Institute of Chartered Financial Analysts of India (ICFAI) University 2007 Certification Finance Financial Accounting – I (111) : - Question Paper

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3.
ans : (d)
cause : The fund available with a company after paying all claims including tax and dividend is Retained earnings. (d) is the accurate ans.
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4.
ans : (b)
cause : The costs that are relevant to the revenue of the period should be charged against the revenue in determining the net income of a business for described period. This is in recognition of matching concept. Hence (b) is the accurate ans
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5.
ans : (b)
cause : Where the grant related to specific fixed asset almost equals its value, the asset should be shown at its nominal value only in the Balance-Sheet. Government grants related to specific fixed asset should be shown as a deduction from the gross value of the asset in the Balance Sheet. Where the grant is related to a non-depreciable asset, it should be credited to Capital Reserve A/c. Government grants of the nature of promoter’s contribution should be credited to Capital Reserve A/c Government grants related to revenue should be credited to Profit & Loss statements over the periods to match them with the related expense.
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6.
ans : (b)
cause : As per AS-16 on borrowing cost a Qualifying Asset is an asset that takes a substantial period of time to get ready for its intended use or sale.
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7.
ans : (e)
cause : In contract accounting, there is a reasonable certainty that the project would be completed and the return consideration is realized. In fact, return consideration may start as soon as the work starts. So, revenue may be recognized at work-in-progress. This is the exception to the revenue recognition principle. Other principles said in (a), (b), (c) and (d) are not accurate. Hence, (e) is actual
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8.
ans : (c)
cause : The amount of cheques deposited but not yet collected or dishonored should be deducted from overdraft balance as per pass book. i.e. deduct Rs.20,000 + Rs.40,000 = Rs.60,000 from overdraft balance as per pass book.
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9.
ans : (c)
cause :
Cost of goods available for sale =
Rs.12,00,000
Cost of goods sold (Rs.13,00,000 × 0.75) =
Rs. 9,75,000
Closing stock
Rs. 2,25,000
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10.
ans : (b)
cause : Dr. Sundry debtors account Cr.
Date
Particulars
Rs.
Date
Particulars
Rs.
April 01, 2005
To Balance b/d
50,000
2005-2006
By Cash
(Balancing figure)
3,70,000
2005-2006
To Sales
3,60,000
March 31, 2006

Earning:   Approval pending.