BBA 1st Semester Financial Accounting Exam 2022
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Questions and Answers

What is accounting, according to the provided text? How does a business use it?

Accounting is the way a business keeps track of its operations.

List the objectives, limitations, and significance of accounting in business.

Objectives of accounting are to record, classify, summarize, and interpret business transactions. Limitations of accounting include subjectivity, historical basis, and potential for fraud. The significance of accounting lies in providing financial information for decision-making, evaluating financial performance, and ensuring legal compliance.

What are IFRS, and what are its advantages?

IFRS stands for International Financial Reporting Standards. Its advantages include greater transparency, comparability, and consistency in financial reporting.

What are the challenges in adopting IFRS in India?

<p>Challenges in adopting IFRS in India include differences in cultural context, legal framework, and accounting practices. There may also be significant costs associated with implementation and training.</p> Signup and view all the answers

What is the purpose of writing a note about "Ethical Issues in Accounting?"

<p>A note on &quot;Ethical Issues in Accounting&quot; aims to highlight the importance of ethical conduct in the accounting profession and address potential issues that may arise.</p> Signup and view all the answers

Which of the following transactions would be considered "Salary Paid"?

<p>Paying your employees their wages. (C)</p> Signup and view all the answers

Which of the following transactions would be considered "Machinery Purchased for Cash"?

<p>Buying a new piece of machinery with cash. (A)</p> Signup and view all the answers

Which of the following transactions would be considered "Outstanding Salary"?

<p>Salary that has been earned by employees but not yet paid. (A)</p> Signup and view all the answers

Which of the following transactions would be considered "Building Sold"?

<p>Selling an existing building for cash. (A)</p> Signup and view all the answers

Which of the following transactions would be considered "Received Cash from Ramesh"?

<p>Receiving a payment from Ramesh for a sale. (C)</p> Signup and view all the answers

What are the "Heads of Accounts Involved" in the given transactions?

<p>The Heads of Accounts Involved include Salary, Machinery, Cash, Outstanding Salary, Building, and Ramesh.</p> Signup and view all the answers

What are the "Types of Accounts" involved in the given transactions?

<p>The Types of Accounts involved include Asset, Liability, Expense, and Income.</p> Signup and view all the answers

Which accounts need to be debited and credited for each transaction?

<p>Here's a breakdown of debits and credits for each transaction: (a) Salary Paid: Debit: Salary Expense, Credit: Cash (b) Machinery Purchased for Cash: Debit: Machinery, Credit: Cash (c) Outstanding Salary: Debit: Outstanding Salary Expense, Credit: Salary Payable (d) Building Sold: Debit: Cash, Credit: Building (e) Received Cash from Ramesh: Debit: Cash, Credit: Ramesh (or Sales Revenue if the cash is received from a sale)</p> Signup and view all the answers

Match the following items with their corresponding accounts:

<p>Salaries = Expense Rent = Expense Cash in Hand = Asset Debtors = Asset Trade Expenses = Expense Purchases = Expense Advances = Asset Bank Balance = Asset Creditors = Liability Sales = Income Capital = Equity Loans = Liability</p> Signup and view all the answers

What is the purpose of preparing Trading, Profit and Loss Account, and Balance Sheet from the given information?

<p>Preparing these financial statements helps in analyzing the company's profitability and financial position.</p> Signup and view all the answers

Briefly explain the purpose of a Cost Sheet.

<p>A cost sheet is a document that provides a detailed breakdown of the costs incurred in manufacturing a product or providing a service.</p> Signup and view all the answers

What is the difference between the Financial Books and the Cost Account?

<p>Financial books focus on recording and reporting financial transactions according to generally accepted accounting principles (GAAP). The Cost Account focuses on tracking the costs incurred in producing goods or services.</p> Signup and view all the answers

What is a Reconciliation Statement?

<p>A Reconciliation Statement is a document used to compare and explain the differences between two sets of financial information. In this case, it helps to reconcile the net profits reported in the financial books and the cost account.</p> Signup and view all the answers

What is the purpose of Activity Based Costing (ABC)?

<p>Activity-Based Costing (ABC) is a method of allocating costs to products or services based on the activities they consume.</p> Signup and view all the answers

What are the factors to be considered while adopting ABC?

<p>Factors to consider include identifying and analyzing activities, assigning costs to activities, and allocating activity costs to products or services.</p> Signup and view all the answers

How does ABC differ from Traditional Costing Systems?

<p>Traditional costing systems allocate costs based on volume measures, such as direct labor hours or machine hours. ABC allocates costs based on activities and their consumption by different products or services.</p> Signup and view all the answers

Flashcards

Accounting

The process of identifying, measuring, and communicating financial information about an organization to interested parties.

Objectives of Accounting

The primary objectives of accounting are to provide information for decision-making, to assess financial performance, and to ensure accountability.

Limitations of Accounting

Accounting has limitations such as subjectivity in estimations, historical data focus, and potential for manipulation.

Significance of Accounting in Business

Accounting is critical for businesses to track their financial health, make informed decisions, and ensure compliance with regulations.

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IFRS (International Financial Reporting Standards)

A set of global accounting standards used by businesses to create financial statements.

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Advantages of IFRS

IFRS aims to improve global comparability and transparency in financial reporting.

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Challenges in Adopting IFRS in India

Adopting IFRS in India presents challenges such as cost of implementation, differences in accounting practices, and cultural adaptation.

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Account

A record of financial transactions involving money.

