INTERMEDIATE EXAMINATION SET 1

MODEL QUESTION PAPER TERM – DECEMBER 2024

PAPER – 6 SYLLABUS 2022
FINANCIAL ACCOUNTING
Time Allowed: 3 Hours Full Marks: 100
The figures in the margin on the right side indicate full marks.

SECTION – A (Compulsory)

I. Choose the correct option: [15 x 2 = 30]

(i) At the end of the accounting year the capital expenditures are shown in the:
a. assets side of the Balance Sheet.
b. liabilities side of the Balance Sheet
c. debit side of the Profit and Loss A/c.
d. credit side of the Profit and Loss A/c

(ii) Memorandum Joint Venture Account is prepared when _______________.

a. the separate set of books is maintained for Joint Venture
b. each Co-venture keeps records of all transactions.
c. each Co-venture keeps records of their own transactions only.
d. All of the above cases

(iii) On 1.1.2024 Mr. X took delivery from Mr. Y of 5 machines on a hire purchase system. ₹ 4,000
being paid on delivery and the balance in five instalments of ₹ 6,000 each, payable annually
on 31st December. The vendor company charges 5% interest p.a. on yearly balances. The cash
price of 5 machines was ₹ 30,000. Calculate the interest per annum.
a. ₹ 4000
b. ₹. 3000
c. ₹. 2000
d. None of Above

(iv) In Hire Purchase system cash price plus interest is known as _________________.
a. Capital value of asset
b. Book value of asset
c. Hire purchase price of asset
d. Hire purchase charges

(v) Which of the following is true in respect of the pro-forma invoice?

a. It is a document sent by the consignor to the consignee
b. Only the details of the goods returned are recorded in this document.
c. It acts as an evidence of the remittance of money on consignment basis.
d. None of the above

(vi) Income & Expenditure A/c shows subscriptions ₹ 8,20,000; Subscriptions accrued in the
beginning of the year and at the end of the year were ₹ 74,000 and subscription received in
advance at the end of the year was ₹ 96,000. The figure of subscription received that would
appear in Receipts & Payments A/c will be:

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Directorate of Studies, The Institute of Cost Accountants of India
 INTERMEDIATE EXAMINATION SET 1
MODEL QUESTION PAPER TERM – DECEMBER 2024
PAPER – 6 SYLLABUS 2022
FINANCIAL ACCOUNTING
a. ₹ 798,000
b. ₹ 6,50,000
c. ₹ 9,50,000
d. ₹ 8,42,000

(vii) The Sacrifice ratio is used at the time of ____________.

a. Admission of a partner
b. Retirement of a partner
c. Death of a partner
d. Dissolution of a partner

(viii) A and B are partners sharing profit an d losses in the ratio of 3: 2. C is coming as a new
partner for 1/5th share of future profit. Calculate new profit sharing and sacrificing
ratio.
a. 3:2
b. 8:5
c. 2:3
d. 5:3

(ix) The Full form of GAAP is _____________________.

a. Generally Accepted Accounting Principles
b. Generally Accepted Accountancy Principles
c. Globally Accepted Accounting Principle
d. Global Accounting Accepted Principles

(x) From the following details estimate the capital as on 31.03.2024, Capital as on 01.04.2023₹
4,10,000. Drawings ₹ 40,000, Profit during the year ₹ 50,000.
a. ₹ 4,10,000
b. ₹ 4,50,000
c. ₹ 4,20,000
d. ₹ 4,00,000

(xi) As on 31st March, 2024 debtors and additional bad debts are ₹ 8,00,000 and ₹ 10,000
respectively. If the provision for bad debts is made at 5% on debtors, then amount of such
provision will be________________.
a. ₹ 40,000
b. ₹ 50,000
c. ₹ 39,500
d. ₹ 40,500

(xii) Which of the following is not a feature of Trial Balance?

a. It is a list of debit and credit balances which are extracted from various ledger accounts;
b. It does not prove arithmetical accuracy which can be determined by audit;
c. It is not an account. It is only a statement of account;
d. All the transactions are primarily recorded in this book; hence it is the primary book of entry.

(xiii) In a Cash Book Debit balance of ₹112 brought forward as credit balance of ₹ 121, while
preparing a Bank Reconciliation Statement taking the balance as per Cash Book as the
starting point:
a. ₹112 to be added
b. ₹121 to be added

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Directorate of Studies, The Institute of Cost Accountants of India
 INTERMEDIATE EXAMINATION SET 1
MODEL QUESTION PAPER TERM – DECEMBER 2024
PAPER – 6 SYLLABUS 2022
FINANCIAL ACCOUNTING
c. ₹ 233 to be added
d. ₹112 to be subtracted

(xiv) Purchase of a laptop for office use wrongly debited to Purchase Account. It is an error of
_______________.
a. Omission
b. Commission
c. Principle
d. Misposting

(xv) Shiva draws a bill on Sanat on 25th October, 2023 for 90 days, the maturity date of the bill
will be.
a. 27th January, 2024
b. 26th January, 2024
c. 25th January, 2024
d. 28th January, 2024

