Centre for Development of Advanced Computing(C-DAC) 2005 M.C.A Computer Aplications 109 FinancialAccounting - - Question Paper
(Please Write your Exam Roll No. immediately) Roll No.
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FIRST SEMESTER [MCA] - DECEMBER 2005 | ||||||
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Q. 1. (a) Distinguish between the following:-
(i) Cash Discount and Trade Discount
(ii) Joint Venture and Partnership
(b) Explain the following :-
(i) Contingent Liabilities
(ii) Finance Lease
(iii) Account Current
(iv) Self Balancing Ledger
(v) Objectives of providing Ledger
(vi) Matching of cost and revenue.
Q. 2. What do you mean by normal loss and abnormal loss in consignment? How are they treated in the books of account for consignor?
Q. 3. What do you understand by bank reconciliation statement? Explain its utility as a control tool.
Q. 4. Elucidate (clarify) the following statement:-
(a) Agreement of trial balance is not a conclusive proof of accuracy of accounting records.
(b) Accounting equation holds good under all circumstances.
(c) Single entry system of book-keeping us an unscientific incomplete and defective system.
(d) Revenue earned and cost of earning revenue should be properly identified for a period.
Q. 5. What is diminishing balance method of depreciation? Describe its advantages and disadvantages.
Q. 6. (a) What do you understand by the following:-
(i) Profitability Ratio
(ii) Turnover Ratio
(iii)Financial Ratio
(b) What are the advantages and limitations of Ration Analysis?
Q. 7. Under which major head will you classify the following item while preparing the balance sheet of the company?
(a) Debenture
(b) Capital Reserve Account
(c) Public Deposits
(d) Forfeited Shares Account
(e) Sundry Creditors
(f) Advances received from customer
(g) Bills receivables
(h) Preliminary Expenses
(i) Goodwill
(j) Share Premium
Q. 8. Suman Company has the following Inventory, Purchase and sales data for August :-
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Inventory |
August 1 |
100 Units @ Rs. 5 |
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Purchase |
August 5 |
600Units @ Rs. 6 |
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August 11 |
300 Units @ Rs. 8 | |
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August 23 |
400 Units @ Rs. 9 | |
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Sales |
August 9 |
400 Units |
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August 18 |
500 Units | |
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August 28 |
200 Units |
The physical inventory count on August 31 shows 300 units in hand. Compute the cost of inventory on hand on 31 August and cost of goods sold for August under each of the following methods:-
First In First Out Last In First Out
Q. 9. (a) What characteristics should an asset possess to be classified as inventory?
(b) Under what circumstances will you treat interest charges as product cost?
(c) Why the Inventory costing method is needed?
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FIRST SEMESTER [MCA] - DECEMBER 2004 | ||||||
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Q. 1. Whether the following statements are true or false. Give reasons very briefly.
(a) Accounting period assumption show that the business has indefinite life.
(b) Heavy advertisement expenditure at the time of introducing a new product is a capital expenditure.
(c) Separate entity concept is not applicable to company.
(d) Profit and loss account shows the financial position of the concern.
(e) Rs. 2,000 paid for erecting a machine should be debited to wages account.
(f) Depreciation and depletion are the same thing.
(g) Receipts and payment account is the summary of income and expenditure.
(h) Buying goods for cash would increase the current ratio.
(i) It is generally accepted that the current liabilities should be two times the current assets.
(j) FIFO method of valuation of inventories is preferred rising prices.
Q. 2. Agreement is a trial balance is conclusive proof of accuracy of books of account. Comment.
Q. 3. Rectify the following error:
(a) Rs. 3,000 paid for purchase of furniture was posted to purchase account.
(b) Rs. 1,000 spend on repair of the building was debited to building account.
(c) Good sold to zed for Rs. 405 have been entered in the sales book as Rs. 504.
(d) Purchaser of goods from Pee has been wrongly passed through sales book. The amount of purchaser was Rs. 2,000.
(e) A sale of Rs. 2,000 made to Mr. Ram was correctly entered in the sales day book was wrongly posted to the debit of Mr. Shyams account.
Q. 4. What do you mean by the term Depreciation ? What are the basic features of
depreciation? Discuss the causes of depreciation. Also describe any two method of providing depreciation.
Q. 5. (a) The following items are found in the trial balance of Mr. Short on 31st December 2003.
Rs.
