Course Outline Course Title: Financial Accounting Course No: BS (A&F): ACC 152 Class: BS (A &F), BS (Commerce) Course No: BS (Commerce): ACC 152 B.Com (Annual system): B.Com (Annual system): Part I, Paper VII Course Objectives: 1. The objective of the course is to introduce the language of business and to train the students for the preparation of financial statements. 2. To develop competence in using computerized accounting systems. 3. To teach the accounts of different forms of business organizations. Topic Corporation, Companies formation, recording of issue of shares Stock splits; right issue of shares; treasury stock ; Sources of retained earnings; retained earnings appropriation to dividends and reserves; concept and types reserves; Valuation of goodwill and shares, Liquidation of joint stock companies. Accounting for the cash dividends, stock dividends. IAS-33 Earnings per Share Account for purchased stock warrants. EPS, Basic EPS, Primary EPS, Diluted EPS, Fully Diluted and Anti Diluted EPS Adjust the weighted average number of common shares for stock dividends, stock splits, and reverse splits. Use of treasury stock method State the major reporting and disclosure requirements for earnings per share Long term liabilities Accounting Information System (AIS) an accountant s perspective. Transaction Processing, ethics, fraud and internal control Revenue cycle, expenditure cycle purchase and cash disbursement procedure, payroll processing and fixed asset procedures. Conversion cycle, financial reporting and management reporting system. Computerized Accounting System Elementary discussion on manual & E.D.P. accounting How to design a chart of Account? Its types along with practical examples. Peachtree Complete accounting software 2006. Section Section A Section B Section C
MODEL PAPER FOR B.COM PART 1 ANNUAL EXAMINATION SYSTEM 2009 & ONWARDS FINANCIAL ACCOUNTING OBJECTIVE PART TIME ALLOWED = 30 MINUTES MAX MARKS = 30 INSTRUCTIONS TO CANDIDATES: This paper comprises 30 MCQ s. Each MCQ carries 1 mark. Please encircle the correct option only. Cutting, overwriting and use of ink remover is not allowed. 1. The major disadvantage of a corporation over partnership is: A. Limited liability of stockholders. B. Additional taxes. C. Transferable ownership rights. D. None of the above. 2. In the stockholders equity section the cost of treasury stock is deducted from: A. Total paid-in capital B. Retained earnings. C. Total shareholders equity. D. Common stock in total paid-in capital. 3. In stock splits, number of outstanding shares is A. Doubled B. Decreased C. Increased D. All of the above 4. When Stock dividend is declared by the company, Balance sheet total is A. Increased with the amount of dividend B. Not affected C. Decreased D. None of the above 5. Goodwill of a corporation and remuneration of its managers A. Related with EPS B. Not Related with EPS C. Positively Related with EPS D. Negatively Related with EPS 6. While calculating Bond s value A. Only Maturity value is considered B. Periodic interest payments are considered C. Both are considered D. Both are ignored.
7. When a bond is redeemed before maturity, which of the following actions are necessary A. Eliminate the carrying value of the bond at redemption B. Record the cash paid C. Recognize the gain or loss on redemption. D. All of the above. 8. Transaction cycles are studied because A. These are easy to understand B. They show relationship C. Accounting is continuous D. All of the above 9. Which of the following is one of the Payroll reports? A. Inventory status report B. Salaries adjustment report C. Payroll cheques printed report D. Query vendor report 10. Journal Entry system is a phase of A. Business activities cycle B. Financial cycle C. Conversion cycle D. Expenditure cycle 11. A documentation tool used to represent the logical elements of a system is a(n) A. Programming flowchart B. Entity relationship diagram C. Document flowchart D. Data flow diagram 12. The coding system used in Peachtree for setting up vendors includes A. Uppercase letters only. B. Lowercase letters only. C. A combination of letters and numbers. D. All of the above. 13. When using Peachtree, dates may be entered in the following way(s): A. "30107" will show as March 1, 2007. B. "4" will show as March 4, 2007 (when working in March 2007). C. The pop-up calendar can be used to select the correct date. D. All of the above. 14. When recording the chart of accounts, the field you use to classify financial statement accounts is called: A. Account ID. B. Account description. C. Account type. D. None of the above. 15. The Vendor Ledgers report displays the: A. Accounts receivable control account. B. Accounts receivable subsidiary ledger. C. Accounts payable subsidiary ledger D. Accounts payable control account NOTE: Only 15 MCQ s (5 MCQ s from each section) are provided for specimen purposes. Actual paper will comprise 30 MCQ s (10 MCQ s from each section)
