Brief Answer Questions:
[10 × 2 = 20]Mention the importance of accounting in decision-making.
What is intangible asset?
What do you mean by going concern concept?
What are the different types of cheques?
Write about the meaning of NFRS.
The following transaction is given:
Started business with Cash of Rs 12,000, and stock of Rs 20,000.
Purchased goods for Rs 10,000 and Cash paid only Rs 4,000.
Commission received Rs 5,000.
Required: Accounting Equation.
The following information are provided to you:
Profit for the year Rs 10,000
Loss on revaluation Rs 40,000
Gain from cash flow hedges Rs 30,000
Gain on sales of investment Rs 50,000
Actual loss on pension schemes Rs 20,000
Required: Statement of other comprehensive income as per NFRS.
You are given the following information about the Company balance sheet:
| Account payable | 120,000 | Outstanding expenses | 20,000 |
| Account receivable | 170,000 | Inventory | 150,000 |
| Bank loan | 100,000 | Cash in hand | 40,000 |
| Plant and machinery | 300,000 | Prepaid expenses | 25,000 |
Required: Opening entries showing capital account.
Nepal Yatayat company purchased a Minibus at the cost of Rs 880,000 on Baishak 2080. The estimated life of the Minibus is 160,000 KMs with a salvage value of Rs 80,000. During 2080 and 2081 the minibus was run for 15,000 KM and 21,000 KM respectively.
Required: Depreciation rate and Depreciation for the years 2080 and 2081.
The following are revenue and capital items given below:
The repair cost of a second-hand bike purchased
The whitewash of an old building
Insurance premium paid
Carriage on goods purchase
Required: Find out the revenue and capital Expenditure.
Short Answer Questions: (Attempt any SIX Questions)
[6 × 5 = 30]What is the double-entry system of Book-keeping? Explain the debit and credit rules.
Differentiate between accounting and accountancy.
What is a financial statement? Why is it prepared?
The following are the information of the asset of the company:
| Particulars | 2080 | 2081 |
| Plant and machinery | 300,000 | 180,000 |
| Land and building | 225,000 | 450,000 |
| Investment | 100,000 | 250,000 |
| Trademarks | 50,000 | 25,000 |
| Cash and bank | 70,000 | 35,000 |
| Inventory | 60,000 | 90,000 |
| Account receivable | 50,000 | 40,000 |
Required: Comparative or Horizontal Analysis.
The bank statement of a company showed a balance of Rs 42,000 on 31st Ashad 2081. However, the company balance showed a different balance of Rs 38,000. On the investigation, the following differences were noticed:
Outstanding cheque Rs 11,000
Deposit in transit Rs 12,000
A customer's cheque of Rs 4,000 was returned with the bank statement marked NSF.
Collection of notes receivable for Rs 5,000 and interest on investment Rs 2,000
Bank charge Rs 2,000 for the service provided by the bank
A cheque of Rs 10,000 was paid by the bank. However, the company recorded Rs 16,000 in its statement.
Required: Bank reconciliation statement.
The following information is provided to you:
| Sales | Rs 700,000 |
| Material purchased | Rs 250,000 |
| Carriage on purchased | Rs 15,000 |
| Store supplies | Rs 20,000 |
| Administrative expenses | Rs 30,000 |
| Selling expenses | Rs 50,000 |
| Wages and salary | Rs 40,000 |
| Interest on loan | Rs 10,000 |
| Dividend received | Rs 30,000 |
| Income tax paid | Rs 15,000 |
| Depreciation on furniture | Rs 25,000 |
| Dividend paid | Rs 20,000 |
Required: a. Value-added statement b. Net profit for the year
The following information is given below:
| 1st July 2022 | Machinery purchased Rs 400,000 |
| 30th June 2023 | Additional machinery purchased Rs 500,000 |
| 30th June 2025 | Machinery purchased on 1st July was sold for Rs 300,000 |
Additional information:
Depreciation is to be provided at the rate of 15% per annum on the basis of the straight line method.
Accounts are closed on 31st December, each year
Required: Machinery accounts from 2022 to 2025.
Long Answer Questions:(Attempt any THREE Questions)
[3 × 10 = 30]What is financial accounting? Write the features and importance of financial accounting.
What is an accounting standard? Also, explain the needs and limitations of accounting standards. [4+6]
The trial balance of B & B company as of 31st December 2025 is given below:
| Particulars | Debit (Rs.) | Credit (Rs.) |
| Common stock | - | 350,000 |
| Building | 200,000 | - |
| Goodwill | 50,000 | - |
| Plant and equipment | 300,000 | - |
| 10% bank loan | - | 120,000 |
| Revenue from operation | - | 600,000 |
| Purchases | 300,000 | - |
| Wages | 20,000 | - |
| Salaries | 23,000 | - |
| Cash at bank | 20,000 | - |
| 10% investment | 100,000 | - |
| Account payable | - | 90,000 |
| Account receivable | 60,000 | - |
| Commission received | - | 10,000 |
| Prepaid insurance | 22,000 | - |
| Office rent | 38,000 | - |
| Interest on investment | - | 5,000 |
| Promotional expenses | 30,000 | - |
| Interest on loan | 12,000 | - |
| Total | 1,175,000 | 1,175,000 |
Adjustment:
Closing stock during the year Rs 40,000.
