All subject questions
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The document contains sample questions from various subjects for an examination. It includes: 1) Six questions from Management Accountancy on topics like why accounting aids management and cash versus mercantile accounting systems. 2) Seven questions from Cost Accounting on topics like budgeting, standard costing, and variances. 3) Ten questions from Auditing on topics like an auditor's role and responsibilities. 4) Eight questions from Advanced Accounting on topics like accounting concepts, depreciation, and ledgers. 5) Four accounting case studies with numerical questions. 6) Sample tax-related questions on determining residential status and taxable income.
All subject questions
- 1. MUSTAFAAHMED 8879416201 Mstfahmed76@gmail.com SUBJECT : MANAGEMENT ACCOUNTANCY TotalMarks : 80 N.B. : 1) All questions are compulsory 2) All questions carry equalmarks. Answerthe following questions : 1) Why is Accounting regarded as an aid to Management(Marks : 15) 2) Explain the term convention of disclosure (Marks : 10) 3) Differentiate between Casn and Mercantile system of Accounting (Marks : 10) 4) Explain the term Accounting Cycle (Marks : 15) 5) Explain the rules regarding posting of transactions into the Ledger(Marks : 15) 6) Whatare the precautions to be taken by an investor to protect himself againstthe possible misuse of ratios by a company.(Marks : 15) SUBJECT : COST ACCOUNTING TotalMarks : 80 N.B. : 1) All questions are compulsory 2) All questions carry equalmarks. Q1) Which are the different ways by which the costcan be analysed? Q2) Define Budgetary Control and explain the pre-requisites for its successfulintroduction and implementation? Q3) Standard costing is a valuable aid to managementdiscuss.State in brief limitation of standard costing? Q4) Explain the importance of the Marginalcost technique in managerialdecision making? Q5) Whatare the advantages ofcost audit? Q6) Enumerate the steps involved in the installation of budgetary control system in an organization? Q7) Differentiate between idle costand standard cost? Q8) How the total cost, variable costand marginalcostdiffer from each other? SUBJECT : AUDITING COURSE : CCA TotalMarks :80 N.B. : 1) All questions are compulsory
- 2. 2) All questions carry equalmarks. Q1) Focus ofthe auditor is no longeron the routine auditbut rendering value added services like costefficiency and decision making.Critically examine the statement with particular emphasis on the changing computerenvironment? Q2) How can the auditor be useful in achieving the objectives of a Charitable Trust or Society and a Co-operative Society? Whatis the legalposition underthe relevant status? Q3) It is the job of the directors to prepare the accounts of a company,auditoronly reports on it. Elucidate and describe the types of auditreport? Q4) The thrust area of an auditor is “True and Fair” and not“True and Correct” Elucidate in the light of statutory provisions underthe Companies Act1956. Q5) Discuss the three types of audits, which although not mandatoryunderthe Income Tax Act 1961,are get done bythe assessee to avail certain benefits underthe act? Q6) Examine the changes broughtaboutin the role of an auditor with the growth of information technologyand rapidly changing computerenvironment? Q7) The auditor only audits the books ofaccount,he does notguarantee them. Elucidate. Q8) Tax auditor is a Catalyst of Revenue Collection, function of the State on the one hand, and a Consultantto the tax payeron the other, discuss? Q9) Who can be appointed as an auditor of co-operative societies? Whatare the rights and duties of auditor underMaharashtra Co-operative Societies Act? Q10)An auditor is protected from unceremonialremovalfrom office enabling him to maintain his independence? Do you agree with the statement? If so discuss the position of the auditor in this regard in the light of statutory provisions underthe Companies Act1956? SUBJECT : ADVANCED ACCOUNTING TotalMarks : 80 N.B. : 1) All questions are compulsory 2) All questions carry equalmarks. Q-1) Briefly explain the following i) Dual aspectconcept
