FUNDAMENTALS OF ACCOUNTING (BBA 105)

PART – A

FILL IN THE BLANKS :- 20 marks

1. The prime function of accounting is to__________________.2. The system of recording transactions based on dual aspect concept is called _____________.3. The cash discount allowed to a debtor should be credited to _____________.4. The process of transferring the debit and credit items from a journal to their respective

accounts in the ledger is termed as _______________.5. For goods withdrawn by the proprietor for personal use _________ account will be debited.6. The statement containing various ledger balances on a particular date is known as _________.7. Outstanding salaries are shown as ______________.8. Sales are equal to _________ plus ________.9. Goods given as samples should be credited to __________.10. Under diminishing balance method, depreciation ___________ every year.11. _______________ method is normally recommended for amortization of intangible assets.12. When money is withdrawn from the bank , the bank _______ account of the customer.13. In case the pass book shows a favourable balance and it is taken as the starting point for

preparing a bank reconciliation statement, cheques issued but not presented for payment should be _________ to find out cash balance.

14. If debenture of the nominal value of Rs. 100000 are issued at discount of 10% for net assets worth Rs. 80000, the balance of Rs. 10000 will be debited to ____________ account.

15. Shares having preferential right as to dividend and repayment of capital are termed as ________.

16. Return of shares voluntarily by a shareholder to the company for cancellation is called ______.17. The amount of share premium received by the company is shown under the heading _______

in the company’s balance sheet.18. In case debenture of Rs. 10000 are issued at par but payable at premium of 10 per cent. The

premium payable will be debited to ________________.19. The convention of ________ implies that all material information should be revealed in the

accounts.20. Accounting __________ are rules of action or conduct which are adopted by the accountant

universally.

PART – B

ATTEMPT ANY 3 QUESTIONS OUT OF 5 QUESTIONS 30 marks

1. “Accounting concepts and conventions are even relevant today”. Discuss the statement and the various concepts and conventions by giving suitable examples.

2. What is a profit and loss account ? How does it differ from trading account?

3. What is a Bank Reconciliation Statement ? How is it prepared ? Submit a pro – forma of a Bank Reconciliation statement with imaginary figures.

4. Write short notes on :-

a) Difference between Trial balance and Balance sheetb) Intangible assetsc) Accounting cycled) Hire purchase system

5. On 1st April 2004, Moon Ltd. Purchased a plant for Rs. 10,00,000. On 1st October, 2004, an additional plant was purchased costing Rs. 500000. On 1st October, 2005, the plant purchased on 1st October 2004 was sold off for Rs.400000. On 1st October 2006, a new plant was purchased for Rs. 1200000 and the plant purchased on 1st October, 2004 was sold for Rs. 420000 on the same date. Depreciation is to be provided at 10% per annum on the Written Down Value on 31st March every year. Prepare the Plant Account for three years ended on 31st March, 2007.

PART – C

ALL QUESTIONS ARE COMPULSORY ATTEMPT 1 QUESTION FROM SET OF QUESTIONS 50marks

1 (a). Define Accounting, state its functions. How does it differ from Book-Keeping? State the persons who should be interested in accounting information.

OR

1 (b). Journalise the following transactions. Also state the nature of each account involved in the Journal entry.

a. Dec. 1, 2000, Ajit started business with cash Rs.40000.b. Dec. 3, he paid into the bank Rs.2000c. Dec. 5, he purchased goods for cash Rs.15000.d. Dec. 8, he sold goods for cash Rs.6000.e. Dec. 10, he purchased furniture and paid by Cheque Rs.5000f. Dec. 12, he sold goods to Arvind for Rs.4000g. Dec. 14, he purchased goods from Amrit Rs.10000h. Dec. 15, he returned goods to Amrit Rs.5000i. Dec. 16, he received from Arvind Rs.3960 in full settlement.j. Dec. 18, he withdraw goods for personal use Rs.1000k. Dec. 20, he withdrew cash from business for personal use Rs.2000l. Dec. 24, he paid telephone charges Rs.1000m. Dec. 26, cash paid to Amrit in full settlement Rs.4900n. Dec. 31, paid for stationary Rs.200, rent Rs.500 and salaries to staff Rs.2000o. Dec. 31, goods distributed by way of free samples Rs.1000.

2 (a). “Is Trial Balance merely a proof of arithmetical accuracy”? Explain the errors which are not disclosed by a Trial Balance?

OR

2 (b). Prepare Trading and Profit and Loss account for the year ended at 31st December, 2000 from the following Trial Balance and adjustments :-

Trial BalancePARTICULARS Rs. Rs.

CapitalPlant and MachineryFixtures and FittingsFuel and Power for factoryOffice salariesElectric expenses of factoryTravelling expensesCarriage on salesCash at bankCash in handDebtorsPurchasesFactory wagesRent and ratesOffice expensesCarriage on purchaseDiscountDrawingsStock on 1st January 2000Manufacturing expensesSalesSales returnCreditorsPurchase returnsBills payableInsurance

110000344010847490784

185019204490136

9560016658019830353055561794844

13640434505360

14844

1140

186460

252354453606344

12844

503362 503362

Adjustments:-Stock on 31st December, 2000 Rs.33160; Depreciation: on Plant & Machinery 5%, on Fixtures & Fittings 10%, Outstanding Rent and Rates Rs.150; Prepaid Insurance Rs.140, Outstanding Wages Rs.700 and Outstanding Salaries Rs.1600.

