Institute of Chartered Financial Analysts of India (ICFAI) University 2007 Certification Finance Financial Accounting (CFA510): - Question Paper

(1 mark)
Debit (Rs.) Credit (Rs.)
(a) Cash account Dr.
To Bank account
10,000
10,000
(b) ‘Mohan’ account Dr.
To Cash account
10,000
10,000
(c) Drawings account Dr.
To Bank account
10,000
10,000
(d) Bank account Dr.
To Cash account
10,000
10,000
(e) Bank account Dr.
To Drawings account
10,000
10,000.
< ans >
9. Which method of depreciation is most improper for petroleum and mining companies for charging
depreciation on oil wells and mines?
(1 mark)
(a) Straight line method
(b) Diminishing balance method
(c) Units-of-production method
(d) Sum-of-the-years’ digits method
(e) Annuity method.
< ans >
10. The cost price of a machine is Rs.1,20,000 and the depreciated value of the machine after three years is
Rs.66,000. If the company charges depreciation under straight line method, the rate of depreciation is
(2 marks)
(a) 25%
(b) 20%
(c) 18%
(d) 15%
(e) 12%.
< ans >
11. The balances extracted from the books of M/s. Good Food as on March 31, 2007 were as under:
Particulars Rs.
Salaries 11,000
Interest on loan from Mr. Agarwal 2,000
Sales 96,000
Purchases 93,000
Rent 13,000
Machinery 1,00,000
Sundry debtors 16,000
Sundry creditors 29,000
5% Loan from Mr. Agarwal (taken on April 01, 2006) 50,000
Capital account 70,000
< ans >
However, Mr. Girish, the proprietor, forgot to consider the subsequent information:
– Outstanding salaries of Rs.1,000.
– Depreciation on Machinery at the rate of 10% per annum.
– Rent paid in advance of Rs.1,000.
The total of the adjusted trial balance after considering all the relevant info was
(2 marks)
Cash 10,000
(a) Rs.2,46,500
(b) Rs.2,45,000
(c) Rs.2,46,000
(d) Rs.2,65,000
(e) Rs.2,57,000.
12. Ex-ante income means
(1 mark)
(a) Original expectation of expected future cash flows at the end of the period less original
expectation of expected future benefits at the beginning of the period
(b) Capital at the end of the period less capital at the beginning of the period
(c) Revised expectation of expected future cash flows at the end of the period less original

Earning:   Approval pending.