Section - A (Compulsory)

1. You are required to answer all the questions. Each

question is followed by 4 answer choices and only one is
correct. You are required to select the choice which
according to you represents the correct answer.
2x15=30
(i) The construction of a factory building was completed
on 1st April, 2023, at a cost of T 56,50,OOO. A sum of Z
45,000 had been incurred for the construction of the
temporary huts for storing building materials.
Insurance premium of T 56,500 paid on 5th April, 2023.
The capital and revenue expenditure would be
(A) Capital Expenditure T 57,51,500 and Revenue
Expenditure T nil
(B) Capital Expenditure T 56,95,OOO and Revenue
EKpenditure T 56,500
(C) Capital Expenditure T 56,50,OOO and Revenue
Expenditure T 1,01,500
(D) Capital Expenditure 1 57,23,250 and Revenue
Expenditure T 28,250
(ii) If a receipt of T 21,500 for interest has been recorded in the
books as payment of
Y 12,500 for interest, the profits would show—
(A) an increase of T 9,000
(B) an increase of Z 34,000
(C) a decrease of 1 9,000
(D) a decrease of Z 34,000
 (iii) Shiva received a bill for Z 58,550 from Vijay and
endorsed it in favour of Makkhii. On the date of
maturity, the bill was dishonoured and for it noting
charges of Z 450 paid by holder. In this case Shiva will
debit—
(A) Vijay by T 58,550
(B) Vijay by Z 58,100
(C) Vijay by 1 59,000
(D) Noting charges account by T 450
2 P
9 l
2 e
5 a
3 s
e

T
u
r
n

O
v
e
r
 (2)

(iv) Joint Venture with XYZ Account, is opened

(A) when separate set of books is maintained for joint venture.
(B) when not maintaining separate set of books for joint venture but
every Co-ventures keepg record his own transactions only.
(C) when not maintaining separate set of books for joint venture but
every Co-ventures keeps complete record of all the transactions.
(D) In all the above situations, (A), (B) and (C).
(v) On 31st March, 2023, the debtors of a trader are T 6,20,000 before writing
off the bad debts of T 15,000. The provision for bad and doubtful debts is
5% on debtors and provision for discount on debtors is 2 . The amount of
provision for discount on debtors is
(A) Z 12,400
(B) Z 12,100
(C) T 11,495
(D) Z 11.780
(vi) Salaries paid during the year 2022-23 were 1 4,70,000. Salaries outstanding
on 01.04.2022 were T 65,000 and it was also outstanding for three months
on 31.03.2023. The amount of salaries shown in Income and Expenditure
Account will be—
(A) T 5,35,000
(B) Z 4,00,000
(C) Z 5,40,000
(D) T 4,05,000
Profit before interest on loan and manager's commission were 1 4,25,250.
Interest on loan is Z 42,000. If the manager is entitled a commission of 5%
on net profit after charging Such commission then manager's commission
will be-
(A} Z 20,250
(B) T 2l,2ó2.50
(C) T 19,1ò2.50
(D) Z 18,250
 (3)

At the end of the accounting year, advances from customers are

(A) debited to Profit and Loss account.

(B) credited to Profit and Loss account.

(C) shown in the Balance Sheet as assets.

(D) shown in Balance Sheet as liabilities.

On 31.03.2023 the debtors of a trader are Z 7,50,000 before writing off the bad
debts of T 25,000.The provision for bad and doubtful debts is SP on debtors
and provision for discount on debtors is 2&o. The amount of net debtors
shown in the balance sheet as at 31.03.2023, will be

(A) T 6,74,250

(B) Z 6,74,975

(C) Z 6,98,250

(D) Z 6,97,500

(x) Following information is given for the year ending 31.03.2023:

Salaries outstanding and paid in advance on 01.04.2022 were Z 33000 and T
22,0fD respectively.
Salaries paid during the year 2022-2023 Z 3,30,000.
Salaries paid in advance and outstanding on 31.03.2023 were T 16,500 and T
44,000 respectively.
The amount of salaries to be shown in Income and Expenditure Account for
the year ending 31.03.2023, will be
(A) Z 3,46,500
(B) T 2,91,500

(C) T 3,13,500
(D) Z 3,68,500
 (4}

Opening
(xi) Stock,
Closing Stock, Sales Return and Sales 7 2,80,0 D; ¥
T 45,000
3,20,000; and T 24,20,000 respectively. If rate of gross profit is 25a
on cost, then gross
QfO t W(

(A) T 6,05,000

(B) T 4,75,000

(C) T 4,84,000

(D) T 5,93,750

(xü) Only items

of revenue nature pertaining to the period of accounts are shown in
the
(A) Receipts and Payments Account.

(B) Ineome and Expenditure Account.

(C) Both (A) and (B)

(D) Balance Sheet.

(xiü) Excess of Hire-purchase price over the cash price is known as

(A) Depreciation
(B) Penalty

(C) Interest

(D) lastalment

(xiv) AS-10 is applicable to which one of the following assets?

(A) Construction Contracte

(B) Live stock

(C) Plantation
(D) Property, Plant and Bquipment
 (5)
202$

(xv) Goods costing Z 2,34,000 are sent to the Branch at a invoice price of Z 3,12,000. The
loading od Invoice price is
(A) 20&
(B) 25&
(C} 33.33&
(D) 28&
Secdon - B
Answer anyJve questions out of seven questions given. Each question carries 14 marks.
2. (a) Oa 30th September, 2023, Shri Sachin Chatte i's Cash Book shows that he had an
overdraft of T 400 on his current account at the baak. On checking the Cash
Book with Bank Statement, you find the following :
(i) Cheques isaued T 1,500 had been entered in the Cash Book but had been presented
into Bank Z 1,IXI0.
Dividend amounting to T 150 had been directly deposited into baak.
Baak had credited interest on Bank Deposit ofT 170 but the same had been
debited
ia the CasfiBook aa 6th October, 2023.
(: › Bank charge of Z J0 shown in the bank statement
but the same had not been
entered in the Cash Book.
A cheque is issued to N.K. Chatteqee for T 50
(v)
was replaced when out of date. It wan
entered in the Cash Book. No other
entry being made. Both the cheques were
(«)
inch in the tots of unpresented cheques
(vii) shown above.
Tire reccipt side of the flash Book had been
(viii) overcast by T 2D.
A cheque for T 20 had been entered as a receipt
in the Cash Book instead of as a
payment.
A cheque drawn for T 8 had been incorrectly
entered in the Cash Book as Z 88.

