Mgt401 Collection of Old Papers

http://vujannat.ning.com BEST SITE TO HELP STUDENTS FINALTERM EXAMINATION FALL 2006

Marks: 60

MGT401 - FINANCIAL ACCOUNTING II (Session - 1 )

Time: 120min

StudentID/LoginID:

______________________________

Student Name:

______________________________

Center Name/Code:

______________________________

Exam Date:

Monday, February 19, 2007

VIRTUAL UNIVERSITY OF PAKISTAN

Financial Accounting II (MGT401) FINAL TERM EXAM (1) (Fall 2006)

Total Marks: 60 Please read the following instructions carefully before attempting any question: All questions are compulsory. This exam consists of 15 Multiple Choice Questions (MCQs) of 1 mark each, 5 True/False of 1 mark each, 5 fill in the blanks of 1 mark each, 3 Short questions carry 5 marks each and 2 Descriptive questions carry 10 marks each. For each Multiple Choice Question, read the options available and select which you consider is the correct option. This examination is closed book, closed notes and closed neighbours. Do not ask question about the contents of this examination from anyone. You may wish to pace yourself with your own watch, but the Supervisor will be the official timekeeper of the test. Failure to comply with the Supervisor’s directions will result in your test being cancelled. Please comply with supervisor’s directions to avoid any unpleasant event.

Question

1

2

3

For Teacher's use only 4 5 6 7

8

9

10

Total

Marks Question Marks Question Marks

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

Question No: 1

( Marks: 1 )

- Please choose one

Issuance of shares at discount is the inverse of:

► Issuance of Bonus

► Issuance at Premium ► Right Shares Issue ► Further Issue

Question No: 2

( Marks: 1 )

- Please choose one

A private company is not required to issue a _________ as it is prohibited by its articles from inviting general public to subscribe for its shares.

► Cash flow statement ► Prospectus ► Income statement

► Balance sheet Question No: 3

( Marks: 1 )

- Please choose one

Risks and rewards associated with the ownership related to:

► Finance Lease ► Operating Lease

► Hire Purchase Agreement

► Installments Question No: 4

( Marks: 1 )

- Please choose one

Minimum lease payment(MLP) includes from lessor point of view:

► Total payment ► Residual value guaranteed by lessee ► Party related to him or third party

► All of the given options Question No: 5

( Marks: 1 )

- Please choose one

In operating lease, rental expenses should be charged to:

► Balance sheet ► Profit and loss account ► Income of lessee

► None of the given options Question No: 6

( Marks: 1 )

- Please choose one

Fair presentation means:

► Application of Companies Ordinance, 1984

► Income Tax Ordinance, 2001 ► IAS with additional disclosure


( Marks: 1 )

- Please choose one

Rendering of services, revenue associated with the transaction can be estimated reliably when, which of the following conditions are satisfied:

► The amount of revenue cannot be measured reliably ► It is doubtful that economic benefits associated with the transaction will flow to the entity

► The stage of completion of the transaction at the balance sheet date can be measured reliably

► The cost incurred for the transaction and the cost to complete the transaction cannot be measured reliably

Question No: 8

( Marks: 1 )

- Please choose one

Which transaction will cause an increase in capital employed:

► Receipt of payment from account receivables in cash ► Increasing the provision for bad debts ► Receipt of a loan

► Disposal of a fixed asset for more than its book value

Question No: 9

( Marks: 1 )

- Please choose one

Income statement formats based on classification of:

► Expenses ► Incomes

► Revenues ► All of the given options

Question No: 10

( Marks: 1 )

- Please choose one

Preliminary expenses are an example of:

► Revenue expenditure ► Deferred revenue expenditure

► Capital expenditure ► None of the given options

Question No: 11

( Marks: 1 )

- Please choose one

The stock sheet for the previous year was incorrectly undercasted by Rs. 200,000, whether it is:

► Changes in accounting policy ► Change in accounting estimate

► Prior period error

► None of the given options

Question No: 12

( Marks: 1 )

- Please choose one

An example of cash flows from operating activities is:

► Cash receipt from sale of goods and rendering of services ► Cash payment to acquire property plant and equipment ► Proceed from short term financing

► Cash payment and receipt from acquisition and disposal other long term assets Question No: 13

( Marks: 1 )

- Please choose one

Inventories are carried in the books of accounts according to the methods of valuation given in:

► IAS 28

► IAS 2 ► IAS 4 ► IAS 29

Question No: 14

( Marks: 1 )

- Please choose one

A public company is required to file a _____________with SECP before allotment of shares.

► Prospectus ► Statement in lieu of prospectus

► Articles of Association ► None of the given options

Question No: 15

( Marks: 1 )

- Please choose one

According to the International Accounting Standards any decrease in the value of goodwill is made with the help of:

► Amortization ► Impairment

► Depreciation ► None of the given options

Question No: 16

( Marks: 1 )

- Please choose one

Fractional shares shall not be offered and all fractions less than a share shall be consolidated and disposed of by the company.

