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Accountacy and Auditing Paper 2013
Q.1: MCQs
1. Double entry book keeping was fathered by: a) Luca Paoili b) Yoyji Ijiri c) Michael Hammer d) Ishikawa 2. Accumulated loss of a company is shown in the balance sheet as: a) Liaility b) Asset c) As footnote in Balance Sheet d) None of These 3. Under the companies ordinance 1984, disclosure of financial information is legally required for listed companies under: a) Schedule 6 b) Schedule 5 c) Schedule 4 d) Schedule 8 4. A company is considered sick under companies ordinance 1984 where current ratio is: a) Below 0.5:1 b) Below 3:1 c) Above 2.5:1 d) None of These 5. Banks are required to prepare their financial information as per following legislation: a) Free to prepare with no legislative requirements b) Under CO 1984 c) Banking Companies Ordinance 1962 d) State Bank Laws 6. Preparation of Financial Statements of Listed Insurance Companies in Pakistan is governed by: a) Insurance Act 1938 b) Insurance Ordinance 2000 c) Companies Act 1913 d) CO 1984 7. Trading loss occurs when: a) Revenues exceed the matching relevant costs b) Revenues and matching costs are equal to each other c) When relevant matching costs exceed revenues d) None of these 8. Accounting requirements governing NGOs are prescribed in: a) Partnership Act 1932 b) Cooperative Societies legislation c) CO 1984 d) None of these 9. Work Sheet is equivalent to: a) Balance Sheet b) Income Statement c) Trial Balance d) None of these 10. Work sheet does include: a) Fund flows statement b) Cash generation statement c) Cash Flow statement d) None of these 11. Deferred tax is shown in the balance sheet is: a) Liablility b) Assete c) An expenditure in income statement d) None of these 12. The following represent tangible assets and are shown in balance sheet as: a) People b) Expenses c) Revenues d) Goodwill (SOME CHALLA DESIGNED THIS PAPER ) 13. Under the rule of thumb a good current ratio is: a) 6:1 b) 10:1 c) .05:1 d) 2:1 14. Financial Analysis is a legislative requirement under: a) CO 1984 b) Partnership Act 1932 c) Voluntary Act d) None of these 15. Pakistan follows the following budget system at the federal level: a) Zero Based Budgeting b) Program Budgeting c) Responsibility Budgeting d) Incremental/Decremental Budgeting 16. Preparation of a budget by a company is compulsory under: a) No Law b) Several laws c) Securities & Exchange Ordinance 1969 d) CO1984 17. Depreciation must be accounted for: a) Revenues b) Fixed Assets c) Share Capital d) None of these 18. Accelerated depreciation is allowed under: a) Income Tax Ordinance 2001 b) Voluntary principles c) Prudential Regulations d) None of these 19. Partnerships are legally required to prepare their financial distribution on wide basis under: a) Partnership Act 1932 b) Securities & Exchange Rules 2000 c) Voluntary act of compliance d) None 20. A company is considered sick the market value compared to its par value is: a) 1:1 b) 2:1 c) 0.25:1 d) None of these |
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ACCOUNTANCY & AUDITING, PAPER-I Part II (ii) Candidate must write Q.No. in the Answer Book in accordance with Q.No. in the Q. paper. (iii) Attempt ONLY FOUR questions from part-II, selecting TWO questions from EACH SECTION. All questions carry EQUAL marks. (ix)Extra attempt of any question or any part of the attempted question will not be considered. (v) Use of calculator is allowed. SECTION-A Q.2. The following information is available: Trial Balance as at December 31, 2012. Particulars Debit Rs. Credit Rs. Capital 6400,000 Drawings 1813800 Good Will 3618200 Land & Building 2400000 Plant & Machinery 1600000 Loose Tools 120000 Bill Receivables 145800 Bill Payable 1352000 Creditors 3068840 Purchase Return 106000 Sales 8720000 Stock 1st Jan 2011 1677800 Purchases 2050800 Wages 858000 Carriage outward 22160 Carriage Inward 55000 Coal & gases 234160 Salaries 1414560 Rent, Rates & Taxes 113000 Discount 60520 Cash at Bank 