Wa0003.

1 EP–CMA–December 2022
EXECUTIVE PROGRAMME EXAMINATION

DECEMBER 2022
CORPORATE & MANAGEMENT ACCOUNTING
Time allowed : 3 hours Maximum marks : 100

Total number of Questions : 100
PART I
1. Accounting ................ of a business entity.
(A) measures past performance
(B) depicts current financial position
(C) helps in forecasting future performance
(D) all of the above
2. Which of the following statements is correct in relation to Trade Discount ?
(A) Recorded in the books of accounts
(B) Calculated on invoice price
(C) Encourage prompt payment
(D) All of the above
3. Journal Proper contains .................... that cannot be entered in any other
subsidiary book.
(A) Cash transactions
(B) Cash and Credit transactions
(C) Contra transactions
(D) Rectification entries
4. For disclosure requirement, list of shareholders holding ................. of shares
as on the balance sheet date should be given.
(A) 5% and above
(B) More than 5%
(C) 10% and above
(D) More than 10%
5. A limited company issued 10,000 equity shares of `100 each, payable `25 on
application, `25 on allotment, `25 on first call and `25 on final call. One
shareholder to whom 800 shares were allotted failed to pay the final call money.
First call was made three months after the allotment and the final call was made
three months after the first call. The company received calls-in-arrears on 800
1
EP–CMA–December 2022 2
shares 3 months after the final call became due. If the company adopts Table F
of Schedule I, the maximum interest payable on calls-in-arrears is :
(A) `500
(B) `600
(C) `1,000
(D) `1,200
6. A company invited applications for 50,000 shares of `10 each at a premium of
`2 per share, payable as `3 on application, `5 on allotment (including premium)
and the balance on call. Applications for 80,000 shares were received, of which
applications for 5,000 shares were rejected and the money was returned.
Allotment was made pro-rata to the remaining applicants and the excess
application money being used towards the allotment. R, to whom 200 shares
were allotted failed to pay the amount due on allotment and call. If his shares
were forfeited and reissued at the rate of `11 per share, then the amount
transferred to capital reserve account would be :
(A) `300
(B) `600
(C) `900
(D) `200
7. The minimum time interval between two successive buy-back offers is
.................... from the closure of the preceding offer of buy-back.
(A) 6 months
(B) 12 months
(C) 18 months
(D) 24 months
8. A company cannot issue bonus shares to its members :
(A) In lieu of dividend
(B) When shares are partly paid-up
(C) When it is not authorized by its articles
9. A company can issue shares under Employees Stock Option Scheme (ESOS)
to the permanent employees of :
(A) Its own
(B) Its subsidiary company
(C) Its holding company
10. RR Ltd. has a paid-up equity share capital of `50 Crores in the year 2022-23.
During the year, the company wants to issue sweat equity shares to its employees.
Previously, if the company has not issued any such shares, to what extent the
company can issue such shares during this year ?
(A) `5 Crores
(B) `7.5 Crores
(C) `10 Crores
(D) `12.5 Crores
11. The acronym XBRL stands for :
(A) Expandable Business Research Language
(B) Expandable Business Reporting Language
(C) Extensible Business Review Language
(D) Extensible Business Reporting Language
12. G Ltd. wants to issue Redeemable Preference Shares to mobilize funds to carry
out an airport development project. In this case, what should be the maximum
redemption period ?
(A) 20 years
(B) 25 years
(C) 30 years
(D) No time limit for redemption
13. PK Ltd. issued 20,000 equity shares of `25 each for public subscription. The
issue was underwritten by P, Q and R as 25%, 30% and 25% respectively. The
company received 13,000 applications, of which marked applications of P, Q
and R were respectively 4,000, 3,000 and 4,000. In this case, the net liability of
P, Q and R respectively is :
(A) 1,000 : 3,000 : 1,000
(B) 500 : 2,400 : 500
(C) 1,400 : 1,680 : 1,400
(D) 1,750 : 2,100 : 1,750
14. Appointment of Debenture Trustee is a precondition to give invitation for subscribing
of debentures to public when the invitation is given to :
(A) Any no. of persons
(B) More than 500 persons
(C) More than 1,000 persons
(D) More than 2,000 persons
15. The amount remaining invested or deposited in the specified securities shall not,
at any time, fall below ................ of the amount of debentures maturing during
the year ending on 31st March of every year.
(A) 10%
(B) 15%
(C) 20%
(D) 25%
16. SS Ltd. purchased `15,000, 8% own debentures of `1,000 each on 30th
September at `960 cum-interest. If interest is payable on 30th June and 31st
December, the amount debited to Own Debentures Account at the time of purchase
would be :
(A) `14,100
(B) `14,400
(C) `14,700
(D) `15,000
17. A company planned to buy-back its own shares for a consideration of `200
crores. For this, as per the SEBI Regulations 2018, the escrow amount that
should be payable is :
(A) `200 crores
(B) `50 crores
(C) `35 crores
(D) `25 crores
18. A company can issue debentures :
(A) With voting rights at par with shareholders
(B) With limited voting rights for specified items only
(C) Without any voting rights only