► True ► False

Question No: 17

( Marks: 1 )

- Please choose one

IAS 20 “Employee Benefits” – specifies calculation, recording and reporting of retirement benefit related costs of the entity.

► True ► False

Question No: 18

( Marks: 1 )

- Please choose one

Lease payments are recognized as expense and sublease payments received are recognized as income,

in the books of lessee.

► True ► False

Question No: 19

( Marks: 1 )

- Please choose one

Creditors (long and short term) are more interested in profitability rather than an entity’s ability to repay them.

► True ► False

Question No: 20

( Marks: 1 )

- Please choose one

An entity shall not present any items of income and expense as extraordinary items, either on the face of the income statement or in the notes.

► True ► False

Question No: 21

( Marks: 1 )

_______________ in the lease is the discount rate that, causes the aggregate present value of minimum lease payments to be equal to the fair value of the leased asset.

Question No: 22

( Marks: 1 )

IAS 1 suggest certain order for the notes to the account, these notes are helpful for users when comparing different _________ of different entities.

Question No: 23

( Marks: 1 )

__________ include expense incurred on administration and management of the business.

Question No: 24

( Marks: 1 )

___________ is the current estimate of discounted value of future cash flows.

Question No: 25

( Marks: 1 )

______________ are those liabilities that depend on happening of an event. Question No: 26

( Marks: 5 )

Briefly describe major classifications of expenses that are to be presented on the face of balance sheet.

Question No: 27

( Marks: 5 )

An organization with a called up and paid up capital of 200,000 ordinary shares of Rs. 10/- each and also 20,000, 10% Preference shares of Rs. 10/- each. The organization manufactures spare parts. The gross profit was Rs. 600,000. The organization paid the required preferred share dividend and declared @ Rs. 1/- per share. Required: Assuming an income tax rate 20% show the trading results and EPS of the organization. Question No: 28

( Marks: 5 )

Differentiate between: (2.5+2.5) 1. Wholly Owned and Partially Owned Subsidiaries. 2. Direct and Indirect Subsidiaries Question No: 29

( Marks: 10 )

Under what conditions a Company can buy its own shares, what is the mode for such purchase and if the company make default in compliance with this section what are the penalties?(6+4) Question No: 30

( Marks: 10 )

Briefly explain the following terms: a. Inception of lease b. Lease term c. Guaranteed residual value d. Interest rate implicit

(2.5x4)

http://vujannat.ning.com

Best Website To Help VUStudents

MGT401 Financial Accounting II Final Term Examination – Spring 2005 Time Allowed: 150 Minutes

INSTRUCTIONS: All questions are compulsory. This exam consists of 10 Multiple Choice Questions (MCQ's), 10 True False and 6 descriptive questions. Each MCQ and True False carry 2 Marks each and Descriptive Questions carry 5 Marks each. You should try to complete MCQ's in 25 - 30 minutes in order to give yourself 120 125 minutes for descriptive questions. For each MCQ question, read the choices available and select the choice which you consider is the correct answer, by clicking on the appropriate check box. Save your answer before proceeding to the next question. Do not click the "Finish button" while solving your paper. Once you clicked the "Finish" button, you will not be able to access your paper again. Click it at the end of your paper. That means you have submitted your complete paper. A clock is given in the exam software. Software will automatically be closed at the end of 150 minutes. Remember not to spend too much time on any one MCQ. Since all MCQ's carry equal marks, it is important to manage your time and responses to test questions effectively. Failure to comply with the Supervisor's directions will result in your test being cancelled. Please comply with supervisor's directions to avoid any unpleasant event.

Total Marks: 50 Question No. 1

Contingent assets are: o Recognized as asset in the balance sheet

Total Questions: 26 Marks : 01

o Disclosed in the financial statements o Any of the given options depending upon certain condition o None of the given options Question No. 2

Marks : 01

A reduction of share capital can be effected through an ordinary resolution.

o True o False Question No. 3

Marks : 01

According to IAS 2 Inventories are assets that are not held for sale in the ordinary course of business.


Marks : 01

Which assets are specifically excluded from Financial Assets:

o o o o

a: b: c: d:

Investments Prepaid Expenses Physical Assets Both (b) and (c)

Question No. 5

Marks : 01

A supplier sends you a statement showing a balance outstanding of Rs. 14,350. Your own records show a balance outstanding of Rs. 14,500/-

o The supplier sent an invoice for Rs. 150 which you have not yet received. o The supplier has allowed you Rs. 150 cash discount which you had omitted to enter in your ledgers o You have paid the supplier Rs. 150 which he has not yet accounted for o You have returned goods worth Rs. 150 which the supplier has not yet accounted for Question No. 6

Repurchased shares can be reissued by Public Unlisted Companies.

Marks : 01


Marks : 05

How is a surplus on revaluation of assets treated? Question No. 8

Marks : 01

Contingent liabilities are:

o a:

possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity o b: liabilities to pay for goods or services that have been received or supplied and have been invoiced or formally agreed with the supplier o Both (a) and (b) o None of the given options Question No. 9

Marks : 01

The capital maintenance concept implies that:

o The capital of a business should be kept intact by not paying out dividends.

o A business should invest its profits in the purchase of capital assets.

o Fixed assets should be properly maintained. o Profit is earned only if the value of an organization's net assets or its operating capability has increased during the accounting period. Question No. 10

Marks : 01

Accounting policy once selected can never be changed.