Debtor 20,000
Bad Debt 500
Provision for bad & doubtful debts on 1.1.2003 800
You are to provide for additional bad debt Rs. 400; bad and doubtful debt 5% shows the treatment of above transaction in the profit and loss account and the Balance Sheet.
(b) Differentiate between outstanding expenses and prepaid expenses. How will you treat them while preparing profit and loss account and the balance sheet?
Q. 6. The following are the details of a spare part of S. R. Mills Ltd.
50 units @ Rs. 25 per Unit 100 units @ Rs. 30 per Unit 60 units
Opening Stock
Purchase
Issued
Purchase
Issued
Issued
Purchase
Issued
1.11.04
2.11.04
5.11.04
11.11.04
20.11.04
22.11.04
27.11.04
29.11.04
200 units @ Rs. 40 per Unit 100 Units 100 Units
150 units @ Rs. 50 per Unit 100 Units
Find out the value of stock on 30.11.04 using
(a) LIFO Method
(b) FIFO Method
Q. 7. What is meant by financial statements? What are the limitations of financial statement? Enumerate various parties interested in financial statements.
Q. 8. Under which major head will you classify the following items while preparing the Balance sheet of a company:
(a) Debenture
(b) Capital Reserve Account
(c) Public Deposits
(d) Forfeited Shares Account
(e) Sundry Creditors
(f) Advances received from customer
(g) Bills receivables
(h) Preliminary Expenses
(i) Goodwill
(j) Share Premium
Q. 9. (a) Distinguish between receipts and payments account and income and expenditure account.
(b) Income and expenditure account of Delhi Sports club show the amount of subscription for 2003 as Rs. 11,000. You are further given:
- Subscription unpaid on 1.1.2003 Rs. 1,000 of which Rs. 900 was received in 2003.
- Subscription paid in advance on 1.1.2003 205
- Subscription paid in advance at 31.12.2003 300
- Subscription for 2003 unpaid at 31.12.2003 350
Ascertain the amount of subscription of subscription received during the year 2003 to be shown in receipts and payments account.
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FIRST SEMESTER [MCA] - DECEMBER 2002 | ||||||
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Q. 1. All parts carry equal marks (one). State True/False with one reason
(a) Generally business transactions are described in money terms.
(b) Financial Accounting facilitates management control.
(c) Financial management is same as financial accounting.
(d) Accounting starts from the point where book keeping ends.
(e) Money does not have constant value.
(f) The annual report is a document that incorporates the balance sheet and income statement.
(g) Business has an indefinite life.
(h) The accounting equation is a statement of equality between debit and credit.
(i) Depreciation is a charge against profit.
(j) The cash book functions both as a Journal and a ledger.
(k) The filling of voucher in petty cash book should be in order.
(l) Bank reconciliation statement shows any undue delay in the clearance of cheques.
Q. 2. What is financial accounting? What are its objectives and limitations?
Q. 3. Mr. A shopkeeper has prepared the following trial balance from his ledger as on 31st March, 2002.
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Particular |
Debit (Rs.) |
Credit (Rs.) |
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Purchase |
6,20,000 | |
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Sales |
8,30,000 | |
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Cash in hand |
4,200 | |
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Cash at Bank |
24,000 | |
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Stock of goods as on 1/4/2001 |
1,00,000 | |
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Mr. As Capital |
5,77,000 | |
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Drawings |
8,000 | |
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Salaries |
64,000 | |
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Postage & Telephone |
23,000 | |
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Salesman Commission |
70,000 | |
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Insurance |
18,000 | |
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Advertising |
34,000 | |
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Furniture |
44,000 |
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Printing & Stationary |
6,000 |
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Motor Car |
96,000 |
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Bad debts |
4,000 |
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Cash Discounts |
8,000 |
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General Expenses |
60,000 |
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Carriage Inward |
20,000 |
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Carriage Outwards |
44,000 |
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Wages |
40,000 |
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Creditor | |
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Debtor |
2,00,000 |
Total 14,87,000 14,87,000
You are requested to prepare Trading and profit and loss account for the year ending 31st March, 2002 and balance sheet as on that date. You are given the following further information:-
(a) Cost of good in stock as on 31st March 2002 is Rs. 1,45,000.
