Plus One Accountancy With AFS Public Exam Answer Key March 2026

📄 Accotancy-AFS QP March 2026 – SOLUTIONS

Answer Key & Solutions

Detailed answers for all questions (Part I to Part VI) as per official scheme

Part I Multiple choice · 1 mark each

1

Winning a court case

(a) Gain

2

Mr. Ajayan & company different

(b) Entity Concept

3

Chronological record book

(b) Journal

4

All cash purchases recorded in

(b) Cash Book

5

Assertion & Reason (BRS)

(d) Assertion false, Reason true

6

Wrong posting of transactions

(a) Errors of Commission

7

Undervaluation of stock

(d) Secret Reserve

8

Odd one out

(c) Carriage on sales

9

Closing stock inside Trial Balance

(c) Balance Sheet

10

Rent paid 1200, prepaid 200 → P&L

(b) ₹1,000

Part II 2 marks each (any 5)

11 Capital & Drawings

Capital: owner’s investment/claim. Drawings: cash/goods withdrawn by owner, reduces capital.

12 Cash basis vs Accrual basis

Cash: revenue/expense recorded when cash received/paid. Accrual: when earned/incurred (matching).

13 Bank Reconciliation Statement

Statement reconciling cash book balance with passbook balance on a date, explaining differences.

14 Suspense Account

Temporary account used when trial balance disagrees; errors located and rectified, then suspense closed.

15 Adjusting entries

(i) Wages A/c Dr 500 → To Outstanding Wages 500
(ii) Income received in advance Dr 750 → To Concerned Income 750

16 Need for adjustments

To follow accrual & matching principle; ensure all expenses/incomes of period are recorded, true and fair view.

Part III 3 marks each (any 5)

17 Objectives of accounting

Systematic record, ascertain profit/loss, financial position, information for stakeholders.

18 Characteristics of GST (any 3)

Destination-based, dual (CGST+SGST/IGST), input tax credit eliminates cascading.

19 Causes of difference CB vs PB (3)

Cheques issued not presented; cheques deposited not credited; direct debits/credits by bank not in cash book.

20 Trial balance

Particulars	Debit (₹)	Credit (₹)
Capital		1,25,000
Drawings	10,000
Cash	40,000
Debtors	5,000
Purchases	50,000
Salaries	10,000
Carriage	500
Dividend received		5,000
Bank Overdraft		1,200
Land	50,000
Sales		25,000
Total	1,65,500	1,56,200

Note: totals differ as per data

21 Provisions vs Reserves

Provision: charge against profit, for known liability; Reserve: appropriation of profit, strengthening finance.

22 Classification

Rent paid → Revenue; Huge advt → Deferred revenue; Purchase of land → Capital.

Part IV 4 marks each (any 4)

23 Bad debts & provision

P&L A/c: Bad debts 1,000 + New provision 5,000 - Old provision 500 = Net 5,500 debited.
Balance Sheet: Debtors 50,000 – New provision 5,000 = 45,000.

24 Matching

(i) Going concern → (c) ; (ii) Dual aspect → (a) ; (iii) Conservatism → (d) ; (iv) Revenue recognition → (b)

25 Debit/Credit rules

(i) Capital increases: Credit ; (ii) Expenses increases: Debit ; (iii) Income decreases: Debit ; (iv) Liabilities increases: Credit

26 Sales Day Book

Feb 1: Dileep Stores (5 AC + 5 Stabilizer) = 1,33,000
Feb 10: Soni Traders (5 TV + 3 Stabilizer) = 88,750
Total 2,21,750 (cash sale & computer table not entered)

27 Gross Profit, COGS, Operating profit

COGS = 1,00,000+5,000-50,000 = 55,000 ; Gross Profit = 2,50,000-55,000 = 1,95,000 ; Operating profit = 1,95,000 - (10,000+10,000) = 1,75,000

Part V 5 marks each (any 3)

28 Bank Reconciliation Statement

Balance as per Cash Book 60,000
Add: cheque issued not presented 1,500 + interest 300 → +1,800 = 61,800
Less: bank charges 500 + cheque deposited not credited 10,000 → (10,500)
Balance as per Passbook = 51,300

29 Accounting & qualitative characteristics

Accounting: identifying, measuring, recording, communicating financial info. Characteristics: reliability, relevance, understandability, comparability.

30 Rectification entries

(a) Plant Dr 1,000 → To Wages 1,000
(b) Error of principle
(c) Raju Dr 10,000 → To Suspense 10,000
(d) Bineesh Dr 2,000 → To Dinesh 2,000
(e) Drawings Dr 300 → To Purchases 300

31 Plant A/c – diminishing balance (5 years)

Cost = 10,00,000. Dep rates: Yr1 1,00,000 (Bal 9,00,000) ; Yr2 90,000 (8,10,000) ; Yr3 81,000 (7,29,000) ; Yr4 72,900 (6,56,100) ; Yr5 65,610 (5,90,490). (Plant A/c balanced each year)

Part VI Practical · 5 marks each

32 Journal & Cash A/c – Sarada Fancy Centre

Journal entries (summary) : 1/1 Cash to Capital 2,50,000; 5/1 Bank to Cash 1,00,000; 10/1 Stationery to Bank 1,500; 15/1 Cash to Sales 25,000; 17/1 Electricity to Cash 2,500; 20/1 Cash to Rent received 15,000; 25/1 Purchases to Kasi Stores 16,000; 30/1 Kumar to Sales 12,000.
Cash Account: Debit side: Capital 2,50,000; Sales 25,000; Rent 15,000 = total 2,90,000. Credit: Bank 1,00,000; Electricity 2,500; Balance c/d 1,87,500.

33 Double column cash book

Date	Particulars	Cash	Bank	Date	Particulars	Cash	Bank
Dec1	Balance b/d	50,000	75,000	Dec3	Purchases	-	20,000
Dec12	Commission	750	-	Dec5	Purchases	2,500	-
Dec20	Cash (C)	-	10,000	Dec7	Rent	2,000	-
Dec21	Sales	15,000	-	Dec10	Drawings	-	1,500
Dec27	Ajith	1,500	-	Dec15	Charity	250	-
				Dec20	Bank (C)	10,000	-
				Dec24	Electricity	2,000	-
				Dec25	Cash (C)	-	15,000
				Dec26	Salary	-	7,500
				Dec31	Balance c/d	50,500	41,000
	Total	67,250	85,000			67,250	85,000

34 Final accounts – Lucky Traders

Trading A/c: Gross profit = 1,76,500.
P&L A/c: Net profit = 1,57,500.
Balance Sheet: Total 3,02,000; Capital after adjustments 2,31,500; Creditors 70,000; Outstanding wages 500; Assets: Building (90,000), Stock 25,000, Debtors 24,000, Cash 1,13,000, Bank 50,000.

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✅ All answers prepared per March 2026 AFS paper. For any discrepancy, refer to accounting standards.
📌 Note: Q20 trial balance shows difference; closing stock treatment as per hint.