WLC COLLEGE (INDIA)

ADVANCED CERTIFICATE LEVEL – II

MODULE NAME : ACCOUNTING FUNDAMENTALS
TIME : 10.00AM to 01.00PM
DATE : 22.06.09
Duration : 3 Hours

READ THE INSTRUCTIONS CAREFULLY

Kindly ensure NO MOBILE PHONES ARE BROUGHT in the examination hall.

Write your roll number in the box provided on the front of the answer book.

Write the name of the Module on the line marked “Subject” on the front of answer book.

Write your CAMPUS name on your main answer sheet.

Tick the appropriate boxes on the front of the answer book to indicate which Questions you have
answered.

Do not repeat the question in your answers, but show clearly the serial number of the question
attempted on the appropriate page in the answer book.

Please show detailed working notes (if any) in respect of each practical sum/s.

Please do all rough work on the paper on extra sheets and attach the same (if any) to the answer
sheets. No marks will be given for figures derived/arrived with rough work/calculation
attached/shown.

Please do not Scribble or mark anything on the question paper.

Please start a new question on a next sheet of your answer book.

Please be sure to write the question number of the question you are answering.

You could be subjected to surprise checks / full body search anytime during the examination.

Grading Criteria:

D: Clarity of concept, application of theory and practical comprehensive reasoning, working

notes, command over expression and neat work.
M: Careful application of theory and presenting appropriate practices with lucid thoughts,
brevity and clear understanding of the subject.
P: Understanding of theory and practices and neat presentation.
F: Poor concept application, careless work and untidy presentation.

ACL – II 1 of 2
 Section-A Case Study

From the following Forecast of income and expenditure, prepare a cash budget for the months
January to April, 2005:
Years Month Sales Purchase Wages Manufacturing Adm. Selling
(Credit) (Credit) expenses expenses Expenses
2004 Nov. 30000 15000 3000 1150 1060 500
Dec. 35000 20000 3200 1225 1040 550
2005 Jan. 25000 15000 2500 990 1100 600
Feb. 30000 20000 3000 1050 1150 620
Mar. 35000 22500 2400 1100 1220 570
April. 40000 25000 2600 1200 1180 710

Additional information is as follows:

1. The customer are allowed a credit period of 2 months.
2. A dividend of Rs 10,000 is payable in April.
3. Capital expenditure to be incurred: Plant purchased on 15th of January for Rs 5,000; a
building has been purchased on 1st March and the payments are to be made in monthly
installments of Rs. 2,000 each.
4. The creditors are allowing a credit of 2 months.
5. Wages are paid on the 1st of the next month.
6. Lag in payment of other expenses is one month.
7. Balance of cash in hand on 1st January, 2005 is Rs 15,000.

Section-B (Attempt Any Three)

Q.1 What do you understand by a cost sheet? How it is prepared?

Q.2 “Cost accounting is an essential tool of management”. Give your comments.

Q.3 What is the difference between absorption costing and marginal costing?

Q.4 What is a flexible budget? How it differs from fixed budget? Prepare a flexible
budget with imaginary figures.

Q.5 Mr. X furnishes the following data relating to the manufacture of a standard product during the
month of April, 2005:
Raw Material consumed 60,000
Direct Labour Charges 36,000
Machines hours worked 3,600
Machine Hour Rate Rs 5
Administrative overheads 20% on work cost
Selling overheads Re1/- per unit
Unit produced 10,000
Unit sold 9,000 at Rs 20 per unit
You are required to prepare a cost sheet from the above, showing:
a) Cost per unit
b) Profit per unit sold and profit for the period.

ACL – II 2 of 2