Set 3

Fourth Semester M.Com Degree Examination

Paper – III : CO 243F – ACCOUNTING STANDARDS
Time -3hrs Max Marks-75
Section –A

Answer all questions. Each question carries 2 marks)

1. What are the main objectives of Accounting standards?
2. What is cost of inventory?
3. What are the two methods for the measurement of the performance of services?
4. Explain retirement of PPE
5. What do you mean by Residual Value of intangible assets?
6. What is Guaranteed Residual Value ?
7. What is Basic Earnings Per share?
8. What is current tax ?
9. What ICDS as per the Income Tax Act 1961 ?
10. Explain value is use?
(10×2=20)
Section –B
(Answer any 5 questions. Each question carries 5 marks)
11. Explain the procedure for setting up and issue of accounting standards ?
12. Explain the benefits of convergence with IFRS.
13. Discuss the steps involved in the computation of Basic and Diluted EPS.
14. Discuss the utility of segment reporting in corporate financial reporting.
15. Explain the disclosure requirements as per AS - 10.
16. Explain the types of differences between accounting income and taxable income and state the
reasons for these differences.
17. What do you mean by intangible asset. Explain the features of intangible asset and give examples
of intangible assets.
18. In the books of M/s Vinod Enterprises Ltd. closing inventory as on 31-03-2019 amounts to Rs.
1,63,000 (on the basis of FIFO method). The company decides to change from FIFO method to
weighted average method for ascertaining the cost of inventory from the year 2018-19. On the
basis of weighted average method, closing inventory as on 31-3-2019 amounts to Rs. 1,47,000.
Realisable value of the inventory as 31-3-2019 amounts Rs. 1,95,000.

Discuss disclosure requirements of change in accounting policy as per A- 1.

(5×5=25)
 Section –C

(Answer any 2 questions. Each question carries 15 marks)

19. Discuss the salient features of AS - 1.

20. (a) What do you understand by 'Revenue' as per AS - 9 ? Give few examples of items not
included within the definition of Revenue as per AS - 9.
(b) Fashion Limited is engaged in manufacturing of readymade garments. They provide you
the following information on 31st March, 2019.
(i) On 15th January, 2019 garments worth Rs. 4,00.00 were sent to Anand on
consignment basis of which 25% garments unsold were lying with Anand as on
31rd March, 2019.
(ii) Garments worth Rs. 1,95,000 were sold to Shine boutique on 25th March, 2019
but at the request of Shine Boutique, these were delivered on 15th April, 2019.
(iii) On 1st November, 2018 garments worth Rs. 2,50,000 were sold on approval basis.
The period of approval was 4 months after which they were considered sold.
Buyer sent approval for 75% goods up to 31st December, 2018 and no approval or
disapproval received for the remaining goods till 31st March, 2019.
You are required to advise the accountant of Fashion Limited, the amount to be
recognised as revenue in above cases in the context of AS 9.
21. (a) Discuss the scope and objectives of AS - 19 and write a note on sale and lease back
transactions.
(b) B & P Ltd. availed a lease from N & L Ltd. Conditions of the lease terms are as under:
(i) Lease period is 3 years, in the beginning of the year 2017, for equipment costing
Rs. 10,00,000 and had an expected useful life of 5 years.
(ii) The fair market value is also Rs. 10,00,000.
(iii) The property reverts back to the lessor on termination of the lease.
(iv) The unguaranteed value is estimated at Rs. 1,00,000 at the end of the year 2019.
(v) 3 equal annual payments are made at the end of each year. Consider IRR = 10%.
The present value of Rs. 1 due at the end of 3 rd year at 10% rate of interest is Rs.
0.7513. The present value of annuity of Rs. 1 due at the end of 3 rd year at 10% IRR
is Rs. 2.4868. State whether the lease constitute finance lease and also calculate
unearned finance income.

22. Explain the salient features of AS -28 and Distinguish between AS – 28 and AS – 36.

(2×15=30)