(b) Mr. A has withdrawn goods worth Rs. 5,000 during the year.
(c) Purchases include purchase of furniture worth Rs. 10,000.
(d) Debtors include Rs. 5,000 bad debts.
(e) Creditors include a balance of Rs. 4,000 to the credit of Mr. B in respect of which it has been decided and settled with the party to pay only Rs. 1000.
(f) Sales include goods worth Rs. 15000 sent to Ram & Co. on approval and remaining unsold as on 31st March 1999. The cost of goods was Rs. 10,000.
(g) Provision for bad debts is to be created at 5% on sundry debtors.
(h) Depreciated furniture by 15% an motor car by 20%.
(i) The salesmen are entitled to a commission of 10% on total sales.
Q. 4. Write short notes on any two of the following:-
(a) The advantages and limitations of accounting ratio.
(b) Measurement of fair income.
(c) Income and expenditure account.
(d) Inventory valuation and depreciation.
Q. 5. Rathi Alloys Ltd. has drawn up the following profit and loss account for the year ended 31st March 2003 :
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Debit Particulars |
Rs. |
Particulars |
Credit Rs. |
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To Opening Stock |
13,000 |
By Sales |
80,000 |
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To Purchases |
40,000 |
By Closing Stock |
19,000 |
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To Wages |
12,000 | ||
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To Unmanufacturing | |||
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Expenses |
8,000 | ||
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To Gross Profit |
26,000 |
To Selling & Dist.
Expenses 2,000
By Gross Profit 26,000
By Compensation for Acquisition of land 2,400
To Admn. Expenses 11,400 To General Expenses 600
To Loss by fire (Furniture) 400 To Net Profit 14,000
28,400 28,400
Find out the
(a) Gross Profit Ratio
(b) Operating Ratio
(c) Ratio of operating net profit to net sales
Q. 6. What is receipt and payment account? How will you deal with donations and legacies in final accounts of a non profit organization?
Q. 7. The following balances are extracted from the books of the branch:
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Stock on 1.1.1999 |
39,000 |
Wages |
8,000 |
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Head Office (Credit) |
42,000 |
Salaries |
2,500 |
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Sundry Debtors |
15,000 |
Carriage and Freight |
1,200 |
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Purchases |
34,500 |
Rent, Rates etc. |
1,200 |
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Goods received from H.O. |
42,500 |
Office Expenses |
300 |
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Returns to H. O. |
2,000 |
Cash in hand |
350 |
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Sales |
96,000 |
Cash at bank |
1,450 |
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Sundry Creditor |
6,000 |
Stock on 31.12.1999 |
42,600 |
The head office sent goods worth Rs. 7,500 to branch office on 30th December 1999, but the branch received the same on 7th January 2000. The branch remitted to head office Rs. 4,500 on 27th December 1999 but the money was received by head office on 2nd January 2002. The branch account in the head office books showed a debit balance of Rs. 54,000 on 31st December 1999. Branch plant & Machinery account appeared in the head office books at Rs. 24,000 on 31st December 1999 which was to be depreciated by 5%. Make necessary journal entries in the book of head office and the branch for reconciling their accounts. Give also journal entries to in corporate in the head office books.
Q. 8. What do you understand by depreciation? Explain sinking fund method of depreciation with example.
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FIRST SEMESTER [MCA] - DECEMBER 2001 | ||||||
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Q. 1. State whether the following statements are true or false. Give Reasons
(a) Going Concern Concept up the time frame for which the performance is to be measured and financial position is to be appraised.
(b) Profit / Loss = Closing Capital + Additional Capital - Drawing - Opening Capital
(c) Goods were sold to Ram Rs. 1,000 on 1.1.2011, Ram paid Rs. 950 on account. Rams account should be credited with Rs. 1000.
(d) Purchase of a fixed assets on credit is recorded in the Journal Paper.
(e) Current ratio represents the profitability position of a company.
(f) Adjustment entries always affect profit and loss A/c and the balance sheet simultaneously.
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Q. 2. The following is the Trial Balance of M/s Nitin Computers as on 31st March 2001. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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The following adjustment are to be made:
(i) Stock as on March 31, 2001 has an estimated market value of Rs. 60,000.
(ii) Stock lost by fire during the year amount to Rs. 45,000 against which insurers paid Rs. 34,000. The receipt was credited to Sales account.