You are required to prepare-

(I) Adjusted Cash Book; and
(B) Bank Reconciliation Statement as on 30.9.2023. 7
 (6)

(b) From the following details, prepare an Adjusted Trial Balance as at 31-3-23.7

Purchase 65,000 Sundry Creditors 35,000

Carriage Inward i,00O Plant and i0,000
Machinery
Wages 6,000 Buildings 5,000
Salaries 10,000 Furniture s,ooo
Rent, rates and 1,800 Bills Receivable 10,000
taxes
IflStlf6RCfl 1,500 Sundry Debtors 40.000
Interest paid 1,000 Capital 66,000
SalflS 95,000 Sundry Expenses 5,000
Cash and Bank 21,500 Opening Stock 21,000
Bills Payable 5,800

Notes.

(i) Salaries and wages due to be paid Z 2,000 and Z 1,000 respectively.

(ii) Insurance was paid to the extent of T 300 advance.

(iii) A sum of 1500 to be written off as bad debt out of sundry debtors and a
provision of 5% to be created for doubtful debts.

(iv) Sundry expenses include T 2,000 spent for the personal purpose of the
proprietor.

(v) Sales for the period include 1500 worth of goods (cost price) taken by
the proprietor for personal consumption. He has also taken goods
wonh T 1,000 (cost price) for personal consumption which has not been
recorded in the books.

(vi) Depreciation to be provided as follows:

Plant and 10%

 Machinery
Buildings 5%

Furniture 10%

(v Closing Stock T 20,000

ii)
 (7) £'—6(fi’A)
Syllabus 2022
3. (a) On 1st July, 2023, G drew a bill for Z
80,000 for 3 months on H for mutual
accommodation. He accepted the bill of
exchange. G had purchased goods worth Z
81,000 from J on the same date. G endorsed
H's acceptance to I in full settlement. On 1st
September, 2023 J purchased goods worth T
90,000 from H. J endorsed the bill of
(b) exchange received thorn G to H and paid 7
9,000 in full settlement of the amount due to
H.
On 1st October, 2023 H purchased goods
worth T 1,00,000 from G. H paid the
amount due to G by cheque. Give the
necessary Journal entries in the book» of H.
Lease Ltd. has initiated a lease for four
years in respect of a vehicle costing
120,00,000 with expected useful life of 5
years. The asset would revert to the
company under the lease agreement. The
other information available in respect of
lease agreement is:
(i) The unguaranteed residual value of the
equipment after the expiry of the lease
term is estimated at 1 2,50,000.
(ii) The implicit rate of interest is 10To.
(iii) The annual payments have been
determined in such a way that the
present value of the lease payment plus
the residual value is equal to the cost of
asset.
Ascertain in the hand of Lease Ltd.
(I) The annual lease payment. Note, (i) PV of residual value for 4th year H 10a
(II) The unearned finance income. is 0.683.
(ii) PV factor for 4 years H 10a is 3.16987.
4. Rajesh does not maintain proper bpoks of account. From the following
particulars prepare the Trading and Profit and LOSS ACcount for the year
ended 31st March, 2023 and the Balance Sheet as on that date:
14
Particulars 31st 31st
March, March,
2022(
#
Debtors 90,000 1,25,00
0
Stock 49000 66,000
Furniture 5A0 7,500
Creditors 30,000 22,500
 (8)

Cash collected from Debtors 3,04,O

OD
Cash paid to Creditors 2,20,00
0
8
Rent
Office Expenses 9,000
Drawings is,00
0
Additional Capital introduced 10,000
Cash Sales 7,500
Cash Purchases 25,000
Discount Received 3,500
Discount Allowed i,5a
Returns Inward 5,tO0
Returns Outward 4,000
Bad Debt i,000
Summary of other transactions is as follows:

"

He had 7 25,000 as Cash Balance in the beginning of the year.

5. A and B were carrying on business as equal partners. The firm's Balance Sheet as
on 31st December, 2022 was as follows:
 Liabilities T AsseS
Capital Accounts: Fixed Assets :
A 1,38,000 Leaseho
B ld
Bank Loan 1,52,000 Buildin
Current Liabilities : «i.ooo g
Sundry Creditors
Bills Payable 80,000
70,000 Plant
and
io,ooo
Machin
ery
1,80,00
0
Furnitur
e
00
Current Assets :
Stock

60,000
Book Debts

68,000
Cash at Bank 2,000
4,10,00fl 4,10,000
The business was carried on till 30th June, 2023. The partners withdrew in equal
amounts half the amount of profits made during the period of six months (from
January to June, 2023) after charging depreciation on
Leasehold Building — 10a per annum
Plant and Machinery — 10a per annum
Furniture — 10&perannum
 (s

Meanwhile Sunday Creditors were reduced by T 15,iXD. Bills Payable by T

2,500 and Bank Loan by 1 20,000. On 30th June stock was valued at 1 7,09,000,
Book Debts were Z 75,0 D md C.ash at Bank was Z 2,500. On 30th June, 2023
the firm sold fire business to a limited company for T 4,00,000 payable in Equity
Shares of 1 10 each.

