Home 
About
Blog
Brief Answer Questions:
[10x2=20]What is GAAP?
Define intangible asset.
What do you mean by business entity concept of accounting
Write about cash basis of accounting.
Write any two importance of cheque.<
The financial position of Kalika and Sons on Baisakh 2079 is as below:
| Cash in hand | 100,000 | Creditors | 150,000 |
| Furniture | 200,000 | Accruals | 50,000 |
| Debtors | 100,000 | Bills payable | 80,000 |
| Stock of goods | 70,000 |
In the beginning, Sardul Company had share capital of Rs 100,000 and retained earnings of Rs 50,000.
During the year, the company reported a net income of Rs 30,000 and paid dividends of Rs 20,000.
Additionally, the company issued 1,000 shares @ Rs 100 each.
Required: Statement of change in equity for the year.
The following transaction are given:
a. Goods costing Rs 60,000 was sold at 10% profit.
b. Rent paid Rs 30,000 and outstanding rent was Rs 6,000
Required: Accounting equation
The following particulars are provided to you:
| Profit for the year | Rs 15,000 |
| Loss on revaluation | Rs 18,000 |
| Gain from cash flow hedges | Rs 14,000 |
| Gain on sale of investment | Rs 15,000 |
XYZ Company purchased a car at the cost of Rs 1,040,000 on $1^{st}$ Baisakh 2079. The estimated life of the car is 100,000 KMs with salvage value of Rs 40,000.
During 2079 and 2080, the car was run for 20,000 KM and 18,000 KM respectively.
Required:
Depreciation for the year 2079 and 2080
Short Answer Questions:(Attempt any SIX Questions)
[6x5=30]Explain accounting process or cycle.
Write the meaning of capital expenditure with suitable example.
What is ledger? Why it is needed?
Following are the information of assets of a Company:
| Particulars | 2078 | 2079 |
| Plant and Machinery | 60,000 | 120,000 |
| Building | 100,000 | 200,000 |
| Investment | 70,000 | 150,000 |
| Trademarks | 20,000 | 40,000 |
| Cash and bank | 50,000 | 25,000 |
| Inventory | 100,000 | 50,000 |
| Account Receivable | 40,000 | 20,000 |
The bank statement of a company shows a balance of Rs 50,000 on $30^{th}$ Chaitra 2079.
However the company balance showed a different balance of Rs 30,000.
On the investigation, the following differences were noticed:
* Outstanding cheque Rs 25,000
* Deposit in transit Rs 15,000
* A customer's cheque of Rs 5,000 was return with the bank statement marked NSF.
* Collection of notes receivable for Rs 6,000 and interest on investment Rs 2,000
* Bank charge Rs 1,000 for the service provided by the bank
* Bank paid Rs 10,000 under instruction of a company. However, the company recorded Rs 18,000 in its statement.
Required: Bank reconciliation statement
The following information is provided to you:
| Sales | Rs 500,000 |
| Material consumed | Rs 150,000 |
| Carriage on purchase | Rs 30,000 |
| Administrative expenses | Rs 40,000 |
| Wages and salaries | Rs 60,000 |
| Interest on loan | Rs 20,000 |
| Dividend received | Rs 10,000 |
| Depreciation on equipment | Rs 30,000 |
| Income tax paid | Rs 10,000 |
a. Value added statement and
b. Net profit for the year
Saswat Pvt. Ltd, an automobile service center, acquired machinery on the $1^{st}$ of Baisakh 2077 for Rs 400,000.
They made another machinery purchase for Rs 500,000 on the $1^{st}$ of Kartik 2078. On the $1^{st}$ of Kartik 2079, they sold the first machinery for Rs 280,000 as it was found unusable.
Depreciation is to be accounted for at a rate of 15% per annum using the straight line method.
Required:
Machinery account for the three-year period from 2077 to 2079, assuming that the books are closed on the $31^{st}$ of Ashad each year.
Long Answer Questions:(Attempt any THREE Questions)
[3x10=30]Explain the interconnection between bookkeeping, accounting, and accountancy, illustrating with an appropriate example.
What is accounting standard? Also, explain the needs and limitations of accounting standards.
The Trial balance of ABC Company as on $31^{st}$ December 2022 is given below:
| Particulars | Debit (Rs) | Credit (Rs) |
| Equity share capital | 500,000 | |
| Building | 400,000 | |
| Goodwill | 20,000 | |
| 12% Bank loan | 100,000 | |
| Revenue from operations/sales | 500,000 | |
| Purchase | 200,000 | |
| Salaries expenses | 33,000 | |
| Cash at bank | 37,000 | |
| Investment | 150,000 | |
| Account payable | 70,000 | |
| Account receivable | 50,000 | |
| Commission received | 30,000 | |
| Prepaid insurance | 24,000 | |
| Office rent | 36,000 | |
| Equipment | 200,000 | |
| Promotional expenses | 50,000 | |
| Total | 1,200,000 | 1,200,000 |
* Closing stock Rs 30,000
* Depreciation rate of building 5% and equipment 25%
* Salary to be paid Rs 3,000; Prepaid insurance expired Rs 18,000
Required:
a. Profit and loss statement for the year ending $31^{st}$ December 2022 as per NFRS.
b. Statement of financial position as on $31^{st}$ December 2022 as per NFRS.
