University of Madras Department of Commerce End Semester Examination Aptil/May 2013 Elective: Financial Accounting & Analysis - (BUS

S E 118) Date: 26-04-2013 Time: 3 Hours Maximum Marks: 60

SECTION - A Answer any FOUR questions All questions carry equal marks (4*5 marks = 20 marks) 1. How accounts can be classified? State the rules of double entry system. 2. Explain Break-even Point (BEP). 3 Explain Trial Balance. 4. What are the Limitations of Accounting Ratios? 6. From the following information, prepare a Trial Balance of Mr. Nanda for the year ended 31st March 2011. Particulars / Name of Accounts Capital Account Furniture & Fittings Motor Car Buildings Debtors Creditors Bad debts Opening Stock Purchases Sales Amount Rs. 25,000 1,280 12,500 15,000 7,600 5000 250 6,920 10,950 30,900 Particulars / Name of Accounts Bank (Cr. Balance) Purchase Returns Commission earned Sales Returns Advertisement Interest paid Cash Balance Insurance & Tax Salaries Amount Rs. 5,700 250 750 400 500 236 1,300 2,500 8,164

7. Opening Stock Rs.29,000; Closing Stock Rs.31,000; Sales Rs.3,20,000; GP Ratio is 25% Calculate Stock Turnover Ratio. SECTION - B Answer any FOUR questions All question carry equal marks (4*10 marks = 40 marks) 8. Explain the following: a) Current Ratio b) Liquidity Ratio c) Gross Profit Ratio d) Debt Equity Ratio 9. What do you mean by Marginal Costing and what are its advantages? 10. The following are obtained from a factory Sales (4,000 Units @ Rs.25/ per unit) Variable Cost Fixed Cost Calculate: a) P/V Ratio b) Break even sales c) Margin of Safety Rs. 1,00,000 72,000 16,800

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11. What are the various accounting conventions? 12. Short notes on Debtors turnover ratio, Debt equity ratio, P/V ratio. (or) Rectify the following errors using suspense account where ever necessary, a) The sale book under cost by Rs. 1,000 b) Purchase return book was over cost by Rs. 1,500 c) Cash received from sankar Rs. 2,000 was debited his account d) Purchase of furniture Rs. 500 was entered as purchase e) Discount allowed Rs. 50 has been credited to discount account. 13. From the following Trial Balance and adjustments, prepare final accounts for the year ended 31st December, 2012. Particulars Sundry Debtors Opening Stock (01-01-2011) Cash Balance Bank Overdraft Plant & Machinery Sundry Creditors Trade Expenses Goods Sold Salaries Carriage Outwards Rent Bills Payable Goods Bought Insurance Business Premises Commission Capital Carriage Inwards Total Debit Balances Rs. 32,000 22,000 1,580 17,500 175 2,225 300 900 1,18,870 1,200 34,500 1,000 2,32,250 Credit Balances Rs. 9,000 10,650 1,34,500 7,600 500 70,000 2,32,250

Adjustments: a) The Stock on 31st December 2012 was Rs. 11,000. b) Rent Rs.100 per month for the last quarter was unpaid. c) Depreciate Plant & Machinery by 10% per annum. d) Depreciate Business Premises by 20% per annum. e) Carry forward unexpired Insurance on 31st December 2010 Rs.400.

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