The partners decided to take shares in the profit sharing ratio, any difference to be settled
in

You are req d to prepare :

(I} Statement of Net AssfltB hS OR 3dth June, 2023;

(D) Statement of Profit earned during the period six months ended on 30.6.2023;

(III) Realisation Account;

Capital Accounts of the partners. 14

6. (a)
X Ltd. has a retail branch at Purr. Goods
are sold at 60% profit on cost. The
wholesale price is cost plus 40a. Goods
areinvoicedfromDe1hiH.O.to branch at
Purr at wholesale price. From the
following particulars ascertain the profit
made at H.O. and branch for the year
ended 31st March, 2023.
B.O.

Stock on 01.04.2022 7,00,000

Purchase 42,00,00
 0
Goods sent to Branch (at invoice 15,12,00
price) 0
Sales 42,84,00
0
Stock on 31.03.2023 1b,80,00
0
Expenses 80,000
Sales at H.O. are made only on wholesale
basis and that at branch only to
customers at retail price.
Stock at H.O. is valued at invoice price.
P—6(FA) ( 10 )
5yllabuc 2022

(b) On 1st April, 2023 the stock of Mr. Hariprasad was destroyed by fire but sufficient
records were saved from which following particulars were ascertained:
Stock at cost 1 Jan. 2022 1,47,000
Stock at cost 31 Dec. 2022 1,59,200
Purchases year ended 31 Dec. 2022 7,96,000
Sales year ended 31st Dec. 2022 9,74,000
Purchases 1.1.2023 to 31.3.2023 3,24,000
Sales 1,1.2023 to 31.3.2023 4,62,400
In valuing the stock for the balance Sheet at
31st Dec. 2022 T 4,600 had been written off
on certain stock which was a poor selling line
having the cost 1 13,800. A portion of these
goods were sold in March, 2023 at a loss of Z
500 on original cost of T 6,900. The
remainder of this stock was now estimated to
be worth its original cost. Subject to the above
exception gross profit had remained at a
7. (a) uniform rate throughout the year.
The value of stock salvaged was T 11,600.
The policy was for 1 1,00,000 and was
subject to average clause.
Work out the amount of the claim of loss by fire.

7
ABC Ltd. is setting up a new refinery outside
tb)
the city limits. In order to facilitate the
construction of the refinery and its operations,
ABC Ltd. is required to incur expenditure
ontheconstniction/developmentof railway
siding, road and bridge. Though ABC Ltd.
incurs (or contributes to) the expenditure on
the construction/development, it will not have
ownership rights on these items and they are
also available for use to other entities and
public at large. Whether ABC Ltd. can
capitalise expenditure incurred on these items
as property, plant and equipment (PPE)? lf
yes, how should these items be depreciated
and presented in the financial statements of
ABC Ltd.?
7
ABC Ltd. has received the following grants
from the Government of Delhi for its newly
started pharmaceutical business:
(i) 20 lakh received for immediate start-up of
business without any condition.
(ii) € 50 lakh received for research and

development of drugs required for the

treatment
of cardiovascular diseases with following
conditions:
(I) That drugs should be available to the
public at 20a cheaper from current
market price; and
(II) The drugs should be in accordance
with quality prescribed
by the
World Health Organisation [WHO).
(iii) Two acres of land received for set up of

plant.

(iv) 1 2 lakh received for purchase of

machinery of Z 10 lakh. Usefiil life of
machinery is 5 years. Depreciation on
this machinery is to be charged on
straight-line basis.
How should ABC Ltd. recognize the government
grants in its books of accounts? 7
 ( 1I ) P-6(yA)
3 Ilabus 2022

8. {a) ‘A’ and ‘B’ were partners in a firm and their capitals were T 5,00,000 and T
3,00,000 respectively on 1st April, 2022. Profit for the year ending 31st
March, 2023 amounted to Z 2,10,000. Drawings of partners were T
1,00,000 and T 60,000 respectively. It was observed that following errors
were committed while distributing the profit:
(i) Manager's commission B 10% on the profits before charging such
commission was omitted.
(ii) Closing Inventory was valued at Z 70,000 whereas its net realisable value (market
value) was Z 50,000.
. tiii) Outstanding salary of employees T 40,000 were not recorded.
(iv) ‘A’ had given a loan off 1,50,000 to the firm on 1st December, 2022, interest
was omitted to be recorded on this loan.
(v) Loan was given to ‘B’ on 1st July, 2022 amounting to T 1,00,000 bearing
interest B 8' r p.a. Interest was omitted to be charged by the firm.
(V1) Interest on Capital H 6 p.a, was not allowed and interest on drawings was not
charged H l0& p.a.
On the basis of above information, answer the following questions :
(I) How much interest should be allowed on A's Loan to the firm? Is it a charge or
appropriation of profit?
(II) What is the amount of net profit?
JH) What is the amount of divisible profit?
” (IV) What is each partner's share of profit? 4
(6) Explain the following accounting conventions:
(i) Full Disclosure
(ii) Consistency
(iii) Materiality
(iv) Conservatism
(c) Explain the methods/criteria for the selection and application of Accounting Policies. 5
 INTERMEDIATE EXAMINATION
December 2024 P-6{FA)
Syllabus 2022
FINANCIAL ACCOUNTING
Time Allowed: 3 Hours Full Marks: 100
The figures in the margin on the right side indicate full marks.
Wherever necessary, candidates may make appropriate assumption(s) and state the same
clearfy in the answer.
Workings should form part of your answer.

