BITM Financial Accounting

bitmsemester 3

This course contains conceptual and theoretical foundation of financial accounting; processing and recording business transactions; accrual accounting concept; adjusting entries, closing entries,; preparation of basic financial statements like profit and loss account, balance sheet and cash flow statement and their analysis.

Chapter Wise Notes Question Banks Syllabus Chapter Wise Questions Viva Practical

Faculty of Management

2023

Bachelor of Information Technology Management

Financial Accounting

ACC201

Full Marks: 100

Pass Marks: 50

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

"Group "A""

Brief Answer Questions:

[10 × 2 = 20]

What is GAAP?

[2]

Define intangible asset.

[2]

What do you mean by business entity concept of accounting?

[2]

Write about cash basis of accounting.

[2]

Write any two importance of cheque.

[2]

The financial position of Kalika and Sons on Baisakh 1^st 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]

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]

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]

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]

10.

XYZ Company purchased a car at the cost of Rs 1,040,000 on 1^st 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]

"Group "B""

Short Answer Questions:(Attempt any SIX Questions)

[6 × 5 = 30]

Explain accounting process or cycle.

[5]

Write the meaning of capital expenditure with suitable example.

[5]

What is ledger? Why it is needed?

[5]

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]

The bank statement of a company shows a balance of Rs 50,000 on 30^th 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]

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]

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]

"Group "C""

Long Answer Questions:(Attempt any THREE Questions)

[3 × 10 = 30]

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

[10]

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

[4+6]

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 31^st December 2022 as per NFRS.

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

[10]

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]

"Group "D""

Comprehensive Answer / Case / Situation Analysis Questions:

[4 × 5 = 20]

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]

BITM Financial Accounting

BITM Semester 3 Financial Accounting Question Paper 2023 – Solved

Faculty of Management