All India Management Association (AIMA) 2007 M.B.A Marketing Management Accounting for ision Making – I - Question Paper

Therefore, Rs.8,25,000 = Rs.7,00,000 + Reserves & surplus + Rs.50,000
Therefore, Reserves & Surplus = Rs.8,25,000 – Rs.7,50,000 = Rs.75,000. < TOP >
8. B According to going concern concept (b), a business entity is presumed to carry on its operations for an indefinite period. < TOP >
9. A According to the requirement of US GAAP compliance for Indian corporate, an Indian company, if it is incorporated under the laws of a jurisdiction outside of the United States, is called as foreign private issuer. < TOP >
10. E Shareholders are treated as creditors for the amount they have paid on shares subscribed by them according to the business entity concept. According to cost concept, all transactions are recorded at cost. The duality concept emphasizes that assets = owner’s equity + outside liability. A business entity is presumed to carry on its operations forever under going concern concept. According to money measurement concept, only those transactions that can be expressed in monetary terms are recorded. < TOP >
11. B The consistency concept requires that once an entity has decided to follow a particular method of evaluation of inventory, it will follow the identical unless there is strong cause to change the method of evaluation. < TOP >
12. E The subsequent are the external users of financial statements.
Government agencies.
Lenders.
Customers.
Investors.
Board of directors are not the external users of financial statements. < TOP >
13. E Maintenance of records of human resources of the company is not an objective of accounting. < TOP >
14. E Periodicity is not a qualitative characteristic of financial statements. < TOP >
15. A Money measurement concept states that if events cannot be quantified in monetary terms then they do not facilitate accounting. Therefore, death of a Chairman of a company, even though it has far reaching consequences for the health of the business is not accounted for, since no monetary measurement of the event is feasible. < TOP >
16. A According to permanency order of balance sheet the order of the liabilities are shown as capital, long-term liabilities, short-term liabilities and current liabilities. In the order of permanency, permanent assets are shown 1st and those of less permanent are shown next. < TOP >
17. C Balance sheet of Axon Ltd., as on March 31, 2008
Sl
no Particulars Figures as at the current financial year
Rs. Figures as at the current financial year
Rs. Figures as at the previous financial year
1. Sources of funds
Share holders funds

Earning:   Approval pending.