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Tuesday, October 16, 2018

Dibrugarh University Question Papers: Advanced Financial Accounting (Nov' 2017)

2017
COMMERCE
(General / Speciality)
Course: 301
Advanced Financial Accounting
(New course)
Full marks: 80
Pass marks:24
Time: 3 hours
  1. (a) State whether the following statements are True or False: 1x4=4
  1. Paid up capital of a banking company must be at least two-third of the subscribed capital of a banking company.
  2. In the financial statements of insurance companies liabilities under the existing policies are determined by actuarial valuation in case of life insurance.
  3. In case of marine insurance, the provision against unexpired risk is 50%.
  4. Brokerage is added in the cost of investment in the books of purchaser of investment.
             (b) Fill in the blanks: 1x4=4
  1. A banking company cannot grant loan to any of its ____________.
  2. Life insurance business is carried on by Life Insurance Corporation of India since
  3. The general insurance business was taken over by the central Government with effect from __________
  4. Sale of right is a _________________ receipts in case of right issue.
  1. Write short notes on any four of the following: 4x4=16
  1. Statutory reserve
  2. Surrender value
  3. Reserve for unexpired risk
  4. Purposes of an Investment A/c
  5. Ex-interest quotations
  1. (a) Discuss the following items which are usually found in a Bank Balance Sheet: 312x4=14
  1. Rebate on bills discounted
  2. Inter branch adjustments
  3. Contingent liabilities
  4. Money at call and short notice
OR
(b) From the following information, prepare Profit & Loss A/c of Jai Bharat Bank Ltd. For the year ended 31st March, 2017. Working should from a part of your answer: 14
Particulars
Rs.
(in ‘000)
Particulars
Rs.
(in ‘000)
Interest on loans
Interest on fixed deposits
Commission
Exchange and brokerage
Salaries and allowances
Discount on bills(gross)
Interest on cash credit
Interest on temporary overdrafts in current accounts
300
275
10
20
150
152
240

30
Interest on Savings Bank deposits
Postage and stamps
Printing and stationery
Sundry expenses
Rent
Taxes and licences
Audit fees
87
10
20
10
15
10
10
Additional information:
  1. Rebate on bills discounted- Rs. 30,000
  2. Salary of managing director- Rs. 30,000
  3. Provision for bad debts- Rs. 40,000
  4. Provision for income tax is to be made @ 55% (round off to the nearest thousands)
  5. Interest of Rs. 4,000 on doubtful debts was wrongly credited to Interest on Loan A/c
  6. Provide Rs. 15,000 as dividend
4. (a) What is Life Insurance? What are the statutory and subsidiary books maintained by a life insurance company. 2+6+6=14
OR
(b) From the figures set out below, prepare Revenue A/c of Eastern India Life Insurance company for the ended 31st march 2017: 14
Rs.(in ‘000)
Life assurance Fund (01.04.2016) 7,50,000
Premiums 3,72,000
Interest, dividends and rents 2,26,000
Consideration for annuities granted 12,500
Fines for revival of lapsed policies 200
Claims paid 42,500
Bad debts 400
Expenses of management 35,000
Commission 16,000
Bonus in reduction of premium 500
Annuities paid 18,500
Surrenders 25,500
Surplus on revaluation of reversions purchased 1,500
Income tax paid 32,000
Bonus in cash 18,000
5. (a) What is General Insurance? Point the main features of accounts of general insurance companies. How profit or loss is ascertained in general insurance business? 2+7+5=14
OR
(b) You are required to prepare Revenue A/c of X Fire Insurance Co. Ltd. From the following figures for the year ended 31st March 2017:
Rs.
Reserve for unexpired risk (01.04.2016) 1,65,000
Fire insurance premium 4,00,000
Fire insurance claims paid 2,10,000
Fire insurance commission 24,730
Fire insurance expenses 85,000
Contribution to fire brigades 2,800
Additional fire insurance reserve 1,55,000
Dividend to shareholders 8,000
Transfer fees (general) 30
Interest and dividend (fire fund) 10,000
Make provision for unexpired risk on the basis of fire insurance premiums 14
6. (a) What is Investment Account? Why is it prepared? Mention the special features of Investment Account. How are stock exchange transactions (sale and purchase of securities) recorded in books? 2+2+6+4=14
OR
(b) On 1st April, 2016 , 400 12% debentures 0f Rs. 100 in X Ltd. held as investment by Y Ltd. at a cost of Rs. 36,800. Interest is payable on 31st March every year. On 1st August, 2016, 50 debentures were purchased @ Rs. 96 cum-interest and on 1st February 2017, 250 debentures were sold at Rs. 99 ex-interest. On 1st march 2017, 100 debentures were purchased at Rs. 94 ex-interest. On 31st March 2017, 150 debentures were sold at Rs. 98 cum-interest. Prepare investment A/c from the above for the year ending 31st March, 2017 using FIFO method. Market price of using debentures on 31st March 2017 is at par. 14

