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BITM Financial Accounting

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BITM Financial Accounting Chapter Wise Questions

Past exam questions for Financial Accounting, organised chapter by chapter with solutions.

Asked on 2023 Exam
1.

Explain the interconnection between bookkeeping, accounting, and accountancy, illustrating with an appropriate example.

[10]

Asked on 2023 Exam
1.

What is GAAP?

[2]
Asked on 2023 Exam
2.

What do you mean by business entity concept of accounting?

[2]
Asked on 2023 Exam
3.

Write about cash basis of accounting.

[2]
Asked on 2023 Exam
4.

What is accounting standard? Also, explain the needs and limitations of accounting standards.

[4+6]

Asked on 2023 Exam
1.

The financial position of Kalika and Sons on Baisakh 1st 2079 is as below:

Cash in hand 100,000 Creditors 150,000
Furniture 200,000 Accruals 50,000
Debtors 100,000 Bills payable 80,000
Stock of goods 70,000

Required: Opening entry

[2]
Asked on 2023 Exam
2.

The following transaction are given:

  • Goods costing Rs 60,000 was sold at 10% profit.
  • Rent paid Rs 30,000 and outstanding rent was Rs 6,000

Required: Accounting equation

[2]
Asked on 2023 Exam
3.

Explain accounting process or cycle.

[5]
Asked on 2023 Exam
4.

What is ledger? Why it is needed?

[5]

Asked on 2023 Exam
1.

Write any two importance of cheque.

[2]
Asked on 2023 Exam
2.

The bank statement of a company shows a balance of Rs 50,000 on 30th Chaitra 2079. However the company balance showed a different balance of Rs 30,000. On the investigation, the following differences were noticed:

Outstanding cheque Rs 25,000

Deposit in transit Rs 15,000

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

Collection of notes receivable for Rs 6,000 and interest on investment Rs 2,000

Bank charge Rs 1,000 for the service provided by the bank

Bank paid Rs 10,000 under instruction of a company. However, the company recorded Rs 18,000 in its statement.

Required: Bank reconciliation statement

[5]

Asked on 2023 Exam
1.

Define intangible asset.

[2]
Asked on 2023 Exam
2.

XYZ Company purchased a car at the cost of Rs 1,040,000 on 1st Baisakh 2079. The estimated life of the car is 100,000 KMs with salvage value of Rs 40,000. During 2079 and 2080, the car was run for 20,000 KM and 18,000 KM respectively.

Required: Depreciation for the year 2079 and 2080

[2]
Asked on 2023 Exam
3.

Write the meaning of capital expenditure with suitable example.

[5]
Asked on 2023 Exam
4.

Saswat Pvt. Ltd., an automobile service center, acquired machinery on the 1st of Baisakh 2077 for Rs 400,000. They made another machinery purchase for Rs 500,000 on the 1st of Kartik 2078. On the 1st of Kartik 2079, they sold the first machinery for Rs 280,000 as it was found unusable. Depreciation is to be accounted for at a rate of 15% per annum using the straight line method.

Required: Machinery account for the three-year period from 2077 to 2079, assuming that the books are closed on the 31st of Ashad each year.

[5]

Asked on 2023 Exam
1.

In the beginning, Sardul Company had share capital of Rs 100,000 and retained earnings of Rs 50,000. During the year, the company reported a net income of Rs 30,000 and paid dividends of Rs 20,000. Additionally, the company issued 1,000 shares @ Rs 100 each.

Required: Statement of change in equity for the year.

[2]
Asked on 2023 Exam
2.

The following particulars are provided to you:

Profit for the year Rs 15,000
Loss on revaluation Rs 18,000
Gain from cash flow hedges Rs 14,000
Gain on sale of investment Rs 15,000

Required: Statement of Other Comprehensive Income as per NFRS

[2]
Asked on 2023 Exam
3.

