BIM (TU) Question Paper 2014 – Financial Accounting | Fourth Semester

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AccountingTribhuvan University | Faculty of Management
BIM / Fourth Semester / ACC 201: Financial Accounting
Year: 2014 (2071)

Full Marks: 60 | Time: 3 Hrs
Candidates are required to give their answer in their own words as far as practicable.

Attempt ALL questions
Group “A” – Brief Answer Questions: [5 X 2 = 10]

1. What are the factors that affect computation of depreciation on fixed assets?
2. What is notes receivables?
3. What are the objectives of creating provisions?
4. A new trading house began its business with Rs. 250,000 initial cash received from its contributors. The trading house purchased goods costing Rs. 80,000 on credit from its suppliers. Later, the trading house paid Rs 79,500 cash in full settlement to its suppliers.
Required: Accounting equation

5. The following errors were detected on verification of books.

Rs 10,000 rent paid to Mr. L. Prasad, the owner of house, were entered in his personal account.
Rs 5,000 paid for installation of plant were debited to Miscellaneous Expenses Account
Require: Entries for rectification

Group “B” – Short Answer Questions: [4 X 5 = 20]

6. Write about accounting and its features.
7. The purchase made by Stationary Shop during Shrawan 2071 are as follows:

Shrawan 12, 2071.
Purchased from Stationary Suppiers
8 dozens of ball pen @ Rs. 15 per pen
5 dozens of pencil @ Rs.600 per dozen
(Less: Trade discount @ 5%)

Shrawan 18, 2071
Purchased from City Stationery Shop
40 sets of Exercise Book @ Rs. 40 each
50 sets of Registered Book @ Rs. 60 each @ 10% trade discount

Shrawan 25, 2071
Purchased from valley Stationary for cash
20 instrument boxes @ Rs. 120 each
25 markers @ Rs. 60 each

Required: (a) Purchase book (b) Purchase account

8. A frim purchased a machine costing Rs 50,000 on January 1, 20X0. The firm paid Rs 15,000 for installation charges of the machine. The machine is expected to run for 10 years after which it will have Rs 5,000 salvage value.
The firm purchased another machine on July 1, 20X0 at a cost of Rs 80,000. The machine purchased on January 1, 20X0 was sold on December 31, 20X2 at a scrap value of Rs 35,000.
The machines depreciate at 10% p.a. in straight-line method. The firm’s financial year ends on December 31 of each year.
Required: machine Account up to 20X3 end.

9. The cash book of a firm reported overdraft of Rs. 20,000 on Shrawan 31. The following differences were noted after verification of cash book and pass book.

A Cheque of Rs 5,000 was issued but not presented for payment.
Two cheques of Rs 6,000 and Rs 3,000 were deposited but the bank collected one cheque of Rs 3,000.
Bank paid telephone bill of Rs 3,000 but yet not informed
Bank charges amounting to Rs 500 was entered twice in the cash book.

Required: Bank Reconciliation Statement

Group “C” – Comprehensive Answer Question: [8+5+4+8+5=30]

10. The financial transaction of a WINDY COMPANY of its first year of operation are as follows:

  • Issued equity shares for Rs 600,000 capital contributed by its investors
  • Bank account was opened by depositing Rs 550,000
  • Purchased machines costing Rs 200,000 from machine supplier and issued cheque for the similar amount
  • Purchased from Trading Concern goods costing Rs 250,000 on credit
  • Goods of the value of Rs.400,000 were supplied to Star Traders
  • Wages amounting to Rs 40,000 and salaries amounting to Rs 25,000 were paid in cheques
  • Received from Star Traders Rs.294,000 and in settlement of Rs 300,000
  • Paid Rs 190,000 to Trading Concern and since the concern allowed Rs 10,000 discount
  • Electricity bills of Rs 18,000 were paid in cash
  • Issued a cheque of Rs 20,000 to trading Concern

Additional information

  • Store ledger shows ending stock value of Rs 40,000
  • The machines depreciate @ 10% p.a.
  • Electicity bill of Rs 5,000 still remaining unpaid
    Required:
    a. Journal entries to bring the above financial transaction into record
    b. Triple column cash book
    c. Purchase, Sales, Customers’ and suppliers’ accounts
    d. Financial Statements by adopting work sheet by reporting cost of goods sold
    e. Cash flows statement for the year base on direct method.

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