1016840 Cash in Hand 18600 Sundry Debtors 1800000 Repairs & maintenance 74600 Printing & stationery 20600 Bad Debts 48520 Advertisement 140840 Sales Returns 85000 Furniture 48000 General Expenses 210040 19646840 19646840 The following adjustments are to be made : Closing stock as on December 31,2011 was Rs 1400000 Depreciation is to be provided on the following assets : ----plant & machinery 10% ----loose tools 10% ----furniture 10% ----land & building 2.5% Provide for the following payables : ----Wages –Rs 60000 ----Advertisement – Rs 20000 ----Salaries – Rs 120000 ----Repair & maintenance – Rs 15000 Provide 5% on the debtors against bad debts and 2%against discounts. Required: - Provide Trading, Profit & Loss Account a Balance sheet as at December 31, 2011 from to the above data. Q.3. The following results of a company are available: a. current ratio 6:1 b. Quick ratio 0.50:1 c. Debt Equity Ratio 90:10 d. Collection Index 136 days e. Time Interest Earned 08:1 Required:- Offer your comment on each of the above regarding their adequacy or otherwise. Q.4. Review salient features of zero-based budgeting. Who authored it? Is it relevant to conditions prevailing in Pakistan? Present your view point candidly. SECTION-B Q.5. Present legal requirements governing preparation of financial statement of Insurance Company under Insurance Ordinance, 2000. Illustrate your answer wherever you can. Q.6. G and D are equal partners in a business in which the books are kept by single entry. Their position on July 01, 2012 was as under: Liabilities Rs. Assets Rs. Bills Payable 62000 Cash in Hand 2700 Sundry Creditors 200000 Cash in Bank 138800 Capital Account G Rs. 800000 1600,000 Bills Receivable 46000 Capital Account D Rs. 800000 Sundry Debtors 486500 Stock 338000 Plant & Machinery 800000 Furniture & Fixture 50,000 1862000 1862000 The following existed as state of affair as on June 30, 2012. ----cash in hand Rs. 4000 ----cash at Bank Rs. 158000 ----sundry creditors Rs. 212000 ----stock Rs.367000 ----Sundry Debtors Rs. 668000 ----Bills Payable Rs. 6000 ----Bills Receivables Rs. 88000 ----plant & machinery is to be depreciated at 10%. Required:- calculate the profit of the year ended on june30, 2012 and draw up the statement of affair as on the date of showing the accounts of the partners in details assuming G withdrew Rs. 100,000 and D withdrew Rs.80000 during the year. Q.7. currently there is growing interest of more and more disclosure in financial reports of corporate. You are required to first list and then explain the followings:- Rationale behind the above movement. Push forces behind the above trend. How for one should go for full disclosure? Where one should stop? Q.8. Define and Illustrate the Followings:- a. Depreciation on Replacement Cost b. Revaluation of assets and legal provisions governing this. c. Deferred Taxation d. Cash Generation Statement. ********************************************** |
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11. Deferred tax is shown in the balance sheet is:
a) Liablility b) Asset c) An expenditure in income statement d) None of these According to IAS-12, deferred tax may be an asset or may be a liability. If it to be received/adjusted in future, it would be asset.If it is to be paid in future, it would be liability.But the examiner gave the options of asset and liability separately and no option was 'may be an asset or may be a liability'.Don't know kis option ko theek kren gay wo? Q k 'none of these 'bhi theek option nhi hai. I think paper setter needs refresher course. |
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Mistake by the paper setter
There was a mistake in the partner question (subjective portion). As it states that "the position of the business on July 01, 2012" then a balance sheet, then after that it says that "the following existed as state of affairs as on june 30, 2012." And at the end question states that "calculate the profit for the year ended on june 30, 2012."
