Tuesday, December 11, 2012

FIN621 old past paper

Date 8-10-012 at 11:00 am...
Question No: 1    ( Marks: 1 )    - Please choose one
 The trial balance shows Supplies of Rs.1,350 and Supplies Expense of Rs.0.  If Rs.600 of supplies are on hand at the end of the period, the adjusting entry would be:

       ► Supplies, Rs.  600 - Debit; Supplies Expense, Rs. 600 - Credit

       ► Supplies, Rs. 750 - Debit; Supplies Expense,    Rs. 750 - Credit

       ► Supplies Expense, Rs. 750 - Debit; Supplies, Rs. 750 - Credit

       ► Supplies Expense, Rs.  600 Debit; Supplies, Rs.  600 - Credit
 Question No: 2    ( Marks: 1 )    - Please choose one
 Which of the following accounts would NOT be included in a post-closing trial balance?

       ► Cash

       ► Accumulated depreciation

       ► Owner’s equity

       ► Fees earned

Question No: 3    ( Marks: 1 )    - Please choose one
 ABC Company has a cost of goods sold of Rs. 500,000. During the year the inventory increased by Rs. 10,000 and accounts payable increased by Rs. 15,000. The interest expense was Rs. 15,000 for the year and dividend of Rs. 11,000 were paid during the year. What would be the cash payments for the purchase of the merchandise.

       ► Rs. 505,000
       ► Rs. 516,000
       ► Rs. 490,000
       ► Rs. 495,000

Question No: 4    ( Marks: 1 )    - Please choose one
 Which of the following must be included in a company's summary of significant accounting policies in the notes to the financial statements?

       ► Description of current year equity transactions
       ► Summary of long-term debt outstanding
       ► Schedule of fixed assets
       ► Revenue recognition policies

Question No: 4    ( Marks: 1 )    - Please choose one
 The purpose of recording depreciation on productive assets is to:

       ► Reflect the decline in the market value of the assets each period

       ► Reduce income when the company has an exceptionally profitable year

       ► Be in conformity with the revenue recognition principle

       ► Allocate the original cost of a productive asset to expense over its useful life
Question No: 5    ( Marks: 1 )    - Please choose one
Which of the following is NOT an advantage of the Trial Balance?

       ► It ensures that the all accounts have identical debits and credits
       ► It ensures that the balance of each ledger account has been computed correctly
       ► The debit and the credit columns of trial balance have been added up correctly
       ► All the transactions have been recorded and nothing has been omitted
Question No: 6    ( Marks: 1 )    - Please choose one
Cost of a building is Rs. 90,000 and its estimated useful life is 30 years. What will be the depreciation expense of this building for one month by using straight line depreciation method?
       ► Rs. 600
       ► Rs. 250
      ► Rs. 300
       ► Rs. 500

Question No: 7    ( Marks: 1 )    - Please choose one
Which of the following regarding retained earnings is FALSE?
       ► Retained earnings represent earnings not distributed to stockholders
       ► Retained earnings is increased by net income and decreased by a net loss
       ► Retained earnings are a component of stockholders’ equity on the balance sheet
       ► Retained earnings are an asset on the balance sheet

Question No: 8    ( Marks: 1 )    - Please choose one
Warner Corporation reported net income in excess of its net cash flow from operations. A possible explanation of this difference is:
       ► Depreciation expense
       ► Non operating gains
       ► A decrease in income tax rates
       ► A decrease in accounts receivable over the period

Question No:9    ( Marks: 1 )    - Please choose one
 Which of the following is the basic function of the Trial Balance?
       ► To prove the equality of debits and credits
       ► To check the balance of all assets
       ►  To prepare the balance sheet
       ► To check the validity of accounts   

Question No: 10   (Marks: 1)    - Please choose one
 The indirect method shows the reconciliation from net income to operating cash flows. Select the adjustment that is added during the reconciliation.
       ► A decrease in accrued liabilities
       ► A decrease in Salaries Payable
       ► Payment of long-term debt
       ► An increase in Accounts Payable
Reat all were new but easy...

Question no 23: marks 3
Difference between Cost and Expense
Question no 24 marks 3:
Why receipts and payments of interest are classified as operating activities
Question no 25: marks 3
Calculate Depreciation using Straight line Method if Cost =100000, Residual Value is= 10000, Estimated Life = 5 years, (3 Marks)
Straight line Method = cost – residual value / estimated life
                                              = 100000 – 10000/5
                                               = 18000

Question no 26:  5 marks
. Gul Ahmad company has Cash sales 270,000 credit sales 490,000 account receivable decreased by 320,000.
Calculate net sales reported in income statement. 2marks

Net sales = cash sales + credit sales
                = 270000 + 490000
               = 760000                     

Calculate cash received from customers on account of account receivable. 3marks Cash received from customer = 270000+ 320000
                                                   = 590000


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