Marks : 05

Briefly explain the following methods for measurement of elements of financial statement: • Historical cost • Current cost • Realizable value • Present value Question No. 12

Marks : 01

Minimum Lease Payments are:

o The lease rentals payable by the lessee to the lessor o The contingent rent payable by lessee o All the payments that the lessee can be required to pay to the lessor o None of the given options. Question No. 13

Marks : 01

The premium collected by a company on issue of shares can be distributed among its existing shareholders only.

o True o False Question No. 1 4

Marks : 01

According to IAS 38 an intangible asset should be measured initially at cost. o True o False Question No. 1 5

Marks : 05

What conditions are to be satisfied for recognition of revenue from sale of goods? Question No. 1 6

Marks : 01

Stock is valued using FIFO. Opening stock was 10 units at 2 each. Purchases were 30 units at Rs. 3 each, then issues of 12 units were made, followed by issues of 8 units. Closing stock is valued at:

o 50 o 58

o 60 o 70 Question No. 1 7

Marks : 01

Private Limited companies are not required to issue prospectus for issue of shares.

o True o False Question No. 1 8

Marks : 05

What are the disclosure requirements of the Companies Ordinance 1984 for Contingent Liabilities? Question No. 1 9

Marks : 01

Discount allowed on issue of shares is:

o o o o o

a: Shown as reduction in share capital. b: Written off as expense c: Charged to share premium account Both (a) and (b) Both (b) and (c)

Question No. 20

Marks : 01

The historical cost convention:

o Fails to take account of changing price levels over time. o Records only past transactions. o Values all assets at their cost to the business, without any adjustment for depreciation. o Has been replaced in accounting records by a system of current cost accounting. Question No. 21

Marks : 01

IAS 23, "Borrowing Cost" requires capitalization of borrowing cost as a benchmark treatment.

o True o False

Question No. 22

Marks : 05

What is the method of recognition in case of exchange of similar assets? Question No. 23

Marks : 01

Liquidity is:

o o o o

Excess of income over expenditure Income generating capability of the business Ability of a business to pay its debts in time Excess of expenditure over income

Question No. 24

Marks : 01

While preparing a cash flow principal payment made under a lease finance arrangement is shown under financing activities.


Marks : 01

A revaluation loss is charged to profit and loss account in the period in which the revaluation is carried out.


Marks : 05

Explain in light of IAS 7 "Cash Flows" what is meant by Cash Flow from Investing Activities? Give examples.

WWW.VUJannat.ning.Com Connecting VU Students

MGT401 Final Term Examination – Spring 2006 Time Allowed: 150 Minutes

Question No. 1

Marks : 1

Finance cost includes ___________ paid on loan, lease and other costs paid to obtain financial services. Question No. 2

Marks : 3

The issue of the shares at discount must be authorized by resolution passed in _______________of the company and must be sanctioned by the Commission. 1. 2. 3. 4.

General Meeting Extra Ordinary Meeting Statutory Meeting None of the given options

Question No. 3

Marks : 3

Property, plant and equipment are carried in the books of accounts in accordance with the requirements of : 1. 2. 3. 4.

IAS 2 IAS 4 IAS 16 IAS 28

Question No. 4

Marks : 1

______________is not required to issue a prospectus as it is prohibited by its article from inviting general public to subscribe for its shares. 1.

A private company

2. 3. 4.

A public company A listed company A non listed company

Question No. 5

Marks : 1

Interest and other costs incurred by an enterprise in connection with the borrowing of funds is known as: 1. 2. 3. 4.

Borrowing cost Historical cost Conventional cost Current cost

Question No. 6

Marks : 1

The amount in excess of the face value of the share is called: 1. 2. 3. 4.

Premium Discount Rebate Interest

Question No. 7

Marks : 1

Cash flow statement is divided into four components: Operating, Financing, Investing, and Leasing Activities. 1. True 2. False Question No. 8

Marks : 1

Example of Non-Current Liabilities under 4th schedule is: 1. 2. 3. 4.

Debentures Liabilities against assets subject to finance lease Long term Murabaha All of the given options

Question No. 9

Marks : 1

Basic EPS should be calculated by:

1. 2. 3. 4.

= Net profit or loss for the period /Weighted average number of ordinary shares = Net profit or loss for the period x Weighted average number of ordinary shares = Weighted average number of ordinary shares / Net profit or loss for the period = Earnings – Profit attributable to Preference Shareholders /Net profit or loss for the period

Question No. 10

Marks : 3

What is the importance of Prospectus under section 2 (1) 29 in an organization? Explain its content as per lay down under section 53 of Companies Ordinance 1984.

Question No. 11

Marks : 3

A legal obligation is an obligation that derives from: 1. A Contract 2. A Legislation 3. The Operation of law 4. All of the given options Question No. 12

Marks : 10

In lease agreement, minimum lease payments include:

1. 2. 3. 4.

