AHSEC| CLASS 12| ACCOUNTANCY| SOLVED PAPER - 2017| H.S. 2ND YEAR
2017
ACCOUNTANCY
Full Marks: 100
Pass Marks: 24
Time: Three hours
The figures in the margin indicate full marks for the questions
1. (a) Fill in the blanks with appropriate word/words: 1x4=4
(i) Unrecorded assets when realised are credited to Realisation Account.
(ii) When Partners' Capital Accounts are fixed, their current Accounts are prepared.
(iii) Partner's Loan Account is paid before payment of capital.
(iv) If a partner takes over a liability of the firm, the partner's
capital account is Credited.
(b) Choose the correct alternative: 1x2=2
(i) Financial Statements are
(1) Summarized reports of recorded facts
(2) Detailed reports of the recorded facts
(3) Summarized reports of only cash transactions
(4) None of the above
(ii) Financial Statements of a company include:
(1) Only Balance Sheet
(2) Only Profit and Loss Account
(3) Only Cash Flow Statement
(4) All of the above
(c) State whether the following statements are true or false: 1x2=2
(i) Financial analysis is used only by the creditors. False
(ii) The decreased partner's executor is entitled to a share of
profit for the period upto his/her death. True
2. What is a Capital Fund? 2
Ans:- In
case of non-profit organization capital funds can be considered as its assets
in excess of its liabilities. Any surplus or deficit ascertained from the
Income and Expenditure Account is added (subtracted) to the capital fund. It is
also called accumulated fund.
3. Ram, Shyam and Hari are partners
sharing profits in the ratio of 2:2:1. Hari retires. Ram and Shyam have decided
to share future profits and losses in the ratio of 2:1. Calculate the gaining
ratio. 2
Solution:-
Ram = 2/3 – 2/5 = 10-6/15 = 4/15 (Gain)
Shyam = 1/3 – 2/5 = 3-6/15 = -1/15 (Sacrifice)
4. Mention any two features of
debentures. 2
Ans:- features of debentures are:-
(i) Specified maturity period:
Debentures are issued for a specified period. They are redeemed at the end of
this period.
(ii) Long-term debt instruments:
Debentures are a part of long-term borrowed funds.
5. Assam Tea Ltd. decided to forfeit
1,000 shares of Rs. 20/- each for non-payment of allotment money of Rs. 5/-
each and 1st and final call money of Rs. 2/- each. Give journal entry for the
forfeiture of shares.
Solution:-
Journal Entries
|
Date |
Particular |
L/F |
Amount |
Amount |
|
|
Share capital A/c To Share Allotment A/c To Share 1st Call A/c To Share forfeited A/c (Being 1,000 shares of Rs. 20 each
forfeited for nonpayment allotment of call money) |
|
20,000 |
5,000 2,000 13,000 |
6. Mention any two methods of valuation
of Goodwill. 2
Ans:- two methods of valuation of
goodwill are:-
(i) Average Profit Method: This method
is divided into two subdivisions.
(a) Simple Average: In this process,
goodwill valuation is done by calculating the average profit based on the
number of years, it is called year's purchases. It can be calculated using the
formula. Goodwill = Average Profit x Number of years of purchase.
(b) Weighted Average: Here, the profit
of the previous year is calculated by a specific number of weights. It is used
to obtain the value of goods, which is divided by the total number of weights
to determine the average weight gain. This technique is used when there is a
change in profit and the current year's profit is given more importance. It is
evaluated using the formula. Goodwill = Weighted Average Profit x Number of
years of purchase, where Weighted Average Profit = Sum of Profit multiplied
by Weight / Sum of Weight
(ii) Super Profit Method: It is the
surplus of expected future maintainable profits over normal profits. There are
two methods among these methods.
(a) Purchase method based on number of years: Goodwill is established by valuing super-profits on the basis of a
specific number of purchase years. This can be estimated by applying the
formula given below. Super Profit = Actual or Average Profit – Normal Profit
(b) Annuity Method: Here, the average
premium is taken as the annuity value over a certain number of years. The
discounted amount of super profit calculates the present value of an annuity at
a given interest rate. Here is the formula used.
Goodwill = Super Profit x Discounting Factor
7. What are the sources of Cash Flows as
per AS-3 (Revised)? 3
Ans:- According to Accounting
Standard-3, various activities of cash flow statement are classified into three
categories as follows:-
(i) Cash flows from operating activities: These are the major revenue generating activities and other
activities of the enterprise. The cash flow statement begins with the operating
activities section. Operating activities generally reflect cash generated
and/or paid out as a result of the firm's main business operations. Under US
GAAP, this category includes cash received from customers, payments to
suppliers, payments for operating costs, payments for income taxes, interest
received or dividends, and payments for periodic interest costs.
(ii) Investing activities: These are the
acquisition and disposal of long-term assets, other investments not included in
cash equivalents. Cash flows from investing activities include non-current
capital assets used in the firm's operations, such as property, plant,
equipment (PP&E) and intangible assets. When a company invests in new
long-term capacity through PP&E or by acquiring another company, investment
is an outflow of cash from investing activities. Disposal of these types of
assets for cash generates inflows.
