Gauhati University Question Papers
ADVANCED FINANCIAL ACCOUNTING (May-June’ 2017)
(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 a Bank.
b) Rebate
on bills discounted for a banking company is an income. (State whether the
statement is true or false.)
c) Commission
of re-insurance ceded is an income. (State whether the statement is true or
false.)
d) Consideration
for annuities granted is _____ for a life insurance company. (Fill in the blank
with appropriate word)
e) Mention
one feature of an Investment Account.
f) Face
Value of the investment is always equal to the Capital Value of the investment.
(State whether the statement is true or false)
g) Government
accounts are generally kept under Single entry system. (State whether the
statement is true or false.)
h) Loss
of Profit Insurance is also known as _____. (Fill in the blank with appropriate
word/words.)
2.
Answer the following: 2x6=12
a) Briefly
explain the meaning of ‘Capital Adequacy’ of a banking company.
b) Mention
two basic features of Government Accounting.
c) Explain
the meaning of ‘re-insurance’ in respect of insurance business.
d) Mention
two objectives of preparing Investment Account.
e) What
is ‘average clause’ in insurance claim?
f) Write
two differences between Government Accounting and Commercial Accounting.
3.
(a) From the following particulars, calculate gross profit on short sales: 5
1) Profit
for 2015 amounted to Rs. 65,000 after debiting standing charges totalling Rs.
75,000.
2) Sales
for 2015 amounted to Rs. 11,20,000.
3) Fire
occurred on June 1, 2016 and affected sales for four months.
4) Sales
for four months ending September 30th, in 2015 and 2016 amounted to
Rs. 3,00,000 and Rs. 40,000 respectively.
5) Accounts
are prepared on 31st December each year.
Or
Explain the accounting treatment of ‘bonus shares’ and ‘right
shares’ in Investment Account.
(b)
From the following information, find out the amount of provision to be made and
to be shown in the Profit and Loss Account of a Commercial Bank as on
31.03.2017: 5
|
|
Rs. (in lakhs)
|
|
Standard Assets
Sub-standard Advance
(unsecured)
Sub-standard
Advances (secured)
Doubtful Advances
(all unsecured) :
Upto one year
Upto three years
More than three
years
Loss Assets
|
4,000
2,000
1,200
900
400
300
500
|
Or
State in brief the books maintained by a banking company. 5
(c)
A Life Insurance Company gets its valuation made once in every three years. The
Life Assurance Fund on 31st March, 2017 amounted to Rs. 40,00,000
before providing Rs. 45,000 for the shareholders’ dividend for the year
2016-17. Its actuarial valuation on 31st March, 2017 disclosed a net
liability of Rs. 36,00,000 under the assurance and annuity contracts. An
interim bonus of Rs. 60,000 was paid to the policy holders during the triennium
ending 31st March, 2017. Prepare a statement showing the amount
available as bonus to policy holders. 5
Or
Point out the main features of accounts of General
Insurance Company. 5
(d)
Briefly describe five principles of Government Accounting. 5
Or
Briefly describe the powers of the Comptroller and Auditor
General of India in connection with audit of accounts. 5
4.
From the following balances, prepare the Profit and Loss Account UCO Bank Ltd.
for the year ended 31.03.2017: 10
|
|
Rs.
|
|
Rent and taxes
Director’s fees
Interest on
overdraft
ATM charges
ATM maintenance
charges
Interest on Current
Accounts
Interest on Loans
Interest on Fixed
Deposit
Commission and
brokerage
Establishment
expenses
Discount on bills
discounted (gross)
Interest on Cash
credit
Interest on Savings
Bank Deposit
Printing and
Stationery
Lockers rent
Depreciation on
Bank’s properties
Sundry charges
Other Information:
1)
Rebate on bills discounted
2)
Bad debt
3)
Provision for taxation to be made at 30%
|
26,000
6,000
3,00,000
1,000
500
84,000
5,18,000
5,50,000
15,000
80,000
4,00,000
4,60,000
1,36,000
5,500
2,000
10,000
3,400
90,000
12,000
|
Or
Explain
the following items in the context of Bank Accounts: 5+5=10
a) Non-banking
assets.
b) Provision
and contingencies.
5.
Nagaon Investment Ltd. furnishes the following details relating to holding in
12% Government Stock: 10
01.01.2016 Opening balance: Face value Rs. 30,000. Cost Rs.
25,000.
01.03.2016 Purchased Rs. 12,000 Stock @ Rs. 91 cum-interest.
01.06.2016 Sold Rs. 8,000 Stock @ Rs. 95 cum-interest.
01.08.2016 Purchased Rs. 6,000 Stock @ Rs. 94 ex-interest.
01.11.2016 Sold Rs. 10,000 Stock @ Rs. 96 ex-interest.
Interest
being payable on 31st March and 30th September each year.
Brokerage and other expenses being 1% in each case. Prepare an Investment
Account in the books of Nagaon Investment Ltd. for the year ending 31st
December, 2016. Apply FIFO method.
Or
Describe the procedure of recording for accounting for
investments in variable income bearing securities. 10
6.
From the following particulars, prepare a Fire Revenue Account of LM Insurance
Co. Ltd. for the year ended 31st March, 2017: 10
|
|
Rs.
|
|
Reserve for
unexpired risk on April 1, 2016
Additional Reserve
on April 1, 2016
Claims paid
Management expenses
Premiums
Interest and
Dividend
Income Tax on
Interest and Dividend
Re-insurance premium
Profit on sale of
Investment
Legal charges
regarding claims
Re-insurance
recoveries
Commission on direct
business
Outstanding claims:
On 31st March, 2017
On 31st March, 2016
|
2,56,000
59,000
3,25,000
1,40,000
5,10,000
90,000
3,500
45,000
10,000
7,200
13,500
52,500
35,000
42,000
|
The
Company calculates its reserve for unexpired risks at 50% of the net premium
each year.
Or
Explain the method followed for assessing the profit of life
insurance business. 10
7. A
fire occurred on the midnight of 30th June, 2016 in premises of M/S
Bad Luck Ltd. From the following figures, calculate the amount of claim to be
lodged with the insurance company for loss of stock: 10
|
|
Rs.
|
|
Stock at cost on
01.01.2015
Stock at cost on
01.01.2016
Purchases during
2015
Purchases from
01.01.2016 to 30.06.2016
Sales during 2015
Sales from
01.01.2016 to 30.06.2016
|
90,000
70,000
4,00,000
6,00,000
6,00,000
8,80,000
|
You
are informed that:
a) In
2016 the cost of purchases has risen by 20% over the levels prevailing in 2015.
b) In
2016 the selling prices have gone up by 10% over the levels prevailing in 2015.
c) Salvaged
value is Rs. 700.
Or
Write in details the System of Financial Administration in
India. 10
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