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Financial Accounting

bbasemester 2
Chapter Wise NotesQuestion BanksSyllabusChapter Wise Questions
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Faculty of Management

2024

Bachelor in Business Administration

Financial Accounting

ACC. 201

Full Marks: 100

Candidates are required to give their answers in their own words as far as practicable. The figures in the margin indicate full marks.

"Section A"

Brief Answer Questions .

[10*2=20 ]

1.

Define patent.

[2]
2.

What is intangible asset?

[2]
3.

What do you mean monetary concept?

[2]
4.

What do you mean by GAAP?

[2]
5.

What are the different types of cheque?

[2]
6.

The following particulars are provided to you:
Profit for the year Rs 40,000
Loss on revaluation Rs 21,000
Gain from cash flow hedges Rs 26,000
Gain on sale of investment Rs 25,000
Required: Statement of Other Comprehensive Income as per NFRS

[2]
7.

The following transaction is given:
Started business with Cash Rs 150,000, machinery Rs 60,000, and stock Rs 40,000
Salary paid Rs 55,000 including an advance of Rs 5,000.
Required: Accounting Equation.

[2]
8.

You are given the following information about the PQ Company Ltd on 31st December 2022:

Particulars Amount Rs.
5000 equity shares of Rs.100 per share 500,000
Share premium 150,000
Retained earnings 200,000
Total shareholder's equity 750,000

The following transition occurred during the year 2023: Issued an additional 2,000 shares of Rs 100 each at Rs.120 each. The company earned a Net Profit of Rs 75,000 during the year. The company declared and paid a dividend of Rs 40,000 during the year.

Required: Statement of change in Equity at the end of 2023.

[2]
9.

Advance Company acquired Cheeps-making machinery of Rs 1,000,000 with a salvage value of Rs 100,000. It has the expected capacity of producing 450,000 packets of cheeps during its life. It produces 110,000 packets of cheeps in year 1 and 150,000 packets in cheeps in year 2.
Required: Depreciation for the year 1 and year 2.

[2]
10.

The following information are given:
 Rs 60,000 was invested as a capital
Purchase goods for Rs 200,000 and paid partially Rs 150,000 on cash
Required: Journal Entries

[2]

"Section B"

Short Answer Questions . (Attempt any SIX Questions ) .

[6*5=30 ]

1.

Write about accounting process.

[5]
2.

Differentiate between revenue and capital expenditure with examples.

[5]
3.

What is ledger? Why it is needed?

[5]
4.

Following are the information of assets of a Company:

Particulars Year 1
Sales 10,000
Cost of Sales 6,000
Gross Profit 4,000
Expenses 1,500
Depreciation 500
Interest on Working Capital 800
Interest on loan 400
Profit before tax 800
Provision for Tax 200

Required: Vertical Analysis

[5]
5.

The following transactions are given:
1st January 2021 Machinery purchased Rs 300,000.
1st July 2022 Additional machinery purchased Rs. 400,000.
30th June 2023 Machinery purchased on 1st January was sold for Rs. 270,000.
Additional Information:
 Depreciation is to be provided at the rate of 15% per annum on the basis of Straight Line Method.
 Accounts are closed on 31st December, each year.
Required: Machinery account from 2021 to 2023

[5]
6.

The bank statement of a company shows a balance of Rs. 50,000 on 30th Ashwin 2081. However the company balance showed a different balance of Rs 36,000. On the investigation, the following differences were noticed:
Outstanding cheque Rs 30,000 ~
Deposit in transit Rs 20,000 r

[5]
7.

A customer's cheque of Rs 5,000 was return with the bank statement marked NSF. 

 Collection of notes receivable for Rs 4,000 and interest on investment Rs 2,000

  Bank charge Rs 2,000 for the service provided by the bank

  Bank paid Rs 11,000 but the company recorded Rs 16,000 in its statement. Required: Bank reconciliation statement

The following particulars are extracted from the trial Balances of a manufacturing firm.

Tax paid 70,000
Dividend paid 30,000
Office supplies 90,000
Dividend received 30,000
Sales 1,200,000
Sundry debtors 180,000
Raw material purchase 550,000
Factory overheads 100,000
Manpower cost 250,000
Selling overhead 50,000
Capital employed 600,000
Depreciation expenses 60,000
Interest expenses 20,000
Motive power 10,000

Required: (a) Value-added statement and (b) Net profit for the year

[5]

"Section C"

Long Answer Questions ( Attempt any THREE Questions ) .

[3*10=30 ]

1.

"Accounting information is essential for taking right decisions in any organization." Explain.

[10]
2.

Write about concept, importance and limitations of accounting standard.

[10]
3.