- 3. ii) Realisation concept Q-2) Distinguish between the following: Actual basis of accounting and cash basis ofaccounting? Q-3) Whatis depreciation? State briefly the different causes ofdepreciation? Q-4) Distinguish between the following : `Double Entry System’ and `Single Entry System’ Q-5) Distinguish between the following Sale and Consignment Q-6) Whatdo you mean by Self balancing ledgers? Discuss the main advantages ofself balancing ledgers? Q-7) Explain the following. i) Adjustment Entries ii) Capital expenditure and Revenue expenditure Q-8) Whatare the different causes ofdiscrepancybetween bank balancesas percash book and pass book? SUBJECT: ACCOUNTING TotalMarks:80 N.B. : 1)All questions are compulsory Q1) ABC Ltd. Produces room coolers.The companyis considering whetherit should continue to manufacture air circulating fans itself or purchase them from outside. Its annualrequirement is 25000 units. An outsidervendor is prepared to supply fans for Rs 285 each.In addition, ABC Ltd will have to incurcosts of Rs 1.50 perunit for freight and Rs 10,000 peryearfor quality inspection, storing etc of the product. {25 Marks } In the mostrecentyear ABC Ltd. Produced 25000 fans atthe following total cost: Material Rs. 50,00,000 LabourRs.20,00,000 Supervision & other indirect labourRs. 2,00,000 Power and LightRs. 50,000 Depreciation Rs. 20,000 Factory Rent Rs. 5,000 Supplies Rs. 75,000
- 4. Power and light includes Rs 20,000 for generalheating and lighting, which is an allocation based on the light points. Indirect labouris attributed mainly to the manufacturing of fans. About75% of it can be dispensed with along with direct labourif manufacturing is discontinued.However, the supervisorwho receives annualsalaryof Rs 75,000 will have to be retained. The machines used for manufacturing fans which have a book value of Rs 3,00,000 can be sold for Rs 1,25,000 and the amountrealized can be invested at 15% return. Factory rentis allocated on the basis of area,and the companyis notable to see an alternative use for the space which would be released. Should ABC Ltd. Manufacture the fans or buy them? Q2) Usha Companyproduces three consumerproducts : P, Q and R. The managementof the companywants to determine the mostprofitable mix. The cost accountanthas supplied the following data. {30 Marks } Usha Company: Sales and CostData Description ProductTotal P Q R Material Costper unit Quantity (Kg) 1.0 1.2 1.4 Rate perKg (Rs) 50 50 50 Cost perunit (Rs) 50 60 70 LabourCostperunit 30 90 90 Variable Overheads perunit15 10 25 Fixed Overheads (Rs .000) 9,175 CurrentSales (Units ,000)100 50 60 210 Projected Sales (Units ,000)109 55 125 289 Selling Price per unit (Rs) 150 200 270 Raw material used by the firm is in short supplyand the firm can expecta maximum supply of 350 lakh kg for nextyear. Is the company’s projected sales mix mostprofitable or can it be changed for the better?
- 5. Q3) DSQ CompanyLtd, a diversified company,has three divisions, cement, fertilizers and textiles. The summaryof the company’s profit is given below: {25 Marks } (Rs/Crore) CementFertilizer Textiles Total Sales 20.0 12.0 18.0 50.0 Less : Variable Cost8.0 9.6 5.4 23.0 Contribution 12.0 2.4 12.6 27.0 Less : Fixed Cost (allocated to divisions in proportion to volumes of Sales) 8.0 4.8 7.2 20.0 Profit (Loss)4.0 (2.4) 5.4 7.0 After allocating the company’s fixed overheads to products the Fertilizers, division incurs a loss of Rs 2.4 crore.Should the companydrop this division? SUBJECT : AUDITING TotalMarks : 80 N.B. : 1) All questions carry equalmarks 2) Answer any four questions CASE STUDIES Q1) H.W.P. Private Ltd. Is having only two members H and W.During the audit of accounts for the year ended 31stMarch 2000,you as a auditor find that : a) H, who is incharge ofpurchases has introduced fictitious purchase bills of Rs 50 lakhs. b) W, who is incharge ofsales has sold goods worth Rs 1 crore without bringing the same in the books ofaccounts.You raise the matter with H and W in their capacity as directors. They contest that as this is a position known to them and within their own fold, you should not report the same underthe Company's Act 1956.Discuss whetherthe above arguments are acceptable underthe Company's Act 1956 for non-reporting? Q2) As an auditor, howwould you reactto the following situation? The companyproduced photocopies offixed depositreceipts as the original receipts were keptin the iron safe of the director finance who was presently out of the country on companybusiness? Q3) ABC Private Limited is engaged in the wholesale business ofbuying and selling silk sarees.