Initial payment or down payment All lease rentals Any amount that is guaranteed to be paid during or at the end of the lease term All of the given options

Question No. 13

Marks : 1

The aggregate amount or the value of the premium on shares shall be transferred to an account, called ________________

Question No. 14

Marks : 1

Following are the examples of the cash flows. Write the names of components of cash flow to which they are directly related: ¾ Cash receipt from sale of Property, Plant and Equipment ¾ Cash payments to Owners i.e. dividend, drawings etc ¾ Cash receipt from sale of goods and rendering of services

Question No. 15

Marks : 1

Royalties shall be recognized on an accrual basis in accordance with the substance of the relevant agreement. 1. True 2. False Question No. 16

Marks : 1

A Furnace has a lining that needs to be replaced every 5 years due to technical reasons. At the balance sheet date, the lining has been in use for 3 years. Comments the above example in accordance to IAS 37, should there any legislative requirement or provision be recognized or not?

Question No. 17

Marks : 1

If the closing balance is lower than the difference of the opening balance and depreciation for the Year, it shows: 1. 2. 3. 4.

An addition of fixed assets has been taken place A disposal of fixed assets Fixed assets are installed under finance lease None of the given options

Question No. 18

Marks : 10

In case of tangible non-current assets, if a policy of revaluation is adopted for the first time, then this is treated as:

1. 2. 3. 4.

No change in Accounting Policy under IAS 8 A change in Accounting Policy A revaluation under IAS 16 Property, Plant and Equipment None of the given options

Question No. 19

Marks : 1

An asset has been leased on July 01, 2005 at a cost of Rs. 871,000. The security deposit Rs. 300,000 and lease rentals include 4 annual installments of Rs. 200,000 each, starting from June 30, 2006. The implicit rate of return (IRR) is 15% p.a. Depreciation is to be charged at 20% on written down method and Residual value is Rs. 200,000. Draw the entries for the following: 1. Recording of asset at the inception of lease 2. Recording of current maturity at the inception of lease 3. Payment of security deposit 4. Payment of first rental installment as on June 30, 2006 5. Recording of current maturity as on June 30, 2006

Question No. 20

Marks : 1

Recording and disclosure on gains / losses arising from foreign currency transactions is included in IAS 21 titled as ________________________ .

Question No. 21

Marks : 1

Right shares are issued when accumulated profit is being capitalized by the issuance of shares.

1. True 2. False Question No. 22

Marks : 1

__________________ is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated cost necessary to make the sale. Question No. 23

Marks : 1

Liquidity is defined as:

1. 2. 3. 4.

Excess of income over expenditures Income generating capability of the business Ability of a business to pay its debts in time Excess of expenditures over income

Question No. 24

Marks : 1

If an entity declares dividends to the holders of equity instruments after the balance sheet date, the entity shall not recognize those dividends as a :

1. 2. 3. 4.

Equity Deferred Liability Liability Asset

Question No. 25

Marks : 3

The information as to profitability is provided by the balance sheet of the entity. 1. True 2. False Question No. 26

Marks : 1

Differentiate between Profit Oriented and Non-Profit Oriented entities. Question No. 27

Marks : 1

How many ways are there to reduce the share capital of a company? Write down their names with sections. Question No. 28

Marks : 1

Under IAS 33 ______________________is widely used by investors as a measure of a company’s performance. Question No. 29

Marks : 1

Which of the following asset is specifically excluded from Financial Assets:

1. 2. 3. 4.

Investments Prepaid Expenses Physical Assets Both Prepaid Expenses & Physical Assets

Question No. 30

Marks : 1

Lease accounting is regulated by __________which was introduced because of abuses in the use of lease accounting by companies.

1. 2. 3. 4.

IAS 17 IAS 12 IAS 39 IAS 32

Question No. 31

Marks :1

Differentiate between Finance Lease and Operating Lease. Question No. 32

Marks : 1

A contractual arrangement whereby, two or more parties undertake, an economic activity which is subject to join control, is called Subsidiary Companies.

1. True 2. False

http://vujannat.ning.com BEST SITE TO HELP STUDENTS FINALTERM EXAMINATION FALL 2006

Marks: 60


Time: 120min

StudentID/LoginID:

______________________________

Student Name:

______________________________

Center Name/Code:

______________________________

Exam Date:

Monday, February 19, 2007

VIRTUAL UNIVERSITY OF PAKISTAN

Financial Accounting II (MGT401) FINAL TERM EXAM (1) (Fall 2006)

Total Marks: 60 Please read the following instructions carefully before attempting any question: All questions are compulsory. This exam consists of 15 Multiple Choice Questions (MCQs) of 1 mark each, 5 True/False of 1 mark each, 5 fill in the blanks of 1 mark each, 3 Short questions carry 5 marks each and 2 Descriptive questions carry 10 marks each. For each Multiple Choice Question, read the options available and select which you consider is the correct option. This examination is closed book, closed notes and closed neighbours. Do not ask question about the contents of this examination from anyone. You may wish to pace yourself with your own watch, but the Supervisor will be the official timekeeper of the test. Failure to comply with the Supervisor’s directions will result in your test being cancelled. Please comply with supervisor’s directions to avoid any unpleasant event.