Section-A
1. Choose the correct alternative:
2x15=30
(i) A Company is a going concern if
(A) its Balance Sheet shows a strong Financial Position.
(B) its Income Statement for the current year shows huge Profit.
(C) there is no evidence that it will or will have to cease operations within foreseeable future.
(D) its a Public Limited company.
(ii) Which of the following errors/omissions are not part of the Bank reconciliation process?
(A) Wrong totalling of Bank column of cash book.
(B) Wrong totalling of cash column of cash book.
(C) Posting wrong amount in Bank column of cash book.
(D) Omission to carry forward balance in the Bank column of the cash book.
(iii) Which of the following is true about financial statements?
(a) Financial Statements give a summary of Accounts.
(b) Financial Statements can be stated as recorded facts.
Select the correct answer.
(A) Statement (a) is correct
(B) Statement (b) is correct
(C) Both (a) and (b) are correct
(D) None of the above.
(iv) X draws a bill on Y for 7 1,80,000 for mutual accommodation in the ratio of 2 : 1. X got it discounted
for T 1,69,200 and remitted 1/3rd of the proceeds to Y. How much money should be remitted by X to Y
at the time of maturity so as to enable Y to honour the bill?
(A) T 1,20,000
(B) 7 1,15,200
(C) T 1,16,800
(D) T 1,20,400

34566 Please Turn Over

£'-6(EA) (2)
ifiyllabus 2022

A firm had a capital balance of Z 1,00,000 at the beginning of a year. At the end of the
year the firm has total assets of T 1,50,000 and total liabilities of T 70,000. If the total
withdrawals during the period is T 30,000, what was the amount of net profit/ net loss for
the year?
(A) Z 10,000 Profit
(B) T 20,000 Loss
(C) T 50,000 Loss
(D) Z 10,000 Loss
(vi) Depreciation charged to Income Statement T 8,00,000, Depreciation u/s 32 of the Income
Tax Act T 20,00,000; unamortised Preliminary Expenditure as per Income Tax records T
1,50,000; Corporate Tax rate is 40%. In this situation, the amount of deferred tax asset /
liabilities to be created
It is assumed that there is adequate evidence of future profits sufficiency.
(A) Deferred Tax Assets 1 4,20,000
(B) Deferred Tax Liabilities 1 4,20,000
(C) Deferred Tax Liabilities T 4,80,000
(D) Deferred Tax Assets T 4,80,000
(vii) Provision for doubtful debt on 1st April 2023 was T 14,000. During the year 2023-24, the
Bad Debts was T 9,500. The Sundry Debtors on 31st March 2024 were T 3,25,000.
Provision is to be made H 5% on debtors. If on 31st March 2024, there was additional
bad debts of T 2,500, then provision for doubtful debts will be
(A) Debited to Profit and Loss Account by T 16,125
(B) Debited to Profit and Loss Account by T 14,125
(C) Debited to Profit and Loss Account by T 18,125
(D) Debited to Profit and Loss Account by 7 2,000
(viii) Cost of Machinery is Z 60,000. Useful life of the asset is 5 years. Annual Depreciation on
Machine under Straight Line Method is T 10,000. The scrap value of the Machine will be
(A) Z 60,000
(B) Z 10,000
(C) T 50,000
(D) Z 70,000
(ix) A company deals in 3 products X, Y and Z which are neither similar nor interchangeable.
At the time of closing of its Accounts for the year 2023-24, historical cost and net
realisable values of the items of closing stock are determined as below:
Items Historical value tT) Net Realisable value (T)
X 20 14
Y 16 16
Z 8 12
 (3)

What will be the value of closing stock†

(A) T 44
(B) ¥ 42
(C) T 38
(D) None of tire above
(X) In case of a club, tfie excess of expenditure over Income is called as
(A) Surplus
(B) Deficit
(C) Capital Fund
(D) Investment in Fixed Assets
(xi) Which of these statements is not ture?
(A) Accumulated Profit and Loss, General Reserve are transferred to old partners
capital accounts.
(B) If assets and liabilities are to be shown in the Balance Sheet at old value,
Memorandum Revaluation account is to be opened.
(C) Profit on Revaluation is transferred to tire capital account of old partneis in equal
fdtÎo.
(D) A Revaluafion Account is a Nominal Account.
(xü) P sends 1,iXi0 bags to Q Hosting T 400 each at an invoice price off 500 each. The
costs incurred were: P's expenses T 4,000; Q's expenses ¥ 1,0fD (non selling) and T
2,0£D (helling); 800 bags were sold by Q. What is the value of Consignment Stoc£ at
invoice
(A) T 1,01,000
(B) V 1,01,800
(C) ¥ 1,01,400
(D) T 1,02,000
(xiü) X and Y entered into a joint venture to
undertake the public issue of ABC Ltd. The
company invited applications for allotment of
2,tD,000 shares at ¥ 10 per share. The issue
was subscribed to the extent of 90a and ilie
remaining were taken by Y. They agned to
share profit and loss in the ratio of 2 : 3. The
shares undertaken by X and Y were
subsequently sold at a premium of T 40 per
sbare. How many shares were undertaken by
X and Y†
( 20,0
A 00
)
( 25,0
B 00
)
( 18,0
C 00
)
( 30,0
D 00
)
P-6(FA) (4)
Syllabus 2022

(xiv) Match the following:

