Centre for Development of Advanced Computing(C-DAC) 2004 M.C.A -109 Financial Accounting - Question Paper

END-TERM exam
FIRST SEMESTER [MCA] - DECEMBER 2004
Paper Code: MCA-109 Subject: Financial Accounting
Time: three Hours (Batch – 2004 & 2005) Maximum Marks: 60

Q. 1. Whether the subsequent statements are actual or false. provide 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 indicates 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 identical 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 2 times the current
assets.
(j) FIFO method of evaluation 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 subsequent 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. Shyam’s account.

Q. 4. What do you mean by the term ‘Depreciation’? elaborate the basic features of
depreciation? explain the causes of depreciation. Also define any 2 method of
providing depreciation.

Q. 5. (a) The subsequent items are obtained 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 give for additional bad debt Rs. 400; bad and doubtful debt 5% indicates the
treatment of above transaction in the profit and loss account and the Balance Sheet.
(b) Differentiate ranging from outstanding expenses and prepaid expenses. How will you treat
them while preparing profit and loss account and the balance sheet?

Q. 6. The subsequent are the details of a spare part of S. R. Mills Ltd.
1.11.04 Opening Stock 50 units @ Rs. 25 per Unit
2.11.04 Purchase 100 units @ Rs. 30 per Unit
5.11.04 Issued 60 units
11.11.04 Purchase 200 units @ Rs. 40 per Unit
20.11.04 Issued 100 Units
22.11.04 Issued 100 Units
27.11.04 Purchase 150 units @ Rs. 50 per Unit
29.11.04 Issued 100 Units
obtain out the value of stock on 30.11.04 using
(a) LIFO Method
(b) FIFO Method

Q. 7. What is meant by financial statements? elaborate the limitations of financial statement?
Enumerate different parties interested in financial statements.

Q. 8. Under which major head will you classify the subsequent 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 ranging from 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.

Earning:   Approval pending.