# Assignment: Generally Accepted Accounting Principles and Rs.

Pages: 5 (963 words) Published: May 3, 2013
MB0041 –Financial and Management Accounting- 4 Credits
(Book ID: B1624)
Assignment Set- 2 (60 Marks)

Note: Answer all questions (with 300 to 400 words each) must be written within 6-8 pages. Each Question carries 10 marks 6 X 10=60

Q1. An accountant finds that the trial balance of his client did not tally and it showed an excess credit of Rs. 69.74. He transferred it to a suspense account and later discovered the following errors. a) Rs. 44.37 paid to Anand has been credited to his account as Rs. 34.37. b) A purchase of Rs. 145.50 has been posted as Rs. 154.50 to the purchases account. c) An expenditure of Rs. 158 on repairs has been debited to the buildings account. d) Rs. 80 was allowed by B as discount which has not been entered in the books. e) A sum of Rs. 125.05 realised on the sale of old furniture has been posted to the sales account. Give journal entries to rectify the errors and show the suspense account as it would appear after adjustments Hint: Total of suspense a/c = 78.74

Q2. Distinguish between management accounting and financial accounting.

Q3. Draw the Balance Sheet for the following information provided by Sarawath Ltd..
a. Current Ratio : 2.50
b. Liquidity Ratio : 1.50
c. Net Working Capital : Rs.300000
d. Stock Turnover Ratio : 6 times
e. Ratio of Gross Profit to Sales : 20%
f. Fixed Asset Turnover Ratio : 2 times g. Average Debt collection period : 2 months
h. Fixed Assets to Net Worth : 0.80
i. Reserve and Surplus to Capital : 0.50
Hint: B/S total 1100000

Q4. Following is the balance sheet for the period ending 31
st
March 2006 and 2007. If the current year’s net
loss is Rs.38,000, calculate the cash flow from operating activities.

31
st
MARCH

2006 2007
Short-term loan to employees 15,000 18,000
Creditors 30,000 8,000
Provision for doubtful debts 1,200 - Bills payable 18,000 20,000
Bills receivable 10,000 22,000
Prepaid expenses 800 600
Outstanding expenses 300 500
Hint: Net cash lost in operating activities (69800)

Q5. The following data are related to the manufacture of a standard product during the month of July 2009. Raw materials consumed Rs.15,000
Direct wages Rs. 9,000
Machine hours worked 900 hours
Machine hours rate Rs.5
Units produced 17,100
Units Sold 16,000 @ Rs.4 per unit
Prepare a cost sheet from the above to show:
a. The cost per unit
b. The profit per unit sold and profit for the period

Hint: Profit = 24000

Q6. Write the differences between absorption costing and management costing.

MB0041 –Financial and Management Accounting- 4 Credits
(Book ID: B1624)
Assignment Set- 2 (60 Marks)

Note: Answer all questions (with 300 to 400 words each) must be written within 6-8 pages. Each Question carries 10 marks 6 X 10=60

Q1. An accountant finds that the trial balance of his client did not tally and it showed an excess credit of Rs. 69.74. He transferred it to a suspense account and later discovered the following errors. a) Rs. 44.37 paid to Anand has been credited to his account as Rs. 34.37. b) A purchase of Rs. 145.50 has been posted as Rs. 154.50 to the purchases account. c) An expenditure of Rs. 158 on repairs has been debited to the buildings account. d) Rs. 80 was allowed by B as discount which has not been entered in the books. e) A sum of Rs. 125.05 realised on the sale of old furniture has been posted to the sales account. Give journal entries to rectify the errors and show the suspense account as it would appear after adjustments Hint: Total of suspense a/c = 78.74

Q2....