Wednesday, February 13, 2019

Gauhati University Question Papers:Financial Accounting - II (May-June’ 2014)


Gauhati University Question Papers
Financial Accounting - II (May-June’ 2014)
Full Marks: 80
Time Allowed: 3 hours
Answer either in English or Assamese
The figures in the margin indicate full marks for the questions
1. Answer the following questions:                                          1x10=10

a)      Select the accounting standard applicable to valuation of inventories from the following options:
1)      AS – 1
2)      AS – 2
3)      AS – 6
4)      AS – 9
b)      In case flow statement donation is classified as:
1)      Financing activity.
2)      Investing activity.
3)      Operating activity.
4)      Philanthropic activity.
c)       In ‘branch accounting’, goods sent to branch account is transferred to the credit of:
1)      Profit and loss account.
2)      Purchase account.
3)      Sales account.
4)      Inventory account.
d)      Which of the following profit is considered for valuation of goodwill?
1)      Gross profit.
2)      Net profit.
3)      Total profit.
4)      Operating profit.
e)      AS – 21 Relates to:
1)      Revenue recognition.
2)      Consolidated financial statement.
3)      Accounting for amalgamation.
4)      Accounting for fixed assets.
f)       Branch stock account is always prepared at:
1)      Invoice price.
2)      Retail price.
3)      Wholesale price.
4)      Cost price.
g)      Normal loss is not shown in the branch account under:
1)      Debtors system.
2)      Stock and debtor system.
3)      Final account system.
4)      Hybrid system.
h)      Indian Partnership Act was enacted in the year:
1)      1922
2)      1932
3)      1942
4)      1952
i)        Balance in Realisation account in a partnership firm is transferred to the capital accounts of the partners in which of the following basis?
1)      Sacrificing ratio.
2)      Gaining ratio.
3)      Capital ratio.
4)      Profit sharing ratio.
j)        A partnership firm can be dissolved under which of the following ‘circumstances?
1)      Quarrel among the partners.
2)      Insanity of one of the partners.
3)      Order from the municipality.
4)      Existence of a dormant partner.
2. Answer the following in brief:                                               2x5=10
a)                  Comment on the following statements:
1)      Dissolution of partnership firm and dissolution of partnership is synonymous.                    2
2)      Goodwill of a firm represents the excess of real net worth of assets over their book value.          2
3)      The average profit method takes into account the abnormal profit or loss arising during the course of business.                                             2
b)      State the basic accounting assumptions under AS-I                  2
c)       What is the treatment of bad debt under debtor system of branch accounting?                         2
3. Answer any four of the following:                                       5x4=20
a)      Discuss the salient features of Accounting Standard AS-9.
b)      State the objectives of branch accounting.
c)       A firm’s normal return is 15% of its net assets. The actual profit earned by it is Rs. 75,000. Its value of net assets is Rs. 3,60,000.
What is the value of goodwill under capitalisation of average profit method?
d)      X and Y are partners in a firm, sharing profits and losses in the ratio of 3 : 2 respectively. They decided to dissolve the firm. Following is the balance sheet on the date of dissolution.
Balance Sheet
Liabilities
Amount
Assets
Amount
Creditors
Capital accounts:
X                  25,000
Y                    5,000
20,000


30,000
Cash at bank
Debtors                                          15,500
Less: Provision                                3,500
Inventory
10,000

12,000
28,000

1,38,000

1,38,000
The assets realised are as follows:
1)      Debtors Rs. 10,000;
2)      Inventory Rs. 18,000;
3)      Goodwill Rs. 5,500;
4)      Realisation expenses Rs. 1,000.
5)      Y brings in necessary cash to meet his deficit.
Give journal entries in the books of the firm.
e)      Discuss the procedure of preparing a foreign branch account in the books of head office.
f)       Give an account of International Accounting Standards Board.
4. Answer the following questions:                          10x4=40
a)      Elaborate the process of issuing IFRS.
b)      The balance sheet of Karna, Arjun and Bhim on 31st March 2013 who are in partnership sharing profits and losses in the ratio of 3 : 1 : 1 is as follows:
Balance Sheet
Liabilities
Amount
Assets
Amount
Creditors
Bills Payable
Contingency Reserve
Mortgage on Building
Capital accounts:
Karna                
Arjun                  
Bhim
7,000
3,500
8,000
11,000

22,000
20,000
18,000
Cash at bank
Motor car
Debtors
Machinery
Furniture
Inventory
4,500
25,000
13,000
21,000
17,000
9,000

89,500

89,500
On 1st April, 2013 the firm is dissolved. The assets realised are as under:
1)      Debtors Rs. 11,000;
2)      Furniture Rs. 18,000;
3)      Inventory Rs. 8,500;
4)      Motor car Rs. 22,000.
Machinery was taken over by Karna and Arjun at book value. Realisation expenses Rs. 400.
Close the books of the firm by preparing necessary ledger accounts.
Or
a)      Discuss the manner of piecemeal distribution of proceeds when a partnership firm goes into dissolution.
b)      Discuss the procedure of settlement of accounts when one or more partners are insolvent.                                        5+5=10
c)       Shan Ltd. invoices goods to its Mumbai branch at cost. Prepare necessary ledger accounts in the books of the head office under Stock & Debtors system from the following information:

Rs.
Opening balance:
Stock
Debtors
Cash
Goods sent to branches
Goods returned by branch
Total sales (of which Rs. 30,000 was cash sales)
Bad debts
Return from customers
Cash remitted to branch
Other expenses of the branch
Cash remitted to branch
Closing balance:
Stock
Debtors

10,000
14,000
400
30,000
3,000
53,500
900
1,000
46,000
6,000
4,500

8,000
15,000


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