Financial Accounting Question Paper Nov' 2018, Dibrugarh University B.com 1st Sem

Financial Accounting Question Paper Nov' 2018
Dibrugarh University B.com 1st Sem

COMMERCE (General/Speciality)

Course: 103

(Financial Accounting)

The figures in the margin indicate full marks for the questions

(New Course)

Full Marks: 80

Pass Marks: 24

Time: 3 hours

1. (a) Answer in one sentence:- 1x4=4

i. What is Accounting Standard?

ii. Who is a ‘Hire Vendor’?

iii. What is ‘interdepartmental transfer’?

iv. What is ‘sub-lease’?

(b) Find the correct answer from the given alternatives: 1x4=4

i. Unearned Income Account is

(1) a liability

(2) an asset

(3) an expense

ii. The total amount to be paid by the buyer under Hire-purchase System is called

(1) cash price

(2) market price

(3) hire-purchase price

iii. In Departmental A/cs, each department is considered as a separate

(1) profit centre

(2) cost center

(3) business centre

iv. Royalty A/c is closed by transferring to

(1) Landlord A/c

(2) Profit & Loss A/c

(3) Shortworkings A/c

2. Write short notes on (any four): 4x4=16

a)International Financial Reporting Standards (IFRS)

b) Instalment Purchase System

c) Independent Branch

d) Minimum Rent

e) Recoupment of Shortworkings

3. (a)

i. What do you mean by basic concepts and conventions of Accounting? 2+2=4

ii. Distinguish between Accounting Standards and Accounting Principles. 4

iii. Write a note on Accounting Standard Board set up in India. 6

(b) Following is the Trial Balance of M/s Khushbu and Neha, a partnership firm, as on 31^st March, 2018. Prepare a Trading and Profit & Loss A/c for the year ended 31^st March, 2018 and a Balance Sheet as on that date: 4+5+5=14

Trial Balance

Dr. Balances	Amount	Cr. Balances	Amount
Drawings:- Khushbu Neha	2,000 3,500	Capital A/cs : Khushbu Neha	35,000 25,000
Land and Building	36,000	Sales	92,500
Machinery	18,000	Returns Outward	1,300
Salaries and Wages	3,700	Bad Debts Reserve	800
Motor car	10,500	General Reserve	3,000
Trade Expenses	1,900	Creditors	23,000
Carriage Inward	400	Commission	1,500
Royalty	1,800
Purchases	45,300
Returns Inward	45,300
Debtors	24,600
Discount	1,000
Insurance	1,200
Opening Stock	23,800
Advertisement	3,000
Cash at Bank	2,900
	1,82,100		1,82,100

Adjustments:

i. Closing Stock (31^st March, 2018)-Rs.36,000

ii. Stock worth Rs. 3,000 uninsured has been destroyed by fire

iii. Depreciate machinery by 15% and motor car by 10%

iv. Of the debtors, Rs. 600 were bad and should be written off and Reserve for Doubtful Debts should be maintained at 5%

v. Khushbu and Neha divides profits and losses equally

4. (a) Distinguish between Hire-purchase System and Instalment Purchase System. Mention four rights of Hire Vendor and four rights of Hire Purchaser as laid down in the Hire-purchase Act, 1972. 6+4+4=14

(b) A motor car was purchased on 1^st April, 2015 under Hire-purchase System. The payment was to be made Rs. 20,000 down and the balances including interest @5% p.a. were to be paid as follows:

On 31^st March, 2016	60,000
On 31^st March, 2017	77,500
On 31^st March, 2018	84,000

The buyer provided depreciation on motor car @ 15% per annum under diminishing balance method.

Ascertain the cash price of the motor car and prepare (i) Hire Vendor’s A/c and (ii) Motor Car’s A/c in the books of Hire Purchaser. 6+4+4=14

5. (a) M/s Dutta Bros. has two departments A and B. Department A transfers goods to Department B at normal market price. From the followings particulars, prepare Departmental Trading and Profit & Loss A/c and a Combined Income A/c for the year ended 31^st March , 2018: 4+5+5=14

Particulars	Dept.-A	Dept.- B	General
Stock as on 1^st April, 2017	12,000	Nil	-
Purchases	2,77,000	24,000	-
Transfer of goods from Dept.-A	-	84,000	-
Purchase Return	1,000	-	-
Wages	12,000	19,200	-
Stock as on 31^st March, 2018	60,000	21,600	-
Salaries	8,000	5,000	-
Printing and Stationery	2,560	1,960	-
Plant and Machinery	-	14,400	-
Salaries (general)	-	-	18,000
Advertisement	-	-	9,600
Bank Charges	-	-	2,400
Sundry Expenses	-	-	3,600

Depreciate Plant and Machinery by 10%. The general unallocated expenses are to be apportioned between A and B departments in the ratio 3:2.

(b) What is ‘Branch A/c’? What are its main objectives? How are inter-branch transactions recorded in Branch A/c? 2+6+6=14

6. (a) Avinash took a colliery on lease with a minimum rent of Rs. 60,000 per annum merging into a royalty of Rs. 5 per ton of coal raised with a right to recoup shortworkings within the first four years of lease. The output for first-five years was given below:

Year	Output (in tons)
1 2 3 4 5	Nil 6,000 10,000 14,000 16,000

Prepare Analytical Table and show the following Ledger A/cs in the books of Avinash: 2+4+4+4=14

i. Royalties A/c

ii. Shortworkings A/c

iii. Landlord’s A/c

(b)

i. Why is Minimum Rent A/c opened in the books of Lessee? 4

ii. Why is minimum rent important in Royalty A/c? 4

iii. Explain the different types of royalty. 4

(Old Course)

Full Marks: 80

Pass Marks: 32

Time: 3 hours

1. (a) Fill in the blanks: 1x4=4

i. Accounting Standard Board was set up in India in the year_____.

ii. Cost of goods sold on Hire-purchase is transferred to _____A/c.

iii. In Branch Accounting, each branch has separate______.

iv. When a partner is not able to meet his liabilities, he is said to be_____.