- 6. The accounts are maintained underthe Companies Actfrom 1stOctober to 30th September each year. The Chief Accountantof the companyis requesting the tax auditor to conducttax audit U/S 44 AB of the I. T. Act for the period for which accounts have been maintained underthe Company's Act. As the tax auditor of ABC Private Limited, howwill you reactto the Chief Accountantrequest? Q4) Comment: The Auditor is responsible forfailure to disclose the affairs of the company keptout of books and concealed from him. Q5) Comment: Balance confirmations from debtors/creditors can only be obtained for balances standing in their accounts at the year end? Q6) Give your comments and observations on the following many cheques have been received by the auditor on the last day of the year, but not yet deposted with the bank? SUBJECT : COST ACCOUNTING TotalMarks : 80 Select any one outof 4 choices give below (2 Marks each X 10 ) (20 Marks) Q1) Which kind of budgeting does nottake into consideration previous figures as base. a) Zero based budgeting b) Sales budgeting c) Fixed budgeting d) Flexible budgeting Q2) Which is the term used for internal transfers between profit centres. a) Process costing b) Standard costing c) Transfer pricing d) Marginalcosting. Q3) Labourcostvariance means difference between a) (Std. Time x Std Rate) — (Actual Time x Act Rate) b) (Std. Time x Act Rate) — (Act Time x Act Rate) c) (Std. Time x Std Rate) — (Act Time x Std Rate) d) (Std. Time x Act Rate) — (Std Time x Std Rate) Q4) Which of the factor is not relevantfor cash flow : a) Depreciation b) Assetpurchased. c) Cash purchase made d) Cash sales made
- 7. Q5) Calculate Fixed Costwhen : P. V.Ratio = 50% Variable cost= Rs 10,000 Break even point= Rs 15,000 Q6) Calculate Break even pointin units. When – Fixed cost= Rs 20,000 Total units sold = 10,000 Nos. Contribution perunit = Rs 2 per unit. Q7) Whatis the formula to calculate currentratio. Q8) Which method values stock at a variable cost level. a) Absorption costing b) Marginalcosting c) Target costing d) Activity based costing. Q9) Which of following plan summarises budget. a) Master budget b) Zero based budgeting c) Fixed budget d) Flexible budget Q10)In which form of costing selling price is finalized first. a) Targetcosting b) Absorption costing c) Total Quality Management d) Activity based Costing Q11)Differentiate between Absorption costing and Marginalcosting.(5 Marks) Q12)Expenses ofbudgeted production of20,000 units in Factory is as follows. (15 Marks) Rs. Per Unit Material 140 Labour50 Variable Overheads 40 Fixed Overheads 20 Variable Expenses (Direct)10 Selling Expenses (10%Fixed)26 Distribution Expenses (20%Fixed)14 Admin Expenses 10 Prepare flexible budgetfor production of 16,000 units and 12,000 units. Also find out costperunit at each level.
- 8. Q13)Following details of A G Ltd are furnished for year 1996.(15 Marks) First 6 month Balance 6 months Sales 45,000 50,000 Total Cost 40,000 43,000 Assume there is no change in price and variable cost and fixed expenses are incurred equally in two half year periods.Calculate for year 1996. 1) Profit volume ratio. 2) Fixed expenses. 3) Break even sales 4) Margin of safety. Q14)Labourbudgetofcompanyfor week is as follows : (15 Marks) 20 men @ 50 paise p hr for 40 hr = 400 40 men @ 30 paise p hr for 40 hrs = 480 _______ 880 ====== Actual Labourwas as follows : 30 men @ 50 paise for 40 hr = 600 30 men @ 35 paise for 40 hrs = 420 _______ 1020 ====== Analyse Labour Variances Q15)Calculate break even point (10 Marks) 1) S. price in Rs 20 2) Manufacturing vari costRs 10. 3) Selling variable costRs 5. 4) Fixed overheads = Rs 5,00,000 5) Selling overheads = Rs 2,00,000 SUBJECT : TAXATION TotalMarks : 80 Instructions: a) Each question carries20 marks b) Make assumptions wherever necessary Q1) a) Mr. Jayantan Indian Citizen, furnishes the following particulars of his income earned during the previous year relevant to assessmentyear 2008-09.