Some guys raised their concern about it during the exam, the supretendent asked them to give a written complaint on this and he also said that other candidates will also get benefit of this error. What do you guys think, what will they do and what should be done in this regard? |
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Accountacy and Auditing Paper II 2013
PART-I ((MCQs) (COMPULSORY) Q.1. (i) Select the best option/answer and fill in the appropriate Circle on the OMR Answer Sheet. (20x1=20) (ii) Answers given anywhere, other than OMR Answer Sheet, shall not be considered. 1. Break-up value of a share can be determined by: (a) Net assets method (b) Yield method (c) Stock exchange quotation (d) None of these 2. In case a company is solvent, the interest on debentures is paid up to the date of: (a) The balance sheet (b) the commencement of winding up (c) Payment (d) None of these 3. Which of the following is not concerned with the valuation of goodwill? (a) Earning capacity method (b) Super profit method (c) Average profit method (d) None of these 4. Debenture holders having a floating charges have priority in payment over: (a) Preferential creditors (b) Secured creditors (c) Unsecured creditors (d) None of these 5. Two companies, X Co. and Y Co., go into liquidation and a new Co., Z Ltd, is formed. It is case of: (a) Absorption (b) External Reconstruction (c) Amalgamation (d) None of these 6. Expenses of liquidation met by vendor Company are debited to (by the Vendor company): (a) Realization account (b) Bank account (c) Goodwill account (d) None of these 7. In the books of consignee the expenses incurred by him on consignment are debited to: (a) Consignment account (b) Sales account (c) Consignor’s account (d) None of these 8. Bonus in reduction of premium appears in the revenue account: (a) As a expense (b) As an income (c) As a profit (d) None of these 9. A contributory is: (a) A creditor (b) Shareholder (c) Debenture holder (d) None of these 10. Appropriations out of profits in case of a banking company are made in: (a) Profit & loss app. A/c (b) Profit & loss A/c (c) Balance sheet (d) None of these 11. Rebate on bills discounted is: (a) An expense (b) An income (c) A liability (d) None of these 12. Increase in amount of bills payable results in: (a) Increase the cash (b) Decrease the cash (c) Has not effect on cash (d) None of these 13. Which of the followings is a non-operating income? (a) Profit on the sale of used plant in manufacturing company (b) Revenue from sales in trading concern (c) Dividends received by an investment company (d) Premiums received from an insurance company 14. Which of the following is not a capital reserve? (a) Premium on the issue of shares (b) Profit prior to Incorporation (c) Dividend equalization reserve (d) Profit on the sales of fixed assets 15. Depreciation as the term is used in accounting means: (a) Physical deterioration of a fixed asset (b) Decline in the market value of the asset (c) Allocation of the cost of fixed asset, over its useful life (d) Making a provision for the replacement of the fixed asset 16. Posting a wrong amount in ledger causes: (a) The trial balance is out of balance (b) Dose not cause the trial balance to the out of balance (c) Cause the ledger account to be out of balance (d) None of these 17. Bank over draft should be classified as: (a) Current asset (b) Current liability (c) Fixed asset (d) None of these 18. The most important test of solvency of a business is calculated with the help of the following ratio: (a) Net profit after taxes / Total assets (b) Total assets / Total outside liabilities (c) Total fixed assets / Capital employed (d) Total fixed assets / Total equity 19. Sales on account for company for the year ended December 31, 2012 amounted Rs. 50000, if the opening balance receivable was Rs. 10000 and the closing balance was Rs. 20000, the cash collected from customers must have been:- (a) 40000 (b) 50000 (c) 60000 (d) 70000 20. Financial accounting reports are prepared primarily: (a) To value the property of the company (b) To show managers the results of their departments (c) To help people make decisions about resource allocation (d) To show the value of shares in the company Part II Section A (Cost Accounting) Q.2 Abbas manufacturing company submitted following information at 31st December 2011. Inventories Opening Closing Raw Material 100000 30000 Facrory Supplies 2000 1000 Work in Process 50000 15000 Finished goods 100000 _____? Other data Direct Labour 100000 Indirect labour 5000 Electric supply expenses 2000 Heating and lighting 4000 Workmen's compensation 3000 Factory insurance 1000 Supertendence expenses 2000 Wages and rent factory 8000 Misc. expenses 1000 Factory supplies purchases 3000 Raw material purchased 230000 Tool expenses 2000 Finished goods inventory 1st january 200 units, sold during the year 2011, 5500 units @ Rs. 300 per unit and the closing inventory of finished goods at 31st December 2011 was 550 units. Required: (a) Cost of goods sold (b) An income statement for the year 2011 (20) Q.3 J.Town's stock at 1st january 2012 consisted of 100 units, cost as follows: FIFO 100 units@ $ 60 $ 6,000 Average cost 100 units @ $ 55 $ 5,500 During the year ended 31st December 2012 Town made the following sales and purchases: Purchases Sales(Units) January 10@ $ 60 March 40 April 80@ $ 100 June 30 November 20 December 10@ $ 120 Required: J. Town's stock at 31st December 2012 and the cost of goods sold for the year ended 31st December 2012 based on: (a) FIFO (b) Average cost(perpetual) (20) Section B (Auditing) Q.4 (a) Explain the relationship between desired level of assurance and legal liabilty of Auditors? (10) (b) List out five specific quantifiable events that an auditor can verify, and state specific criteria for evaluating the events. (10) Q.5 (a) Distinguish between the responsibilty for fraudulent omission and responsibilty for unintentional errors. (10) (b) Elaborate the different types of Audit, under the Companies Act 1984. (10) Section C (Income Tax) Q.6 The following is the profit & loss account of Bright Company (Public) Ltd. For the tax year 2010-2011. Find out the total taxable income of the company and total tax payable. (20) Debit side Rs Salaries and wages 80000 Printing & stationary 10000 Rent exp. 15000 Reserve for doubtful debts 7000 Director's Fee 3000 Donations 10000 Cost of issue of debentures 2500 Loss of embezzlement 5000 Provision for gratuity 10000 Vehicle repair 20000 Depriciation 15000 Bad debts 1100 Income tax 21000 Rent, rate & tax 6000 Net Profit 27000 232600 Credit side Gross profit 171600 Income from rented shop 21000 Casual income 10000 Dividend 15000 Winning from lottery 4000 Sundry receipts 11000 232600 Notes: 1. Depriciation allowable Rs. 11800 2. Donations were paid to approved institutions. 3. Salaries and wages include Rs. 12400 paid to the Director of the company Q.7 From the following data, calculate income tax payable by Mr. Hassan Khan for the year ending 30th june 2011. (20) 1. Basic salary Rs. 26000 p.m 2. Medical allowance Rs. 3500 p.m 3. House rent allowance Rs. 16000 p.m 4. Bonus Rs. 8000 5. Zakat deduction Rs. 5200 6. Agriculture income Rs. 50000 Section D (Business organization and finance) Q.8 (a) Identify three basic forms of business ownerships and state the merits and demerits of any one of them. (10) (b) How does a corporation operate? What effective roles can be played by the Board of Directors and top management in a corporation? (10) Q.9 Select any FOUR to describe moderately: (5 each) (20) (a) Types of share capital (b) Prospects (c) Sinking Fund (d) Issue of Shares at Discount (e) Memorendum of Association (f) Manufacturing Companies |
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Total units of finished goods at the end of period are provided i.e. 550 units. You just have to multiply these 550 units with unit cost of production. So calculate unit cost of production first.
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seher bano (Wednesday, March 20, 2013) |
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Indirect labour Electric supply expenses Heating and lighting Workmen's compensation Factory insurance Supertendence expenses Wages and rent factory Misc. expenses Tool expenses |
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