Question Marks

1

2

3

For Teacher's use only 4 5 6 7

8

9

10

Total

Question Marks Question Marks

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

Question No: 1

( Marks: 1 )

- Please choose one

Issuance of shares at discount is the inverse of:

► Issuance of Bonus

► Issuance at Premium ► Right Shares Issue ► Further Issue

Question No: 2

( Marks: 1 )

- Please choose one

A private company is not required to issue a _________ as it is prohibited by its articles from inviting general public to subscribe for its shares.

► Cash flow statement ► Prospectus ► Income statement


( Marks: 1 )

- Please choose one

Risks and rewards associated with the ownership related to:

► Finance Lease ► Operating Lease

► Hire Purchase Agreement

► Installments Question No: 4

( Marks: 1 )

- Please choose one

Minimum lease payment(MLP) includes from lessor point of view:

► Total payment ► Residual value guaranteed by lessee ► Party related to him or third party


( Marks: 1 )

- Please choose one

In operating lease, rental expenses should be charged to:

► Balance sheet ► Profit and loss account ► Income of lessee


( Marks: 1 )

- Please choose one

Fair presentation means:

► Application of Companies Ordinance, 1984

► Income Tax Ordinance, 2001 ► IAS with additional disclosure


( Marks: 1 )

- Please choose one

Rendering of services, revenue associated with the transaction can be estimated reliably when, which of the following conditions are satisfied:

► The amount of revenue cannot be measured reliably ► It is doubtful that economic benefits associated with the transaction will flow to the entity

► The stage of completion of the transaction at the balance sheet date can be measured reliably

► The cost incurred for the transaction and the cost to complete the transaction cannot be measured reliably

Question No: 8

( Marks: 1 )

- Please choose one

Which transaction will cause an increase in capital employed:

► Receipt of payment from account receivables in cash ► Increasing the provision for bad debts ► Receipt of a loan

► Disposal of a fixed asset for more than its book value Question No: 9

( Marks: 1 )

- Please choose one

Income statement formats based on classification of:

► Expenses ► Incomes

► Revenues ► All of the given options

Question No: 10

( Marks: 1 )

- Please choose one

Preliminary expenses are an example of:

► Revenue expenditure ► Deferred revenue expenditure

► Capital expenditure ► None of the given options

Question No: 11

( Marks: 1 )

- Please choose one

The stock sheet for the previous year was incorrectly undercasted by Rs. 200,000, whether it is:

► Changes in accounting policy ► Change in accounting estimate

► Prior period error ► None of the given options

Question No: 12

( Marks: 1 )

- Please choose one

An example of cash flows from operating activities is:

► Cash receipt from sale of goods and rendering of services ► Cash payment to acquire property plant and equipment ► Proceed from short term financing

► Cash payment and receipt from acquisition and disposal other long term assets Question No: 13

( Marks: 1 )

- Please choose one

Inventories are carried in the books of accounts according to the methods of valuation given in:

► IAS 28

► IAS 2 ► IAS 4 ► IAS 29

Question No: 14

( Marks: 1 )

- Please choose one

A public company is required to file a _____________with SECP before allotment of shares.

► Prospectus ► Statement in lieu of prospectus

► Articles of Association ► None of the given options

Question No: 15

( Marks: 1 )

- Please choose one

According to the International Accounting Standards any decrease in the value of goodwill is made with the help of:

► Amortization ► Impairment

► Depreciation ► None of the given options

Question No: 16

( Marks: 1 )

- Please choose one

Fractional shares shall not be offered and all fractions less than a share shall be consolidated and disposed of by the company.

► True ► False

Question No: 17

( Marks: 1 )

- Please choose one

IAS 20 “Employee Benefits” – specifies calculation, recording and reporting of retirement benefit related costs of the entity.

► True ► False

Question No: 18

( Marks: 1 )

- Please choose one

Lease payments are recognized as expense and sublease payments received are recognized as income, in the books of lessee.

► True

► False

Question No: 19

( Marks: 1 )

- Please choose one

Creditors (long and short term) are more interested in profitability rather than an entity’s ability to repay them.

► True ► False

Question No: 20

( Marks: 1 )

- Please choose one

An entity shall not present any items of income and expense as extraordinary items, either on the face of the income statement or in the notes.

► True ► False

Question No: 21

( Marks: 1 )

_______________ in the lease is the discount rate that, causes the aggregate present value of minimum lease payments to be equal to the fair value of the leased asset.

Question No: 22

( Marks: 1 )

IAS 1 suggest certain order for the notes to the account, these notes are helpful for users when comparing different _________ of different entities.

Question No: 23

( Marks: 1 )

__________ include expense incurred on administration and management of the business.

Question No: 24

( Marks: 1 )

___________ is the current estimate of discounted value of future cash flows.

Question No: 25

( Marks: 1 )

______________ are those liabilities that depend on happening of an event.

Question No: 26

( Marks: 5 )

Briefly describe major classifications of expenses that are to be presented on the face of balance sheet.