The Trial Balance of KK company as of 31st December 2023 is given below:

Particulars Debit (Rs.) Credit (Rs.)
Equity share capital - 300,000
Building 200,000 -
Copyright 20,000 -
10% Debenture - 100,000
Interest on Debenture 5,000 -
Revenue from operation - 470,000
Purchases 250,000 -
Salaries & wages 35,000 -
Cash at bank 40,000 -
8% Investment 100,000 -
Account payable - 76,000
Account receivable 40,000 -
Commission received - 18,000
Prepaid insurance 24,000 -
Office rent 26,000 -
Plant & Equipment 200,000 -
Marketing expenses 30,000 -
Interest on investment - 6,000
Total 970,000 970,000

Adjustment:

Stock at the end of the year Rs 50,000.

 Depreciation on Building is 5% and Plant & Equipment is 15%.

 Salary to be paid Rs 5,000.

 Prepaid insurance expired during the year Rs 20,000.

Required:

 a) Profit and Loss Statement for the year ending 31st December.

 b) Statement of Financial Position as on 31st December.

[10]
4.

The KK Company's Statement of Profit and Loss account and Statement of Financial Position for two years have been Below : 

Statement of Profit and Loss for the year 2023
Particulars Amount (Rs)
Revenue from operation 1,200,000
Less: Cost of sales (800,000)
Gross margin 400,000

Add Other income


(including dividend received Rs 10,000)

 60,000
Total 460,000
Less: Distribution expenses (100,000)
Less: Administrative expenses (write-off of goodwill Rs 10,000 and depreciation of Rs 90,000) (260,000)
Operating Profit 100,000
Less: Finance cost (25,000)
Net profit before tax 75,000
Less: Provision for tax (18,750)
Net profit after tax 56,250
Less: Dividend paid (6,000)
Retained Earnings 50,250

Statement of Financial Position of a company for 2022 and 2023
Assets 2022 2023
Non-Current Assets:
Property, plant and equipment 500,000 600,000
Intangible assets (Goodwill) 40,000 30,000
Investments 160,000 220,000
Total Non-Current Assets 700,000 850,000
Current Assets:
Inventories/Stock 40,000 50,000
Cash and cash equivalents 50,000 60,000
Account receivables 60,000 50,000
Trade and Other receivables 50,000 40,000
Total Current Assets 200,000 200,000
Fictitious Assets - -
Total Assets (Total Non-current and Current Assets) 900,000 1,050,000
Equity:
Share capital @Rs.100 each 500,000 600,000
Reserve/Retained earnings 30,000 80,250
Non-controlling interests - -
Total Equity 530,000 680,250
Liabilities
Non-Current Liabilities:
10% Loans and borrowings 250,000 351,000
Total Non-Current Liabilities 250,000 351,000
Current Liabilities:
Trade and other payable 50,000 -
Income tax liabilities - 18,750
Provisions 70,000 -
Total Current-Liabilities 120,000 18,750
Total Liabilities (Total Non-current and Current) 370,000 369,750
Total Equity and Total Liabilities 900,000 1,050,000

Required: Statement of Cash Flow under NFRS

[10]

"Section D"

Comprehensive Answer / Case / Situation Analysis Questions :

[20 ]

1.

The XYZ Company's Statement of Profit and Loss account and Statement of Financial Position for two years have been given below:

Statement of Profit and Loss for the year 2080
Particulars Amount (Rs.)
Revenue from operation 6,00,000
Cost of sales (400,000)
Gross profit 200,000
Other income 20,000
Total 220,000
Distribution expenses (60,000)
Administrative expenses (115,000)
Operating profit 45,000
Financial cost (7,500)
Net Profit 37,500

Statement of the financial position of a company for 2079 and 2080
Assets 2079 2080
Non-current assets:
Property, plant, and equipment 200,000 250,000
Intangible assets 10,000 7,500
Investment (long-term) 45,000 55,000
Total Non-current Assets: 255,000 312,500
Current Assets:
Inventories / Stock 20,000 30,000
Cash and cash equivalents 25,000 30,000
Account receivable 20,000 15,000
Trade and Other receivable 15,000 20,000
Total current assets 80,000 95,000
Fictitious assets - -
Total assets 335,000 407,500
Equity:
Share capital @Rs.100 each 200,000 225,000
Reserve/Retained earnings 45,000 82,500
Non-controlling interest - -
Total Equity 245,000 307,500
Liabilities:
Non-current liabilities:
10% Loan and Borrowing 60,000 75,000
Total non-current liabilities 60,000 75,000
Current liabilities:
Trade and Other payable 15,000 25,000
Income tax payable - -
Provision 15,000 -
Total current liabilities 30,000 25,000
Total liabilities 90,000 100,000
Total Equity and Liabilities 335,000 407,500

Required: Financial analysis for 2080:

a) Current ratio (2:1)

b) Acid test ratio (1:1)

c) Debt to total capital ratio (less than 40%)

d) Stock turnover ratio (at least 8 times)

e) Total assets turnover ratio (more than 1 time)

f) Net profit margin (at least 12%)

g) Return on assets (at least 5%)

 h) Return on equity (at least 7%)

i) Average sales period (45 days or less than 45 days)

 j) Account receivable turnover ratio (at least 8 times)

k) Comment on the above result.

[20 ]