List 1 List 2
(I IND AS16 (a) Qualifying assets will never include biological
) assets.
(II AS 10 (b) Government grants as capital contribution are
) specifically recognized.
(II AS 12 (c) No recognition criteria for b.xed assets are laid out.
I)
(IV IND AS 23 (d PP1O ac. ‘ :‹ i.hon win:ietar;, a
) ) recognizes at fair value.
(I) (II) (IV)
(A) (c) (b) (a (d)
(B) (d) (b) )(c) (a)
(C) (d) (c) (b) (a)
(D) (d) (c) (a) (b)
(XV) State which of the following statements is correct.
(A) Stock Debtors System of maintaining Branch Account is used for independent
branch.
(B) The buyer gets immediate possession but not ownership of the asset under
Installment Payment.
(C) Unusual items and defective items are separate under insurance claims.
(D) Operation lease is a Revocable contract.
Section-B
Answer any five out of seven Questions. 14x5=70
2. (a) On comparing the Cash Book of Shivam with the
Bank Pass Book for the year ended 31st March,
2024, following discrepancies were noticed:
(i) Cheques of T 85,000 deposited into the
bank on 25th March, cheques amounting to
T 25,000 were collected on 5th April.
(ii) Cheques amounting to T 38,000 drawn on
28th March, of which a cheque for 1 8,000
was presented on 3rd April.
(iii) A cheque for 7 4,000 entered in Cash Book
but omitted to be banked on 31st March.
(iv) A bill receivable for T 18,000 previously
discounted (discount T 90) with the bank
had been dishonoured but advice was
received on 3rd April.
(v) A cheque of T 20,000 wrongly credited in
the Pass Book on 29th March was reversed
on 2nd April.
(vi) Bank had wrongly debited T 15,000 in the
account on 31st March and reversed it on
10th April, 2024.
Prepare a Bank Reconciliation Statement as on
31st March, 2024, if the Balance as per Cash
Book on 31st March, 2024 was I 1,82,500.
 (5) P—6(''A)
Syllabus 2022
(b) State with reasons whether the following are
Capital Expenditure or Revenue Expenditure:
(i) Expenses incurred in connection with
obtaining a license for starting tire factory
were Z 10,000.
(ii) 7 1,000 paid for removal of stock to a new
site.
(iii) Rings and Pistons of an engine were
changed at a cost of 7 5,000 to get full
efficiency.
{" ) T 2,000 spent as lawyer's fee to defend a
suit claiming that the firm's factory site
belonged to the Plaintiff. The suit was not
successful.
(v) T 10,000 were spent on advertising the
3. (a)
introduction of a new product in the
market, the benefit of which will be
effective during four years.
(vi) A factory shed was constructed at a cost of
T 1,00,000. A sum of 7 5,000 had been
incurred for the construction of the
temporary huts for storing biiilding
materials.
(b)
(vii) A pair of bullocks of T 50,000 was killed by
lightning.
Indra drew upon Chandra a bill for 7 90,000 on
April 1, 2024 for 3 months, for mutual
accommodation. Chandra accepted the same
immediately on receipt. On April 4, Indra got it
discounted at 6% p.a. and remitted 1/3rd of the
proceeds to Chandra. At maturity, Indra was not
able to send the required sums and asked
Chandra to receive a 2 months Promissory Note
for T 60,900 which Chandra did. Chandra got
the Note discounted for T 60,000 and met his
acceptance. Indra became insolvent just before
his Promissory Note was due for payment. Only
25% was received from his estate. You are
required to pass journal entries in the books of
Indra.

7
On 1st April,2021, Aarvi Limited purchased a
machine on hire purchase system, whose cash
price was 7 12,00,000. The hire purchase price
of the machine was T 15,00,000. T 3,00,000
was payable immediately and the balance was
to be paid in three equal annual installments.
The books are closed on 31st March each year.
The company charge depreciation H 15% per
annum on the reducing balance basis.
Calculate interest included in each installment
and prepare Machinery Account for three years 7
in the books of Aarvi Limited.
4. Rahul does not maintain a proper books of account. However, he maintains a record of his
bank transactions and is also to give the following information from which you are requested
to prepare his final accounts for the year 2023-24.
Particulars 31.03.2023 31.03.2024
Debtors T 1,02,500 ?
Creditors ? Z 46,000
Stock 150,000 T 62,500
Bank Balance ? T 50,000
Fixed Assets 17,500 € 9,000
P-6(FA) (6)
Syllabes 2022

Details of Bank transactions are as follows:

PaPtiCUlitPS Amount in
T
Received from Debtors 3,40,000
Additional capital introduced 5,000
Sale of Fixed Assets ( book value I 2,500) 1,750
Paid to creditors 2,80,000
Expenses paid 49,250
Persollal Drawings 25,000
Purchase of Fixed Assets 5,000
No cash transactions took place during the year. Goods are sold at cost plus 25%. Cost of
goods sold was T 2,60 000. 14

5. Raylink Ltd. agreed to purchase the business of a firm consisting of two brothers, A. Ray and
S. Ray as on March 31, 2024. The Balance Sheet of the firm on that date was as follows:
Liabilities T Assets Z
Capital Accounts: Leasehold Premises 1,17,500
A. Ray 1,90,000 Plant & Machinery 70,000
S. Ray 1,45,000 Furniture & Fixtures 17,500
General Reserve 75,000 Stock-in-Trade 1,55,000
Creditors 1,00,000 Debtors 1,37,500
Cash 12,500
5,10,000 5,10,000
The company agreed to takeover the liabilities and all the assets, with the exception of cash,
the agreed purchase price being T 4,50,000 to be satisfied as to 1/4th in cash and 3/4th by
issue of fully paid equity shares of T 10 each at an agreed value of T 12.50 per share.
The company made the following revaluations of the assets taken over when bringing them to
books:
Leasehold Premises T 1,55,000 Stock-in- Z 1,45,000
Plant & Machinery Trade T 1,25,000
Furniture & Fixtures 1 62,5öö Debtors
You are required to: T 12,500
(a) Pass the necessary journal entries to record the acquisition of the business in the books
of the company; and
(b) Prepare the post-acquisition Balance Sheet of Raylink Ltd. 6+8
 (7) P-6(FA)
Syllabus 2#22

6. (a) Adhiraj Ltd., Noida, started a branch in Surat on April 1, 2023 to which goods were sent
at 20% above cost. The branch makes both credit and cash sales. It is the policy to meet
branch expenses from branch cash, and remit the balance money to Head Office (H.O.).
The branch does not maintain double entry books of accounts, and necessary accounts
relating to the branch are maintained by the H.O.