Question No: 27

( Marks: 5 )

An organization with a called up and paid up capital of 200,000 ordinary shares of Rs. 10/- each and also 20,000, 10% Preference shares of Rs. 10/- each. The organization manufactures spare parts. The gross profit was Rs. 600,000. The organization paid the required preferred share dividend and declared @ Rs. 1/- per share. Required: Assuming an income tax rate 20% show the trading results and EPS of the organization. Question No: 28

( Marks: 5 )

Differentiate between: (2.5+2.5) 1. Wholly Owned and Partially Owned Subsidiaries. 2. Direct and Indirect Subsidiaries Question No: 29

( Marks: 10 )

Under what conditions a Company can buy its own shares, what is the mode for such purchase and if the company make default in compliance with this section what are the penalties?(6+4) Question No: 30

( Marks: 10 )

Briefly explain the following terms: a. Inception of lease b. Lease term c. Guaranteed residual value d. Interest rate implicit

(2.5x4)

WWW.VUjannat.ning.com http://vujannat.ning.com Largest Online Community of VU Students MIDTERM EXAMINATION FALL 2006

Marks: 40


Time: 60min

StudentID/LoginID:

______________________________

Student Name:

______________________________

Center Name/Code:

______________________________

Exam Date:

Saturday, November 25, 2006

Please read the following instructions carefully before attempting any question: •

All questions are compulsory.

•

This exam consists of 10 Multiple Choice Questions (MCQs), 5 true false, 5 short questions and 1 descriptive question.

•

Time management is very important. MCQs and fill in the blanks may be solved first to secure enough time for remaining descriptive question.

•

The use of notes, handouts, books or any other helping material is strictly prohibited in the centre during the exam.

•

Please reply the short descriptive question and long descriptive question keeping in view the marks allocated for each question.

•

For each MCQ question, read the choices available and select the choice which you consider is the correct answer, by clicking on the appropriate check box.

•

Save your answer before proceeding to the next question.

•

Do not click the “Finish button” while solving your paper. Once you clicked the “Finish” button, you will not be able to access your paper again. Click it only at the end after attempting the whole paper, which will be an indication that you have submitted your complete paper.

•

A clock has been given in the exam software. Software will automatically be closed after 90 minutes.

•

It is your responsibility to manage time and responses to test questions effectively.

•

Failure to comply with the supervisor’s directions will result in your test being cancelled. Please comply with supervisor’s directions to avoid any unpleasant event.

Question Marks Question Marks Question Marks

1

2

3

11

12

13

For Teacher's use only 4 5 6 7 14

15

16

17

8

9

10

18

19

20

21

Question No: 1

( Marks: 1 )

- Please choose one

Which one of the following is the example of non-profit oriented organization:

► NGO’s ► Trusts

► Societies ► All of the given options

Question No: 2

( Marks: 1 )

- Please choose one

Annual General Meeting (AGM) is required to be held within _________ of incorporation.

► 06 months ► 12 months

► 15 months

Total

► 18 months

Question No: 3

( Marks: 1 )

- Please choose one

The amount by which the carrying amount of an asset exceeds its recoverable amount is called as:

► Impairment loss ► Residual value

► Depreciation ► Fair value

Question No: 4

( Marks: 1 )

- Please choose one

Which of the following are the examples of development activities?

► Design, construction and testing of pre-production models ► Design of tools, jigs moulds dies, involving new technology

► Design, construction and operation of pilot plant ► All of the given options

Question No: 5

( Marks: 1 )

- Please choose one

Investments made for long term in associated companies, is recorded using _______method of recognition and shown separately in the balance sheet as long-term assets.

► Equity ► Cost

► Both Cost and Equity ► None of the given options

Question No: 6

( Marks: 1 )

- Please choose one

Costs of purchase of Inventories comprising which of the following:

► Purchase price ► Import duties and other taxes ► Transport less trade discount, rebate and other similar amounts


( Marks: 1 )

- Please choose one

Under Benchmark Treatment IAS-2, does not recommend the following method of stock valuation for incorporating its value in financial statement.

► FIFO method ► The weighted average cost method

► LIFO method ► None of the given options Question No: 8

( Marks: 1 )

- Please choose one

A contractual arrangement whereby, two or more parties undertake, an economic activity which is subject to joint control is called ________.

► Joint Venture ► Subsidiary Companies

► Associated Companies ► None of the given options

Question No: 9

( Marks: 1 )

- Please choose one

An intangible asset with indefinite useful life shall:

► Be amortized using straight line method ► Not to be amortized

► Be amortized using reducing balance method ► Either be amortized using straight line method OR be amortized using reducing balance method

Question No: 10

( Marks: 1 )

- Please choose one

A complete set of financial statement includes which of the followings:

► A Balance sheet and Income statement ► A statement of changes in financial position

► Notes, other statements and explanatory material

► All of the given options

Question No: 11

( Marks: 1 )

- Please choose one

In the first step of formation of a Company the availability of name is checked from SECP, that is at least two companies with same name can registered.

