.
• They ensure profits are neither overstated nor understated.
• They ensure assets and liabilities are shown correctly.
• They transform raw numbers into meaningful financial statements.
Final Analogy: If accounting is like cooking, then adjustments are the spices. Without
them, the dish (final accounts) may look bland or misleading. With them, the flavor is
balanced, and the result is satisfying—for the businessman, the examiner, and the
reader.
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