GURUKUL FOR MEC & CA SOL FOR CA-FOUNDATION (F6) R.

EXAM-1

ACCOUNTS
Question-1: (10 x 2 = 20Marks)
State with reasons, whether the following statements are True or False
Statements are True or False
1. True
2. False
3. True
4. True
5. False
6. False
7. True
8. True
9. False
10. True

Question-2: (10 Marks)

Question-3: (5 + 5 = 10Marks)
(a)
GURUKUL FOR MEC & CA SOL FOR CA-FOUNDATION (F6) R.EXAM-1

(b)

Question-4: (5 Marks)

Refer Gurukul Material (M2) Pg. No – 112 Question –Q5(a)

GURUKUL FOR MEC & CA SOL FOR CA-FOUNDATION (F6) R.EXAM-1
Question-5: (4 x 5 = 20Marks)
Write short Answers
1. Provision means “any amount written off or retained by way of providing for depreciation,
renewal or diminution in the value of assets or retained by way of providing for any known
liability of which the amount cannot be determined with substantial accuracy”.
It is important to know the difference between provisions and contingent liabilities. The
distinction between both of them can be explained as follows:

S.No Provision Contingent liability

1. Provision is a present liability of A Contingent liability is a possible
uncertain amount, which can be obligation that may or may not crystallise
measured reliably by using a substantial depending on the occurrence or non-
degree of estimation. occurrence of one or more uncertain
future events.
2. A provision meets the recognition A contingent liability fails to meet the
criteria. same.
3. Provision is recognised when Contingent liability includes present
(a) An enterprise has a present obligations that do not meet the
obligation arising from past events; recognition criteria because either it is
an outflow of resources embodying not probable that settlement of those
economic benefits is probable, and obligations will require outflow of
(b) A reliable estimate can be made of economic benefits, or the amount cannot
the amount of the obligation. be reliably estimated.
4. If the management estimates that it is If the management estimates, that it is
probable that the settlement of an less likely that any economic benefit will
obligation will result in outflow of outflow the firm to settle the obligation,
economic benefits, it recognises a it discloses the obligation as a contingent
provision in the balance sheet liability.
Example: The GST department imposes a penalty on Alpha Ltd. for violation of a provision in
the GST Act. The company goes on an appeal to court. If the management of the company
estimates that it is probable that the company will have to pay the penalty, it recognises a
provision for the liability. On the other hand, if the management anticipates that the
judgement of the court will be in its favour and it is less likely that the company will have to
pay the penalty, it will disclose the obligation as a contingent liability instead of recognising a
provision for the same.
2.
GURUKUL FOR MEC & CA SOL FOR CA-FOUNDATION (F6) R.EXAM-1
3. Ledger is known as principal books of accounts and it provides full information regarding all
the transactions pertaining to any individual account. Ledger contains all set of accounts (viz.
personal, real and nominal accounts).

4. The basic considerations in distinction between capital and revenue expenditures are:
(a) Nature of business.
(b) Recurring nature of expenditure
(c) Purpose of expenses.
(d) Effect on revenue generating capacity of business.
(e) Materiality of the amount involved.

MATHS
1. A 2. B 3. B 4. D 5. C 6. A 7. B 8. A 9. C 10. C
11. B 12. B 13. D 14. D 15. B 16. B 17. C 18. B 19. A 20. B

STATISTICS

21. C 22. C 23. C 24. A 25. D 26. A 27. D 28. D 29. A 30. B
31. D 32. C 33. A 34. A 35. A 36. B 37. C 38. C 39. B 40. A