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

The company maintains a provision for bad debts at 5% and provision for discount on debtors at 2.5%
of the debtors. If the debtors as on March 31, 2007, before writing off bad debts and discount allowed
amounted to Rs.1,00,000, the balance in the provision for discount on debtors account on March 31,
2007 stood at (rounded off to closest rupees)
(2 marks)
Particulars Amount (Rs.)
Balances as on April, 01, 2006:
Provision for bad debts 5,000
Provision for discount on debtors 2,000
During 2006-07:
Bad debts written off 1,000
Discount allowed 1,500
(a) Rs.2,500
(b) Rs.2,463
(c) Rs.2,438
(d) Rs.2,316
(e) Rs.2,410.
< ans >
19. Swedish Ltd. depreciates machinery at 20% p.a. on the original cost. It purchased a 2nd hand
machine for Rs.5,00,000 on April 1, 2005 and spent immediately Rs.60,000 and Rs.40,000 on its repairs
and installation respectively. On October 1, 2007 they disposed off the machinery purchased on April 1,
< ans >
2005 for Rs.4,00,000.
The profit/(loss) on sale of machinery was
(2 marks)
(a) Rs.1,20,000
(b) (Rs.1,00,000)
(c) Rs.1,60,000
(d) Rs.1,00,000
(e) (Rs.1,60,000).
20. various evaluation bases are used in accounting and in this context, realizable value means
(1 mark)
(a) The amount paid or payable to acquire a benefit
(b) The amount that needs to be paid if the asset is to be acquired currently
(c) The current discounted value of future inflows that an item is expected to generate in the normal course
of business
(d) The net amount collectible in the event of the asset’s disposal
(e) The amount paid or payable to lose a benefit.
< ans >
21. Errors disclosed by a trial balance include
(1 mark)
(a) Complete omission of the recording of a transaction from the books of accounts
(b) Posting of an aspect of a transaction on the accurate side of a wrong account
(c) Recording both aspects of a transaction more than once in the books of accounts
(d) Posting of an aspect of a transaction more than once
(e) Recording a transaction at an amount which is totally various from the true amount.
< ans >
22. Capital expenditure is an expenditure which

Earning:   Approval pending.