Saturday, September 12, 2015

Dibrugarh University - Financial Accounting (Nov' 2014)

2014 (November)
COMMERCE (General / Speciality)
Course: 103
(Financial Accounting)
Full Marks: 80
Pass Marks: 24
Time: 3 hours

The figures in the margin indicate full marks for the questions.
(New Course)

1. (a) Fill in the blanks :                  1x4=4
                     i.            Accounting Standards Board was set up in India in the year ____.
                   ii.            The cost of goods sold on hire purchase is transferred to ____ Account.
                  iii.            Royalty paid on sales is debited to ____ Account.
                 iv.            In departmental accounts, each department is considered as a  Separate ____ centre.

(b) Write ‘True’ or ‘False’:            1x4=4

                     i.            Accounting principles are formulated by the government.
            ii.            The total amounted to be paid by the buyer under hire-purchase system is called hire-purchase price.
                  iii.            In branch accounting, each branch has separate entity.
                 iv.            Short working is the excess of minimum rent over royalty payable for the year.

2. Write short notes on :                               4x4=16
1)      The provisions of Accounting Standard – 6
2)      Repossession of goods under hire-purchase system
3)      Inter-departmental transactions
4)      Sublease
3. (a) Following is the Trial Balance of Karan and Arjun as on 31st March, 2014 :
Trial Balance
Debit balance
Rs.
Credit balance
Rs.

Opening Stock
Purchases
Bills Receivable
Cash in Hand
Bad Debts
Machinery
Advertisement
Sundry Debtors
Goodwill
Land & Building
Fuel
Wages and Salaries
Rent & Taxes
Discount
Commission
Furniture


1,60,000
4,00,000
     4,000
   26,000
    2,000
1,32,000
  16,000
1,00,000
1,40,000
4,50,000
   30,000
   80,000
   40,000
   17,200
   20,000
   30,000


Sundry Creditors
Bank Loan
Sales
Bills Payable
Interest
Capital :
  Karan
  Arjun



1,50,000
 87,200
8,40,000
  40,000
 10,000

3,20,000
2,00,000










16,47,200

16,47,200
From the following additional information, you are required to prepare Trading & Profit & Loss A/c and also a Balance Sheet of Karan and Arjun for the year ended 31st March, 2014.                                4+4+4=16
1)      Closing Stock as on 31st March, 2014 was Rs. 1,20,000.
2)      Depreciate machinery by 10% and furniture by 5%
3)      Create a reserve of 5% on Sundry Debtors for Bad Debts
4)      Write of ¼th of advertising
Or
(b) (i) Discuss the need for introducing and developing Generally Accepted Accounting Principles.            8
(ii) Discuss in brief the IFR Standards.      6

4. (a) Prakash & Co. purchased as machine on 01.01.2011 on hire – purchases basis. The payments were to be made as follows:
On signing the agreement
At the end of the first year
At the end of the second year
At the end of the third year
10,000
12,000
7,000
4,400

33,400
Interest included in Rs. 33,400 was charged on the cash price @ 10% p.a. 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 Prakash & Co.            4+5+5=14
Or
(b)  (i) Explain the features of Installment-purchase system.       6
(ii) Distinguish between Hire-purchase system and Installment-purchase system.             8

5. (a) Gojen obtained from Brojen a coal mine on lease for five years from 1st April, 2009                on the following terms :
                     i.            Royalty is to be paid @ Rs. 2 per ton
                   ii.            Minimum Rent is Rs. 3,000 per year
                  iii.            Each year’s shortworking can be recouped during the subsequent two years subject to a maximum of Rs. 500 per annum.
                 iv.            If there is any cessation of work due to strike, the minimum rent may be reduced proportionately with regard to the length of the stoppage. Production of coal during the five years was as follows:
Year
Output ( in tons )
2009-10
2010-11
2011-12
2012-13
2013-14
1000
1500
1800
1200
1300
                               
During the year 2012 – 13 , there was a stoppage in work due to strike lasting 4 months. From the above particulars, prepare (i) Royalties A/c, (ii) Short workings A/c and  (iii) Brojen’s A/c in the books of Gojen. Show the Analysis table also. 4+4+4+2=14
Or
(b) (i) What is called ‘Rock Rent’ in Royalty Account.        4
(ii) What do you mean by ‘Recoupment of Short workings’? What conditions are to be satisfied for recoupment of short workings?                           2+3=5
(iii) Distinguish between Rent and Royalty.          5

6. (a) In the context of Branch Accounts, explain the following :                3½x4=14
1)      Goods-in-transit
2)      Cash-in-transit
3)      Inter-branch Transactions
4)      Depreciation of Branch Fixed Assets.
Or
(b) From the following particulars, prepare Departmental Trading and Profit & Loss A/c in columnar form for the two departments and thereafter the Combined Income Account of Red-Rose Brothers for the year ended 31st March, 2014.
Particulars
Dept. – A
Dept. - B

Stock on 01.04.2013
Purchase from outside
Wages
Salaries
Transfer from Dept. A
Stock on 31.03.2014
Sales to outsiders

   30,000
2,05,000
   10,000
    3,600
-
   35,000
2,00,000

  5,000
20,000
  1,000
  2,400
50,000
12,000
70,000
The entire Closing Stock of Department – B represents goods transferred from                 Department – A at cost plus 25%. Administrative and selling expenses amount to Rs. 14,000 which is to be allocated between the two departments in the ration of 6 : 1.                    4+6+4=14

(Old Course)
Full Marks: 80
Pass Marks: 32

1. (a) Write ‘True’ or ‘False’ :       1x3=3
                     i.            Minimum Rent is also known as ‘Rock Rent’ in Royalty Accounts.
                   ii.            Unearned Income Account is a liability.
                  iii.            Registration of partnership firm is compulsory.