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Types of Accounts

A classification of accounts based on their nature and function.

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Debit and Credit

The process of recording financial transactions in the appropriate accounts.

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Balance Sheet

A summary of a business's financial position at a specific point in time.

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Profit and Loss Statement

A statement that shows a business's revenues and expenses over a specific period.

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Trading Account

A statement that shows the cost of goods sold and the gross profit.

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Closing Stock

The value of goods available for sale at the end of a period.

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Provision for Doubtful Debts

A provision for potential bad debts based on an estimate of uncollectible receivables.

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Costing

A systematic process of recording, classifying, and summarizing the costs associated with producing goods or services.

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Cost Sheet

A detailed statement that summarizes the costs incurred in producing a good or service.

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Gross Profit

The difference between the cost of goods sold and the total sales revenue.

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Manufacturing Overhead

Expenses related to producing a good or service.

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Selling and Distribution Overhead

Expenses incurred in selling and distributing products.

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Reconciliation Statement

A statement that reconciles the difference between the net profit reported in the financial statements and the net profit reported in the cost accounts.

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Break-Even Point (BEP)

The point at which total revenue equals total costs.

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BEP Volume

The number of units that need to be sold to reach the break-even point.

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BEP Value

The total sales revenue required to reach the break-even point.

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Absorption Costing

A costing method that allocates fixed manufacturing overhead costs to each unit produced.

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Marginal Costing

A costing method that only considers variable costs in product costing.

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Normal Loss

A loss that is expected to occur during a production process.

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Abnormal Loss

A loss that is unusual and unexpected during a production process.

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Trial Balance

A list of all the accounts and their balances, which is used to check the accuracy of accounting entries.

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Balance Sheet

A comprehensive financial statement that shows a company's assets, liabilities, and equity at a specific point in time.

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Activity-Based Costing (ABC)

A method of allocating costs to products or services based on the activities required to produce them.

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Traditional Costing System

Traditional costing systems often use simpler methods of allocating costs, which can be less accurate than ABC.

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Job Costing

To calculate the cost of a specific job.

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Study Notes

BBA/BBA(MS)/BBA(IB) 1st Semester Financial and Management Accounting -I Examination, 2022

  • Examination details:
    • Examination type: Regular
    • Semester: 1st
    • Subject: Financial and Management Accounting-I
    • Paper: P1'
    • Time allowed: 3 hours
    • Maximum marks: 75
    • Instructions: Answer any five questions. All questions carry equal marks.

Question 1

  • Topic: Accounting Objectives, Limitations, and Significance in Business.
  • Description: Accounting is the process used by businesses to track their operations. This question requires an explanation of accounting objectives, limitations, and importance within a business environment.
  • Marks: 15

Question 2 (a)

  • Topic: IFRS Meaning and Advantages
  • Description: The question asks for the meaning and advantages of IFRS (International Financial Reporting Standards). Answers should address the challenges encountered in adopting IFRS in India.
  • Marks: 15

Question 2 (b)

  • Topic: Ethical Issues in Accounting
  • Description: This question asks you to write on the ethical issues involved in accounting.
  • Marks: 8.7

Question 3

  • Topic: Transaction Analysis and Account Classification
  • Description: This question provides a set of transactions and requires the student to identify the heads and types of accounts involved, along with debit and credit aspects of each transaction.
  • Marks: 15

Question 4

  • Topic: Financial Statement Preparation
  • Description: This question provides financial information, requiring students to prepare a Trading, Profit and Loss Account, and Balance Sheet. The supplementary information includes details like closing stock, outstanding salary, and rent, adjustments for doubtful debts.
  • Marks: 15

Question 5

  • Topic: Cost Sheet Preparation
  • Description: The question provides various details regarding a cost sheet preparation for a business including raw materials, opening/closing stock, direct wages, factory overhead, direct expenses, office/administration overhead, and selling/distribution overhead. Students must calculate total costs for accurate cost sheet preparation.
  • Marks: 15

Question 6

  • Topic: Reconciliation of Reported Profits between Financial and Cost Accounts
  • Description: This question details contrasting profit figures reported in financial and cost reports. Students will reconcile these differences by identifying reasons for variations.
  • Marks: 15

Question 7

  • Topic: Break Even Point (BEP) Calculations
  • Description: This question requires the calculation of BEP in terms of volume and value and the required sales to achieve specific profit targets.
  • Marks: 15

Question 8

  • Topic: Absorption vs. Marginal Costing, Normal vs. Abnormal Loss, Trial Balance vs. Balance Sheet
  • Description: This asks for a comparative analysis of different costing methods and their implications on financial statements.
  • Marks: 15

Question 9

  • Topic: Activity-Based Costing (ABC)
  • Description: This question requires a comprehensive understanding of ABC, including its definition, advantages, factors to consider when adopting it, and how it differs from traditional costing methods.
  • Marks: 15

Question 10

  • Topic: Job Costing and Overhead Application
  • Description: This question provides data for job costing, including wages and overhead costs. Students will determine and apply overhead costs based on estimated and actual costs.
  • Marks: (No mark mentioned)

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BBA/BBA(MS)/BBA(IB) 1st Semester Financial and Management Accounting-I Past Paper 2022 PDF

Description

Prepare for the BBA Financial and Management Accounting-I examination with this quiz. Covering essential topics such as accounting objectives, IFRS advantages, and their challenges in India, this exam requires answering five questions in three hours. Perfect for revising key concepts before the test.

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