Unique Paper Code 8408
Revised 0 of 14

Financial Accounting2019

B.Com (Hons) · 4 questions

Duration: 1.3 HoursMaximum Marks: 38

From an older CBCS paper

Reworded by Kunji from the printed paper. The original paper belongs to the University of Delhi. See DU's question bank.

Before you start

  1. Numbers and theory. 8 numerical parts and 6 theory parts. Numericals take longer to lay out, so give them your freshest time.
  2. Pace. Two minutes a mark: about 30 minutes for each 15-mark question, with nothing spare in 1.3 hours. Pick your side of each OR before you start writing.
  3. Keep score. Every part opens a worked answer checked against the books. Turn the key when you have revised it; the boxes at the top fill in, on this device.

1.

15 marks
· ~30 min
(a)Why accounting standards are needed and importantExplain why Accounting Standards are needed and why they are important.(5)
(b)Final accounts with goods on approval, fire loss and other adjustmentsFrom Sunita's Trial Balance below, prepare : 10 (i) the Trading and Profit and Loss Account for the year that ended on 31st March, 2017 and (ii) the Balance Sheet as at that date. Adjustments : (i) Stock on 31st March,…(10)
OR
(a)The convention of materiality and full disclosureWith examples, explain the convention of 'Materiality'. Does Materiality contradict 'Full Disclosure' ?(5)
(b)College: Income and Expenditure Account and Balance SheetFrom the information below, prepare a College's Income and Expenditure Account for the year ended 31st March, 2017 and its Balance Sheet as on that date : 10 On 31st March, 2016 the College had these assets : Furniture…(10)

2.

10 marks
· ~20 min
(a)Machinery and Provision for Depreciation accounts (diminishing balance)Y bought a second-hand machinery on 1-2-2015 for ₹ 96,000, paying ₹ 14,400 to overhaul it and ₹ 9,600 to install it, the installation being completed by 31-3-2015. On its machinery, the company provides depreciation at…(6)
(b)Significance of inventory valuation; periodic versus perpetual systemsWhy is inventory valuation significant ? How does the Periodic System of Inventory Valuation differ from the Perpetual System ?(4)
OR
(a)Machinery account over three years (straight line, part-year depreciation)Savita bought a machine for ₹ 96,000 on 1st April 2015. She charges depreciation by the Straight Line Method and closes her books on December 31st each year. The machine's useful life is 8 years, after which it can be…(6)
(b)Closing inventory by the weighted average methodAccording to the Weighted Average Method, calculate the value of closing inventory on March 31, 2019 :(4)

3.

3 marks
· ~6 min
(b)Operating lease versus financial leaseHow does an Operating Lease differ from a Financial Lease ?(3)
OR
(b)Journal entries for a financial lease in the lessee's booksIn the case of a Financial Lease, give the Journal entries in the Lessee's books.(3)

4.

10 marks
· ~20 min
(a)Branch Account under the Debtors System (invoice price)Mrs. Bhatia & Daughters, Kanpur has a branch at Jodhpur, to which goods are invoiced at cost plus 25%, the branch's selling price. From the details below, prepare the Jodhpur Branch Account (Debtors System) to find the…(7)
(b)Allocation of common expenses among departmentsA Company has 3 Departments, whose details are as below : 3 Allocate these expenses to the 3 departments :(3)
OR
(a)Branch Adjustment and Profit and Loss Accounts (Stock and Debtors System)M/s PQR Ltd. has branches at Lucknow and Kanpur, to which goods are invoiced at cost plus a 20% profit on sales. The information below is available about the transactions at Lucknow branch for the year ending 31st…(7)
(b)Bases of allocating common expenses among departmentsState the basis on which common expenditures are allocated among different departments.(3)

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