FRSA Practice Questions for Assignment

1. Explain the Realization concept and Consistency concept with illustrations 2. Write a
Short note on: Bank Reconciliation Statement and Explain the causes for the
differences.
3. “Ratio Analysis is a tool to examine the financial health of business with a view to
make financial results more intelligible” – Explain its advantages and limitations. 4.
Write a short note on: (a) IGAAP (b) IAS

5. “GAAP helps govern the world of accounting according to general rules and
guidelines. It attempts to standardize and regulate the definitions, assumptions,
and methods used in accounting across all industries” – Discuss various
accounting concepts with relevant illustrations.

6. Mr. Sampath is a dealer in furniture. Show the accounting equation for the following
transactions.

(i) Started business with cash Rs.1,00,000

(ii) Deposited cash into bank Rs. 60,000
(iii) Borrowed loan from bank Rs. 25,000
(iv) Bought goods and paid by cheque Rs. 10,000
(v) Cash withdrawn for personal use Rs. 5,000
(vi) Cash withdrawn from bank for office use Rs. 3,000
7. Mr. Pradeep Singh operating his own Departmental Store in Noida and he has
asked you to finalize his account for the year ended 31stMarch,2021. Till date,
he himself has recorded the transactions in books of accounts. As a basis for
audit, Mr. Pradeep furnished you with the following statement.
Particulars Dr. (Rs.) Cr.
(Rs.)

Capital 1,556

Drawings 564

Leasehold premises 750

Sales 2,750

Due from customers 530

Purchases 1,259

Purchase Return 264

Loan from Bank 256

Trade Payables 528

 Trade expenses 700

Cash at bank 226

Bills Payable 100

Salaries and Wages 600

Inventories (1.4.2020) 264

Rent and rates 463

Sales Return 98

Total 5,454 5,454

Required: Prepare the Corrected Trial Balance.

8. The following is the financial data extracted from the ledger balances of M/s.
Suzulon India Limited for theYear ended 31st March 2022.
Particulars Rs. (in Lacs)

Sales Revenue 4,855

Cost of Materials Consumed 2,500

Purchases of Stock-In-Trade 350

Depreciation and Amortization Expense 125

Other Expenses 120

Other Income 225

Changes in Inventories of Finished Goods (300)

Employee Benefits Expense 550

Finance Costs 50

Tax @ 25%

Required: Prepare a Statement of Profit and Loss for the year ended 31.3.2022.
9. TVS Srichakra/TVS Tyres was launched in the year 1982 has rebranded its entire
range in favour of the new TVS Eurogrip brand. The company currently has about
3000 dealers across India, and exports to more than 70 countries. The following is
 the Trial Balance as on 31.3.2022:
Trial Balance as on 31.3.2022
Particulars Debit (Rs.) Credit (Rs.)

Share Capital (50000 shares of 10 each) 5,00,000

Property, Plant and Equipment and Goodwill 7,50,000

Salaries and Wages 20,000

Sales Revenue 3,00,000

Cost of Goods Consumed 2,35,000

Share application money pending allotment 25,000

Short Term Borrowings and Creditors 70,000

Interest 32,000

LT Borrowings from SBI Bank 1,20,000

Other Expenses 20000

Cash, Inventories and Receivables 30,000

Reserves and Surplus 65,000

Govt Grant 30000

PF Contribution 23,000

Total 11,10,00 11,10,000

0

Required: Prepare a Balance Sheet for the year ended 31.3.2022

10.Asian Paints Limited and Berger Paints Limited are Indian multinational paint
companies, headquartered in Mumbai. The companies are engaged in the business
of manufacturing, selling and distribution of paints, coatings, products related to
home decor, bath fittings and providing of related services. The data extracted
from the books of the Asian Paints and Berger Paints for the year 2022:
Particulars Asian Berger
Paints Paints
(Rs. in (Rs. in
Crore) Crore)

Revenue from Operations 18,883 6,077

Cost of Materials Consumed 8,524 3,057

Employee Benefit Expenses 1,128 352

 Finance Costs 71 33

Depreciation And Amortization 697 186

Expenses

Other Expenses 2,812 1,133

Required: Compute the Following Ratios and interpret the same: (a) Net Profit Ratio
and (b) Operating Ratio.

11. Tata Motors Limited provides the following summary of Statement of Profit &
Loss for the previous two years, namely 31st March 2020 and 31st March 2021.
Particulars 31/03/20 31/03/21
(Rs in Crores.) (Rs in Crores.)

Revenue from Operations 47,874 45,311

Cost of Materials Consumed 30,011 26,172

Employee Benefit Expenses 4,213 4,384

Operating Expenses 908 830

Depreciation and Amortization 3,682 3,375

Finance Cost 2,359 1,973

Other Expenses 5,804 7,960

Required: (a). Prepare Trend Analysis for P & L Statement.

(b). Summarize the performance from profitability point of view.

12. TVS Motor Company Limited is an Indian multinational motorcycle company

headquartered at Chennai, India. It is the third largest motorcycle company in India.
The following information’s were extracted from its financial statements:
Particulars 2021 (Rs.) 2022 (Rs.)