(iii)Rent due, but not paid as on March 31, 2001 amounted to Rs. 20,000.
(iv) Three monthly factory lighting and heating due but not paid worked out to be Rs. 3,000.
(v) Insurance paid in advance amounted to Rs. 1000.
(vi) Depreciation @ 10% is required to be written off on plant and machinery, 55 on furniture and 255 on motor van.
(vii) Written off further bad debts is to be increased to Rs. 30,000.
(viii) The bank loan was contracted on July 1, 2000 you are required to prepare the profit and loss A/c for the year ended March 31, 2001 and also the balance sheet as on March 31, 2001. Show the working notes wherever required.
Q. 3. On July 1, 1991 Gopal purchases the second hand machinery Rs. 20,000 and spent Rs. 3000 on re-conditioning and installing it. On January 1, 1992 the firm purchased new machinery worth Rs. 12,000. On June 30, 1993, the machinery purchased on January 1, 1992 was sold for Rs. 8,000. On July 1, 1993 fresh machinery was purchased for this machinery to be made as follow :
July 1, 1993 Rs. 5,000
June 30, 1994 Rs. 6,000
June 30, 1995 Rs. 5,500
Payments in 1994 and 1995 include interest Rs. 1,000 and Rs. 500 respectively. The company writes off the depreciation @ 10% pa on the original cost. The account is closed every year on 31st March. Show the machinery account for three year ending 31, March 1994.
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Q. 4. (a) Calculate by FIFO method of inventory valuation, the cost of goods sold and value of ending inventory from the following data. | ||||||||||||||||||||||||||||||||
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(b) Compare the FIFO and LIFO method of stock valuation with the reference to their effect on pricing of issues of goods, valuation of closing stock and profits during a period of rising prices.
Q. 5. XYZ Ltd. had a branch at Calcutta. Goods are invoiced to the branch at cost plus 25%. Branch has been instructed to send all cash daily to the head office. All expenses are paid by the head office except petty expenses which are met by the branch manager.
From the following particulars, Prepare the Branch Account in te books of the head office.
Opening Stock Closing Stock Opening Sundry Debtor Closing Sundry Debtor Cash sales for the year Credit sales for the year Goods invoiced from the head office Expenses paid by the head office Expenses paid by the branch Cash submitted to the head office Furniture purchased by the branch manager.
Rs.
2.500
3.500 1,400 1,800 10,800
7000
18,200
1,640
120
15,000
1,200
Q. 6. Prepare Receipt and payment accounts and income and expenditure A/c of City Club for the year ended 31st March 2000 from the following particulars -
Subscriptions collected (including Rs. 4,000 for 1998) 30,000
Donation Received (not to capitalized) 2,000
Subscription outstanding at the end of the year 6,000
Rent paid 1,800
Purchase of furniture at the beginning of the year 1,000
Purchased of sports equipment 2,500
Purchases of magazine and newspaper 1,200
Sale of old furniture at the beginning of the year 500
Opening cash balances and bank balance 6,800
Instrument purchased 4,000
Interest on Investment received 1,000
Bank Charges 20
Postage, telegrams and telephones 1,800
Printing and stationary 1,000
Printers bill 500
Entrance fees 1,400
Legacies received 2,000 Honorary secretary allowances ( including Rs. 2000 for last year) 1,800
Outstanding allowances (Honorary Secretary) 300
Q. 7. Differentiate between (any four)
(a) Capital expenditure and Revenue expenditure
(b) Trial Balance and Balance sheet
(c) Periodic and perceptual method of inventory.
(d) Fund flow statement and Balance sheet
(e) Liquidity and solvency ratios.
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FIRST SEMESTER [MCA] - DECEMBER 2001 | ||||||
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Q. 1. Give the right answer giving atleast one reason in support for you choice. (True/False)
(a) Depreciation is a charge against profit.
(b) All possible expenses and losses should be provided for but expected income and gains should be ignored.
(c) Balance sheet shows the financial position at a point of time.
(d) Which of the following accounting equation is correct?
A-Capital = Total Assets - (Debenture + Loans)
B-Capital = Total Assets - (All Internal and external liabilities)
(e) Acid test measures the correct economic position of an undertaking.
(f) Window dressing of Balance sheet serves the interest of investors.
(g) Timely publication of Annual Accounts is highly important.