The ABC 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 2022
| Particulars | Amount (Rs) |
| Revenue from operation | 1,100,000 |
| Less: Cost of sales | (700,000) |
| Gross margin | 400,000 |
| Add Other income | 60,000 |
| (including interest received Rs.6,000) | |
| Total | 460,000 |
| Less: Distribution expenses | (135,000) |
| Less: Administrative expenses (write-off of goodwill Rs. 10,000 | (200,000) |
| and depreciation of Rs.75,000) | |
| Operating Profit | 125,000 |
| Less: Finance cost | (25,000) |
| Net profit before tax | 100,000 |
| Less: Provision for tax | (25,000) |
| Net profit after tax | 75,000 |
| Less: Dividend paid | (7,500) |
| Retained Earnings | 67,500 |
| Assets | 2021 | 2022 |
| Non-Current Assets: | ||
| Property, plant and equipment | 400,000 | 500,000 |
| Intangible assets (Goodwill) | 40,000 | 30,000 |
| Investments | 140,000 | 190,000 |
| Total Non-Current Assets | 580,000 | 720,000 |
| Current Assets: | ||
| Inventories/Stock | 20,000 | 50,000 |
| Cash and cash equivalents | 50,000 | 40,000 |
| Account receivables | 40,000 | 60,000 |
| Trade and Other receivables | 20,000 | 30,000 |
| Total Current Assets | 130,000 | 180,000 |
| Fictitious Assets | ||
| Total Assets (Total Non-current and Current Assets) | 710,000 | 900,000 |
| Equity: | ||
| Share capital @Rs.100 each | 400,000 | 500,000 |
| Reserve/Retained earnings | 40,000 | 107,500 |
| Non-controlling interests | ||
| Total Equity | 440,000 | 607,500 |
| Liabilities | ||
| Non-Current Liabilities: | ||
| 10% Loans and borrowings | 200,000 | 250,000 |
| Total Non-Current Liabilities | 200,000 | 250,000 |
| Current Liabilities: | ||
| Trade and other payable | 50,000 | 17,500 |
| Income tax liabilities | 25,000 | |
| Provisions | 20,000 | |
| Total Current-Liabilities | 70,000 | 42,500 |
| Total Liabilities (Total Non-current and Current) | 270,000 | 292,500 |
| Total Equity and Total Liabilities | 710,000 | 900,000 |
Comprehensive Answer/Case/Situation Analysis Questions:
[4x5=20]The ABC 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 2022
| Particulars | Amount (Rs). |
| Revenue from operation | 900,000 |
| Less: Cost of sales | (500,000) |
| Gross margin | 400,000 |
| Add Other income | 50,000 |
| Total | 450,000 |
| Less: Distribution expenses | (105,000) |
| Less: Administrative expenses | (235,000) |
| Operating Profit | 110,000 |
| Less: Finance cost | 10,000 |
| Net profit | 100,000 |
| Assets | 2021 | 2022 |
| Non-Current Assets: | ||
| Property, plant and equipment | 400,000 | 500,000 |
| Intangible assets | 40,000 | 30,000 |
| Investments (long term) | 60,000 | 90,000 |
| Total Non-Current Assets | 500,000 | 620,000 |
| Current Assets: | ||
| Inventories/Stock | 40,000 | 50,000 |
| Cash and cash equivalents | 40,000 | 30,000 |
| Account receivables | 50,000 | 60,000 |
| Trade and Other receivables | 40,000 | 55,000 |
| Total Current Assets | 170,000 | 195,000 |
| Fictitious Assets | ||
| Total Assets (Total Non-current and Current Assets) | 670,000 | 815,000 |
| Equity: | ||
| Share capital @Rs.100 each | 400,000 | 500,000 |
| Reserve/Net Profit | 90,000 | 190,000 |
| Non-controlling interests | ||
| Total Equity | 490,000 | 690,000 |
| Liabilities | ||
| Non-Current Liabilities: | ||
| 10% Loans and borrowings | 150,000 | 100,000 |
| Total Non-Current Liabilities | 150,000 | 100,000 |
| Current Liabilities: | ||
| Trade and other payable | 20,000 | 25,000 |
| Income tax liabilities | ||
| Provisions | 10,000 | |
| Total Current-Liabilities | 30,000 | 25,000 |
| Total Liabilities (Total Non-current and Current) | 180,000 | 125,000 |
| Total Equity and Total Liabilities | 670,000 | 815,000 |
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 equity (at least 7%)
h. Return on assets (at least 5%)
i. Average sales period (45 days or less than 45 days)
j. Account receivable turnover ratio (at least 8 times)
k. Comment on the results