RELIABLE COMMERCE CLASSES

SECTION-1

FAA II

60 MARKS

2 HRS

Q.1 M/s Jadhav construction undertook contract for Rs. 5,00,00,000 on 1st August,2008. The contract was completed on 31st March, 2010. The contractor closes his accounts on 31 st March.The details of the contract are as follows: Particulars For the period ended For the period ended 31-3-2009 31-3-10 Material issued 95,48,500 1,17,65,000 Direct labour 31,37,800 45,40,000 Subcontract charges 7,88,900 28,13,000 Administrative Overheads 15,85,400 31,42,000 Supervision charges 3,45,600 8,05,500 Material Returned to Stores 1,32,400 2,44,300 Work uncertified 5,23,200 Work certified (cumulative) 2,00,00,000 5,00,00,000 Material at site 1,00,600 Cash received 1,80,00,000 3,20,00,000 Architect Fees 4% of work certified 4% of work certified The plant and machinery purchased 1-8-2088 for the contract was Rs. 84,25,000 and the estimated scrap value of the plant and machinery at the end of the contract was Rs. 4,25,000. It realized on completion of contract at its estimated scrap value. You are required to prepare: 1. Contract A/C for the period ended 31-3-2009 and 2. Contract A/C for the year ended 31st march 2010 (15) (OR) Q.1 Om industries Ltd. Is manufacturing product which passes through three consecutive process process1, Process2 and Process 3 The following figures have been taken from their boos for the month ended on 31 st January 2011 Particulars Process I Process ii Process iii Quantitative information: Basic Raw material at Rs. 10 25,000 per (kgs) 24,000 23,200 22,250 Output during the month (kgs) Other additional information: Process material 1,50,000 2,70,000 3,50,000 Direct wages 80% of process 70% process 60% process material material material Factory overheads 80% of Direct 90% of direct 75% of Direct Wages wages wages Machine overheads 22,000 16,980 15,620 Normal Loss % 2% 4% 4% Scrap value per kg(Rs) 2 3 5
1

RELIABLE COMMERCE CLASSES

FAA II

60 MARKS

2 HRS

You are required to Prepare process Accounts Q.2 following details are furnished by MBA Ltd. Of expenses incurred during the year ended 31st march, 2010 Particulars Rs. Direct material 3,40,000 Opening stock of finished goods (1,000 units) 85,250 Closing stock of Finished Goods(2,000 units) ? Depreciation on plant and machinery 96,000 Loss on sale of machinery 17,500 Trade fair expenses 85,500 Direct expenses 1,60,000 General Managers Salary 3,80,000 Dividend paid 7,800 Direct wages 2,60,000 Advertisement 1,85,250 Depreciation on computers 1,72,000 Drawing and designing expenses 54,000 Purchase of machinery 1,90,000 Depreciation on delivery van 1,14,000 Office maintenance charges 1,80,000 Factory rent 1,50,000 Sales(19000 units) 22,80,000 Closing stock of Finished Goods to be valued at Cost of production. You are required to prepare cost sheet showing various elements of cost both in total and per unit and also find out profit and per unit profit. Q.2 A) from the following particulars, you are required to calculate: I) Fixed cost ii) Profit volume ration iii) Break even sales iv) Sales to earn profit of Rs. 6,00,000 v) Margin of safety of the year 2009. Particulars 2009(Rs.) 2010(Rs.) Total cost 12,96,000 18,72,000 Sales 14,40,000 21,60,000 b) From the following information calculate; 1. labour cost variance 2. labour rate variance and 3. Labour Efficiency variance Standard Hours for 4 units - 24 hours
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RELIABLE COMMERCE CLASSES

Standard Rate Actual production Actual Hours Actual Rate

FAA II

60 MARKS

2 HRS

-Rs. 18 per unit -1,800 units -10,500 Hours -Rs. 3.10 per hour

SECTION II
Q.3 a) Distinguish between vouching & verification in brief. (8 marks) b) What are the Qualification and Disqualification of Auditor? (7 marks) OR Q.3 a) Explain in detail the provisions of Companies Act, 1956 regarding Appointment of an auditor. (8 marks) b) What is Window dressing? What are the objections against it? (7 marks) Q.4 SELECT THE APPOINTMENT OPTION & REWRITE THE FOLLOWING SENTENCES: 1. Which of the following errors will not affect the trial balances? a) Wrong balancing of an account b) Wrong totaling of an account c) Writing an amount in the wrong but on the correct side d) None of these 2. Sales book was overcast by Rs. 500. This is a) Error of omission b) Error of commission c) Error of principle d) None of the above 3. ---------- is basically responsible for prevention & detection of Errors& Frauds. a) Auditor b) Management c) Accountant d) Cashier 4. Balance Sheet audit includes verification of; a) Assets b) Liabilities c) Income & expenditure accounts where applicable d) All of the above 5. Audit of banks is an example of : a) Statutory audit b) Balance sheet audit c) Concurrent audit
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RELIABLE COMMERCE CLASSES

d) All of the above 6. An audit programmed may be a) Statutory b) Permanent c) Fixed or flexible d) Standard 7. Working papers are the property of the a) Client b) Client & the Auditor c) Auditor d) None of the above

FAA II

60 MARKS

2 HRS

8. Audit programmed is prepared by a) The client b) The client& the auditor c) The auditor & his assistants d) The chief accountant 9. Current file & permanent file are together known as a) Audit plan b) Audit programmed c) Audit procedures d) Audit working papers 10. Internal auditors are appointed by a) Board of Directors in a board meeting b) Shareholders in annual general meeting c) The management d) The central Government 11. Checking serial number of vouchers during vouching helps the auditors to a) Detect errors of principle b) Detect compensating errors c) Detect errors of omission d) None of the above 12. Checking serial number of vouchers on the voucher during vouching helps the auditor to obtain evidence that a) The transaction took place b) There are no unrecorded transactions c) The transaction is recorded in the books on the right date d) The transaction is valid 13. Which of the following documents is not relevant for vouching sales?
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RELIABLE COMMERCE CLASSES

FAA II

60 MARKS

2 HRS

a) Daily cash sales summary b) Delivery challans c) Credit memos d) Sale department attendance record 14. Government companies Auditor are appointed by a) Share holders b) Director c) Comptroller and auditor general of India. d) Management 15. Which audit is conducted in between 2 consecutive Annual audits? a) Periodic Audit b) Concurrent Audit c) Interim audit d) Final audit

OR
Q.4 state whether following statements are True or False 1. 2. 3. 4. 5. 6. The term general purpose financial statements does not include Directors Report. A clean audit report indicates that the business will continue to be profitable in future. Errors of principal will affect the Trial balance. Interim audit of company is compulsory under the Indian companies Act.1956. An audit programmed should not be in writing as it is confidential. A copy of the audit working papers should also be given to the company for their reference 7. Audit procedures mean the methods used to obtain audit evidence. 8. Vouching is the audit procedure to check the balances or various accounts as at the end of the year. 9. Random selection method of sampling is known as interval sampling. 10. Internal auditor must be a qualified chartered accountant. 11. Auditor should verify whether the payee has signed on a revenue stamp. If the sum exceed Rs. 50. 12. Auditor need not check the Goods received note in case of cash purchase. 13. Verification means comparing the entries in books of accounts with documentary evidence in support thereof. 14. An invoice is reliable evidence that the asset is owned by the company. 15. The first auditor of a company are appointed by the shareholder in the first meeting of the members to be held within 30 days of the date of incorporation of the company