2019 Question Paper B.Com 1st Semester (CBCS) FINANCIAL ACCOUNTING

2019

(December)

COMMERCE

(CORE)

Paper: C-101

FINANCIAL ACCOUNTING

Full Marks: 80

Pass Marks: 32

Time: 3 hours

The figures in the margin indicate full marks for the questions

1. (a) Choose the correct answer: 1x3=3
(i) As an information system, the accounting process serves persons of

(1) Inside the organization

(2) Outside the organization

(3) Both inside and outside the organization
(ii) For recognition of revenue at international level, the corresponding International Accounting Standard is

(1) IAS – 18

(2) IAS – 21

(3) IAS – 24
(iii) On dissolution of a firm, cash in hand is transferred to

Realization A/C
Partners’ capital A/c in their profit-sharing ratio
Cash A/C

(b) Fill in the blanks: 1x3=3

(i) Accounting Standards may also be termed as ______ forms of Generally Accepted Accounting Principles.
(ii) Accounting Principles are ______ to establish standards for sound accounting practices.
(iii) Under debtors system, Branch A/C discloses ______ of the branch.

(i) Trial Balance is not an account.

(ii) The hire-purchaser may, at any time, terminate the hire-purchase agreement after giving the owner at least 21 days notice in writing.

2. Write short notes on any four of the following: 4x4=16

(a) Straight-line method of Depreciation

(b) Indian Accounting Standard (Ind-AS) 101

(d) Independent branches

(e) Garner vs. Murray decision

3. (a) What are Accounting Principles? Distinguish between Accounting Principles and Accounting Standards. 2+4=6

(b) Arrange the following balances taken from the Ledger of Saurav Srivastav into a Trial Balance on 31^st March, 2019: 6

4. (a) What is meant by business income? What are its features? Discuss the procedure for measurement of business income. 2+3+5= 10

(b) (i) Write the salient features of Accounting Standard (AS) – 9 with respect to revenue recognition. 4

(ii) X Ltd. Bought a machinery for Rs. 30000 on 1^st April, 2015. One more machinery was purchased on 1^st October, 2015 costing Rs. 20000. On 1^st July, 2016, a new machinery for Rs. 10000 was added to the existing machinery. On 1^st January, 2017, one-third of the machinery which was installed on 1^st April, 2015 was sold for Rs. 3000. The rate of depreciation was 10% p.a. on diminishing balance method.

Show the machinery A/c in the books of X Ltd. The accounting period ends on 31^st December each year. 6

5. Following is the Trial Balance of a trader Mr. Prakash as on 31^st March, 2019:

Prepare Trading and Profit & Loss A/C for the year ended 31^st March, 2019 and Balance Sheet as on that date after taking into account the following adjustments: 3+3+4=10

(i) Stock on 31^st March, 2019 was valued at Rs. 34220

(ii) Allow interest on capital @ 10% p.a.

(iii) Provision for bad debts is to kept at Rs. 1000

(iv) Depreciate Plant and Machinery @ 10% p.a. and Furniture @ 5% p.a.

(v) The proprietor Mr. Prakash has taken goods worth Rs. 5000 for personal use.

6. (a) What is Hire-purchase system? What are its features? Should depreciation be charged on fixed assets purchased on hire-purchase system? 3+5+2= 10

(b) Blue Bird co. purchased two machines of Rs. 5250 each from Kapili Machine Co. on 1^st April, 2016 on hire-purchase system. As per agreement, payment to be made Rs. 3000 down and the balance in three equal annual instalments along with interest @ 5% p.a. Blue Bird Co. writes off depreciation @ 10% p.a. on written down value method.

After having paid the first instalment, the buyer could not pay the second instalment and the seller took possession of one machine adjusting the value of other against the amount due taking the machine @ 20% depreciation on Diminishing Balance Method. Seller, after spending Rs. 100 on repairs, sold it away for Rs. 4000.

Show the ledger A/C in the books of both the parties. Books are closed on 31^st March each year. 3+3+3+1=10

7. (a) Arun of Mumbai has a branch at Guwahati. Goods are invoiced to the Branch at cost plus 25%. Branch is instructed to deposit cash everyday in the Head Office Account with the bank. All expenses are paid through cheques by the Head Office except petty cash expenses which are paid by Branch out of all cash receipts.

Prepare Branch A/C in the books of Head Office taking into account the following information: 10

(b) (i) What are the objectives of keeping Branch Accounts? 4

(ii) With respect to Branch Accounts, how will you deal with the following matters? 2x3=6

Depreciation of Branch Fixed Assets
Goods-in-Transit
Remittance-in-Transit

8. (a) (i) What do you mean by dissolution of partnership firm? Discuss the reasons that lead to dissolution of firm. 2+4=6

(ii) Distinguish between Revaluation A/C and Realization A/c. 4

(b) Ajay, Bijay and Sanjay were partners sharing profits and losses as 4:3:3. The firm was dissolved on 31^st March, 2019. The Balance sheet of the firm on that is given here under. As the process of realization seemed dilatory, it was decided to distribute cash as and when realized and to appoint Sanjay to look after the distribution at a remuneration of 1% of the value of assets realized (other than Cash at Bank) and 10% of the amount distributed to the partners: