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Financial Accounting and Analysis

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Chapter Wise NotesQuestion BanksSyllabusChapter Wise Questions
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Faculty of Management

2078

Bachelor of Business Studies

Financial Accounting and Analysis

MGT 211

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 Questions Answer Attempt ALL questions.

[10*2=20]

1.

What is going concern concept of accounting?

[2]
2.

Write about the accrual basis of accounting.

[2]
3.

What is internal control to a business?

[2]
4.

Write down the meaning of bad debts.

[2]
5.

What is perpetual inventory system?

[2]
6.

On Bhadra \( 1^{\text{st}} \) S.S. Company borrowed Rs. 200,000 from bank by signing a 3-month, 15% notes payable. It paid the principal and interest at due date.

Required: Journal entries for issue and retirement of note.

[2]
7.

You are provided the following information.

\( \text{Sales} = \text{Rs. } 450,000 \quad \text{Wages to workers} = \text{Rs. } 75,000 \)
\( \text{Commission received} = \text{Rs. } 15,000 \quad \text{Income tax paid} = \text{Rs. } 7,500 \)
\( \text{Opening Stock} = \text{Rs. } 30,000 \quad \text{Closing Stock} = \text{Rs. } 60,000 \)
\( \text{Cost bought in materials and services} = \text{Rs. } 270,000 \)

Required: Amount of value added.

[2]
8.

The following information are given:

Started business with cash of Rs. 80,000 and goods of Rs. 40,000.

Received rent Rs. 21,000 including advance rent of Rs. 3,000.

Commission received Rs. 10,000 and accrued commission is Rs. 2,000.

Required: Accounting equation.

[2]
9.

The following transaction of the Electricity Shop are given below:

Ashad 7 Returned to Ram Electricity Shop

30 Fans @ Rs. 2,000 each

3 dozen Lamps @ Rs. 200 each

Less: Trade discount 10%

Ashad 14 Returned 12 Heaters to Banshal Lights for Rs. 30,000

Required: Return outward book

[2]
10.

An organization sold goods for Rs. 30,000 in terms of 2/10, net 30. The customer return goods of Rs. 10,000 after some days. The due amount is settled by the customer within the given period.

Required: Journal entries for the above transactions.

[2]

"Section B"

Here is the text extract from the provided image, Screenshot 2026-06-24 215851.png: Short Questions Answer Attempt any FIVE questions.

[5*10=50 ]

1.

The balance sheet of a company for two years are given below

Liabilities Year1 Year 2 Assets Year 1 Year2
Equity Share capital 800,000 900,000 Fixed assets 600,000 800,000
Share premium 80,000 90,000 Inventory 200,000 250,000
12% Debentures 100,000 50,000 Accounts receivable 200,000 160,000
Provision for tax 20,000 30,000 Prepaid expenses 20,000 10,000
Provision for dividend 10,000 20,000 Cash 80,000 70,000
Accounts payable 60,000 90,000
profit and loss a/c 30,000 110,000
Total 1,100,000 1,290,000 Total 1,100,000 1,290,000

Income Statement for the Year 2

Particulars Rs.
Sales revenue 900,000
Less: Cost of goods sold 600,000
Gross Profit 300,000
Less: Operating expenses:
Administrative expenses: 120,000
Depreciation 90,000
Interest paid 10,000
Premium on redemption of debentures 5,000
Total operating expenses 225,000
Net income 75,000
Add: Gain on sale of fixed assets costing Rs. 35,000 5,000
Retained earning 80,000

Required: Cash flow statement showing operating, investing and financing activities.

[10]
2.

The XYZ Company sells a single product for Rs. 2 per unit and uses a periodic inventory system. The following data are available for the year.

Date Transaction Number of Units Unit Cost Rs. Total Rs.
Baisakh 14 Beginning inventory 1,100 1 1,100
Ashad 18 Purchase 600 1.1 660
Bhadra 24 Sale (1,000) - -
Kartik 25 Sale (500) - -
Magh 19 Purchase 900 1.2 1,080
Chaitra 25 Sale (700) - -

Required :

(a) Cost of goods sold, ending inventory and gross profit under weighted average costing method

(b) Cost of goods sold, ending inventory and gross profit under LIFO method.

[10]
3.