Particulars T Particulars T
Cost of goods sent to Noida 50,000 Cash remitted to H.O. 43,000
Branch
Goods received by branch 54,000 Cash in hand at branch at 2,000
till the
March 31 (at IP) end of the year
Credit sales for the year 58,000 Cash remitted by H.O. to 3,000
branch during the year
Closing Debtors 20,800 Closing stock at branch at 6,000
IP
Bad debts 200 Expenses incurred at 12,000
branch
Show the Surat Branch Account in the books of the Noida H.O. to determine the profit and
loss of the branch for the year ended March 31, 2024. 7

(b) On 10th December,2024 a fire occurred in the premises of Chandu. All stock except to the
extent of Z 28,800 were destroyed. Chandu values the stock at cost less 10 per cent. Stock
was insured for 1 1,00,000. From the following information, ascertain the amount of
claim to be lodged by Chandu:

Particulars T
Stock on 1st Apri1,2023 1,44,000
Purchases less returns during 2023-24 5,60,000
Sales less returns during 2023-24 8,00,000
Stock on 31st March,2024 90,000
Purchases less returns from 1st Apri1,2024 to date of 5,84,000
fire
Sales less returns from 1st Apri1,2024 to date of fire 6,40,000
7
7. (a) (i) In the context of AS 11, what do you mean by ‘Integral Foreign Operation’?
State how the following items of integral foreign operation should be translated:
(I) Salaries & Wages;
(II) Depreciation on Furniture; and
(III) Machineries carried at fair value. 1+3
 (8)
Syllabus 2022

7. (a) (ii) While clarifying the scope of AS-22 (Accounting for Taxes on Income), explain the
meaning of the following terms related to it.
(I) Accounting income (loss)
(II) Taxable income (tax loss)
Tan expense (tax saving) 3
7. (b) (i) As per AS-12, explain the treatment of the following:
(I) A firm acquired a fixed asset for T 850 lakhs on which the Government grant
received was 40%.
(II) Capital subsidy received from the Central Government for setting up a plant
in the notified backward region. Cost of the plant 1 900 lakhs, subsidy received
T 250 lakhs.
(III) T 225 lakhs received from the local authority for providing medical facilities
to the employees. 3
7. (b) (ii) List out comparative provisions between AS 11 and IND AS 21. 4

8. (a) Briefly explain merits of IND AS. 5

(b) Answer the following question:
(i) Profit is earned on sale of fixed asset . What should be the accounting treatment of
this profit?
(ii) Why is the full cost of an asset not treated as an expense in the year of its purchase?
(iii) Do you think that the convention of conservatism results creation of secret reserves?
(iv) Goods worth T 1,00,000 were burnt by fire and a claim of T 70,000 has been
accepted by the insurance company. How will it be recorded in the final account?
(v) State .with the reasons whether the following statement is true or false.
The provision for the discount on Debtors is calculated after deducting the provision
for doubtful debts from debtors. 5
(c) Give entries for the following transactions:
(i) Realisation expenses 1 8000 were paid by Rana a partner.
(ii) Realisation expenses T 10,000 paid by the firm on behalf of the Dhana (a partner),
he has to bear the realisation expenses.
(iii) Realisation expenses T 20,000, out of which 60% to be borne by Mana (a partner)
and remaining by the firm.
(iv) Realisation expenses T 10,000 to be borne by Kana, a partner, but paid by Dhana,
another partner. 4

INTERMEDIATE EXAMINATION
June 2024
 P—6(FA)
Syllabus 2022

FINANCIAL ACCOUN7ING

Time Allowed: 3 hours Full Marks: 100

The figures in th€ nfff/’gi on the right si‹le indi‹’atc full marks.
Where neccssar) , cancliJate may nitike appr‹)pi rate assumytiotis and
cleai‘l y .stcite thetn in the respective un.swat.
All working notes Dtusi form part of the ansn›er.
Answer to Question No. 1 in section A is compulsory, further answer any five
front Question No. 2 /o Question No. 8 iD section B.
Section-A
1. Choose the correct option from the four affect trial balance.
alternatives given: (D) Error of casting is an error of
(i) Select the correct equation: principle.
(A) Owners Equity = Assets +
Liabilities
(B) Owners Equity + Outside
Liabilities = Total Assets
(C) Assets + Owner Equity =
Outside Liabilities
(D) Outside Equity + Profit =
Total Assets
(ii) Cash In Hand A/c may have.
(A) Only debit balance
(B) Only credit balance
(C) Debt or Credit balance
(D) All of the above
(iii) Fundamental accounting
assumptions are
(A) going concern, consistency
and accrual.
(B) going concern, money
measurement and prudence.
(C) going concern, business
entity and accounting period.
(D) going concern, matching and
consistency.
(iv) Choose the correct statement:
(A) Errors of principle do not
affect agreement of trial
balance.
(B) Compensating errors affect
trial balance.
(C) One side error does not
 2x15—30

31965 Please Turn Over

P-6(FA) (2)
Syllabus 2022
(v) Calculate sales from the following details: Opening Stock
7 4,000
Cost of Goods sold 7 30,000
Closing Stock 7 2,000
Direct Expenses I s,000
Gross Profit T 1,500
(A) T 28,000
(B) T 31,500
(C) 132,000
(D) Z 33,000
(vi) Mr. P issued Cheques worth T 15,000 in March, 2024, out of which 1 10,000 only were
presented for payment by 31st March, 2024. While reconciling bank and cash book balance as
on 31st March, 2024, how much would be added to balance as per Cash Book to arrive at
balance as per Pass Book?
(A) 1 15,000
(B) T 10,000
(C) 15,000
(D) T 7,500
(vii) A second hand car purchased for T 2,00,000 (excluding initial repair cost of 7 50,000) is sold
for T 1,00,000 after 2 years. If depreciation is charged at the rate 20 o on WDV, profit or loss
on sale of car is
(A) Profit Z 28,000
(B) Profit 7 60,000
(C) Loss T 60,000
(D) Loss 1 28,000
(viii) X drew a bill of exchange on Y for Z 20,000 payable after 3 months. On the due date, Y could
not make the payment and requested to renew a fresh bill for another 3 months at 12a interest.
The amount of fresh bill would be
(A) Z 20,600
(B) T 22,400
(C) Z 21,200
(D) Z 20,300
(ix) Choose the odd one:
(A) Premium method
(B) Revaluation method
(C) Wilout raising goodwill account
(D) Revaluation of unrecorded asset
 (3) P-6(FA)
Syllabus 2022