(b) Write ‘True’ or ‘False’: 1x4=4

i. Accounting Standard 6 deals with Depreciation Accounting.

ii. Hire-purchase is an agreement of hiring.

iii. Branch Stock A/c is always prepared at cost price.

iv. Royalty is in the nature of rent.

2. Write short notes on (any four): 4x4=16

a)The provisions of Accounting Standard-1

b) Termination of Hire-purchase agreement

c) Inter-branch transactions

d) Rock rent

e) Rules of Garner vs. Murray

3. (a) What do you mean by ‘Accounting Standards’? Mention the procedure for issuing Accounting Standards. 3+9=12

(b) Sima and Rima share profits and losses equally. From the following Trial Balance of their business as on 31^st March, 2018 and a Balance Sheet as on that date: 3+4+5=12

Particulars	Dr. Balances	Cr. Balances
Capital:- Sima Rima Current A/c:- Sima Rima Land and Building (at cost) Machinery (at cost) Purchases (adjusted) Sales Returns Salaries Wages Rent and Taxes Cash at Bank Furniture Accumulated Depreciation Debtors Creditors Sales Closing Stock	- - 12,000 6,000 60,000 45,000 5,00,000 10,000 60,000 72,000 28,000 15,000 25,000 - 3,44,000 - - 65,000	15,000 15,000 - - - - - - - - - - - 12,000 - 4,00,000 8,00,000 -

Adjustment:

In the accumulated depreciation, Land and Building-Rs.5,000;

Machinery-Rs. 6,000 and Furniture-Rs. 1,000 have been included

4. (a) Jayshree Company purchased a machine on 1^st April, 2016 on Hire-purchase system. The payments were to be made as follows:

On signing of the agreement At the end of the 1^st year At the end of the 2^nd year At the end of the 3^rd year	5,000 6,000 3,500 2,200
	16,700

Interest included in Rs. 16,700 was charged on the cash price @ 10% per annum

You are required to ascertain the cash price of the machine and write up Machinery A/c and Hire Vendor’s A/c in the books of Jayshree Company. 3+4+4=11

(b) What is ‘Instalment Purchase System’? What are its features? Distinguish between Instalment Purchase System and Credit Sales. 2+3+6=11

5. (a) What do you mean by Branch Accounting? What are its features? Distinguish between Branch Accounting and Departmental Accounting. 2+4+5=11

(b) The Golaghat Head Office supplies goods to its branch at Sivasagar at cost. The branch sells the goods for cash and on credit and remits the proceeds to the Head Office promptly. The branch expenses being met by the Head Office by cheque. The followings are the transactions relating to the branch for the year ended 31^st March, 2018:

Particulars

Amounts

Stock at Branch on 1^st April, 2017

Debtors at Branch on 1^st April, 2017

Goods sent to Branch during the year

Total sales at Branch

(including cash sales Rs. 2,20,000)

Goods returned by Branch

Collection from debtors

Discount allowed

Bad Debts written off

Cheque sent by Head Office towards the branch expenses:

Salaries 50,000

Rent 25,000

Petty expenses 5,000

____________

Stock at Branch on 31^st March, 2018

60,000

80,000

4,50,000

20,000

4,20,000

20,000

10,000

80,000

90,000

Prepare Branch A/c and Goods sent to Branch A/c in the books of Head Office. Also prepare Branch Debtors A/c as a part of your working note. 6+3+2=11

6. (a) i. What is Minimum Rent? Why is it important in Royalty A/c? 2+2=4

ii. What do you mean by ‘Recoupment of Shortworkings’? What conditions are to be satisfied for recoupment of shortworkings? 3+4=7

(b) Sri Amrit Baruah took a colliery from Sri Amar Singh on lease for a period of 20 years from 1^st April, 2013 on a royalty of Rs. 16 per ton of coal raised with a minimum rent of Rs. 80,000 per annum and power to recoup shortworkings in the first four years of the lease.

The annual coals raised were as follows:

Year	Output (in tons)
2013-14 2014-15 2015-16 2016-17 2017-18	3000 3500 5000 8000 10000

From the above particulars, prepare in the books of Sri Amrit Baruah: 4+4+3=11

i. Royalties A/c

ii. Amar Singh’s A/c

iii. Shortworkings A/c

7. (a) In a partnership firm, Arun and Barun are sharing profits and losses in the ratio of 5:3. They decided to dissolve their firm as on 31^st March, 2018. Their Balance Sheet as on 31^st March, 2018 is given below:

Liabilities	Amount	Assets	Amount
Creditors Loan from Arun Loan from Barun Capital Arun Barun	9,316 3,684 600 8,000 5,400	Goodwill Furniture Machinery Inventory Debtors Cash	4,000 1,000 2,000 9,200 10,000 800
	27,000	Goodwill Furniture Machinery Inventory Debtors Cash	27,000

The assets were realized as follows:

Particulars	Amount
Goodwill Furniture Inventory Debtors Machinery	2,600 900 8,300 10,200 8,800

Creditors were paid Rs. 9,120 in full settlement of their claim. Realization expenses amount to Rs. 110. A bill for Rs. 130 due for sales tax was received during the course of realization and this was also paid. Close the books of the firm. 11

(b) What is Amalgamation of firms? What are its main objectives? Name the different forms of amalgamation. 2+6+3=11

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Financial Accounting Question Paper Nov' 2018, Dibrugarh University B.com 1st Sem