SECTION – B

(Answer any five questions out of seven questions given. Each question carries 14 Marks)

[5 x 14 = 70]

2. (a) On 1st April, 2021, Som Ltd. purchased a machine for ₹66,000 and spent ₹5,000 on
shipping and forwarding charges, ₹7,000 as import duty, ₹1,000 for carriage and
installation, ₹500 as brokerage and ₹500 for an iron pad. It was estimated that the
machine will have a scrap value of ₹ 5,000 at the end of its useful life which is 15 years.
On 1st January, 2022 repairs and renewals of ₹3,000 were carried out. On 1st October,
2023 this machine was sold for ₹50,000. Prepare Machinery Account for the 3 years.
[7]

(b) The Trial Balance of a concern has agreed but the following mistakes were discovered
after the preparation of Final Accounts.
(i) No adjustment entry was passed for an amount of ₹2,000 relating to outstanding rent.
(ii) Purchase book was overcast by ₹1,000.
(iii) ₹ 4,000 depreciation of Machinery has been omitted to be recorded in the book.
(iv) ₹600 paid for purchase of stationary has been debited to Purchase A/c.
(v) Sales books was overcast by₹ 1,000.
(vi) ₹ 5,000 received in respect of Book Debt had been credited to Sales A/c.
Show the effect of the above errors in Profit and Loss Account & Balance Sheet.
[7]

3.(a) X draws a bill for ₹1,200 and Y accepts the same for mutual accommodation in the ratio
of 4:2. X discounts the bill for ₹1,110 and remits 1/3rd of the proceeds to B.
Before the due date, Y draws another bill for ₹1,800 on X in order to provide funds to
meet the first bill. The second bill is discounted for ₹ 1,740 by Y and a sum of ₹360 is

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Directorate of Studies, The Institute of Cost Accountants of India
 INTERMEDIATE EXAMINATION SET 1
MODEL QUESTION PAPER TERM – DECEMBER 2024
PAPER – 6 SYLLABUS 2022
FINANCIAL ACCOUNTING
remitted to X after meeting the first bill. The second bill is duly met. Show journal entries
in the books of both X and Y. [7]

(b) ER Logistics acquired a delivery van on hire purchase on 01.04.2023 from Mahavir
Enterprises. The terms were as follows:
Particulars Amount (₹)
Hire Purchase Price 180,000
Down Payment 30,000
1st instalment payable after 1 year 50,000
2nd instalment after 2 years 50,000
3rd instalment after 3 years 30,000
4th instalment after 4 years 20,000
Cash price of van ₹1,50,000. Calculate Total Interest and Interest included in each
instalment. [7]

4. X, a sole trader furnishes you with the following bank summary for the year ended
December 31, 2023

Particulars ₹ ₹
Balance on December 31, 2022 11,000
Add: Deposits:
Cash [out of cash sales] 1,25,000
Collection from Credit Customers 3,50,000
Income from Personal Investment 36,000
5,11,000
5,22,000
Deduct: Cash Withdrawn from:
Personal Drawings 20,000
Shop Expenses 40,000 60,000
4,62,000
Cheques issued to Suppliers of
Goods 3,50,000
Services 40,000
Cheques issued for Personal Purposes 55,000
Bank Charges 500 4,45,500
Balance on December 31, 2023 16,500

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Directorate of Studies, The Institute of Cost Accountants of India
 INTERMEDIATE EXAMINATION SET 1
MODEL QUESTION PAPER TERM – DECEMBER 2024
PAPER – 6 SYLLABUS 2022
FINANCIAL ACCOUNTING
X informs you that he had the following Assets and Liabilities in addition to the Bank
Balance described on December 31, the extracts of which are as under:
Asset & Liabilities 2023 2022
₹ ₹
Assets:
Cash Balance 7,000 4,000
Amounts due from Customers 37,000 27,500
Unsold Inventory at Cost 13,000 10,000
Prepaid Expenses 3,000 2,000

60,000 43,500
Liabilities:
Creditors for Goods 23,000 28,000
Creditors for Services 2,500 1,500

25,500 29,500

He also informs you that:

A. He uses 75% of cash sale proceeds for making cash purchases; the remaining
balance being deposited in Bank.
B. He had allowed cash discount of 5,000 to his credit customers for prompt
payment; he was allowed cash discount 7,000 by his suppliers of goods for prompt
payment.
C. Collections from credit customers and payments to suppliers of goods are
invariable by crossed cheques.
X ask you to show his capital account and prepare:
(i) Receipt and payment account for the year ended December 31, 2023
(ii) Trading and Profit & Loss account for the year ended December 31, 2023
(iii) Balance Sheet as on December 31, 2023 [14]

5. A partnership firm was dissolved on 30th June, 2024. Its Balance Sheet on the date of
dissolution was as follows:

Liabilities (₹) Assets (₹)

