Gauhati University Question Papers
ADVANCED FINANCIAL ACCOUNTING (May-June’ 2014)
(MAJOR)
Full Marks: 80
Time Allowed: 3 hours
Answer either in
English or Assamese
The figures in the
margin indicate full marks for the questions
1.
Answer as directed: 1x8=8
a) Write
the meaning of Non-performing Assets of Bank.
b) What
is Actuarial Valuation in the context of a Life Insurance accounts?
c) Write
with reasons whether the following statement is true or false: “Capital value
of the investment is always equal to the Nominal Value of the Investment.”
d) Mention
one important feature of Investment Account.
e) What
is meant by ‘Insurance Claim’?
f) Write
whether the following statement in the context of Insurance claim is true or
false: “If the stock was undervalued, the amount by which it was undervalued
should be added to the given value.”
g) Name
any two committees formed by Parliament for control of public expenditure.
h) Write
two important objectives of GASAB.
2.
Answer the following: 2x6=12
a) What
is Investment Account? Explain.
b) Shivaji
purchased 300, 12% Debentures of Tomtom Ltd. @ Rs. 95 cum interest on
01.06.2013. Interest is payable on 30th June and 31 December each
year. Calculate the cost of Investments for Shivaji.
c) Write
a brief note on “Period of Indemnity” in the context of Insurance Claims.
d) What
is “Memorandum Trading Account” in the context of Insurance Claims? Show a
specimen of such account.
e) Write
any four objective of Government Accounting.
f) Explain
any two differences between Government Accounting and Commercial Accounting.
3.
(a) From the following balances, prepare schedule 2: Reserve and Surplus for
Sun Bank Ltd. as on 31.03.2014 from the following information. 5
|
|
Rs.
|
|
Statutory Reserve
Net Profit before
appropriation
Securities Premium
Capital Reserves
Profit and loss
Account (31.03.2013)
Revenue and other
Reserves
|
6,000
4,000
3,000
12,000
6,700
4,000
|
Or
Explain
the special features of Accounting of a Banking entity. 5
(b) Write short notes on:
1) Life
Fund and
2) Reserve
for Unexpired Risk in the context of Life Insurance and General Insurance
Companies respectively.
Or
A fire insurance company provided the following information
as on 31.03.2014.
|
|
Rs.
|
|
Reserve for
Unexpired Risks as on 01.04.2013
Additional Reserve
for Unexpired Risks as on 01.04.2013
Premiums earned
during the year
Reinsurance Premium
during the year
|
1,40,000
40,000
2,50,000
20,000
|
The
Company calculates in reserve for unexpired risks at 50% of the net premium
received each year and maintains additional reserve at 10% of net premiums
annually.
You
are required to show the adjustment for change in reserve for unexpired risks
while calculating ‘Premiums Earned (Net)’. 5
(c) Answer any two of the following question: 5x2=10
1) Briefly
describe the powers of the Comptroller and Auditor General of India in
connection with audit of accounts.
2) Briefly
describe the Government Accounting standard setting procedure followed in
India.
3) Write
a note on the ‘Consolidated Fund of India’.
4.
UBI Bank Ltd. supplied the following balances as on 31st March 2014.
|
|
Rs.
|
|
Bills Discounted and
Purchased (Dr.)
Rebate on Bills
Discounted (31.03.2013) (Cr.)
Discount Received
(Cr.)
|
4,36,000
8,000
87,000
|
The
particulars of bills discounted are detailed below (Due dates include grace
periods):
|
Amount of Bills
discounted
|
Due Date
|
Rate of discount
|
|
2,06,000
1,30,000
1,00,000
|
31.03.2014
15.05.2014
20.06.2014
|
10%
10%
10%
|
You
are required to calculate the Rebate on Bills Discounted as on 31.03.2014 and
to pass the necessary Journal entries in this regard. 10
Or
Explain
the following terms in the context of Bank Accounts. 5+5=10
1) Non-banking
Assets.
2) Provisions
and Contingencies.
Mention
how these items are presented in the Final Accounts.
5.
Best Life Insurance Corporation ascertained its Life Insurance Fund at Rs.
70,00,000 by preparing Revenue Account for the year ended 31.03.2014. It was
found later that the following had been omitted from the accounts:
|
|
Rs.
|
|
a)
Outstanding Premium
b)
Interest accrued on Investment
c)
Income tax to be deducted on (b) above
d)
Claims intimated but not admitted
e)
Bonus utilised for reduction of premium
f)
Claims covered under re-insurance
|
60,000
80,000
10,000
50,000
15,000
20,000
|
You
are required to pass Journal Entries to give effect to the above adjustments
and also show the Actual Life Assurance Fund. 10
Or
The
following balances are extracted from the accounts of a General Insurance
Company Ltd. related to the year ended 31st March 2013.
|
|
Rs.
|
|
Reserve for
Unexpired Risk (01.04.2013)
Additional Reserve
(01.04.2013)
Premium:
On Direct Business
On Reinsurance Accepted
On Reinsurance Ceded
Outstanding Premium (31.3.2014)
Outstanding Premium (31.3.2013)
Claims Incurred:
On Direct Business
On Reinsurance Ceded
On Reinsurance
Accepted
Outstanding Claims
(31.3.2013)
Outstanding Claims
(31.3.2013)
Commission
Commission on
Reinsurance Ceded
Employees Salaries
etc.
Legal and
Professional Charges
Other Operating
Expenses
Profit on Sale of
Investments
Interest, Dividend
and Rent
|
3,00,000
60,000
7,00,000
1,40,000
1,00,000
40,000
30,000
2,50,000
20,000
50,000
16,000
20,000
80,000
5,000
90,000
10,000
32,000
10,000
55,000
|
On
the basis of aforesaid balances you are required to prepare Revenue Account of
the Insurance company for the year ended 31.03.2014 in proper format. 10
6.
Consider the following information taken from the records of Bora Ltd. 10
a) The
company had a balance of 5% Government Bonds of Rs. 5,00,000 (Cost Rs.
4,80,000) as on 31.12.2012.
b) Interest
was receivable on April 1 and October 1 each year.
c) The
company received interest upto October 1, 2012.
d) On
July 1, 2013 Bonds worth Rs. 80,000 were sold for Rs. 70,000.
You
are required to prepare Investment Account for the year ending December 31,
2013 considering brokerage of ½ % on buying and selling and ignoring tax, stamp
duty etc. 10
Or
Write
brief note on: 10
a) Cum-Interest.
b) Ex-Interest.
c) Fixed
income bearing securities.
d) Brokerage.
7.
M/s Sushmita Ltd. supplied the following information:
a) Accounts
are prepared on 31st December each year and net profit for the year
2012 amounted to Rs. 7,50,000 after charging standard charges of Rs. 3,30,000.
Sales for 2012 were 54,00,000.
b) Fire
occurred in the establishment on July 1, 2013 which affected sales for three
months.
c) Sales
for three months ending 30th September 2012 and 2013 were Rs.
4,50,000 and Rs. 1,50,000 respectively.
d) The
Company took a fire policy for Rs. 14,00,000 with a six month indemnity period.
e) Sales
for 12 months period ended on June 30, 2013 were Rs. 58,00,000.
f) The
company spent Rs. 10,000 as additional expenses to mitigate the effect of the
loss.
You
are required to ascertain the amount of claim to be lodged in the above case.
Also state whether Average clause will be applicable or not in ascertaining the
amount of claim. 8+2=10
***
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