(Old course)
Full marks: 80
Pass marks: 32
1. (a) Fill in the blanks: 1x4=4
  1. A non performing asset is an asset that ceases to generate____________for the bank.
  2. Revenue account of a life insurance business is prepared in the prescribed from ____of the Insurance act
  3. Under the Provincial Insolvency Act, rent due to the ________is not preferential.
  4. Investment Account is a ___________ Account.
(b) Write True and False: 1x4=4
  1. Banks show the provision for income tax under Provision and Contingencies.
  2. Life Assurance fund represents profit of the life insurance company.
  3. Only FIFO method is used to calculate cost of closing balance of investment.
  4. Inflation is a state in which too much of money is chasing too few goods.
2. Write short notes on any four of the following: 4x4=16
  1. Sub-standard Assets
  2. Life insurance Corporation act, 1956
  3. Deficiency A/c
  4. Columnar Investment A/c
  5. Historical Accounting
3. (a) From the following information, prepare the profit & Loss A/c with necessary schedules of AB Bank Ltd. for the year ended 31st March 2017: 12
Rs.
Interest on Loans 25,90,000
Interest on Deposits 38,50,000
Rebate on Bills Discounted 4,90,000
Commission 82,000
Establishment Charges 5,40,000
Discount on Bills Discounted (Net) 14,60,000
Interest on Cash Credit 22,30,000
Rent and rates 1,80,000
Interest on overdrafts 15,40,000
Directors fees 30,000
Auditor’s fees 12,000
Postal expenses 14,000
Printing and Stationery 29,000
Sundry Expenses 17,000
Other information:
  1. Bad debts Rs. 4,00,000
  2. Provision for Income Tax Rs. 10,00,000
OR
(b) Explain in relation to bank Accounting: 3x4=12
  1. Non Performing Assets
  2. Rebate on Bills Discounted
  3. Cash Reserve Ratio
  4. Slip System of Posting
4. (a) What is meant by Reserve for Unexpired Risk? How and why is it created in general insurance? Also distinguish between general insurance and life insurance.     2+3+3+3=11
OR
(b) The Life Assurance Fund of an insurance company showed a balance of Rs. 64,24,000. It is found that the following adjustments are yet to be made: Rs.
Dividend from investments 3,21,000
Income tax on above 65,200
Bonus in reduction of premium 9,35,400
Claims covered under reinsurance 3,79,000
Claims intimated but not accepted 9,40,000
Pass necessary Journal Entries and compute the actual Life Assurance fund 8+3=11
5. (a) What is Statement of Affairs? How is it prepared? Distinguish between a statement of Affairs and a Deficiency account. 2+5+4=11
OR
(b) Mr. Rajen filed his petition for bankruptcy on 31st March 2017, 2017 on which date his books showed the following balance: 11
Dr. Cr.
Cash in hand 200
Fixtures and fittings (estimated to
produce Rs. 1,600) 5,000
Stock in trade(estimated
to produce Rs. 24,000) 36,000
Trade creditors 40,000
Bills payable 44,000
Sundry debtors:
    Goods 20,000
    Doubtful (estimated
to produce 50%) 40,000
Bad 40,000
Bank overdraft 24,000
Capital 33,200
1,41,200 1,41,200
Preferential creditors included trade creditors amounting to Rs. 700. Liabilities on bills discounted was Rs. 10,000, out of which Rs. 2,000 were expected to rank. His household furniture etc. was valued at Rs. 5,000. He owned a house valued Rs. 15,000 having a mortgage on it Rs. 12,000 at 4%. Interest was paid up to September 30,2016. Creditors for rates on the house amounted to Rs. 300. Prepare the Statement of Affairs and the Deficiency A/c of Mr. Rajen. 7+4=11
6. (a) What are Investment Accounts? What are the special features of Investment Accounts? Discuss the purposes of Investment Accounts 2+5+4=11
OR
(b) Mr. A held on 1st January 2016 Rs. 1,00,000 of 3.5% Government Loan at Rs. 95,000. Three months interest had accrued. On 31st May, he purchased a further Rs. 40,000 of the loan @ Rs. 96 (net) cum interest. On 31st July, Rs. 30,000 of the loan was sold at Rs. 94 (net) ex interest. On 31 March and 30 September and was collected on 4th April and 5th October. The price of the loan on 31st December 2016 was Rs. 96. Draw up the loan A/c. Ignore income tax and paise. 11
7. (a) What do you mean by Accounting for Price Level Changes? Explain clearly accounting for price level changes under Current Purchasing Power (CPP) method. 3+8=11
OR
(b) Ram Ltd. followed the LIFO system. From the particulars given below, ascertain the cost of sales and closing inventory under CPP method: 11
General price index
Inventory on 01.01.2016
Rs. 20,000 200
Purchases during 2016
Rs. 75,000 240(average for 2016)
Inventory on 31.12.2016

Rs. 25,000 300

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