Roll No.

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IMS Unison University
End Term Examination
Name of the Programme: BBA Semester & Session: I, 2023-24
Subject: Basic Financial Accounting Subject Code: BBA 101
Full Marks: 100 Time: 3 Hours
Instructions: Marks Difficulty
1. Answer all Questions from Part-I and Part-II & any two questions from Part –III. Level – Please
2. 2. Don’t write anything on question paper except Roll No. specify as per
the Guidelines
for setting of
question paper
Q. No. Part-I (Very short answer type questions) 5x2=10
1.(a) What is a compound entry? 2
1.(b) Give four examples of economic decisions that are based on 4
accounting information.
1.(c) Classify the following accounts under three types of accounts: 3
(a) Rent A/c
(b) Dividend Received A/c
(c) Furniture A/c
(d) Loan A/c
1.(d) What can we learn from the cash flow statement about a business 4
enterprise?
1.(e) Write a short note on Disclosure under Financial Instruments under 5
International Financial Reporting Standards (IFRS)7?
1.(f) Name the method that assumes that an asset should be depreciated 4
more in the earlier years and less in later years of use.
1.(g) What is 'understandability' and 'comparability' qualitative 6
characteristics of financial statements?
1.(h) Identify four financial ratios on which the management of a retail store 3
should focus?
Part- II (Short answer type questions) 5X10=50
2. “Debit means increase and credit means decrease”. Comment giving 3
proper examples.
3. From the following particulars, write up the cash book of M/s AB Ltd. 6
of Kolkata with cash and bank columns and bank columns and bring
down the final balance:
2022 ₹

Oct. 1 Cash in hand 100

Oct. 1 Cash at bank 3,500
Oct. 5 Paid salary by cheque 250
Oct. 7 Paid to AB Ltd. by cheque 260
 Oct. 9 Received a cheque from BB Ltd. 2,500
Oct. 12 Bought goods for cash paid by cheque 750
Oct. 15 Received cash from M/s S.Chand 1,500
Oct. 17 Deposited cash into bank 1,450
Oct. 18 Sundry creditors were paid by cheque 1,250
Oct. 19 Received from debtors by cheque which 1,780
could not be sent to bank
Oct. 20 BB Ltd. cheque dishonoured 2,500
Oct. 22 BB Ltd. paid cash 2,500
Oct. 24 RR Ltd. issued a cheque for ₹470 in full 500
satisfaction of his account for
Oct. 27 Shyam Lal was paid ₹395 in full 400
satisfaction of his account amounting to
Oct. 31 Deposited into the bank 2,200
4. Why Indian companies are facing many issues and problems in 4
publishing the corporate annual reports?
5. The following summary cash account has been extracted from the 7
company’s accounting record:
Summary Cash Account (₹ In ’000)
Particulars ₹ ₹
Balance at 01.03.2021 35
Receipt from customers 2,783
Issue of shares 300
Sale of fixed assets 128
3,246
Payments to suppliers 2,047
Payment for fixed assets 230
Payment for overheads 115
Wages and salaries 69
Taxation 243
Dividends 80
Repayments of bank loans 250 (3034)
Balance at 31.12.2021 212
Prepare cash flow statement of this company for the year ended 31st
March, 2022 in accordance with AS-3 (Revised).
The company does not have any cash equivalents.
6. “Trial balance is a summary record of all assets and liabilities of the 5
business”. Do you agree, and if yes, why?
7. Machinery account of M/s Gopi Oil Mills, showed a debit balance of 5
 ₹32,400. On 1st January, 2022 depreciation was provided at 10% per
annum. On 1st July, 2022 a part of machinery purchased for ₹10,000 on
1st January, 2020 was sold for ₹7,000 and on the same date a new
machinery which cost ₹20,000 was purchased. On 31st December,
2022 the company decided to change the method of depreciation from
diminishing balance method to fixed instalment method with effect
from 1st January, 2020 at 10% per annum. Prepare machinery account
for 2022.
8. Specify the purpose of conceptual framework for preparation and 4
presentation of financial statements.
9. Name the ratio that you would calculate in each of the following cases 5
to indicate:
(a) The ability of the company to meet its current obligations.
(b) The rapidity with which accounts receivables are collected.
(c)The ability to meet interest (and other fixed charges) obligations.
(d) The profitability of equity funds invested in the firm.
(e) The dividend paid in relation to earnings per share.
Also calculate from the following ROCE and Return on Net Worth:
Share Capital 30,00,000; General Reserve 15,00,000; Balance of
Statement of Profit & Loss 5,00,000; 15% long term Loan 30,00,000;
PBT 17,50,000. Ignore tax.
Part–III (Long/Case Study/Case based/Application Oriented answer 2X20=40
type questions) Attempt any two questions
10. Explain the role of accounting in context of the statement “Accounting 5
is indispensable”. In what way is accounting information useful for
owners, managers, creditors and employees of a business?
11. Explain the procedure for issue of Accounting Standards (AS) 6
followed by ICAI as brought out by the preface to the statements of
Accounting Standards. Also explain what is the scope and legal status
of these Accounting Standards in India?
12. What is depreciation? What is the need for providing depreciation? 7
Describe two methods of providing depreciation. Also explain the
effects of depreciation on:
I. Profit and Loss account, and
II. The balance sheet
13. The financial statements of Neon Company are as follows: 8
NEON COMPANY
Profit and Loss Account
For the Year Ended, September 30
 2022 ₹ 2021 ₹
Net Sales 60,000 51,000
Cost of Goods Sold 42,000 41,000
Gross Profit 18,000 10,000
Selling and Administrative Expenses 7,800 7,000
Profit before Interest and Tax 10,200 3,000
Interest Expenses 1,800 900
Profit before tax 8,400 2,100
Income Tax 4,000 900
Profit after Tax 4,400 1,200

NEON COMPANY
Balance Sheet, September 30
2022 ₹ 2021 ₹
Shareholders’ Funds:
Share Capital 20,000 20,000
Reserves and Surplus 7,500 5,100
27,500 25,100
Liabilities:
Secured Loans 4,500 4,000
Unsecured Loans 1,200 1,000
Current Liabilities 3,500 3,300
9,200 8,300
36,700 33,400
Assets:
Fixed Assets 27,000 26,000
Investments 1,000 1,000
Inventories 1,700 1,400
Debtors 3,000 2,700
Cash 2,500 2,000
Other Current Assets 1,500 300
36,700 33,400
Required:
1. Prepare a horizontal analysis of the profit and loss account and
balance sheet showing amount and percentage changes from
2021 to 2022.
2. Prepare common-size profit and loss account and balance sheet.
3. Comment on the results found in Requirements 1 and 2.

Dr. Ishi Mohan

 Name and Signature of the Paper Setter (Signature of Moderator(s))
Note: Instructions, if any, should be clearly indicated on the Question Paper regarding use of Graph Papers,
Log Table, Calculators etc.