► True ► False Question No: 12

( Marks: 1 )

- Please choose one

An increase in economic benefits during the accounting period in the form of increase of assets and decrease in liabilities is termed as Expenses.


( Marks: 1 )

- Please choose one

An item of property plant and equipment that qualifies for recognition should be initially measured at its cost.


( Marks: 1 )

- Please choose one

In IAS 23 Qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use.


( Marks: 1 )

- Please choose one

Cash discounts are usually received on bulk purchase and are agreed at the time of negotiation of cost. The cost of inventory is recorded net of these discounts.


( Marks: 3 )

What is the main objective for the preparation of Financial Statements? Question No: 17

( Marks: 3 )

Differentiate between Depreciation and Impairment. Question No: 18

( Marks: 3 )

How many types of relations exist among different companies? Question No: 19

( Marks: 3 )

Who is responsible for the preparation and maintenance of financial statements of a company? Question No: 20

( Marks: 3 )

What is the effect of revaluation of asset and how it is adjusted?

Question No: 21

( Marks: 10 )

Explain different types of financial risks that an entity may transfer to another party while undertaking transactions in Financial Instruments?

www.VUjannat.ning.com

MGT401 Financial Accounting II Mid Term Examination – Spring 2006 Time Allowed: 90 Minutes

All questions are compulsory. This exam consists of 10 Multiple Choice Questions (MCQ’s), 5 fill in the blanks, 5 short questions and 1 descriptive question. Each MCQ carries 1 Mark each, each fill in the blank carries 1 mark each, each short Question carry 3 Marks each and descriptive questions carry 10 marks each. You should try to complete MCQ’s in 10 - 15 minutes in order to give yourself 75 - 80 minutes for descriptive questions. For each MCQ question, read the choices available and select the choice which you consider is the correct answer, by clicking on the appropriate check box. Save your answer before proceeding to the next question. Do not click the “Finish button” while solving your paper. Once you clicked the “Finish” button, you will not be able to access your paper again. Click it at the end of your paper. That means you have submitted your complete paper. A clock is given in the exam software. Software will automatically be closed at the end of 90 minutes. Remember not to spend too much time on any one MCQ. Since all MCQ’s carry equal marks, it is important to manage your time and responses to test questions effectively.

Use of calculator is allowed. Failure to comply with the Supervisor’s directions will result in your test being cancelled. Please comply with supervisor’s directions to avoid any unpleasant event.

Question No. 1

Marks : 1

Generally there are two types of discounts; __________ and _____________ . Question No. 2

Marks : 1

IAS 2 ___________are assets: • Held for sale in the ordinary course of business; • In the process of production for sale. Question No. 3

Marks : 1

There is no concept of capital in:

Sole proprietorship NGO’s / NPO’s Partnership Public Limited Company

Question No. 4

Marks : 1

A contractual arrangement whereby, two or more parties undertake, an economic activity which is subject to joint control is called _________ Question No. 5

Marks : 1

The surplus arising from revaluation of fixed assets of an entity is shown:

Separately in the balance sheet. As indirect income in income statement Added in the fixed asset None of the given options

Question No. 6

Marks : 1

A Company uses FIFO method to evaluate its stock. The information for the stock is as follows: • Opening stock was 10 units at 2 each. • Purchases were 30 units at Rs. 3 each, and • Then issues of 12 units were made, followed by issues of 8 units. Closing stock is valued at:

Rs. 50 Rs. 58 Rs. 60 Rs. 70

Question No. 7

Marks : 3

What is balance sheet? Describe its contents. Question No. 8

Marks : 1

_________ is the net balance of the total assets of the business less third party’s liabilities. Question No. 9

Marks : 1

__________ is an asset that necessarily takes a substantial period of time to get ready

for its intended use.

Question No. 10

Marks : 1

The capital maintenance concept implies that:

The capital of a business should be kept intact by not paying out dividends. A business should invest its profits in the purchase of capital assets. Fixed assets should be properly maintained. Profit is earned only if the value of an organization’s net assets or its operating capability has increased during the accounting period.

Question No. 11

Marks : 1

The cost of inventories of a service provider does not consist of:

Costs of personnel directly engaged in providing the service Supervisory personnel Attributable overheads. Labour and other costs relating to sales

Question No. 12

Marks : 1

Statuary Meeting is required to be held within:

3 to 6 months 1 to 3 months 6 to 9 months 9 to 12 months

Question No. 13

Marks : 3

Explain Accounting treatment of Capital in Companies. Question No. 14

Marks : 3

Define Authorized Capital. Question No. 15

Marks : 1

Goodwill is most appropriately classified as:

A fixed asset An intangible asset A fictitious liability A semi-fixed asset

Question No. 16

Marks : 10

How many methods are there for Recognition of Investment in Associated Companies? Explain each method in detail. Question No. 17

Marks : 1

If a Company purchased an Asset for Rs.20, 000. The estimated useful life of asset is ten years. After five years the Book Value of the Asset will be: (using straight line method of depreciation and no residual value)

16,000 10,000 8,000 5,000

Question No. 18

Marks : 3

How many types of Financial Risk are there in a business? Question No. 19

Marks : 1

A complete set of financial statements include: A balance sheet A statement of changes in financial position & Notes, other statements and explanatory material. An income statement All of the given options.

