Model Paper Financial Accounting-II For D.Com-Part-II Annual Examinations 2013 & Onward Part-A Objective

Model Paper “Financial Accounting-II” For D.Com-Part-II Annual Examinations 2013 & Onward Part-A Objective Time: 30 Minutes

Roll No. _______

Marks: 20

Note:- This part is compulsory. It should be attempted on the question paper and returned to the Supervisory staff after the prescribed time. Cutting, overwriting and use of lead pencil is not allowed. Supervisory staff is required to attach it with the Answer Book. Q.1.

Choose the correct answer and encircle it.

(20 x 1) = 20

1. IASC was established in 1973 at: (a) London (b) New York (c) Paris (d) Islamabad 2. If applied factory overhead is greater than the actual factory overhead it is called as: (a) Under applied F.O.H (b) Over-applied FOH (c) Actual FOH (d) None of these 3. Interest received is: (a) Gross Income (b) Net Income (c) Other Income (d) Operating income 4. Freight in is: (a) Direct labour (b) Direct expenses (c) Factory overhead (d) Indirect expenses 5. When material is issued, it is recorded in: (a) Receipts section (b) Issued section (c) Balance section (d) Sales section 6. Receipt and Payment Account Shows: (a) Income & Expenses (b) Cash Received and Paid (c) Assets & Liabilities (d) Capital and Profit 7. If debit side of receipt and payment account exceeds credit, it represents: (a) Cash at bank (b) Bank overdraft (c) Deficit balance (d) Surplus balance 8. Non-trading institutions prepare: (a) Trading account (b) Profit and loss account (c) Income and expenditure account (d) Income statement 9. A partner who invest in the business but does not take active part is: (a) Secret partner (b) Sleeping partner (c) Active partner (d) Nominal Partner 10. An intangible asset regarding the reputation of a business is known as: (a) Trade mark rights (b) Patent rights (c) Goodwill (d) Bonus

11. Revaluation account is a: (a) Real account (c) Cash account

(b) Personal account (d) Nominal account

12. Sacrificing ratio is calculated by the formula: (a) Capital ratio-Old ratio (b) New ratio-Old ratio (c) Old ratio-New ratio (d) Gaining ratio-Profit ratio 13. Loss on Realization is divided among the partners: (a) In Capital Ratio (b) In Profit Sharing Ratio (c) In Equal Ratio (d) None of these 14. A corporation is managed by:(a) Owners (b) Promoters (c) Directors (d) Managers 15. The shares of public limited company are: (a) Not refundable (b) Not transferable (c) Transferable (d) Transferable with the permission of registrar 16. Shares discount is shown in the Balance Sheet as an: (a) Assets (b) Deduction from paid up capital (c) Separate item on liability side (d) None of above 17. Statement of retained earning is also known as: (a) Profit loss appropriation account (b) Statement of affairs (c) Income statement (d) None of these 18. If depreciation is not charged, the profit is: (a) Overstated (b) Understated (c) No effect (d) None of these 19. Under the straight line method of providing depreciation it: (a) Increases every year (b) Decreases every year (c) Remains constant every year (d) None of these 20. Depreciation is necessary to calculate: (a) Net profit (b) Net financial position (c) Tax

(d) None of these

Model Paper “Financial Accounting-II” For D.Com-Part-II Annual Examinations 2013 & Onward Part-B Subjective Time: 02:30 Hours

Marks: 80

Section-I Q.2. Write the short answer to any Twenty Five (25) from the following questions:(25x2=50) (1) Give four advantages of IAS. (2) Briefly describe IAS-7. (3) Prime Cost. (4) Conversion Cost. (5) Fictitious Assets. (6) What is meant by Cost of Goods Sold? (7) What is meant by Applied FOH? (8) What is meant by Operative Expenses? (9) What is meant by LIFO Method? (10) What is meant by Purchase Requisition? (11) Legacies. (12) NGO. (13) Give three examples of non trading concerns. (14) What is meant by Deficit of the year? (15) What is meant by subscriptions in arrears? (16) What is meant by accrued incomes? (17) Active Partner. (18) Give three disadvantages of partnership? (19) What is meant by Secret Partner? (20) Why a minor can not become full fledged partner? (21) What is meant by profit on revaluation? (22) Name three methods for the valuation of goodwill? (23) How the ratio of sacrifice is calculated? (24) What is meant by all the partners insolvent? (25) What was the decision of Garner vs Murray case? (26) When the liabilities are not transferred to realization account? (27) What do you know about preliminary expenses? (28) Define Prospectus. (29) What is Purchas Consideration? (30) Define Bonus Share. (31) Retained Earnings. (32) Dividend. (33) Scrap Value. (34) Diminishing Balance Method. (35) Straight Line Method. (36) Write down four methods of depreciation. (37) What is meant by wear and tear of asset?