Revenue 20,169 18,849

Purchase of 10,192 10,782

Materials

Inventories 1,292 1,188

Debtors 1,546 1,454

Creditors 3,160 3,187

Required: Calculate Activity Ratios for 2022 and interpret the same.
13. MRF India Limited provides the following summary of Statement of Profit & Loss
for the previous twoyears, namely 31st March 2021 and 31st March 2022.
Particulars 31/03/21 31/03/22
(Rs in (Rs in
Crores.) Crores.)

Revenue from Operations 16,129 16,322

Cost of Materials Consumed 8,854 9,462

Employee Benefit Expenses 1,388 1,321

Operating Expenses 359 215

Depreciation and Amortization 1,137 981

Finance Cost 265 274

Other Expenses 2,410 2,838

Required: (a) Prepare a Comparative P & L Statement.

(b) Summarize the performance from the profitability point of view.

14.Venkata Ramana Rao Traders dealing with Rice business from Mangalore. The
following transactionsextracted from his books of accounts.
2021 Transactions Rs.

Mar-01 Business commenced with Cash 80,000

Mar-02 Cash deposited into bank 44,000

Mar-03 Purchased furniture by cheque 12,000

Mar-08 Sold goods for cash 13,000

Mar-12 Purchased goods for cash 5,000

Mar-15 Cheque received from Nithin 9,500

Mar-20 Cash withdrew from bank 2,500

Mar-25 Paid Salary 3,400

Mar-31 Rent paid by cheque 2,600

Required: Prepare Cash and Bank Ledger Accounts.

15. Mr.Ravindra has commenced a travel company in Hubli. During the month of July, a
travel company recorded the following transactions

July -1 Ravindra invested Rs.25,000 to start the business

July -2 He paid Rs.500 as rent for the month
July -3 Purchased a Machinery worth Rs.8,000 for credit
July -4 Purchased Office supplies worth Rs.500
July -5 Paid Advertising Rs.750
July -6 Paid Salaries Rs. 3,000
July -7 Earned trip revenue Rs.10,000 out of which Rs.2,000 got in cash immediately
July -8 Paid Rs.5,000 to the Machinery supplier
July -9 Used Rs.100 worth supplies
July -10 Paid Rs.1,000 miscellaneous expenses through company's credit card
Required: Use Accounting equation to show their effect on Assets, Liabilities and Owner's
Equity.

16.Sun and Moon Departmental Stores records the following transactions in its
journal entries:
Date Transaction Amount (Rs.)

2022 Commenced business with Capital 3,00,000

Apr 1

Apr 5 Cash deposited into Bank 80,000

Apr 9 Goods Purchased for Cash 1,00,000

Apr 12 Goods Sold and Cash received 1,45,000

Apr 18 Goods purchased for credit from Wet & Dry 10,000

Apr 22 Cash withdrawn from business for personal use 15,000

Apr 26 Rent paid by cash 4,500

Apr 28 Salary paid by cheque 25,000

Apr 30 Cheque paid to Wet and Dry full settlement 10,000

Required: Prepare Cash and Bank Ledger for Sun and Moon Departmental Stores

17. From the following ledger balances of Franklin Company, you are required to
prepare a classified Balance Sheet as on March 31,2022
Good Will 3100 Short-term investments 2000

Land 10000 Cash 6600

Equipment 24000 Owner's Capital 34050

Depreciation on Equipment 5000 Mortgage payable 10000

 Investment in shares 5000 Notes Payable (Long-term) 1300

Investment in Bonds 2200 Notes Payable 11000

Inventories 5100 Accounts Payable 2100

Prepaid Insurance 400 Salaries payable 1600

Notes receivable 1000 Interest payable 1350

Accounts receivable 7000

Required: Prepare a Balance Sheet with relevant Notes.

18. Fineotex Chemical Limited is a Chemical Company headquartered in Mumbai,

India. The company is engaged in manufacturing of Specialty chemicals and
Enzymes for Textile and Garment Industry, Water Treatment Industry, Leather
Industry, Construction Industry, Paint Industry Agrochemicals, Adhesives and
others. The following are their financial statement for the year ended 31.3.2021:

Balance Sheet as on 31.3.2021

Equities & Liabilities Rs.

Shareholders’ Funds [10,000 shares] 1,00,000

Non-Current Liabilities 50,000

Current Liabilities 10,000

Total 1,60,000

Assets Rs.

Non-current Assets 1,05,000

Cash and bank 10,000

Debtors 20,000

Stock 18,000

Other Current Assets 7,000

Total 1,60,000

The statement of P&L for the year ended 31.3.2021 is provided below:
Particulars Rs.

Sales [Cash sales being 25% of credit sales] 2,00,000

 Cost of Goods sold 1,20,000

Operating Expenses 50,000

Interest Expenses 10,000

Tax 6,000

Profits after Tax (PAT) 14,000

Required:
Calculate the following ratios and interpret the results:
(a) Inventory Turnover Ratio, (b) Gross Profit Ratio, (c) Earnings per Share, (d)
Return on Equity, (e) Current Ratio and (f) Interest Coverage Ratio. -----------