(a) A Company purchased a delivery Van for Rs. 560,000 on \( 1^{\text{st}} \) Jan 2018 and spent Rs. 40,000 on its repairs. On\( 1^{\text{st}} \)July, 2019 , it purchased another Van for Rs. 600,000. On \( 1^{\text{st}} \)July 2020 , it sold off the \( 1^{\text{st}} \) Van for Rs. 400,000. Depreciation is provided  @ 15% p.a. on diminishing balance method.

Required: Van Account for  three years ending \( 31^{\text{st}} \)December each year 

(b) Explain about the ethics of accounting.

[10]
4.

a) The following information is available for GG Company on \( 31^{\text{st}} \) Chaitra 2075

Balance as per bank statement = Rs. 15,000

Balance as per company records = Rs. 11,000

Cheque not deposited upto \( 31^{\text{st}} \) Chaitra = Rs. 2,400

Bank service charge for the month = Rs. 100

Bill receivable collected by bank only = Rs. 2,000

Interest on bill is recorded on company = Rs. 500Outstanding cheque of Chaitra = Rs. 4,000

Required : Bank Reconciliation Statement as on \( 31^{\text{st}} \) Chaitra 2075. 

b) Define treasury stock with its features.

[10]
5.

"Lease is a legal and biding contracts that set forth the terms of rental agreements in real estate and real and personal property". Discuss.

[10]
6.

Discuss in brief about the disclosures required for financial statement under Nepal Financial Reporting Standard (NFRS).

[10]

"Section C"

Long Questions Answer Attempt any TWO questions.

[2*15=30 ]

1.

The financial transaction of a trader are provided below:

a. Started business with cash Rs. 300,000 and bank balance Rs. 100,000.

b. Deposited into bank Rs. 150,000.

c. Purchased merchandise goods for Rs. 50,000 on account.d. Sold merchandise goods on account for Rs. 170,000.

e. Received a cheque from debtor, Rs. 142,500 after deduction of 5% discount. The cheque was banked immediately.

f. Paid Rs. 45,000 to creditor by issuing a cheque after deduction 10% discount.

g. Rs. 13,000 was paid for insurance premium.

h. Paid utilities Rs. 10,000

i. Paid office salary Rs. 26,000

j. Rent paid Rs. 18,000 through cheque.

Additional Information:

a. Unsold stock recorded at Rs. 20,000

b. Salaries remain unpaid amounted to Rs. 4,000

c. Insurance premium includes prepaid Rs. 1,000

Required:

i. Journal entries for the financial transactions.

ii. Triple column cash book.

iii. Ledger accounts of Debtors and Creditors.

iv. Trial balance

[15]
2.

The XYZ Company's Statement of profit and Loss a/c and Statement of Financial Position for two years have been given below:

Particulars Amount (Rs.)
Sales 2,000,000
Less: Cost of goods sold 1,200,000
Gross Profit 800,000
Less: Operating Expenses
Depreciation 180,000
Interest paid 20,000
Debenture Premium 12,000
Other operating Expenses 318,000
Net Income before other Income 270,000
Add: Profit from sale of fixed assets (book value Rs. 60,000) 10,000
Net profit 280,000

Statement of Financial Position of a Company for 2074 and 2075

Capital & Liabilities 2074 2075
Share Capital @ Rs. 100 per share 1,000,000 1,200,000
Share Premium 100,000 120,000
General Reserve 30,000 50,000
12% Debenture 200,000 100,000
Account payable 120,000 150,000
Bank Overdraft 130,000 150,000
Retained Earnings 100,000 380,000
Total 1,680,000 2,150,000
Assets
Fixed Assets 1,000,000 1,200,000
Investment 100,000 240,000
Inventories 80,000 100,000
Account Receivable 230,000 300,000
Cash 250,000 300,000
Preliminary expenses 20,000 10,000
Total 1,680,000 2,150,000

Required for 2075:

  • a. Current Ratio

  • b. Quick Ratio

  • c. Debt Equity Ratio

  • d. Debtors Turnover Ratio

  • e. Fixed Assets Turnover Ratio

  • f. Net Profit Ratio

  • g. Return on Equity

  • h. Return on Total Assets

  • i. Interest Coverage Ratio

  • j. Stock Turnover Ratio

[15]
3.

a. Who are the internal and external users of accounting information? 

b. What is value added statement? Also explain the objectives of value added statement.

[15]