3(a). Explain the need, significance and causes of depreciation? What factors should be considered for determining amount of depreciation?

OR

3(b). Write short notes on:-i. Sinking fund method

ii. Distinguish between “Straight Line Method” and “Written Down Value Method”.

4(a). What is Forfeiture of Shares? What are the legal requirements necessarily followed by the Board before forfeiture of shares? How can forfeiture shares be re-issued? Show Journal Entries for recording forfeiture and re-issue of forfeiture shares.

OR

4(b). Show Journal Entries for the following:- On 1st January 2000, a Company offers 8000 shares of Rs.10 each. Applications are received for full 8000 shares. Money payable is as follows:-

On Application Rs.3 per shareOn Allotment Rs.2 per shareOn First call Rs.3 per shareOn Final call Rs.2 per share

5(a). Briefly explain the difference between:-i. Personal and Impersonal account

ii. Real account and Nominal account

OR

5(b). What is meant by Hire Purchase System? How does it differ from Installment System?

BUSINESS ECONOMICS (BBA 103)

PART - A

FILL IN THE BLANKS (20 x 1= 20 marks)

1. Economics is a _____________________ science.2. Law of demand states that there is ______________ relationship between price and demand.3. If the demand of two goods are not at all inter-related, then it is called ___________ of

demand.4. Demand for a good is associated with another good, it is called __________ demand.5. In oligopoly, price determination is done using ____________ curve.6. The more we have of a thing, the __________ we desire additional units of it.7. The object of monopoly is ___________ maximization.8. At the point where _____________ is equal to _______, the profit will be maximized.9. The difference between fixed and variable costs holds good only in the _________ run.10. When the average cost is ___________, the marginal cost is less than the average cost and

when average cost is ___________, the marginal cost is higher than the average cost.11. At any given time, the demand for the commodity or service at the prevailing price is _______

than it would be at a higher price and ________than it would be at a lower price.12. Elasticity of demand for a commodity is said to be ____________ if the total expenditure on

the commodity increases in the event of a rise in its price.13. Demand for wheat is____________ elastic.14. _______________ is the addition made to the total cost by producing one more unit of output.15. If the price of the commodity rises relatively to other goods, the consumer will buy less of that

commodity and buy more of the other goods in place of this particular good. This is called _________.

16. Man’s wants are _________ and means to satisfy them are ________.17. The additional benefit which a person derives from a given increase of his stock of anything

_________ with the growth of the stock that he has.18. Goods that can be consume only once are known as __________ goods.19. ______________ is the utility at the point where the consumer stops further consumption of a

commodity.20. The elasticity is the ratio of the percentage change in the _____________________ to the

percentage change in the _____________.

PART – B

ATTEMPT ANY 3 QUESTIONS OUT OF 5 QUESTIONS (3 x 10 = 30 marks)

1. What is Managerial Economics? How it is different from Traditional Economics? What are the responsibilities of Managerial Economist?

2. Explain with example the ‘law of demand’ and discuss its main characteristics. What are its exceptions? Why does a demand curve always slope downwards to the right?

3. Discuss the nature of the short-run and long-run average cost curves. Why is the long-run cost curve flatter than the short-run cost curve?

4. What is Break-Even Analysis? State its limitations and uses? What are the objectives of Break-Even Analysis?

5. Write short notes on:i. Micro v/s Macro economics

ii. Degree or types of price elasticity of demandiii. Relationship between average variable cost, average fixed cost and average costiv. Graphical presentation of break-even point

PART – C

ALL QUESTIONS ARE COMPULSORY ATTEMPT 1 QUESTION FROM SET OF QUESTIONS (5 x 10 = 50 marks)

1(a). Illustrate the relationship of Managerial economics with other relevant academic disciplines.

OR

1(b). State and explain the relevance and importance of economics to management.

2(a). Define “Elasticity of Demand”. Describe the factors which determine the Elasticity of Demand for a commodity.

OR

2(b). What is the importance of demand forecasting? Which steps would you take in forecasting the demand? Explain ‘Delphi’ method of demand forecasting.

3(a). From the following information calculate Fixed Cost, Variable Cost, Average Fixed Cost, Average Variable Cost, Average Cost and Marginal Cost.

OUTPUT TOTAL COST012345678910

3006007007507808009001035118016502300

OR

3(b). What do you understand by Market Structure? Differentiate between Pure Competition and Monopoly.

4(a). Define Profit. How are Profits determined? Critically examine the Rent Theory of Profit.

OR4(b). Write short notes on:-

i. Cross elasticity of demandii. Margin of safety

iii. Break – even analysisiv. Pricing under Oligopoly

5(a). State the ‘Monopoly’ and ‘Monopolistic’ market conditions and trace a line of difference between the two.

OR

5(b). Meaning and objectives of business firms. What is the difference between Accounting Profit and Economic Profit.