(h) Miscellaneous Expenditure (to the extent not written off) is an item of assets.
(i) Double entry system is the only scientific system of book-keeping.
(j) Companies should charge depreciation irrespective of use of machines.
(k) Goodwill is an intangible asset.
(l) Expenditure incurred on installation of an asset is a capital expenditure.
Q. 2. Prepare a Trading and Profit and Loss account for the year ended on 31st March 2001 and Balance sheet on that date from the ledger balances and other information as below:-
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Commission to Salesman 3,750 Interest on loan 4,500 |
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Land & Buildings |
1, 96,000 |
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Plant & Machinery |
2, 25,000 |
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Furniture & Fixtures |
25,000 |
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Debtors |
28,000 |
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Stock in trade |
35,000 |
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Bills Receivable |
15,000 |
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Cash Balances |
15,000 |
10, 74,000 10, 74,000
Other information:-
(i) Unsold stock , Rs. 60,500
(ii)Provide 5% for Bad 7 Doubtful Debts.
(iii) Charge depreciation on Plant & Machinery @ 10% and on furniture @ 20%
(iv) Outstanding rent Rs. 6,000.
(v)Accrued Interest Rs. 1,500
(vi) Tax payable Rs. 15,000.
Q. 3. What do you mean by Financial Statement Analysis? Explain the techniques which are used for analysis of the annual accounts of any company.
Q. 4. ABC Ltd. has drawn its balance sheet for the year ended on 31.03.2001.
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( to the extent not written off) |
3,71,000 3,71,000
You are required to calculate the following accounting ratios and comment on the Liquidity, current period and long-period solvency of the company.
(a) Liquid Ratio
(b) Current Ratio
(c) Debt-Equity Ratio.
Q. 5. (a)Mention the different method of inventory valuation.
(b) Prepare the statement of inventory using FIFO and LIFO methods of inventory valuation from the following information obtained from cost records of a firm.
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1999 | |
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January 1 |
Balance 100 Units @ Rs. 15 |
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January 10 |
Purchases 55 Units @ Rs. 20 |
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January 12 |
Issued 200 Units |
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January 20 |
Purchases 55 Units @ Rs. 25 |
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January 31 |
Issued 400 Units |
Q. 6. On 1st January 1998, X Ltd. purchased a machine for Rs. 3,60,000 and spent Rs.
15,000 on its installation. On 1st July the same year another machine costing Rs. 1, 50,
000 was added. On 1st July, 2000 the machinery which was purchased on 1st January, 1998 was discarded for Rs.1,60,000 and on the same date, a new machine was purchased for Rs. 3,00,000
Show the Machinery Account as would appear in the book of the company for the first four years if depreciation is charged at 10% per annum by straight line method.
Q. 7. Following is the summary of cash transaction of Youngmans club, Delhi for the year ended on 31st March 2000. Prepare an Income and Expenditure Account for the year ended on 31st March 2000 and also the Balance sheet on the date.
Receipts Amount Payment Amount
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Cash in hand |
21,500 |
Rent & Taxes |
12,750 |
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Entrance Fee |
6,250 |
Salaries |
14,250 |
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Subscriptions |
23,000 |
Electric Charges |
750 |
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Donations |
16000 |
General Expenses |
1,800 |
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Interest |
950 |
Books |
5,150 |
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Profit from Variety |
Office Expenses |
6,000 | |
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show |
11,000 |
Investments |
23,000 |
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Cash at Bank |
9,000 | ||
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Cash in Hand |
6,000 | ||
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78,700 |
78, 700 |
At the beginning of the year, the club had books worth Rs. 45,000 and furniture worth Rs. 8,700. Subscription in arrears on 1st April, 1999 were Rs. 900 and Rs. 1,050 on 31st March 2000 Rs. 2700 was due by way of rent in the beginning as well as at the end of the year.
Depreciate furniture by Rs. 750 and books by Rs. 4,500. On 31st March 2000, Salaries Rs. 2,500 and electric charges Rs. 500 were outstanding.
Q. 8. Write short notes on any two of the following:-
(a) Measurement of fair income
(b) Debtors system of Branch Accounting
(c) Distinction between Capital and Revenue items of expenditure and income
(d) Payroll Accounting.
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Attachment: |
| Earning: Approval pending. |