(iii) Financial activities: These are
those activities which result in changes in the size and structure of owner's
capital and borrowings of the enterprise. Cash flows from financing activities
are those that occur between a firm and its investors. These include both the
equity investments of stockholders (owners) and the debts of bondholders and
other creditors. When the company issues new shares, it records cash inflow
from the financing, and when it repurchases shares, pays dividends or pays off
debt, it records cash outflow.
Or
From the following details, calculate Current Ratio: 3
Sundry Debtors - 1,00,000/-
Stock - 8,000/-
Prepaid Expenses - 6,000/-
Sundry Creditors - 8,000/-
Bank Overdraft - 2,000/-
Interest Payable - 2,000/-
Debentures - 50,000/-
Buildings - 1,00,000/-
Solution:-
Current Ratio = Current Assets/ Current liabilities
= Debtor + Stock + Prepaid
Expenses/ Creditor + Bank overdraft + Interest payable
= 10,000 + 8,000 + 6,000/
8,000 + 2,000 + 2,000
= 24,000/ 12,000
= 2:1
8. Explain the meaning of financial
statements. 3
Ans:-
Financial statements are the end product of an accounting process, it provides
a true picture of a company's performance over a time period and such
statements are used by various users of accounting information. These
statements are prepared annually.
A financial statement is a document that summarizes the financial
position of an individual or business, including assets, liabilities, and net
worth. It is used to assess the financial health of an individual or business.
Financial statements are basically reports that show financial and
accounting information related to businesses. The management of a company uses
it to communicate with external stakeholders. These include shareholders, tax
authorities, regulatory bodies, investors, creditors etc.
These statements basically include the following reports:-
(i) Balance sheet
(ii) Profit and loss statement
(iii) Statement of cash flows
(iv) Income sheet
Or
What is trend analysis? Mention its usefulness. 1+2=3
Ans:- Trend analysis presents each
financial item as a percentage for each year. These trend analyzes not only
help accounting users to assess the financial performance of the business but
also help them form an opinion about various trends and predict the future
trend of the business.
Usefulness and importance of trend analysis:-
Following are the various importance of trend analysis:-
(i) Help in forecasting: Trends provided
by trend analysis help accounting users to forecast future trends of the
business.
(ii) In percentage terms: Trend is
expressed as a percentage. Analyzing percentage data is easier and less time
consuming.
(iii) User-friendly: Since trends are
expressed in percentage figures, it is the most popular financial analysis to
analyze the financial performance and operational efficiency of a company. In
other words, one does not need to have deep and sophisticated knowledge of
accounting to analyze these percentage trends.
(iv) Presents a comprehensive picture: Trend analysis presents a comprehensive picture about the financial
performance, feasibility and operational efficiency of a business. Generally,
companies prefer to present their financial data as percentage trends over a 5-
or 10-year period.
9. What is Common Size Statement? What
do they show? 1+2=3
Ans:- Common
size statement is a form of analysis and interpretation of financial
statements. This is also known as vertical analysis. This method analyzes
financial statements by considering each line item as a percentage of the base
amount for that particular accounting period.
Common size statements are not financial ratios of any kind, but
rather a simple way of expressing financial statements, making those statements
easier to analyze.
Common size specifications are always expressed as a percentage.
Therefore, such statements are also called 100 percent statements or component
percent statements because all the individual items are taken as percentages of
100.
Or
Explain any one Method of Valuation of Goodwill. 3
Ans:- methods of valuation of goodwill are:-
(i) Average Profit Method: This method
is divided into two subdivisions.
(a) Simple Average: In this process,
goodwill valuation is done by calculating the average profit based on the
number of years, it is called year's purchases. It can be calculated using the
formula. Goodwill = Average Profit x Number of years of purchase.
(b) Weighted Average: Here, the profit
of the previous year is calculated by a specific number of weights. It is used
to obtain the value of goods, which is divided by the total number of weights
to determine the average weight gain. This technique is used when there is a
change in profit and the current year's profit is given more importance. It is
evaluated using the formula. Goodwill = Weighted Average Profit x Number of
years of purchase, where Weighted Average Profit = Sum of Profit multiplied
by Weight / Sum of Weight
10. State any three features of Receipts
and Payments Account.
Ans:- Following are the features of
Receipt and Payment Account:-
(i) Nature: It is a genuine account.
This is the short form of cash book.
(ii) Nature of transactions: It records
only cash and bank transactions. Apart from cash and bank transactions other
transactions like depreciation, loss/profit on sale of assets etc. are not
recorded in this account.
(iii) No distinction between capital and revenue items: It records all cash and bank receipts and payments of both capital
and revenue nature.
Or
Explain the meaning of Fund-based Accounting. 3
Ans:- Fund based accounting is used in non-profit
organizations to record transactions related to certain items. In such cases a
fund is created in the books of accounts and all the revenue related to the
item for which we have created the fund is added to the fund and all the
related expenses are deducted from the fund. Like building fund, tournament
fund etc.
The concept of fund-based accounting refers to the accounting
whereby receipts and income relating to a particular fund are credited to that
particular fund and payments and expenditure are debited to it. Such funds are
created for specific purposes like building funds, library funds, sports funds
and prize funds etc.
11. Mention any three limitations of
Financial Statements. 1x3=3
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