JNTU
JNTU MBA 2020 FINANCIAL ACCOUNTING AND ANALYSIS Previous Question Paper (January - 2020 - R19)
Note: This question paper contains two parts A and B. Part A is compulsory which carries 25 marks. Answer all questions in Part A. Part B consists of 5 Units. Answer any one full question from each unit. Each question carries 10 marks and may have a, b, c as sub questions.
Part A
Answer the following:
Explain any THREE accounting conventions.
Answer
Accounting conventions are customs or traditions used as a guide in preparing financial statements:
- Convention of Consistency: Accounting policies and methods should remain consistent from one period to another to ensure comparability of financial data over time.
- Convention of Conservatism (Prudence): This principle dictates that accountants should anticipate no profits but provide for all possible losses. It ensures that financial statements do not overstate the financial position.
- Convention of Full Disclosure: All material and relevant information regarding the financial affairs of the business must be fully disclosed in the financial statements or accompanying notes to allow stakeholders to make informed decisions.
What is the difference between Journal and Ledger, Explain with examples?
Answer
The Journal is the book of original entry where transactions are recorded chronologically as they occur, whereas the Ledger is the book of final entry where transactions are classified and summarized into specific accounts.
| Feature | Journal | Ledger |
|---|---|---|
| Process | Journalizing | Posting |
| Sequence | Chronological | Analytical |
Example: If a business buys furniture for cash, the entry in the Journal is: Debit Furniture A/c, Credit Cash A/c. In the Ledger, this is posted to the Furniture account and the Cash account separately.
What are the possible reasons for keeping incomplete records? Explain any three? What are the features of incomplete records?
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What is funds flow in accounting? Distinguish between Funds Flow and Cash Flow.
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What is DuPont Chart Analysis? Draw the DuPont and explain its significance.
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Part B
What is Book-Keeping? Differentiate between Single Entry and Double Entry with examples.
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What are generally accepted accounting principles (GAAP) issued by ICAI?
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Discuss the following accounting standards accepted under IAS: i) AS2- Valuation of Inventory ii) AS3- Cash flow statement iii) AS6- Depreciation Accounting iv) AS-10- Accounting for fixed assets
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Explain the following: i) Cash Vs Credit transactions ii) Sundry Debtors Vs. Bills Receivables iii) Simple average method of material issues
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Explain the concept of depreciation? What is accumulated depreciation? Discuss the different methods of depreciation with their relative merits and demerits.
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Explain the following: i) Current Assets Vs. Fixed Assets ii) Cash expenses Vs. non-cash expenses iii) Depletion Vs. Amortization
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From the following ledger balances of M/s Aravind and Company as on 31-12-2013, prepare a) Trial Balance b) Final Accounts. All figures are given in Rupees.
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Why is Inventory Valuation necessary? Discuss various methods of Inventory Valuation with their relative merits and demerits.
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Define Goodwill? How does the Nature of Business and the Quality of Product affect the value of good will of a firm? Discuss and explain any two methods of valuation of goodwill with suitable examples.
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From the following information relating to A Limited, prepare a) Statement of changes in the requirements of working capital b) Funds Flow statement and c) Cash flow statement.
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Ramco Cements presents the following information and you are required to calculate Funds From Operation.
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The Balance Sheets of National Company as on 31st December, 2017 and 2018 has been presented below. From the above, prepare the statement of changes in the requirements of working capital.
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Following is the summarized Balance Sheet of ABC Company as on 31-12-2015. Calculate and interpret the following ratios: a) Current Ratio b) Liquid Ratio c) Proprietary fund ratio d) Fixed Assets to proprietary fund ratio e) Debt-equity ratio f) Capital gearing ratio g) Gross Profit ratio h) Net Profit Ratio i) Stock turnover Ratio j) Debtors turnover ratio k) Return on proprietors fund l) Turnover to fixed assets ratio
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From the following information, prepare the Balance Sheet of PQR Company Limited as on 31-03.2012, with as many details as possible.
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