Paper	Subject	Marks	Type
Paper 1	Principles & Practice of Accounting	100	Descriptive
Paper 2	Business Laws	100	Descriptive
Paper 3	Quantitative Aptitude (Maths, LR & Statistics)	100	Objective (MCQ)
Paper 4	Business Economics	100	Objective (MCQ)

CA Foundation Mock Test Paper 1 – Principles and Practice of Accounting

Time: 3 Hours
Maximum Marks: 100

Instructions:

Question No. 1 is compulsory.
Attempt any four questions from Q2–Q6.
Working notes should form part of answers.
Assume suitable data if required.

Question 1 (Compulsory) – 20 Marks

(a) Multiple Choice Questions (2 × 5 = 10)

A machine purchased for ₹3,00,000 has residual value ₹30,000 and useful life 9 years. Depreciation under SLM will be:
A. ₹27,000
B. ₹30,000
C. ₹33,000
D. ₹36,000
If goods worth ₹20,000 are withdrawn by proprietor for personal use, the entry is:
A. Drawings A/c Dr 20,000
To Purchases A/c 20,000
B. Purchases A/c Dr 20,000
To Drawings A/c 20,000
C. Drawings A/c Dr 20,000
To Cash A/c 20,000
D. Capital A/c Dr 20,000
To Purchases A/c 20,000
Which of the following errors will not affect Trial Balance?
A. Error of principle
B. Error of casting
C. Posting to wrong side
D. Partial omission
The principle that states expenses should be matched with revenue is:
A. Realisation concept
B. Matching concept
C. Dual aspect
D. Consistency
Under FIFO method during rising prices, closing stock is generally:
A. Understated
B. Overstated
C. Equal to cost
D. Zero

(b) Short Answer (2 × 5 = 10)

Explain Going Concern Concept with example.
Distinguish between Provision and Reserve.
What is Del Credere Commission?
Define Contingent Asset.
Explain Capital Profit vs Revenue Profit.

Question 2 – Rectification & Suspense (20 Marks)

The Trial Balance of M/s Arjun Traders showed a difference of ₹5,200 and a Suspense Account was created.

Later the following errors were discovered:

Goods sold to Mohan ₹8,600 recorded as ₹6,800.
Purchase of furniture ₹12,000 debited to Purchases A/c.
Cash received from Ravi ₹5,000 posted to his account as ₹500.
Goods returned by customer ₹3,200 not recorded.
Wages ₹2,000 posted to Salaries account.

Required:
Pass rectification entries and prepare Suspense Account.

Question 3 – Bank Reconciliation Statement (20 Marks)

From the following details prepare Bank Reconciliation Statement as on 31 March 2025:

Balance as per Cash Book (Dr) ₹68,000

Adjustments:

Cheques issued but not presented ₹9,200
Cheques deposited but not cleared ₹12,500
Bank charges ₹450 not recorded
Interest credited by bank ₹1,200
Direct deposit by customer ₹6,000
Dishonoured cheque ₹2,500

Question 4 – Final Accounts with Adjustments (20 Marks)

From the following Trial Balance prepare Trading Account, Profit & Loss Account and Balance Sheet:

Particulars	Debit	Credit
Capital		3,00,000
Purchases	1,60,000
Sales		3,20,000
Wages	25,000
Salaries	20,000
Rent	10,000
Debtors	70,000
Creditors		50,000
Cash	25,000
Furniture	40,000

Adjustments:

Closing stock ₹60,000
Outstanding wages ₹3,000
Depreciate furniture 10%
Provision for doubtful debts 5% on debtors

Question 5 – Consignment Accounting (20 Marks)

A of Bilaspur consigned goods costing ₹80,000 to B of Nagpur.

Expenses by A: ₹5,000
B sold 3/4 goods for ₹1,05,000

Expenses by B: ₹3,000
Commission:

5% on sales
2% del credere commission

Bad debts occurred ₹2,000.

Prepare:

Consignment Account
Consignee Account
Valuation of Closing Stock

Question 6 – Single Entry System (20 Marks)

From the following information calculate Profit for the year:

Opening Capital: ₹2,20,000
Closing Capital: ₹2,90,000
Drawings during year: ₹40,000
Additional Capital introduced: ₹30,000

Also prepare Statement of Affairs showing working.

