0710 FA (CFA510) - Question Paper Financial Accounting...

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Question Paper Financial Accounting (CFA510): October 2007 Answer all questions. Marks are indicated against each question. 1. Which of the following is a real account? (1 mark) (a) Bank account (b) Stock of stationery account (c) Returns inward account (d) Outstanding rent account (e) Capital account. < Answer > 2. Which of the following statements is false ? (1 mark) (a) Ledger is the main book of account in which all accounts are maintained (b) The credit balance of a nominal account indicates income received (c) Debit balance in commission account indicates commission paid (d) Cash account always shows credit balance (e) In case of bank overdraft bank account shows credit balance. < Answer > 3. In a manufacturing company, which of the following systems is called product costing system? (1 mark) (a) Perpetual inventory system (b) Periodic inventory system (c) Accrual system (d) Weighted average method (e) Specific identification method. < Answer > 4. The value of inventory far in excess of the normal requirement of a firm is shown under (1 mark) (a) Current assets (b) Fictitious assets (c) Intangible assets (d) Non-current assets (e) Miscellaneous expenditure. < Answer > 5. The books of Bharat Ltd. revealed the following information: On March 31, 2007, the cost of missing inventory that may have been pilfered by the storekeeper was estimated to be Rs.75,000. The company’s rate of gross profit on sales has remained constant at 25%. The value of inventory on March 31, 2007 was (2 marks) Particulars Rs. Opening inventory 6,00,000 Purchases during the year 2006-2007 34,00,000 Sales during the year 2006-2007 48,00,000 (a) Rs.3,25,000 (b) Rs.1,25,000 (c) Rs.1,00,000 (d) Rs.1,50,000 (e) Rs.2,25,000. < Answer > 6. Which of the following items is generally not considered as part of inventory? (a) Raw-material < Answer >
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(1 mark) (b) Work-in-process (c) Consumables (d) Finished goods (e) Machinery spares. 7. Which of the following inventory valuation methods shows higher profits during a period of rising prices? (1 mark) (a) FIFO (First In First Out) (b) LIFO (Last In First Out) (c) Weighted average (d) Simple average (e) Specific cost. < Answer > 8. Mohan withdrew Rs.10,000 from firm bank account for his personal use. The entry to be passed is (1 mark) Debit (Rs.) Credit (Rs.) (a) Cash account Dr. To Bank account 10,000 10,000 (b) ‘Mohan’ account Dr. To Cash account 10,000 10,000 (c) Drawings account Dr. To Bank account 10,000 10,000 (d) Bank account Dr. To Cash account 10,000 10,000 (e) Bank account Dr. To Drawings account 10,000 10,000. < Answer > 9. Which method of depreciation is most appropriate for petroleum and mining companies for charging depreciation on oil wells and mines? (1 mark)
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This note was uploaded on 07/20/2010 for the course ICFAI CFA taught by Professor Cfa during the Fall '09 term at Indian School of Business.

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0710 FA (CFA510) - Question Paper Financial Accounting...

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