The Trial balance of ABC Company as on 31st December 2022 is given below:

Particulars Debit (Rs) Credit (Rs)
Equity share capital – 500,000
Building 400,000 –
Goodwill 20,000 –
12% Bank loan – 100,000
Revenue from operations/sales – 500,000
Purchase 200,000 –
Salaries expenses 33,000 –
Cash at bank 37,000 –
Investment 150,000 –
Account payable – 70,000
Account receivable 50,000 –
Commission received – 30,000
Prepaid insurance 24,000 –
Office rent 36,000 –
Equipment 200,000 –
Promotional expenses 50,000 -
Total 1,200,000 1,200,000

Adjustments:

  • Closing stock Rs 30,000
  • Depreciation rate of building 5% and equipment 25%
  • Salary to be paid Rs 3,000; Prepaid insurance expired Rs 18,000

Required:

a. Profit and loss statement for the year ending 31st December 2022 as per NFRS.

b. Statement of financial position as on 31st December 2022 as per NFRS.

[10]
Asked on 2023 Exam
4.

The ABC 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 2022

Particulars Amount (Rs)
Revenue from operation 1,100,000
Less: Cost of sales (700,000)
Gross margin 400,000
Add Other income (including interest received Rs.6,000) 60,000
Total 460,000
Less: Distribution expenses (135,000)
Less: Administrative expenses (write-off of goodwill Rs.10,000 and depreciation of Rs.75,000) (200,000)
Operating Profit 125,000
Less: Finance cost (25,000)
Net profit before tax 100,000
Less: Provision for tax (25,000)
Net profit after tax 75,000
Less: Dividend paid (7,500)
Retained Earnings 67,500

Statement of Financial Position of a company for 2021 and 2022

Assets 2021 2022
Non-Current Assets:
Property, plant and equipment 400,000 500,000
Intangible assets (Goodwill) 40,000 30,000
Investments 140,000 190,000
Total Non-Current Assets 580,000 720,000
Current Assets:
Inventories/Stock 20,000 50,000
Cash and cash equivalents 50,000 40,000
Account receivables 40,000 60,000
Trade and Other receivables 20,000 30,000
Total Current Assets 130,000 180,000
Fictitious Assets - -
Total Assets (Total Non-current and Current Assets) 710,000 900,000
Equity:
Share capital @Rs.100 each 400,000 500,000
Reserve/Retained earnings 40,000 107,500
Non-controlling interests - -
Total Equity 440,000 607,500
Liabilities
Non-Current Liabilities:
10% Loans and borrowings 200,000 250,000
Total Non-Current Liabilities 200,000 250,000
Current Liabilities:
Trade and other payable 50,000 17,500
Income tax liabilities - 25,000
Provisions 20,000 -
Total Current-Liabilities 70,000 42,500
Total Liabilities (Total Non-current and Current) 270,000 292,500
Total Equity and Total Liabilities 710,000 900,000

Required: Statement of Cash Flow under NFRS

[4+2+2+2]

Asked on 2023 Exam
1.

The following information is provided to you:

Sales Rs 500,000
Material consumed Rs 150,000
Carriage on purchase Rs 30,000
Administrative expenses Rs 40,000
Wages and salaries Rs 60,000
Interest on loan Rs 20,000
Dividend received Rs 10,000
Depreciation on equipment Rs 30,000
Income tax paid Rs 10,000

Required:

(a) Value added statement and

(b) Net profit for the year

[5]

Asked on 2023 Exam
1.

Following are the information of assets of a Company:

Particulars 2078 2079
Plant and Machinery 60,000 120,000
Building 100,000 200,000
Investment 70,000 150,000
Trademarks 20,000 40,000
Cash and bank 50,000 25,000
Inventory 100,000 50,000
Account Receivable 40,000 20,000

Required: Horizontal Analysis

[5]
Asked on 2023 Exam
2.

The ABC 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 2022

Particulars Amount (Rs.)
Revenue from operation 900,000
Less: Cost of sales (500,000)
Gross margin 400,000
Add Other income 50,000
Total 450,000
Less: Distribution expenses (105,000)
Less: Administrative expenses (235,000)
Operating Profit 110,000
Less: Finance cost 10,000
Net profit 100,000

Statement of Financial Position of a company for 2021 and 2022

Assets 2021 2022
Non-Current Assets:
Property, plant and equipment 400,000 500,000
Intangible assets 40,000 30,000
Investments (long term) 60,000 90,000
Total Non-Current Assets 500,000 620,000
Current Assets:
Inventories/Stock 40,000 50,000
Cash and cash equivalents 40,000 30,000
[20]