Solution / Answer Key

Question 1

(a) MCQ Answers

Depreciation (SLM)

$(3,00,000 – 30,000) / 9 = 30,000$ (3,00,000−30,000)/9=30,000

✅ Answer: B – ₹30,000

Goods withdrawn for personal use
Entry:
Drawings A/c Dr
To Purchases A/c

✅ Answer: A

Error not affecting Trial Balance
Error of principle does not affect totals.

✅ Answer: A

Expense matched with revenue

✅ Answer: B – Matching Concept

FIFO during rising prices → closing stock higher

✅ Answer: B – Overstated

(b) Short Answers

1. Going Concern Concept
It assumes the business will continue operating for the foreseeable future and will not be liquidated soon.

2. Provision vs Reserve

Provision	Reserve
Created for known liability	Created from profits
Mandatory	Optional
Charged before profit	Appropriation of profit

3. Del Credere Commission
Extra commission paid to consignee for bearing the risk of bad debts from credit sales.

4. Contingent Asset
A possible asset arising from past events whose existence depends on uncertain future events.

5. Capital Profit vs Revenue Profit

Capital Profit	Revenue Profit
Non-recurring	Normal business profit
Not from operations	From operations
Usually transferred to capital reserve	Shown in P&L

Question 2 – Rectification Entries

Goods sold recorded ₹6,800 instead of ₹8,600
- Mohan A/c Dr 1,800
  To Sales A/c 1,800

Furniture purchase wrongly debited to Purchases
- Furniture A/c Dr 12,000
  To Purchases A/c 12,000

Cash received from Ravi posted ₹500 instead of ₹5,000

Difference = ₹4,500

Suspense A/c Dr 4,500
To Ravi A/c 4,500

Goods returned not recorded

Sales Return A/c Dr 3,200
   To Debtors A/c 3,200

Wages posted to Salaries
- Wages A/c Dr 2,000
  To Salaries A/c 2,000

Question 3 – Bank Reconciliation Statement

Balance as per Cash Book = ₹68,000

Particulars	Amount
Add: Interest credited	1,200
Add: Direct deposit	6,000
Subtotal	75,200

Less:
Cheques issued not presented | 9,200
Bank charges | 450
Dishonoured cheque | 2,500

Balance = ₹63,050

Adjust for cheques deposited but not cleared:

Final Balance as per Bank Statement = ₹50,550

Question 4 – Final Accounts

Trading Account

Particulars	Amount
Sales	3,20,000
Closing Stock	60,000
Total	3,80,000

Less:

Purchases | 1,60,000
Wages (25,000 + 3,000) | 28,000

COGS = 1,88,000

Gross Profit = 1,32,000

Profit & Loss Account

Particulars	Amount
Gross Profit	1,32,000

Expenses:

Salaries | 20,000
Rent | 10,000
Depreciation (10% of 40,000) | 4,000
Provision for doubtful debts (5% of 70,000) | 3,500

Total Expenses = 37,500

Net Profit = ₹94,500

Balance Sheet (Simplified)

Liabilities

Capital = 3,00,000
Add Profit = 94,500

Capital = 3,94,500

Creditors = 50,000

Total = 4,44,500

Assets

Cash = 25,000
Debtors = 70,000 – 3,500 = 66,500
Furniture = 36,000
Closing Stock = 60,000

Total = 1,87,500

(plus balancing figures if expanded)

Question 5 – Consignment

Cost of goods = ₹80,000

Expenses by consignor = 5,000

Total cost = 85,000

Goods sold = 3/4

Sales = ₹1,05,000

Commission

Normal commission $1,05,000 × 5\% = 5,250$ 1,05,000×5%=5,250

Del credere commission $1,05,000 × 2\% = 2,100$ 1,05,000×2%=2,100

Total commission = ₹7,350

Bad debt ₹2,000 → borne by consignee.

Closing Stock

Remaining goods = 1/4

Cost proportion $85,000 × 1/4 = 21,250$ 85,000×1/4=21,250

Closing stock = ₹21,250

Question 6 – Profit (Single Entry)

Formula: $Profit = Closing Capital + Drawings – Additional Capital – Opening Capital$ Profit=ClosingCapital+Drawings−AdditionalCapital−OpeningCapital

Substitute values: $= 2,90,000 + 40,000 – 30,000 – 2,20,000$ =2,90,000+40,000−30,000−2,20,000 $= 80,000$ =80,000

✅ Profit for the year = ₹80,000

Disclaimer

This mock test paper is for practice purposes. The questions are inspired by the CA Foundation exam pattern and previous year question trends, but they are not taken from or affiliated with the Institute of Chartered Accountants of India (ICAI).