(x) Operating lease is a

(A) Revocable Contract
(B) Non-Revocable Contract
(C) Operating Contract
(D) None of the above
(xi) State which of the following statement is false:
(A) Salvage of stock means stock saved during accident.
(B) Unusual items and defective items are separate under insurance claim.
(C) Defective items means goods which cannot fetch the usual rate of gross profit.
(D) Average clause is applicable in case of under insurance.
(xii) A, B and C are three Partners sharing profits and losses in the ratio of 3 : 2 : 1. B retires
from the firm .What is the gaining ratio of the remaining partner?
(A) 3 : l
(B) 1 : 2
(C) 2 : l
(D) 1 : 3
(xiii) Goods are transferred from Department X to department Y at a price so as to include a
profit of 33 33% on cost. If the value of closing stock of department Y is Z 18,000 then
amount of stock reserve on closing stock will be
(A) T 6,000
(B) Z 4,500
(C) T 9,000
(D) None of the above
(xiv) Income statement of a Charitable Institution is known as
(A) Profit and Loss Account
(B) Receipts & Payments Account
(C) Income & Expenditure A/c
(D) Statements of Affairs
(xv) Contingent Liabilities would appear
(A) on the Liabilities Side.
(B) on ie Assets Side.
(C) as a note to Balance Sheet.
(D) None of the above
P-6(HA) (4)
Syllabus 2022

SECTION-B
Answer any 5 out of 7 Questions.
Each question carries 14 marks.

14x5=70

2. (a) On 31st March, 2023 in the Trial Balance of

Singhania Brothers, balance of ie Machinery
Account appears as T 19,80,000. The firm follows
rate of depreciation on machinery H 15% per
annum on Written Down Value Method. On
scrutiny, it was found that the Machinery
appearing in the books on 01.04.2022 at 7
4,50,000 was disposed of on 30th November,
2022 in exchange of new machinery costing 7
3,50,000.
You are required to calculate:
(i) Total depreciation to be charged in the Profit and Loss
Account
(ii) Profit or loss on exchange of machine
(iii) Book value of machinery in Balance Sheet as on
31.03.2023
(b) The Trial Balance of Rajesh Brothers on 31st March, 2023 did not agree. In order to close the
books, the accountant placed the difference for 1 26,700 (Dr) to Suspense Account for necessary
adjustment in the next period, On 25th April, 2023 the following errors, arising in 2022-23 were
detected.
(i) T 4,509 allowed as cash discount to a trade debtor was not debited to the Discount Account.
(ii) Credit Sale of T 6,550 was posted to the credit of the customer's account as Z 5,650.
(iii) Machine purchased on 1st October, 2022 for 1 50,000 in cash was posted to the Purchase
Account in the ledger. Rate of Depreciation was applicable on machine 15% per annum.
(iv) Sales book was overcast by 7 10,000 in February 2023.
Give Journal entries to rectify the errors and prepare Suspense Account. 7
3. (a) Kush of Kanpur sent to latin ofjaipur, a
consignment of 400 electric sewing machine
costing each T 24,000 (invoice price T S0,000).
Kush paid freight and insurance of 1 96,000. latin
spent Z 31,200 for clearance and the selling
expenses were T 1,500 per sewing machines as
and when the sale was made by Jatin. In transit
10 sewing machines were stolen for which the
insurance company paid 7 1,85,000 in full
settlement to Kush. Jatin sold 210 sewing
machines at 132,000 per sewing machine and
130 sewing machines at 7 35,000 per sewing
machine. Jatin was entitled to a commission of
5% on total sales value plus one-forth of the
amount by which the gross sale proceeds less
total commission thereon exceeded the invoice
price. The hnal amount due was settled.
You are required to show the Consignment
Account, latin's Account and Loss in Transit
account in the book of Kush.
 (5) P-6(FA)
Syllabus 2022