MODEL PAPER FOR B.COM PART 1 ANNUAL EXAMINATION SYSTEM 2009 & ONWARDS FINANCIAL ACCOUNTING SUBJECTIVE PART TIME ALLOWED = 90 MINUTES MAX MARKS = 45 INSTRUCTIONS TO CANDIDATES: This paper comprises of 3 Sections Attempt only one question from each section. Each question carries 15 marks. Question No 1: SECTION A (Attempt any one of two) (a) How are EPS results computed for a corporation with complex capital structure? (5) (b) Star Corp. reports following stockholders equity on December 31, 19A: Common Stock Rs.1 par, 150,000 shares authorized, 100,000 shares outstanding Rs. 100,000 Paid-in capital in excess of Par Rs. 700,000 Retained Earnings Rs. 1,026,000 It completed the following transactions related to stockholders equity in the year 19B: Jan. 10 Purchased 20,000 shares of its own stock at Rs.12 cash per share. Mar.02 Directors declared Rs.1.25 per share cash dividend to the stockholders of Corp. recorded at March 15. Mar.31 Paid the dividend declared on March 02. Oct.11 Sold 12,000 of its treasury stock at Rs.15 cash per share. Nov.25 Sold 8,000 of its treasury stock at Rs.10.50 cash per share. Dec.06 Directors declared Rs.2.50 per share cash dividend payable on January 05, 19C to the December 12 shareholders of record. Dec.31 Corp. reported Rs.241,000 net income for the current year, which is still to be closed. Question No 2: Required: Prepare Journal Entries and Stockholders Equity Section of Balance sheet from the foregoing information. (07+03) (a) What are the reasons of declaring a stock dividend? How small and large stock dividends are recorded? (06) (b) Quick Solutions Inc. issued 100,000 common shares on January 01, 2006. Further 25,000 shares were sold in the market on April 15, 2006. Company declared a 20% stock dividend on November 01, 2006. Capital structure includes 6% preferred stock (non-cumulative and non-participating), Rs. 50 par, 1,000 shares outstanding. Net income for 2006 was Rs. 1.25 million. No cash dividends were declared during the year. Required: Calculate EPS from the above data. (09)
SECTION B (Attempt any one of two) Question No 3: - (a) Define and distinguish between Data Flow Diagram, Entity Relationship Diagram and Flow Charts. Give at least two examples of ERD and DFD. (10) (b) On March 16, 2002, when market interest rate was 8%, Chris Company issued 7% 1,000 bonds having Par Rs.1,000 each (maturity date is March 15, 2017). Interest was to be paid on each March 15 and September 15. Company uses straight-line amortization for bonds premium or discount. Required: Pass necessary journal entries for 2002. (05) Question No 4: - (a) The Phillip Inc. is engaged in manufacturing. When materials are ordered, a duplicate of the purchase order is sent to the receiving department. When the materials are received, the receiving clerk records the receipt on the copy of the order, which is then sent to the accounting department to support the entry to accounts payable and material purchases. The materials are then taken to stores, where the quantity is entered on bin cards. Required: (i) Identify any deficiency in the above mentioned procedures. (ii) Recommend changes in the procedures to correct each weakness. (08) (b) Mehmood Textile Ltd issued Rs.600,000, 11% 5 years bond on 01-01-2005 for Rs.550,000. Interest is payable semiannually on 30 th June and 31st December of each year, Company uses the straight line method to amortize bond premium or discount. Required: Calculate the amount of interest that will be expensed on 30 th June & 31 st December 2005. Calculate the carrying value of bond on 30-06-2006. (05+02) SECTION C (Attempt any one of two) Question No 5: Devise a coding scheme using block and sequential codes for the following chart of accounts for Digital Camera distributors: (15) Taxes Payable Cash Notes Payable Accounts Receivable Bonds Payable Office supplies Inventory Common shares Prepaid insurance Share Premium Inventory Retained Earnings Marketable Securities Sales Delivery Van Sales Returns Accumulated Depreciation-Delivery Van Dividend Income Plant Cost of Goods Sold Accumulated Depreciation-Plant Wages Expense Furniture and Fixtures Utility Expense Accumulated Depreciation-Furniture & Fixtures Supplies Expense Building Insurance Expense Accumulated Depreciation-Building Depreciation Expense Land Advertising Expense Accounts Payable Fuel Expense Wages Payable Interest Expense Question No 6: With respect to inventory module of Peachtree Accounting Software answer the following questions? Which inventory system Peachtree uses? (2) How to set up an inventory item? (6) How to record an inventory adjustment? (4) What are the inventory reports it generates (List any three)? (3)