Depreciation of building was 5% and plant and equipment was 25% during the year.
Salary to be paid Rs 7,000.
Prepaid insurance expired during the year Rs 600.
Required:
a. Profit and Loss Statement for the year ending 31st December as per NFRS.
b. Statement of Financial Position as on 31st December as per NFRS.
The XYZ company statement of profit and loss account and statement of financial position for two years have been given below:
Statement of profit and loss for the year 2025
| Particulars | Amount (Rs.) |
| Revenue from operation | 4,00,000 |
| Cost of sales | (250,000) |
| Gross margin/profit | 150,000 |
| Other income (including interest received Rs 4000) | 13,000 |
| Total revenue | 163,000 |
| Distribution expenses | (10,000) |
| Administrative expenses (including depreciation on equipment of Rs 30,000, and write-off of goodwill of Rs 10,000) | (80,000) |
| Operating profit | 73,000 |
| Financial cost | (15,000) |
| Net profit before profit | 58,000 |
| Provision for tax | (21,250) |
| Net profit after profit | 36,750 |
| Dividend paid | (5,000) |
| Retained earning | 31,750 |
Statement of the financial position of a company for 2023 and 2025
| Assets | 2023 | 2025 |
| Non-current assets: | ||
| Property, plant, and equipment | 300,000 | 400,000 |
| Intangible assets (Goodwill) | 60,000 | 50,000 |
| Investment | 90,000 | 140,000 |
| Total Non-current Assets | 450,000 | 590,000 |
| Current Assets: | ||
| Inventories / Stock | 40,000 | 50,000 |
| Cash and cash equivalents | 30,000 | 70,000 |
| Account receivable | 90,000 | 70,000 |
| Trade and Other receivable | 10,000 | 20,000 |
| Total current assets | 170,000 | 210,000 |
| Fictitious assets | - | - |
| Total assets | 620,000 | 800,000 |
| Equity: | ||
| Share capital @Rs.100 each | 400,000 | 600,000 |
| Reserve/Retained earnings | 40,000 | 71,750 |
| Non-controlling interest | - | - |
| Total Equity | 440,000 | 671,750 |
| Liabilities: | ||
| Non-current liabilities: | ||
| 10% Loan and Borrowing | 100,000 | 75,000 |
| Total non-current liabilities | 100,000 | 75,000 |
| Current liabilities: | ||
| Trade and Other payable | 60,000 | 32,000 |
| Income tax payable | - | 21,250 |
| Provision | 20,000 | - |
| Total current liabilities | 80,000 | 53,250 |
| Total liabilities | 180,000 | 128,250 |
| Total Equity and Liabilities | 620,000 | 800,000 |
Required: Statement of Cash Flow under NFRS [4+2+2+2]
Comprehensive Answer/ Case / Situation Analysis Questions:
[20]The XYZ Company's Statement of Profit and Loss account and Statement of Financial Position for two years have been given below:
Statement of Profit and Loss for the year 2080
| Particulars | Amount (Rs.) |
| Revenue from operation | 1,000,000 |
| Cost of sales | (600,000) |
| Gross profit | 400,000 |
| Other income | 40,000 |
| Total | 440,000 |
| Distribution expenses | (140,000) |
| Administrative expenses | (210,000) |
| Operating profit | 90,000 |
| Financial cost | (7,500) |
| Net profit | 82,500 |
Statement of the financial position of a company for 2080 and 2081
| Assets | 2080 | 2081 |
| Non-current assets: | ||
| Property, plant, and equipment | 400,000 | 500,000 |
| Intangible assets | 30,000 | 20,000 |
| Investment (long-term) | 80,000 | 105,000 |
| Total Non-current Assets | 510,000 | 625,000 |
| Current Assets: | ||
| Inventories / Stock | 60,000 | 50,000 |
| Cash and cash equivalents | 30,000 | 70,000 |
| Account receivable | 40,000 | 30,000 |
| Trade and Other receivable | 30,000 | 40,000 |
| Total current assets | 160,000 | 190,000 |
| Fictitious assets | - | - |
| Total assets | 670,000 | 815,000 |
| Equity: | ||
| Share capital @Rs.100 each | 400,000 | 450,000 |
| Reserve/Retained earnings | 90,000 | 172,500 |
| Non-controlling interest | - | - |
| Total Equity | 490,000 | 622,500 |
| Liabilities: | ||
| Non-current liabilities: | ||
| 10% Loan and Borrowing | 120,000 | 150,000 |
| Total non-current liabilities | 120,000 | 150,000 |
| Current liabilities: | ||
| Trade and Other payable | 30,000 | 42,500 |
| Income tax payable | - | - |
| Provision | 30,000 | - |
| Total current liabilities | 60,000 | 42,500 |
| Total liabilities | 180,000 | 192,500 |
| Total Equity and Liabilities | 670,000 | 815,000 |
Required: Financial analysis for 2081:
a. Current ratio (2:1)
b. Acid test ratio (1:1)
c. Debt to total capital ratio (less than 40%)
d. Stock turnover ratio (at least 8 times)
e. Total assets turnover ratio (more than 1 time)
f. Net profit margin (at least 12%)
g. Return on assets (at least 5%)
h. Return on equity (at least 7%)
i. Average sales period (45 days or less than 45 days)
j. Account receivable turnover ratio (at least 8 times)
k. Comment on the above result.