2015
FINANCIAL ACCOUNTING-I
Full Marks: 80
Time: 3 hours
(The figures in the margin indicate full marks for the questions)
1. Write the meaning of the following: 1x10=10
a) Revenue recognition principle of accounting.
b) Accounting conventions.
c) Neutrality of accounting information.
d) Sectional balancing ledger system.
e) Cash price in Hire Purchase system.
f) Hire purchase Interest.
g) Repossession by hire vendor.
h) Minimum to Royalty A/c.
i) Patent Royalty.
j) Lessee in Royalty Accounting system.
2. Write the answer very briefly: 2x5=10
a) Mention two features of accounting principles.
b) State two advantages of sectional balancing ledger system.
c) State two features of self balancing ledger system.
d) Mention two points of differences between Hire Purchase and Credit Sale.
e) Mention two types of rights one may acquire after payment of royalty.
3. Write the answer of the following briefly: 5x4=20
(a) State the limitations of accounting standards.
Or
Give a brief account of structure of Generally Accepted Accounting Principles.
(b) Is self balancing ledger system superior to sectional balancing ledger system? Give reasons.
Or
How does sectional balancing ledger system help in internal check system?
(c) What are the special features of Installment Purchase System?
Or
Abhishek purchased a Hero bike on hire purchase system. The term of payment is four annual installments of Rs. 16,920 at the end of each year. The rate of interest charged by hire vendor is 5% per annum. Assume that the purchase was made on 1st April and the accounting year closes on 31st March each year. Calculate cash price of the bike.
(d) State the manner of recoupment of Shortworking under Royalty account.
Or
Rajmahal Ltd. leased some land to Goel Ltd. at a royalty of Rs. 10 per ton on the output raised subject to dead rent of Rs. 55,000 per annum with the right of recoupment shortworking during the first three years of the lease. The output for the first four years was as follows:
4. Describe the authorities involved in formulating Accounting Standard in India. 10
Or
Name the different parties interested in accounting information and explain why they need it. 10
5. Ananya Enterprise maintains three ledgers under sectional balancing ledger system – General ledger, debtor’s ledger and Creditor’s ledger. From the following particulars, prepare Total Debtor’s A/c and Total Creditor’s A/c in the General Ledger for the year 2014: 5+5=10
Rs.
| |
Sundry debtors on 1.1.2014
Sundry creditors on 1.1.2014
Total purchases for 2014
Total sales for 2014
Cash sales
Credit Purchases
Trade discount on sales
Trade discount on purchases
Discount allowed to debtors
Discount allowed to creditors
Bills receivable received
Bills payable accepted
Cheque issued to creditors
Cheque received from debtors
Cash refunded to debtors
Bills Payable dishonoured
Cheque (received) dishonoured
Transfer from debtors ledger to creditors ledger
Transfer from creditors ledger to debtors ledger
Returns outward
Bad debts recovered
Bad debts written off
Interest charged to debtors
Cash refunded by creditors
|
25,000
20,000
52,000
80,000
25,000
43,000
4,000
5,000
1,000
1,200
21,500
10,000
25,500
30,000
1,500
1,000
3,000
2,500
1,500
2,500
900
2,000
500
600
|
Or
From the following particulars prepare Purchase Ledger Adjustment A/c and Sales Ledger Adjustment a/c as they would appear in General Ledger: 5+5=10
Rs.
| |
Debtors on 1.4.2014
Creditors on 1.4.2014
Credit purchases
Credit sales
Cash received from customers
Cash paid to creditors
Bills receivable received
Bills payable issued
Cash received on bills receivable
Cash paid on bills payable
Bills receivable dishonoured
Bills receivable discounted
Goods returned by customers
Discount received
Discount allowed
Bad debts
Transfer from Purchases Ledger to Sales Ledger
Credit balance in Sales Ledger on 30.4.2014
Debit balance on Purchases Ledger on 30.4.2014
|
71,700
47,100
74,600
93,275
69,300
41,700
18,400
14,800
10,400
9,800
3,200
5,000
2,225
1,150
3,230
2,320
1,830
1,200
700
|
6. On 1st January, 2010 Mr. Kautilya purchased a machine from North East Enterprise on hire purchase system. The cash price of which was payable as Rs. 12,000 down and the balance in three equal yearly installments together with interest @ 10% p.a. The amount of each installment including interest was Rs. 17,600. Depreciation was provided @ 20% p.a. on the machine under diminishing balance method. At the end of three years of service, the machine was sold for Rs. 30,000 cash.
Prepare Machinery A/c and the Hire Vendor A/c in the books of Purchaser for three years upto 31st December, 2012. 5+5=10
Or
M/S B.K. Enterprise purchased on installment system a machine from Rahul Enterprise on 1st January, 2010 for a sum of Rs. 80,000, Rs. 20,000 is to be paid on signing of the contract and rest in three annual installments of Rs. 20,000 each. The cash price of the machine is Rs. 74,500 and interest is charged by the vendor at 5% p.a. the buyer charges depreciation at 10% p.a. on the diminishing balance method.
Prepare Machinery A/c and Rahul Enterprise A/c in the books of M/S B.K. Enterprise.
7. Atul took the lease of a mine from Ratul at a given rate of royalty with a minimum rent of Rs. 20,000 per year. Each year’s excess of minimum rent over royalty is recoverable out of the royalty for the next two years. In the event of any strike and minimum rent not being reached, it was agreed that the actual royalty earned for the year would be the full royalty obligation for the year concerned.
The actual royalty for the different years were as follows:
Year
|
Quantity
|
First Year
Second Year
Third Year (Strike)
Fourth Year
Fifth Year
|
Nil
8,000
19,000
22,500
30,000
|
Prepare Royalty Account and Shortworking Account in the books of Atul.
Or
Saya Co. Ltd. took lease of a coal mine from Meghnad at annual dead rent of Rs. 2,000 subject to a royalty payable @ 75 paisa per ton extracted. The right to recoup shortworking was during the next two years following the shortworking. The output for five years was as follows: 5+5=10
Year
|
Saya Co. Ltd.
(Tons)
|
Gopal
(Tons)
|
Total output
(Tons)
|
2010
2011
2012
2013
2014
|
4,500
4,640
5,200
5,600
7,200
|
1,500
2,160
2,800
3,600
4,800
|
6,000
6,800
8,000
9,200
12,000
|
Prepare Royalty Payable A/c and Royalty Receivable A/c in the books of Saya Co. Ltd. for first three years.
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