Capitals : Cash 5,400
Atrik Sundry Assets 94,600
Mohit 38,000
Rupa 24,000
Loan A/c — Mohit 18,000
Sundry Creditors 5,000
15,000
1,00,000 1,00,000
The assets were realised in instalments and the payments were made on the proportionate
capital basis. Creditors were paid ₹ 14,500 in full settlement of their account. Expenses of

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Directorate of Studies, The Institute of Cost Accountants of India
 INTERMEDIATE EXAMINATION SET 1
MODEL QUESTION PAPER TERM – DECEMBER 2024
PAPER – 6 SYLLABUS 2022
FINANCIAL ACCOUNTING
realisation were estimated to be ₹ 2,700 but actual amount spent on this account was
₹ 2,000. This amount was paid on 15th September. Draw up a Memorandum of distribution
of Cash, which was realised as follows:
On 5th July ₹ 12,600
On 30th August ₹ 30,000
On 15th September ₹ 40,000
The partners shared profits and losses in the ratio of 2: 2: 1. Give working notes. [14]

6. (a) SS Textiles Ltd. have a branch in Auckland, New Zealand. The trail balance of the branch
as on 31.03.2023 was as given below:
Particulars Dr. (NZ $) Cr. (NZ $)
Head Office Account 18,000
Sales 1,20,000
Goods from the Head Office Account 90,000
Opening Stock 15,000
Office furniture 20,000
Cash 100
Bank 1,900
Expenses outstanding 2,000
Salaries 6,000
Taxes & Insurance 500
Rent 2,000
Debtors 4,500
1,40,000 1,40,000
The Branch Account in the head office showed a debit balance of ₹13,20,000 and ‘Goods sent
to Branch Accounts’ a credit balance of ₹80,00,000. Office furniture were acquired in 2021
when NZ $1 = ₹80. The exchange rates were (NZ $1): January 1, 2023 - ₹ 88; December 31,
2023 - ₹ 92; Average – ₹ 90. The stock at branch on December 31, 2023 was valued at NZ
$9,000.
Convert the Branch Trial Balance into rupees and prepare the Branch Trading and Profit and
Loss Account for 2023, and the Branch Account in Head Office books. Depreciation is to be
written off the office furniture @ 10%. [7]

(b)A fire occurred on Mar. 15, 2024 in the premises of Omega Ltd. A Loss of Profit policy was
taken by Omega Ltd. for ₹ 80,000. The indemnity period was for 3 months. Net Profit for the
year ending Dec. 31, 2023 was ₹56,000 and standing charges (all insured) amounted to

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Directorate of Studies, The Institute of Cost Accountants of India
 INTERMEDIATE EXAMINATION SET 1
MODEL QUESTION PAPER TERM – DECEMBER 2024
PAPER – 6 SYLLABUS 2022
FINANCIAL ACCOUNTING
₹49,600. Determine insurance claim from the following details available from quarterly sales
tax returns:
Sales 2021 2022 2023 2024
(₹) (₹) (₹) (₹)
From Jan.1 to Mar.31 1,20,000 1,30,000 1,42,000 1,30,000
From Apr.1 to June 30 80,000 90,000 1,00,000 40,000
From July 1 to Sept.30 1,00,000 1,10,000 1,20,000 1,00,000
From Oct.1 to Dec.31 1,36,000 1,50,000 1,66,000 1,60,000

Sales from 16.3.2023 to 31.3.2023 28,000

Sales from 16.3.2024 to 31.3.2024 Nil
Sales from 16.6.2023 to 30.6.2023 24,000
Sales from 16.6.2024 to 30.6.2024 6,000 [7]

7. (a) Describe the disclosure requirements under AS-11 for exchange differences recognised in
the profit & loss account. [7]

(b) On 14.08.2023, Pushkar Ltd. obtained a loan from RRC Bank of ₹ 65 lakhs to be utilised
as under:
Purchase of equipment: ₹ 19,50,000;
Construction of factory shed: ₹ 26,00,000;
Advance for purchase of delivery vehicle: ₹6,50,000;
Working capital: ₹13,00,000.
In March, 2024 installation of the machinery was completed and also construction of
factory shed was completed and the machinery installed. However, the truck was not
delivered within 31.03.2024. Total interest charged by the bank for the year ending
31.3.2024 was ₹11.70 lakhs. Discuss how the interest amount would be treated in the
financial statements of the company as per AS 16. [7]

8. Answer the following questions:

(a) Which factors govern the selection of applicable accounting policies. [5]
(b) On 31st March 2023, a club had subscription in arrears of ₹28,000 and in advance ₹4,000.
During the year ended 31st March 2024, the club received subscription of ₹2,08,000 of which
₹12,500 was related to 2024-25. On 31st March, 2023, there were 5 members who had not
paid subscription for 2024 @ ₹1,600 per person. Prepare the Subscription Account for the
year 2023-24. [5]

(c) Examine the applicability of Section 37 of the Partnership Act. [4]

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Directorate of Studies, The Institute of Cost Accountants of India