GUWAHATI UNIVERSITY (Board Question of Advanced Corporate Accounting for B.COM 6th semester of 2023)
Board Question paper of Advanced Corporate Accounting for B.COM 6th semester of 2023, SOLVED
2023
COMMERCE
(Honours Elective)
Paper COM-HE-6036
(Advanced Corporate Accounting)
Full Marks: 80
Time: Three hours
The figures in the margin
indicate full marks for the questions. Answer either in English or in Assamese.
1. Answer the following as directed:
(i) The IASB was
previously known as the Indian Accounting Standard Committee. (State whether the statement is true or
false)
ANSWER - False.
It was previously known as the
IASC (International Accounting Standards Committee), not the Indian Accounting
Standard Committee.
(ii) State the
meaning of corporate annual report.
ANSWER - A
corporate annual report is a yearly document that provides financial and
operational information about a company to stakeholders.
(iii) The
liquidator is entitled to receive his remuneration after payment of liquidation expenses.
(Fill in the blank)
(iv) Creditors
can propose voluntary liquidation of a company. (State whether the statement is true or false)
ANSWER - True.
Creditors
can propose voluntary liquidation of a company to address financial
difficulties and settle debts.
(v) What is bank
overdraft?
ANSWER - A bank overdraft is when an account holder
withdraws more money than they have in their account, resulting in a negative
balance.
(vi) Income on
non-performing assets is to be recognized on cash on basis. (Fill in the blank)
(vii) What is
bonus to policyholders?
ANSWER - Bonus
to policyholders is a share of profits given by insurance companies, often in
the form of additional coverage or increased payouts, to policyholders who have
maintained their policies for a certain period.
(viii) Annuity is
an income for the insurance company.
(State whether the statement is true or false)
ANSWER - False.
Annuity is an outgoing payment
made by an individual or entity to an insurance company or another institution
in exchange for a series of future payments or a regular income stream.
(ix) What is
investment accounting?
ANSWER - Investment
accounting tracks and manages financial activities related to investments,
ensuring accurate recording and reporting of their values.
(x) Profit earned
prior to incorporation cannot be distributed as dividend. (State whether the statement is true or false)
ANSWER - True.
Profit earned before a company's
incorporation is considered a pre-incorporation profit and cannot be distributed
as dividends.
2. Answer the
following questions: 2
x 5 = 10
(a) Mention the
major components of financial reporting.
ANSWER - Financial
reporting includes the balance sheet (assets, liabilities, equity), income
statement (revenue, expenses, profit), and cash flow statement (cash inflows,
outflows), providing insights into a company's financial health.
(b) What is
Liquidator's Final Statement of Account?
ANSWER - The
Liquidator's Final Statement of Account is a comprehensive document prepared by
a liquidator at the end of the winding-up process of a company, detailing the
distribution of assets to creditors and shareholders. It summarizes all
financial transactions during liquidation.
(c) What is
Statutory Liquidity Ratio (SLR)?
ANSWER - Statutory
Liquidity Ratio (SLR) is a requirement for banks to maintain a certain portion
of their deposits as liquid assets like cash, gold, or government securities,
ensuring financial stability.
(d) Explain the term Life Fund'
ANSWER - The
"Life Fund" refers to the total amount of money that life insurance company’s
hold, which comes from policyholders' premiums. It's used to pay out claims and
manage policy obligations.
(e) Mention two
objectives of preparing Investment Account.
ANSWER - Two
objectives of preparing an Investment Account are to accurately track and
report the performance of investments, and to ensure proper accounting and
management of investment-related transactions.
3. Answer the
following questions: (any four) 5
x 4 = 20
(a) Write a note
on IND AS.
ANSWER - Indian
Accounting Standards (IND AS) are a set of accounting rules used in India to
ensure consistency, transparency, and comparability in financial reporting.
They align with international standards, enhancing the quality and credibility
of financial statements for investors and stakeholders.
(b) State the
procedure of determining the liquidator's remuneration on liquidation of a
company.
ANSWER - The
liquidator's remuneration in a company's liquidation is determined by either a
court or creditors' committee. It's usually a percentage of the assets realized
and distributed. The liquidator submits a report on the work done, and the
remuneration is approved accordingly, ensuring fair compensation for their
services.
(c) Briefly
explain about 'Rebate on Bills Discounted' in the context of banking companies.
ANSWER - "Rebate on Bills Discounted" is
a practice in banking where a bank allows a reduction or discount on the
interest charged for discounting bills of exchange. It encourages early
repayment by offering a lower interest rate, benefiting both the borrower and
the bank in terms of faster liquidity and interest income.
(d) Write a short
note on re-insurance claim.
A reinsurance claim occurs when an insurance company
transfers a portion of its risk to another insurance company (reinsurer). If
the original insurer pays a claim to its policyholder, it can file a
reinsurance claim with the reinsurer to recover a portion of the claim amount,
reducing its own financial exposure.
ANSWER - To ascertain pre-incorporation profit or
loss, calculate the difference between the value of assets contributed by
promoters and liabilities assumed, as of the incorporation date. If assets
exceed liabilities, it's profit; if liabilities exceed assets, it's a loss.
Adjustments are made for any expenses or incomes incurred before incorporation.
(f) Mention the
contents of Corporate Annual Report
ANSWER - A Corporate Annual Report typically
includes financial statements (balance sheet, income statement, cash flow
statement), management's discussion and analysis, notes to the financial
statements, auditor's report, corporate governance information, performance highlights,
future outlook, and information about directors, executive compensation, and
shareholder information.
4. Answer the
following as directed:
(a) XY Ltd. went into
liquidation with the following liabilities:
(i) Secured
creditors ₹40,000 (Securities realised ₹40,000)
(ii) Unsecured
creditors ₹55,000
(iii) Amount due
to workmen ₹ 10,000
(iv) Liquidation
expenses ₹2,000
(v) Liquidator's
remuneration ₹4,000
(vi) Preferential
creditors ₹27,000
The various assets (excluding securities in the hands of secured creditors)
realised ₹25,000
ANSWER - Liquidator's Final Statement of Account
Liabilities:
1. Secured Creditors (Securities realized ₹40,000)
2. Unsecured Creditors ₹55,000
3. Amount due to Workmen ₹10,000
4. Liquidation Expenses ₹2,000
5. Liquidator's Remuneration ₹4,000
6. Preferential Creditors ₹27,000
Total
Liabilities: ₹138,000
Assets Realized (excluding secured creditors' securities):
₹25,000
Distribution
to Creditors:
1. Preferential Creditors ₹27,000
2. Secured Creditors (Securities realized ₹40,000)
(Remaining
securities after repayment to secured creditors)
Remaining
Assets: ₹25,000 - ₹40,000 = -₹15,000 (deficiency)
Since the remaining assets are insufficient to cover the
liabilities, there is a deficiency.
Distribution:
1. Preferential Creditors: ₹27,000
2. Unsecured Creditors: ₹55,000 (remaining amount)
3. Amount due to Workmen: ₹10,000
4. Liquidation Expenses: ₹2,000
5. Liquidator's Remuneration: ₹4,000
Total
Distribution: ₹98,000
Remaining Deficiency: ₹138,000
- ₹98,000 = ₹40,000
Note: The deficiency of ₹40,000
cannot be paid due to insufficient assets.
Liquidator's Final Statement of
Account has been prepared based on available information.
IT WILL BE UPDATED SOON
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