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

ques. Paper Financial Accounting – I (111) : January 2007
• ans all ques..
• Marks are indicated against every ques..
1.
Amortization of unidentified intangible assets is in terms of
(a)
Conservatism concept
(b)
Going concern concept
(c)
Matching concept
(d)
Time period concept
(e)
Business entity concept.
(1 mark)
< ans >
2.
If office equipment is purchased for cash, what effect will this transaction have on the financial position of thecompany?
(a)
There is no change in the assets, liabilities and owners’ equity
(b)
There is a reduce in assets, increase in liabilities and no change in owners’ equity
(c)
There is a reduce in assets, no change in liabilities and a reduce in owners’ equity
(d)
There is an increase in assets, reduce in liabilities and no change in owners’ equity
(e)
There is an increase in assets, no change in liabilities and an increase in owners’ equity.
(1 mark)
< ans >
3.
The fund available with a company after paying all claims including tax and dividend is called
(a)
Net profit
(b)
Net operating profit
(c)
Capital profit
(d)
Retained earnings
(e)
Profit before tax.
(1 mark)
< ans >
4.
The costs that are relevant to the revenue of the period should be charged against the revenue in determining the netincome of a business for a defined, period. This is in recognition of
(a)
Cost concept
(b)
Matching concept
(c)
Realization concept
(d)
Accrual concept
(e)
Materiality concept.
(1 mark)
< ans >
5.
Which of the subsequent statements is not in accordance with the Accounting Standard for treatment of GovernmentGrant?
(a)
Government grants related to specific fixed asset should be shown as a deduction from the gross value of the asset in the Balance-Sheet
(b)
Where the grant related to specific fixed asset almost equals its value, the market value should be shown in the Balance-Sheet
(c)
Where the grant is related to a non-depreciable asset, it should be credited to Capital Reserve Account
(d)
Government grants of the nature of promoter’s contribution should be credited to Capital Reserve Account
(e)
Government grants related to revenue should be credited to Profit and Loss statements over the periods to match them with the related expense.
(1 mark)
< ans >
6.
As per AS-16 on borrowing cost, a qualifying Asset is
(a)
An asset which is necessary for substantial production of a material with which a company deals with
(b)
An asset that takes a substantial period of time to get ready for its intended use or sale
(c)
An asset which is qualified by an Engineer as fit for operation/running
(d)
An asset which costs atleast 7% of the net worth of a company
(e)
An asset on which a mention is made by the Auditors in their qualified report.
(1 mark)
< ans >

Earning:   Approval pending.