- 9. Sr.no Particulars Rs. 1. Interest on NepalDevelopmentBond (1/3 received in India) 21,000 2. Income from Agriculture in Bangladesh 40,000 3. Rent from Property in Japan received outside India 10,000 4. Income earned from Business in London which is controlled from Delhi (Rs. 15,000 received in India 35,000 5. Interest paid by an Indian companybutreceived outside India 9,000 6. Past untaxed profit broughtto India 33,000 7. Profit from a business in Thane and managed from outside India 50,000 8. Profit on sale of building in Mumbaibutreceived in Sri Lanka 40,000 9. Pension from an Indian employerin India received in Rangoon 30,000 Find out his gross total income if he is i) Residentand ordinarily resident. ii) Residentbut not ordinarily resident. iii) Non-residentin India for the assessmentyear2008-09.(15 Marks) b) Mr Chetan who is an Indian citizen returned to India on 1st July 2007 on a visit. He left India on 25 September2007.Prior to 1st April 2007 he was in India for more than 365days during the preceding four years 2003-04 to 2006-07.Whatis his residential status for the assessmentyear 2008-09? (5 Marks) Q2) Mrs Amrita joined XYZ Ltd., New Delhi, on 1st April 1982 as a Director. She receives the following emoluments during the previous year ending 31stMarch 2008.Determine the taxable income of Mrs. Amrita for the assessmentyear 2008-09,taking into accountthe following information: (20 Marks) a) Salary received Rs 16,000 b) Bonus received Rs 2,000 c) House Rentallowance Rs 6,800 d) Salary in lieu of leave Rs 12,000 e) Entertainment allowance Rs 3,000 f) Companyprovides free gas and electricity(cost) Rs 6,000 g) Domestic servant(not being sweeper,watchmen or gardener)paid for by the companyRs 12,800 h) Free education for her two sons in a school maintained by the company(cost) Rs 12,000 i) Free lunch in office Rs 10,000 j) Salary of cook Rs 12,000
- 10. Cook is engaged byMrs. Amrita. She contributes i) Rs 13,500 towards contribution to a recognized Provident fund and ii) Insurance premium ofRs 15,000 on a policy of Rs 1,40,000 taken on herown life. Her income from other sources is Rs 26,000 Besides,Mrs Amrita owns the following properties: a) House –Ipurchased on 1stJuly 2007 is given on rent(rent being Rs 2,000 permonth). Construction of house was completed on 1stJune 2007. b) House –II constructed in 1973 is self –occupied.Expenses incurredfor the two houses are as follows: House I House II Muncipaltax paid on 31stMarch 2008 2,100 6,200 Lease Rent200 1,200 Fire insurance 2,300 600 Repairs 200 - Collection charges 50 - Q3) ended 31stMarch,2008 : (20 Marks) Particulars Rs Particulars Rs To Salaries 56,000 By Gross profit 3,40,000 To Travelling expenses 14,000 BySubsidies and cash To Embezzlementof cash 10,000 Assistance from govt. 66,000 To Professional Tax 1,500 By Export Award received To Insurance on health From Government42,000 Of employees 2,250 By amountwithdrawn from To wealth tax 9,750 public providentfund A/c 52,000 To Diwali expenses 4,350 ByDividend from Indian Cos. 1,00,000 To telephone & telex charges 5.650 To Advertisement 17,500 To depreciation 10,000 To Interest on loan 15,000 To Guesthouse expenses 8,000 To expenses on scientific Research 2,12,000 To Net profit 2,34,000 6,00,000 6,00,000 Following additional information has been provided :
- 11. a) Salary includes paymentof Rs 20,000 outof India on which no tax has been deducted at source. b) The expenditure on scientific research allowable underthe Income Tax Act is Rs 2,04,500. c) Travelling expensesinclude Rs 2,400 incurred on travelling to Allahabad to attend Kumbhmela. d) Diwali expenses include Rs 1,000 paid to son for purchase ofcycle. e) Interest on loan is paid outside India on which no tax has been deducted atsource. f) Advertisement expenses includeRs 2,500 on advertisementin a brochure published bya political party and remaining expenses ofRs 15,000 the benefits of which will accrue for the period of5 years in all. g) Depreciation allowable as perIncome tax is Rs 8,650. Compute the taxable income from business ofMr. Narayan Vyas for the assessmentyear 2008-09. the previous year 2007-08:(20 Marks) Name of the AssetCost of acquisition Rs. FMV on 1stApril 1981 Rs. Full value of consideration Rs. Goodwill of a business ---40,000 4,00,000 Tenancyrights of a commercialbuilding ---- 1,00,000 6,00,000 Route permit ---- 50,000 5,00,000 Shares acquired in 1978 70,000 50,0004,00,000 ii) Would your answerchange ifthe Goodwill transferred is of a profession instead of business? iii) Whatshallbe your answerif the shares are sold through a recognized stock exchange on 1st December 2007 Q4b)The following incomes are received by Mr. Mohan during financial year 2007-08 a) Director’s fees Rs 2,000 b) Income from agricultural land in Pakistan Rs 5,000 c) Ground rentfor land in PathankotRs 10,000 d) Interest on Postal Savings bank A/c Rs 100 e) Interest on deposits with Industrial Finance Corporation ofIndia Rs 500 f) Dividend from a foreign companyRs 700 g) Rentfrom sub-letting a house Rs 26,250 h) Rentpayable by Mr. Mohan for the sub-lethouse Rs 12,000 i) Other expenses on sub-let-houseRs 1,000
- 12. j) Winnings from horse – race (Gross) Rs 12,300 k) Interest on securities (Gross)Rs 4,000 You are required to calculate Income from other sources ofMr. Mohan for the assessment year 2008-09