Tuesday, January 21, 2020

Gauhati University Question Papers: Financial Statement Analysis (Nov-Dec'2018)


2018
FINANCIAL STATEMENT ANALYSIS
Paper: 5.5
(Accountancy Major)
Full Marks – 80
Pass Marks - 24
Time – Three Hours
The figures in the margin indicate full marks for the questions
1. Answer the following questions as directed:                                      1x5=5
a)         Copyright is an example of wasting asset. (State ‘true’ or ‘false’)
b)         ‘Financial statements portray the financial effects of transactions and other events by grouping them into broad classes according to their economic characteristics’. (State whether the statement is ‘true’ or ‘false’)
c)          Horizontal analysis is also known as
1)         Dynamic analysis.
2)         Static analysis.
3)         External analysis.
4)         Internal analysis.
(Select the correct answer)
d)         Cash flows are _______ and _______ of cash and cash equivalents. (Fill in the blanks)
e)         Which of the following is an example of cash flow from operating activity?
1)         Buy-back of equity shares.
2)         Redemption of debentures.
3)         Payment of interest by a financial enterprise.
4)         Raising of long-term loans.
(Select the correct answer)
2. Write the meaning of the following:                                    2x5=10

a)         Cash flow.
b)         Financial statement.
c)          Vertical analysis.
d)         Absolute liquid ratio.
e)         Sources of funds.
3. Answer the following questions:                                        5x5=25
(a) Explain in brief the limitations of financial statements.
(b) Explain common-size statements.
(c) Anand Ltd. supplies you the following information for the year ended 31st March, 2018:

Rs.
Credit sales
Cash sales
Returns inward
Opening inventory
Closing inventory
Rate of GP
3,75,000
2,25,000
20,000
25,000
21,400
20%
Find out (1) Inventory turnover ratio and
(2) Inventory conversion period.
(d) From the following information, calculate cash flow from operating activities:

Rs.
Cash sales
Credit sales
Collection from customers
Cash purchases
Credit purchases
Cash paid to suppliers
Commission received
Commission accrued
Office expenses paid
Office expenses outstanding
Out of total salary of Rs. 6,000, salary paid in cash Rs. 2,000 and balance remains outstanding.
Income tax paid
Donation paid
2,00,000
3,50,000
90,000
50,000
1,20,000
60,000
2,000
1,000
8,000
500

400
100

Or
Distinguish between Funds flow Statement and Cash flow Statement.
(e) What are the objectives of corporate financial reporting?
Or
Write a brief note on the contents of Annual Report of a joint stock company.
4. Why is Financial Statement significant? Describe the various qualitative characteristics of Financial Statement. 4+6=10
Or
What is meant by accounting information? Explain the qualitative features of accounting information.              4+6=10
5. “Corporate financial reporting is intended to supply information useful to various groups in making decisions.” Explain.                          10
Or
What is corporate financial reporting? Explain in brief the contents of Board of Directors’ Report. 4+6=10
6. With the help of the following information complete the Balance Sheet of Udayan Ltd.:    10
Annual sales
Sales to Net Worth
Current Debt to Net Worth
Total Debt to Net Worth
Current Ratio
Sales to Inventory
Average collection period
Fixed Assets to Net Worth
Rs. 40,00,000
4 times
50%
80%
2.2 times
8 times
40 days
70%
 Or
State the different types of financial analysis and discuss the limitations of analysis and interpretation of financial statements.                        5+5=10
7. Prepare a Fund Flow Statement from the following data:
Particulars
2016-17
(Rs.)
2017-18
(Rs.)
(i) Equity and Liabilities:
Shareholders’ Fund:
Equity share capital
Reserve and Surplus:
Statement of profit and loss (surplus)
Non-current Liabilities:
Long-term Debts
Current Liabilities:
Accounts payable
Accumulated Depreciation


5,00,000

2,80,000

1,40,000

2,00,000
2,10,000


5,30,000

3,70,000

1,30,000

2,10,000
2,50,000

13,30,000
14,90,000
(ii) Assets:
Non-current Assets:
Fixed Assets
Current Assets:
Inventories
Accounts Receivable
Cash and cash equivalent
Other Assets


5,00,000

3,10,000
2,40,000
80,000
2,00,000


5,80,000

3,20,000
2,70,000
70,000
2,50,000

13,30,000
14,90,000
Additional Information:
a)         Fixed assets (original cost Rs. 40,000, accumulated depreciation Rs. 15,000) were sold for Rs. 10,000.
b)         Depreciation for the year 2017-18 amounted to Rs. 55,000 duly charged to Statement of Profit and Loss.            10
Or
What is the purpose of preparing a Cash flow Statement? How is it prepared? Explain.     3+7=10
***

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