(b) Mr. Rana purchases a car on Hire Purchase system on 01.01.2021. The Total cash price of the
car is 1 4,50,000 payable T 90,000 down and three instalments of T 1,70,000, 1 1,50,000 and T
1,08,460 payable at the end of 1st, 2nd and 3rd respectively. Interest is charged at 10% p.a.
You are required to calculate interest paid with each instalment. 7
4. Sohan is a small trader and does not maintain his books on double entry system. The details of his
business are available as follows:
Particulars oi.o4.2022 31.03.2023
3) (TI
Cash in Hand 1,00
0
Bank Balance 74,000 (Cr) 40.000
(Dr)
Sundry debtors 5,30s000 8,80,000
Sundry Creditors 1,50,000 1,95,00
0
Stock 1,70,000 1,90.00
0
Investments 1,20,000 1.35,00
0
Plant 2.00,000 2,00,00
0
Furnittlre 14,000 14,00
0
Sohan had withdrawn T 3 lakh during the year, and he introduced fresh capital of T 65,000 on 1st
October, 2022. A provision to 5% on Sundry debtors is necessary. Write off depreciation on plant
at the rate of 15% per annum and on furniture at the rate of 109c per annum. Interest on opening
capital to be allowed at the rate of 10% per annum. The manager is entitled for a commission at
the rate of 10% on the net profit after charging such commission.
You are required to ascertain Sohan's profit or loss for the year ended 31st March 2023. 14
5. X, Y and Z were partners sharing profits and losses in the ratio of 3 : 2 : 1. The firm's Balance Sheet
on 3lst March, 2023 was as follows:
Liabilities Amount in Assets Amount in
(T) (1)
Creditors 4,25,00 Cash in Hand 17,000
0
Bills Payable 1,35,00 Cash at Bank 2,48,000
0
General 5,10,00 Debtors 8,70,000
Reserve 0 Less : Provision for Bad 30,000 8,40,000
Capital A/c
debt
X 9,70,00 Bills Receivable 1,65,00
Y 0 0
7,40,00 Stock in trade 3,15,000
0
3,80,00 Investments (Market 3,75,000
0
Value T 4,10,000)
Furniture 4,20,000
Land & Building 7,80,000
 31,60,00 31,60,00
0 0
Y retired on 1st April, 2023 and it was agreed that he should be paid all his dues in full on that
date. For this purpose, goodwill was to be calculated on the basis of 4 years' purchase of super
profit method.
P-6(FA) (6)
Syllabus 2022
Other informations are given below:
(i) Average capital employed in the business T 26,10,000.
(ii) Net trading profit of the firm for past 3 years T 6,30,000; T 5,40,000; T 6,75,000.
(iii) Rate of interest expected from capital having regard to the risk involved —l0&.
(iv) Fair Remuneration to the partners for their services — Z 1,20,000 per annum.
(v) Stock and furniture to be depreciated by l09o.
(vi) Aprovisionof5H on debtors to becreatedfordoubtfuldebtsandaprovisionforliability of T 18,000 to be
created against bill discounted.
(vii) The value of land and building is appreciated by 7 2,35,000 and investment is to be taken at its
market value.
(viii) Due to revaluation, the value of assets and liability are not to be altered.
(ix) In order to meet Y's obligation, X and Z bring in additional capital of 7 3,50,000 and 1 7,20,000
respectively.
(x) The Profit or Loss sharing ratio of X and Y in new firm will be 5 : 3. You are
required to:-
(a) Calculate value of goodwill and show its treatment.
(b) Calculate profit or loss on revaluation of Assets and Liabilities and show its adjustment among
the partners.
(c) Show the balances of Partners' Capital account after Y's retirement.
(d) Prepare firm's balance sheet after retirement of Y. 14
6. (a) The Ranu stores of Jaipur has a retail branch at Kota. The goods are invoiced to ie branch at selling
price which is obtained by adding 50% on cost price. All expenses are paid by head offiee. The
particular are as follows:
Y
Balance as on 1st April, 2022
-Stock at Invoice price 1,20,000
-Debtors 43,200
Goods Sent to Branch (Invoice Price) 18,00,00
0
Goods returned by Branch (Invoice Price ) 24,000
Cash Sales 72,000
Credit Sales 16,32,00
0
Goods returned by Debtors 12,000
Cash received from Debtors 15,60,00
0
Discount allowed to Debtors 12,000
Bad Debt 2,400
Branch Expenses paid by Head Office : Rent 19,200
: Salaries 1,01,000
: Misc Expenses 6,000
Balance as on 31st March, 2023
-Stock at Invoice Price 1,99,200
-Debtors 88,800
 (7) P-6(HA)
Syllabus 2022

You are required to prepare Branch Stock account, Branch Debtors Account. Goods sent to Branch
Account, Branch Expenses Account, Branch Adjustment Account, Branch Stock Reserve Account
and in the books of Head Office. 7
(b) From the following information ascertain consequential loss claim: 7
1. Financial year ends on 31st March, with sales of T 25,00,000.
2. Date of fire 1st September following.
3. Period of intemiption — lst September to 1st February, next year,
4. Indemnity period — 6 months.
5. Net Profit Z 2,75,000 plus insured standing charges T 3,00,000.
6. Uninsured Standing Charges T 50,000.
7. Sum Insured Z 6,16,000.
8. Standard Turnover for corresponding months (1st September to 1st February in the year
preceding the fire 7 7,50,000.
9. Turnover in period of intemiption T 2,25,000.
10. Annual Turnover (i.e 12 months preceding the fire) T 28,00,000.
11. Incurred additional expenses amounting to T 50,000 with a saving of insured standing charges
T 14,000.
12. Reduced turnover avoided through additional expenses T 1,50,000.
13. Special,Cireumstances clause stipulated:
(i) Increase in turnover (standard and annual) 10%
(ii) Increase in rate of gross profit 2%

7. (a) Rukamani Ltd. had made a rights issue of shares in 2022. In the offer document to its members, it
had projected a surplus of 7 60 crores during the accounting year ended on 31st March, 2023. The
draft results for the year prepared on the hitherto followed accounting policies and presented for
perusal of the board of directors, showed a deficit of 1 15 crores. The board in consultation with the
Managing Director decided on the following :
(i) Value year-end inventory at works cost 75 crores) instead of the hitherto followed method of
valuation of inventory at prime cost 45 crores).
(ii) Not to provide for “after sale expenses” during the warranty period. Till the last year, provision
at 2% of sale used to be made under the concept of “matching of cost aganst revenue” and
actual expenses used to be charged against the provision. The Board now decided to account
for the expenses as and when actually incurred. Sales during the year Z 900 crores.
(iii) Provide for permanent fall in the value of investments, on which fall had taken place over the
past 5 years, the provision being T 15 crores.
As Chief accountant of the company, you are asked by the managing director to draft the notes on
accounts for inclusion in the annual report for 2022-2023. 7
(b) What is the objective of Accounting Standard 10? As per AS 10 which are included in bearer plant
and which are not? 7
P-6(FA) (8)
Syllabus 2022
8. (a) State the provisions of Accounting Standard 12, relating to presentation of Government Grants in
Financial Statements. 5
(b) On 31st December, 2022, Sundry Debtors and provision for doubtful debts are T 50,000 and Z
5,000 respectively. During the year 2023, 13,000 are bad and written off on 30-09-2023. An amount
of Z 400 was received on account of a Debt which was written off as bad debt last year on 31-12-
2023. The debtors left was verified and it was found that Sundry Debtors on 31st December 2023
stood in ie books were T 40,000 out of which a customer Mr. X who owed T 800 was to be written
off as Bad.
Prepare Bad Debt A/c., Provision for Doubtful Debt A/c, assuming that ie same %
should be maintained for provision for doubtful debts as it was on 31-12-2022. Show also Profit &
Loss Account (abstract) for the year ended 31-12-2023 and Balance Sheet (abstract) as on that date.
5
(c) What do you mean by piecemeal distribution? Explain it. 4