Maharaja Agrasen Institute of Management Studies

(A unit of Maharaja Agrasen Technical Education Society)

Affiliated to GGSIP University; Recognized u/s 2(f) of UGC
Recognized by Bar Council of India; ISO 9001: 2015 Certified
Institution Maharaja Agrasen Chowk, Sector 22, Rohini, Delhi -
110086, INDIA Tel. Office: 8448186947, 8448186950
www.maims.ac.in

Department of Business Administration

Year: 2021-22
Semester: Ist
Internal Exam

Course/ Subject Code: BBA 105 Course/ Subject Title: Financial Accounting & Analysis
Question 1 is compulsory and carries 4 marks. Attempt any six question from remaining, all carry 6 marks each
Questions CO
1) Explain any two of following in brief: CO1
i. Materiality concept
ii. Limitations of accounting
iii. Accounting standards
iv. Difference between accounting and book keeping

Q2) ‘Accounting is an information system’ Explain the statement with reference to the
need for accounting to : a) Creditors, b) Investors and c) Banks.

Or CO2

Financial accounting is an unnecessary luxury for business establishments". Comment

on this statement?

Q3) Distinguish between any two of the following:

i) Trade Discount and Cash Discount
ii) Financial Accounting and Management Accounting
iii) Diminishing Balance and Straight Line Method of Depreciation
Or CO3

Write short notes on

a. Social Responsibility Accounting
b. HR Accounting

Q4) Journalize the following transactions: Any six

1. Opening balances are Cash Rs. 5,000; Bank Balance Rs. 2,000; Furniture Rs. 1,500;
Stock Rs. 7,500; Debtors Rs. 2,000 and Creditors Rs. 1,800.
2. Purchased goods for cash worth Rs. 2,000 at 10% trade discount.
3. Sold goods to Mahesh worth Rs. 5,000 at 10% trade discount and 10% cash
discount, half the amount received in cash.
4. Paid to Mittal Rs. 5,000 on behalf of Jain.
5. Goods costing Rs. 15,000 were destroyed by fire out of which goods worth Rs.
10,000 were insured
6. Rent due Rs.11,000 but paid Rs. 6,000
7. Purchased machinery Rs.25,000 and Spent Rs. 1,000 as wages for installation of
machinery.
8. Paid from business cash for proprietor’s Life-Insurance Premium Rs. 1,000; Income
Tax Rs. 500.
Or CO7
Journalize any six transactions.
(a) InvestedRs4,00,000 cash and office equipment withRs1,50,000 in a business called
Bobbie Consulting. (b) Purchased land and a small office building. The land was
worthRs1,50,000 and the building worthRs3,50,000. The purchase price paid
withRs2,00,000 cash and a long term note payable forRs3,00,000.
(c) Purchased office supplies on credit forRs12,000.
(d) Bobbie transferred title of motor car to the business. The motor car was
worthRs90,000.
(e) Purchased forRs30,000 additional office equipment on credit.
(f) PaidRs75,00 salary to the office manager.
(g) Provided services to a client and collectedRs30,000
(h) PaidRs4,000 for the month’s utilities.

Q5) Saroj Khanna has been trading for some years in food grains. The following list of
balances has been extracted from her ledger as on 31 March 2020, the end of her most
recent financial year :
Capital 83,887
Sales 2,59,870
Trade creditors 19,840
Returns out 13,407
Provision for bad debts 512
Discount Allowed 2,306
Discount Received 1,750
Purchases Return inwards 1,35,680
Carriage outwards 5,624
Drawings 4,562
Carriage inwards 18,440
Rent, Rates and Insurance 11,830
Electricity 25,973
Postage, Stationary and Telephone 11,010
Advertising 2,410
Salaries and Wages 5,980
Bad Debts 38,521
Cash in hand 2,008
Cash at Bank 534
Stock as at 1 April, 2019 4,440
Trade Debtors 15,654
Fixtures and Fittings at cost 24,500
Provision for depreciation on: 1,02,990
Fixtures and Fittings at 31 March, 2020 63,020
Depreciation 12,074
 Stock as at 31 March, 2020 17,750
The following additional information as on 31 March 2020 is available :
(i) Insurances have been prepaid by Rs 1,120
(ii) Electricity is accrued by Rs 1,360
(iii) Rates have been prepaid by Rs 5,435.
(iv) The provision for bad debts is to be adjusted so that it is 3% of trade
debtors.
Prepare final accounts.
Or CO2
The following items are found in the trial balance of ABC Ltd. on 31st March 2020.
Debtors-Rs 16000
Bad Debts-Rs 300
Provision for bad and Doubtful Debts on 1 April 2019- Rs 700
You are to provide for the bad and doubtful debts @ 5%.
Prepare Bad debts account, Bad and Doubtful debts Provision account, Debtors
Account, Profit and Loss account and Balance sheet after adjustments

Q6) On 1st January, 2006, A Ltd. Purchased a machine for ₹ 2,40,000 and spent ₹
10,000 on its erection. On 1st July, 2006 an additional machinery costing ₹ 1,00,000
was purchased. On 1st July, 2008 the machine purchased on 1st January, 2006 was sold
for ₹ 1,43,000.
Show the Machinery Account for the first three calendar years after charging
depreciation at 5% by the Straight Line Method.
CO4
Or
Explain the need and significance of depreciation? What factors should be considered
for determining amount of depreciation?

Q7) A Ltd. issued 10,000 Equity Shares of Rs 100 each at Rs 120 payable as follows:
Rs 25 on application, Rs 45 on allotment (including premium), Rs 20 on first call; and
Rs 30 on second and final call. 9,000 Equity Shares were applied for and allotted. All
the money was received with the exception of first call and the final call on 200 Equity
Shares held by Ram. These Equity Shares were forfeited. Pass Journal entries to record
the above issue of shares.
Or
CO5
Write short notes on:
a. Surrender of shares
b. Issue of shares at Premium

Q8) XYZ Ltd. issued 5,000; 9% Debentures ofRs100 each. Pass the Journal entries in
each of the following cases:
(i) The debentures are issued at a premium of 10%.
(ii) The debentures are issued as a collateral security to bank against a loan of Rs
4,00,000.
(iii) The debentures are issued at a discount of 5%.
(iv) The debentures are issued to a supplier of machinery costing Rs 4,50,000.
(v) The debentures are issued to a supplier of Machinery costing Rs 6,00,000 as his full
and final payment.
Or

Describe various methods for redemption of Debentures? O6