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FIRST TERM INTERNAL EXAMINATION

I Sem., B.Com (Hons.) 2014
Paper Code : BCOM 101

Subject : Financial Accounting

Date : 07-10-2014

( Batch 2014 2017)

Time: 2 Hours

Maximum Marks: 40

(Attempt any 2 questions and Q1 is compulsory)

1. Write short notes on: (Any 4)
(2.5 * 4 Marks)
i.
Accounting and Other Disciplines
ii.
Difference between Cash Basis and Accrual Basis of Accounting
iii.
Periodicity of Accounting
iv. Differentiate between Accounting Concepts and Conventions
v. IFRS
vi.
XBRL
2. i. Define Accounting Standards. What are its benefits? Explain the procedure of
Accounting Standards in India.
(7.5 Marks)
ii. Record the following transactions in the journal:
Date

(7.5 Marks)

Transactions

2013 Jan 1 Started business with cash Rs. 20,000

2 Deposited into bank Rs. 18,000
3 Purchased machinery for Rs. 10,000 from Jawahar and gave him a cheque for
amount.
15 Paid installation charges of machinery Rs. 200
20 Purchased timber from Naveen of the list price of Rs. 4,000. He allowed 10%
Trade Discount
23 Furniture costing Rs. 1000 was purchased in furnishing the office
25 Sold furniture to Naresh of the list price of Rs. 2,000 and allowed him 5% Trade
Discount
28 Received a cross cheque from Naresh for Rs. 1,860 in full settlement and sent
the cheque to bank.
29 Sent to Naveen in full settlement a cheque for Rs. 3,500
30 Paid wages Rs. 700 and rent Rs. 400

3. i. Define Capital Expenditure. Give its salient features and distinguish between capital

and revenue expenditure.

(7.5 Marks)
ii. State with reasons whether the following are Capital or Revenue Expenditure or
Receipt.
(7.5 Marks)
a. Expenses on a foreign tour for purchasing new machinery.
b. Cartage paid to bring the new machines to factory.
c. Compensation paid for breach of contract to acquire stock-in-trade.
d. Cash received form debtors.
e. Bad debts recovered.
f. Premium received on issue of shares.
g. Repairs necessitated by negligence of an operator of machine.
h. Scrap value of machinery.
4. i. What is depreciation? Why it is needed? Distinguish between SLM and WDV method
of depreciation.
(7.5 Marks)
st
ii. Green Channel purchased a second-hand machine on 1 January, 2010 for Rs.
1,60,000. Overhauling and erection charges amounted to Rs. 40,000. Another machine
was purchased for Rs. 80,000 on 1st July, 2010. On 1st July, 2012, the machine installed
on 1st Jaunuary, 2010 was sold for Rs. 1, 00,000. On the same date, another machine was
purchased for Rs. 30,000 and was installed on 30 th September, 2012. Under the existing
practice, the company provides depreciation @ 10% p.a. on original cost. However, from
the year 2013, it is decided to adopt WDV method and to charge depreciation @ 15% p.a.
This change was to be made with retrospective effect. Prepare Machinery Account in the
books of Green Channel Co. for the year 2010 to 2013.
5. i. The following are the details of a spare part of Sriram Mills:
01.01.2013
01.01.2013
15.01.2013
01.02.2013
15.02.2013
20.02.2013
01.03.2013
15.03.2013

Opening Stock
Purchases
Issued for consumption
Purchases
Issued for consumption
Issued for consumption
Purchases
Issued for consumption

(7.5 Marks)
(7.5 Marks)

Nil
100 units @ Rs. 30 per unit
50 units
200 units @ Rs. 40 per unit
100 units
100 units
150 units @ Rs. 50 per unit
100 units

Required: Find out the Value of Stock, i.e., Closing Stock and Cost of Goods Sold as on
31.03.2013, if the company follows:
(a) First In First Out basis.
(b) Last In First Out basis. (c) Weighted Average basis.
ii. Define Inventory. Explain the two inventory systems in detail.
(7.5 Marks)

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