Section-II Long Questions Note:- Attempt any three (3) questions.

(3x10 = 30)

Q.3. At the end of 2010, Brothers Manufacturing Company has the following balances:Rs. Rs. Material Inventory (01-01-2010)

45,000

Material Inv (31-12-2010) 55,000

Work in Process Opening Inv.

70,000

Work in Process End. Inv. 50,000

Finish Goods Opening Inv.

63,000

Finish Goods End. Inv.

60,000

Fuel Opening Inventory

4,000

Fuel Ending Inventory

2,000

Fuel Purchases

3,000

Purchase of Material

90,000

Superintendence

4,000

Repair to Machinery

500

Rent of Factory

5,500

Factory Insurance

700

Tool Expenses

200

Indirect Labour Freight-in Direct Labour

Depreciation Machinery

2,000

1,200

Power, heat and light

3,000

2,000

Purchases Return

4,000

50,000

Factory Overhead applied at 85% of Direct Labour. REQUIRED: Prepare Cost of Goods Sold Statement.

Q.4. Following is the summary of cash transactions of Faisalabad Hockey Club for the year ended on 31st December 2011. Receipts Balance of Cash

Amount 5,070

Payments Salaries

Amount 3,800

Admission Fee

1,280

Furniture Purchased

8,400

Ground rent

2,340

Refreshment

1,200

Municipal grant

5,200

Repairs

1,900

Annual subscription

9,500

Special match expenses

2,100

Miscellaneous receipts

4,200

Purchase of sports material

7,250

Loan from bank

10,000

Sport fee paid

1,400

Balance of Cash

11,540

37,590

37,590

The club owned building Rs.90,000 and furniture Rs.8,400 as on 1st January 2011. Required: Prepare income and expenditure account and balance sheet as on 31st December 2011.

Q.5. A.B and C are partners sharing profit and loss equally. Their Balance Sheet stood as follows on 31st December, 2011. Assets Cash in hand Accounts receivable Merchandise inventory Furniture Land and Building

Amount

Liabilities

Amount

800 35,000 5,200 20,000 1,00,000

Accounts payable Reserve Fund Capital Account A. 50,000 B. 50,000 C. 50,000

5,000 6,000 1,50,000

1,61,000

1,61,000

They admitted D into partnership on 1st January 2011 on the following terms: i) ii) iii) iv)

D is to pay Rs.52,500 as his capital. Merchandise inventory is valued at Rs.5,000 Furniture is to be depreciated at 10% Land and Building is valued at Rs.1,18,700.

Required: Pass the necessary journal entries and prepare balance sheet of the new firm. Q.6. Zahid Limited with an authorized Capital of Rs.2,00,000 divided into 4,000 shares of Rs.50 each has taken necessary steps to issue 3,000 shares at discount of 10%, out of these 500 shares were issued to directors on 25th March 2012 and 2,500 to the general public. Applications were received for 2,000 shares on 1st April, 2012. The directors allotted these shares on 10th April, 2012. Required:

Record the Journal entries and prepare the balance sheet.

Q.7. A merchant purchased a machine worth Rs.17,000. The estimated life of the machine is 5 years. During these five years, the working hours of the machine was as under:1st year 1,800 hours 4th year 1,400 hours and

2nd year 1,200 hours 5th year 1,600 hours

3rd year 2,000 hours

The scrap value of the machine is Rs.2,000. You are required to calculate the yearly depreciation charges and prepare a Comparative Schedule of Depreciation Expenses using the following methods:1. 2. 3. 4.

Straight Line method. Double Declining Balance method. Sum-of-the-year’s-digits methods. Unit of Production method.

========================================================