(b) Fill in the blanks :       1x3=3
                     i.            Cash Flow Statement is prepared as per Accounting Standard ____.
                   ii.            Hire-purchase transactions are controlled by the Hire-Purchase Act of ____
                  iii.            Cash sent by the branch not received by the head office by the end of the year is debited to ____ Account.

(c) Choose the correct Answer :                                1x2=2
                     i.            Royalty paid on sales is debited to (Trading Account / Profit & Loss Account / Profit & Loss Appropriation Account).
                   ii.            If inventory at branch is shown at invoice price instead of cost price, then the account which is used for adjustment is (Reserve Stock Account / Stock Reserve Account / Stock Suspense Account).

2. Write brief notes on (any four) :           4x4=16
(a)    Instalment-purchase System

(b)   Independent Branch

(c)    Features of Accounting Income

(d)   Garner vs. Murray Rule

(e)   Minimum Rent

3. (a) (i) How does the money measurement concept limits the scope of accounting?     4

(ii) Write four points of the necessity of accounting.        4

(iii) Write a short note on Indian Accounting Standards Board.    4

Or
(b)From the following Trial Balance of Mr. Pathak, you are required to prepare Trading & Profit & Loss A/c for the year ended 31st March, 2014 and a Balance Sheet as on that date.       4+4+4=12
Trial Balance
Debit Balances
Rs.
Credit Balances
Rs.
Opening Stock
Furniture
Purchase
Carriage Inward
Bad Debts
Wages
Debtors
Sales Return
Rent
Salaries
Cash
Drawings
Building
Advertisement
Interest on Bank Overdraft
Miscellaneous Expenses
50,000
32,000
11,10,600
9,400
3,600
1,04,000
1,60,000
30,000
48,000
1,36,000
17,800
28,000
3,20,000
20,000
14,000
6,800
Sales
Creditors
Bank Overdraft
Provision for Doubtful Debts
Discount
Purchase Return
Capital
14,00,000
1,45,000
1,00,000
4,200
1,000
40,000
4,00,000

20,90,200

20,90,200
Adjustments:
                     i.         Closing Stock is valued at Rs. 72,000
                   ii.         Make a provision for Bad and Doubtful Debts @ 5% on Debtors.
                  iii.         Depreciate furniture by 10%
                 iv.         Provide for Interest on Capital @ 6 % p.a.

4. (a) On 1st January, 2010, Assam Traders purchased a machine from M/s Jai Hind Machinery on Hire-purchase system. As per agreement, an amount of Rs. 5,000 paid on signing the agreement and balance in three equal annual installments of Rs. 20,000 each on 31st December each year. The hire vendor charged interest @ 5% p.a. on yearly balance. Depreciation was charged @ 15% p.a. straight-line method.  Ascertain the cash price of the machine and prepare (i) Machinery A/c and (ii) M/s Jai Hind Machinery’s A/c in the books of Assam Traders.      3+4+4=11
Or
(b) Distinguish between the following:                  7+4=11
                     i.            Hire-purchase System and Installment-purchase System.
                   ii.            Complete Repossession and Partial Repossession.

5. (a) Sri Madan Baruah took a colliery from Sri Mohan Singh on lease for a period of 20 years from 1st January, 2008 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 short-workings was first four years of the lease.
Year
Tons
2008
2009
2010
2011
2012
3000
3500
5000
9000
10000

From the above particulars, prepare in the books of Sri Madan Baruah (i) Royalties A/c, (ii) Short workings A/c and (iii) Sri Mohan Singh’s A/c.         3+4+4=11
Or
(b) What is Royalty? Explain the different types of royalty. Also distinguish between Rent and Royalty.  2+4+5=11

6. (a) A head office at Kolkata supplies goods to its Dibrugrh Branch on cost. The               branch sells the goods for cash and on credit and remits the proceeds to the head office promptly. The branch expenses are being met by the head office by cheque. The following are the transactions relating to the branch for the year ended 31st March, 2014:
Stock at branch on 01.04.2013
Debtors at branch 01.04.2013
Goods sent to branch during the year
Total sales at branch (including cash sales Rs. 1,10,000)
Goods returned by branch
Goods returned by customers
Cash received from debtors
Discount allowed to debtors
Bad Debts written off   
Cheque sent to branch for expenses:
Salaries
Rent
Petty Expenses
Stock at branch on 31.03.2014
30,000
40,000
2,25,000
        3,70,000
10,000
10,000
2,10,000
10,000
  5,000

25,000
14,500
500
45,000
Prepare Dibrugarh Branch A/c and goods sent to Branch A/c in head Office books. Show               Branch Debtors A/c as a part of your working note.    6+3+2=11
Or
(b) In the context of Branch Accounts, explain the following:      2+3+3+3=11
                     i.            Depreciation on Branch Fixed Assets.
                   ii.             Inter-branch Transactions
                  iii.            Cash-in-transit
                 iv.             Goods-in-transit

7. (a) A, B and C are partners in a partnership firm. They decided to dissolve the partnership on 31st December, 2013. Their Balance Sheet as on 31st December, 2013 was as follows:
Balance Sheet
Liabilities
Rs.
Assets
Rs.
A’s Capital
B’s Capital
2,00,000
   60,000
Cash
C’s Capital
Realization A/c (Dr.)
1,50,000
   20,000
   90,000

2,60,000

2,60,000
C is insolvent and cannot pay anything. Pass Journal Entries and prepare Ledger A/c’s in the books of the firm:    5+6=11
                     i.            Just prior to decision in Garner vs. Murray
                   ii.            After decision in Garner vs. Murray
Or.
(b) What do you mean by Amalgamation of firms? What are the major objectives of amalgamation? Name the different forms of amalgamation.                2+6+3=11


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