Gauhati University Question Papers
ADVANCED FINANCIAL ACCOUNTING (May-June’ 2016)
(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) The
Banking Regulation Act was passed in the year 1956. (State whether the
statement is True or False)
b) Non-banking
assets must be disposed off within _____ years from the date of acquisition.
(Fill in the blank with appropriate word)
c) Commission
on reinsurance ceded is treated as an
1) Income
2) Expenditure
(Choose the correct alternative)
d) Premium
received by an insurance company is shown in the _____ Account. (Fill in the
blank with appropriate word)
e) Face
value of the investment is always equal to the capital value. (State whether
the statement is True or False)
f) Cost
of bonus shares is _____. (Fill in the blank with appropriate word)
g) Government
accounting always follows Double Entry System. (State whether the statement is
True or False)
h) The
difference between the Standard Turnover and the Actual Turnover during the indemnity period is called _____.
(Fill in the blank with appropriate word)
2.
Answer the following: 2x6=12
a) Briefly
explain the meaning of non-performing assets.
b) What
is a Valuation Balance Sheet?
c) Mention
any two features of Investment Accounting.
d) What
is a Loss of Profits Policy?
e) Mention
any two objectives of Government Accounting.
f) What
is Contingency Fund?
3.
(a) Nirvan Bank Ltd. discounted bills of the face value of Rs. 10,00,000 for
Rs. 9,68,000 on 13th January, 2014. Of the total discount, Rs.
12,500 pertains to the next accounting year, i.e., 2014-2015. Show the Journal
entries to be passed at the time of discounting the bills. Also show the
opening entry in the books of the bank at the beginning of the next year. 5
Or
Explain the special features of Bank Book Keeping. 5
(b) The
Revenue Account of a life insurance company shows the Life Assurance Fund on 31st
March, 2015 at Rs.
62,21,310 before taking into account the following items:
|
|
Rs.
|
|
Claims recovered
under reinsurance
Bonus utilized in
reduction of Life Insurance Premium
Interest accrued on
securities
Outstanding premium
Claims intimated but
not admitted
|
12,000
4,500
8,260
5,410
26,500
|
Compute
the correct Life Assurance Fund as on 31st March, 2015, after taking
into account the above omissions. 5
Or
Write a brief note on Revenue Account of a General Insurance
Company. 5
(c)
A fire occurred on 25th April, 2015 in the premises of CARELESS Ltd.
The information available from the books of the company is as follows:
|
|
Rs.
|
|
The value of
inventory on 01.01.2015
Purchases from
01.01.2015 to 25.04.2015
Direct labour
payment
Direct expenses paid
Sales from
01.01.2015 to 25.04.2015
Gross profit ratio
is 20% on sales
Salvaged value of
stock
|
50,000
3,00,000
75,000
50,000
5,00,000
-
10,000
|
Prepare
a statement showing the amount of claim to be lodged in case of loss of
inventory assuming that the whole of inventory is insured. 5
Or
Explain bonus shares and rights shares. 5
(d)
Explain the responsibilities of Government Accounting Standards Advisory Board.
5
Or
Write a note on Consolidated Fund of India. 5
4.
From the following particulars, prepare the Profit & Loss A/c of UCO Bank
Ltd. for the year ending 31st March, 2015:
|
|
Rs.
|
|
Commission Charged
Discount on Bills
Discounted
Director’s and
Auditor’s Fees
Establishment
Expenses
Interest on Loans
Interest on Fixed
Deposits
Interest on Cash
Credit A/c
Sundry Expenses
Interest on Current
A/c
Interest on
Overdraft
Interest on Savings
Bank A/c
Postage and Telegram
Printing and
Advertising
Unexpired Discount
on Bills Discounted
Rent and Taxes
|
7,000
2,10,000
5,000
60,000
2,80,000
2,98,000
2,40,000
2,000
45,000
60,000
72,000
2,000
3,000
55,000
22,000
|
Make
a provision of Rs. 30,000 for doubtful debts; Interest income of Rs. 2,000 on
non-performing assets cannot be recognised as income in Profit & Loss A/c
during the year. 10
Or
Explain
the guidelines issued by the Reserve Bank of India to the banks on the concept
of income recognition. 10
5.
From the following figures, prepare a Revenue A/c in the statutory form for
Life Insurance Corporation of India for the year ended 31st March,
2015: 10
|
|
Rs.
|
|
Claims by death paid
Claims by maturity
paid
Premium
Consideration for
annuities granted
Annuities paid
Bonus paid in cash
Expenses of
management
Commission
Interest, dividend
and rent (net)
Income tax deducted
at source
Surrenders
Bonus in reduction
of premium
Dividend paid to
shareholders
Life Assurance Fund
on 01.04.2014
Outstanding death
claims on 01.04.2014
Outstanding death
claims on 31.03.2015
|
1,42,000
70,200
14,12,100
1,64,000
1,06,900
4,800
76,200
19,140
1,95,700
12,400
26,300
1,800
9,000
30,45,000
22,000
16,000
|
Additional
Information:
a) Increase
in net liability on all contracts in force on 31.03.2015 over the same on
31.03.2014 was Rs. 2,00,000.
b) Transfer
20% of surplus to Shareholders Account and 10% to Catastrophe Reserve.
Or
State the procedure of ascertainment
of profit of a life insurance company and distribution of such profits. 10
6.
Jaipur Investments Ltd. holds 1000, 15% debentures of Rs. 100 each in Udaipur
Industries Ltd. as on 1st April, 2014 at a cost of Rs. 1,05,000.
Interest on investment is payable on 30th June and 31st
December every year. On 1st May, 2014, 500 debentures are purchased
cum-interest at Rs. 53,500. On 1st November, 2014, 600 debentures
are sold ex-interest at Rs. 57,300. On 30th November, 2014, 400
debentures are purchased ex-interest at Rs. 38,400. On 31st
December, 2014, 400 debentures are sold cum-interest at Rs. 55,000.
Prepare
an Investment A/c in the books of Jaipur Investment Ltd. valuing holding on 31st
March, 2015 at cost (applying FIFO method). 10
Or
What is Investment Accounting? Explain the procedure of
recording investment transactions in fixed income-bearing securities. 3+7=10
7.
From the following particulars, ascertain the amount of claim to be lodged in
respect of the consequential loss policy:
a) Fire
occurred on 1st July, 2014 and it affected sales for three months.
b) Sales
for 3 months ending 30th September in 2013 and in 2014 were Rs.
1,50,000 and Rs. 50,000 respectively.
c) The
policy was for Rs. 4,50,000 with a 6 months period of indemnity.
d) Sales
for 12 months ending 30th June, 2014 were Rs. 19,00,000.
e) Accounts
are prepared on 31st December. The net profit for 2013 amounted to
Rs. 2,50,000 after debiting insured standing charges totalling Rs. 1,10,000.
Sales for 2013 were Rs. 18,00,000.
f) A
sum of Rs. 3,500 was spent as additional expenses to mitigate the effect of the
loss. 10
Or
Show the distinction between Government Accounting and
Commercial Accounting. 10
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