Question No. 20

Marks : 1

The main aim of accounting is to:

Maintain ledger accounts for every transaction. Provide financial information to users of such information. Produce a Trial balance. Record every financial transaction individually.

Question No. 21

What do you understand by the term Contingent Liabilities?

Marks : 3

WWW.VUjannat.ning.com http://vujannat.ning.com Largest Online Community of VU Students MIDTERM EXAMINATION SPRING 2007

Marks: 40


Time: 90min

StudentID/LoginID:

______________________________

Student Name:

______________________________

Center Name/Code:

______________________________

Exam Date:

Tuesday, May 08, 2007

Financial Accounting II (MGT401) Midterm Examination (Spring 2007) TIME ALLOWED: 90 Minutes TOTAL MARKS : 40 INSTRUCTIONS:

Please read the following instructions carefully before attempting any question: All questions are compulsory. This exam consists of 10 Multiple Choice Questions (MCQs) of 1 mark each, 5 True False of 1 mark each, 3 Short questions of 5 marks each and one Descriptive question of 10 marks. For each Multiple Choice Question, read the options available and select which you consider is the correct one. This examination is closed book, closed notes and closed neighbors. Do not ask question about the contents of this examination from anyone. You may wish to pace yourself with your own watch, but the Supervisor will be the official timekeeper of the test. Failure to comply with the Supervisor’s directions will result in your test being cancelled. Please comply with supervisor’s directions to avoid any unpleasant event

Question Marks Question Marks Question Marks

1

2

3

11

12

13

Question No: 1

( Marks: 1 )

For Teacher's use only 4 5 6 7 14

15

16

17

8

9

18

19

10

Total

- Please choose one

In case of a single member company _______ person(s) is (are) required to be nominated to takeover the company in case of a death of the member.

► One

► Two ► Three

► Four Question No: 2

( Marks: 1 )

- Please choose one

Company should be termed as a __________ of another company if other company holds more than 50% of its shares or has the power to appoint more than 50% of its directors.

► Associated ► Subsidiary ► Joint Venture


( Marks: 1 )

- Please choose one

Directors or shareholders having ______ voting power can call for Extraordinary General Meetings (EOGM).

► 10% ► 15% ► 20%

► 25% Question No: 4

( Marks: 1 )

- Please choose one

Quality control during commercial production cost Rs. 10,000/- will be charged to:

► Research expenses

► Development cost ► Profit and Loss account ► None of the given options Question No: 5

( Marks: 1 )

- Please choose one

Which one of the following is an example of Conversion Cost?

► Labour and factory overheads ► Labour and work in process

► Work in process and finished goods

► Factory overhead and work in progress Question No: 6

( Marks: 1 )

- Please choose one

Which of the followings are among the non-current assets?

► Tangible and intangible assets ► Operating assets

► Financial assets of a along term nature ► All of the given options

Question No: 7

( Marks: 1 )

- Please choose one

Which one of the following is the concept of the capital maintenance?

► Financial capital maintenance ► Physical capital maintenance ► Both Physical and Financial capital maintenance


( Marks: 1 )

- Please choose one

Movement of capital issued and reserves are presented through which of the following statement?

► Cash flow statement ► Statement of changes in equity ► Income statement


( Marks: 1 )

- Please choose one

A maximum limit of the amount of the capital that a company can issue is mentioned in the Memorandum of Association and Article of Association of the company is called:

► Authorized capital ► Issued capital

► Subscribed capital ► Paid up capital Question No: 10

( Marks: 1 )

- Please choose one

Cost of inventories will consist of which of the following costs?

► Purchase cost ► Costs of conversion

► Installation costs


( Marks: 1 )

- Please choose one

Cash discounts are received on early payment of the outstanding amount. These discounts are conditional and are not reduced from the value of the inventory.


( Marks: 1 )

- Please choose one

In the rare cases of conflict between an IAS and the Framework, the Framework will prevail.


( Marks: 1 )

- Please choose one

Current assets will also include marketable securities if they are expected to be realized within twelve months of the Balance Sheet date.


( Marks: 1 )

- Please choose one

Significant influence is the ability to participate and to control the financial and management affairs of the enterprise.


( Marks: 1 )

- Please choose one

International Accounting Standards (IAS) are issued by International Accounting Standard Board (IASB).


( Marks: 5 )

State different objectives of International Accounting Standard (IAS)? Question No: 17

( Marks: 5 )

Differentiate between legal obligation and constructive obligation. Question No: 18

( Marks: 5 )

What are the effects of revaluation of asset and how it is adjusted? Question No: 19

( Marks: 10 )

State the different methods of recognition of Investment in Associate.

Mgt401 Collection of Old Papers

Recommend Documents