DISTANCE EDUCATION
M.B.A.(B DEGREE EXAMINATION,
DECEMBER 2017.
Second Semester
FINANCIAL ACCOUNTING
(Upto 2012-2013 Academic Year and 2013 calendar Year)
Time 3 hours Maximum 100 marks
PART A — X 8 40 marks)
Answer any FIVE questions.
1. Describe the scope of financial accounting.
2. What are the advantages of subsidiary books?
3. From the following balances of Mr. Kumaran, prepare
Trading account for the year ending 31.12.2014
Rs.
Opening stock 1.1.2014 12,000
Purchases 28,000
Carriage inwards 200
Sales returns 1,200
Purchase returns 1,200
Sales 40,000
Wages 1,500
Stock on hand as on 31.12.2014 14,000
Sub. Code
21
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4. Write the differences between single entry system and
double entry system of accounting.
5. Mano keeps his book on single entry system. From the
items given below calculate the missing figure.
Capital in the beginning Rs. 12, 000
Profit made during the year Rs. 000
Drawings Rs. 000
Capital at the end
Capital introduced during the year Rs. 000
6. The Satpal Limited has issued 40, 000 equity shares of
Rs.40,00, 000,Rs. 20, 00, 000 paid up and Rs.
preference shares, fully paid up. For the year ending
31st December 2014, it had earned a profit of
Rs. 00, 000 which is appropriated as follows:
Rs. 60, 000 towards debenture redemption fund
preference dividend (tax free). tax being 20%
10% ordinary dividend, tax being 20%
Rs. 75, 000 to general reserve
Balance to be carried forward
Prepare Profit and Loss Appropriation account.
7. Write the points of differences between internal
reconstruction and external reconstruction.
8. Write a note on any two softwares used in maintaing
accounts of a company.
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PART B — × 15 60 marks)
Answer any FOUR questions.
9. Explain the different concepts and conventions of
accounting.
10. The balances extracted from the books of Solomon are
given below. Prepare Trial balance as on 31st March 2014.
Rs. Rs.
Solomn's Capital account 30,000 Sundry creditors 4,000
Sales 30,000 Cash in hand 1,800
Purchases 20,000 Cash at bank 6,000
Interest(Dr) 400 Bills receivable 11,000
Sales returns 1000 Bills payable 7,000
Purchase returns 800 Discount earned 800
Sundry debtors 15,000 Wages 7,000
Commission 1000 Rent 800
Plant and machinery 8000 Telephone charges 1000
Miscellaneous income 400
11. From the following trial balance, prepare trading profit
and loss account for the year ended 31.03.2014 and a
balance sheet as on that date:
Trial balance
Particulars Debit(Rs) Credit(Rs)
Capital 40,000
Sales 25,000
Purchases 15,000
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Particulars Debit(Rs) Credit(Rs)
Salaries 2,000
Rent 1,500
Insurance 300
Drawings 5,000
Machinery 28,000
Bank balance 4,500
Cash 2,000
Stock 1.4.2013 5,200
Debtors 2,500
Creditors 1000
66,000 66,000
Stock on 31.3.2014 Rs. 4,900
Salaries unpaid Rs. 300
Rent paid in advance Rs. 200
Insurance prepaid Rs. 90
12. Muthu maintains books on single entry. He gives you the
following information.
Particulars January 1,2014(Rs.) December 31, 2014(Rs.)
Cash in hand 2,000 3,000
Cash at bank 1,000 2,000
Stock in trade 16,000 18,000
Furniture 3,000 5,000
Sundry debtors 21,000 30,000
Trade creditors 5,000 7,000
He has taken Rs. 4,000 from the business to meet his
personal expenses. Calculate the profit or loss for the
year 2014.
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13. Moon Co limited is a company with an authorised
capital of Rs. 5,00,000 divided into 5,000 equity shares of
Rs. 100 each on 31.12.2014 of which 500 shares were
fully called up. The following are the balances extracted
from the ledger as on 31.12.2014.
Trial Balance of Moon Co Limited.
Debit Rs. Credit Rs.
Opening stock 50,000 Sales 3,25,000
Purchases 2,00,000 Discount received 3,150
Wages 70,000 Profit Loss a/c 6,220
Discount allowed 4,200 Creditors 35,200
Insurance (Up to
31.3.2015)
6,720 Reserves 25,000
Salaries 18,500 Loan from Managing
Director
15,700
Rent 6,000 Share capital 2,50,000
General charges 8,950
Printing 2,400
Advertisements 3,800
Bonus 10,500
Debtors 38,700
Plant 1,80,500
Furniture 17,100
Bank 34,700
Bad debts 3,200
Calls-in -areas 5,000
6,60,270 6,60,270
Prepare the Company's profit and loss account for the
year ended 31.12.2014 and also balance sheet.
Closing Stock was valued at s. 1,91,500
Depreciation on plant at 15% and on furniture at
10% should be provided.
A tax provision of Rs. 8,000 is considered necessary.
The directors declared an interim dividend on
15.8.2014 for 6 months ending June 30, 2014
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14. The summarized Balance sheets of Gery Ltd and Reny
Ltd as on March 31 were as follows.
Liabilities Gery
Ltd

Reny
Ltd
Rs.)
Assets GeryLtd

RenyLtd
Rs)
Issued Share
Capital:
Good will 60,000
Shares of Rs. 10
each
4,00,000 3,00,000 Fixed assets
less
Creditors 40,000 1,20,000 Depreciation 3,00,000 1,20,000
Profi and Loss
a/c
70,000 Current assets 2,10,000 1,40,000
P&L a/c 1,00,000
5,10,000 4,20,000 5,10,000 4,20,000
Gery Ltd resolved to take over the business of Reny Ltd
with effect from April 1. The shareholders of the latter
company agreed to accept shares in the former company
on the basis that the shares of Gery Ltd were worth of
Rs. 12 each and the shares of Reny Ltd were worth Rs. 5
each.
The purchasing company took over the fixed assets of
Reny Ltd together with the current assets and was not
required to pay the liabilities.
Draw up the balance sheet.
15. Explain the benefits of computerizing the accounts.
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