(D) With voting rights to Debenture Trustees only
19. In case of Companies other than listed companies, ...................... has the right
to determine the exercise price under the Employees Stock Option Scheme
(ESOS).
(A) The Company
(B) The Securities and Exchange Board of India
(C) The Central Government
(D) The Employees of the Company
20. The voting power, in respect of shares with differential rights, of a company shall
not exceed .................. of total voting power including voting power in respect
of equity shares with differential rights issued at any point of time.
(A) 24%
(B) 49%
(C) 74%
(D) 50%
21. According to Ind ASl, the basis for presentation of general purpose financial
statements is to ensure :
(A) Comparability
(B) Consistency
(C) Accuracy
22. Cash Flow Statement, as a part of financial statements, helps in assessing the
................ of an enterprise.
(A) Liquidity
(B) Solvency
(C) Efficiency in Cash Management
23. Consider the following information :
(in Crore `)
Paid-up share capital 30
Long-term loan repayable after 3 years 10
Accumulated losses 7
Share application money 0.5
Preliminary expenses 0.8
Reserves (including a revaluation reserve of `1 crore) 6
From the above particulars, the effective capital for the purpose of managerial
remuneration is :
(A) `36.2 crores
(B) `37.2 crores
(C) `38 crores
(D) `46 crores
24. T Ltd. provided the following information from its records as on 31-03-2022.
Total Turnover `870 crores
Gross Profit `11 crores
Net Profit `4.7 crores
Paid-up share capital `400 crores
Total value of assets `1,250 crores
Total value of liabilities `300 crores
The company is liable to constitute a CSR Committee in 2022-23 as per the
criteria of :
(A) Net Worth
(B) Turnover
(C) Net Profit
(D) T Ltd. is not liable to constitute CSR committee
25. The Director or an employee of a company, who .................... with related party
against the provisions of Section 188 of The Companies Act, 2013 shall be liable
for a penalty.
(A) Entered into a contract
(B) Authorized a contract
(C) Authorized an arrangement
(D) Any of the above
26. Sitting fee to directors for attending Board or Committee meeting shall be decided
by :
(A) The General Body of the Company
(B) The Board of Directors of the Company
(C) The Articles of Association of the Company
(D) The Central Government
27. If a company spends any amount as CSR expenditure in a year in excess of the
requirement provided u/s 135(5), the said excess amount shall be set-off against
the requirement to spend u/s 135(5) up to immediately succeeding ................
financial year(s).
(A) One
(B) Three
(C) Five
(D) No time limit
28. A holding company can hold shares of subsidiary, but a subsidiary cannot hold
shares of its holding company. This restriction does not apply to :
(A) Foreign subsidiary company
(B) Investment company
(C) Subsidiary company holding shares as trustee
(D) Government company
29. S Ltd. has a capital of `4,00,000 in shares of 100 each, out of which H Ltd.
purchased three-fourths of the shares at `4,80,000. The profit of S Ltd. at the
time of purchase of shares by H Ltd. was `1,20,000. If S Ltd. decided to make
a bonus issue out of pre-acquisition profits, of one share for every five shares
held, the cost of control after the issue of bonus shares would be :
(A) `1,80,000
(B) `1,50,000
(C) `1,20,000
(D) `90,000
30. Unrealized profit included in stock of goods sold by holding company to subsidiary
or subsidiary company to holding company should be ..................... while
preparing consolidated financial statements.
(A) Deducted from stock in consolidated balance sheet only.
(B) Deducted from P&L Account balance in consolidated balance sheet only.
(C) Deducted from stock as well as P&L Account balance in consolidated balance
sheet.
(D) Shown separately on assets side of the consolidated balance sheet.
31. The share capital of H Ltd. and S Ltd., constituted in shares of `10 each, was
respectively `5,00,000 and `1,00,000 as on 31st March, 2022. S Ltd., had a
credit balance of `30,000 in reserves on that date when H Ltd. acquired 8,000
shares of S Ltd. for `1,40,000. S Ltd. decided to make a bonus issue out of
post-acquisition profits, of two shares of `10 each, fully paid, for every five
shares held. In this case, the value of minority interest would be :
(A) `20,000
(B) `26,000
(C) `28,000
(D) `34,000
32. The fundamental accounting assumption(s) to be followed to avoid specific
disclosure of accounting policies in financial statements include :
(A) Going Concern
(B) Consistency
(C) Accrual
33. The most important traditional performance measure for shareholder value creation
is :
(A) Earnings per share
(B) Shareholder value added
(C) Economic value added
(D) Market value added
34. In case of Government Company, the Comptroller and Auditor General of India,
within _________ from the date of receipt of audit report, has the right to conduct
a supplement audit.
(A) 21 days
(B) 30 days
(C) 45 days
(D) 60 days
35. Which of the following is the newly added reporting clause in Companies (Auditor’s
Report) Order 2020 ?
(A) Reporting on managerial remuneration
(B) Reporting on cash losses
(C) Reporting on transaction with related parties
(D) Reporting on statutory dues
36. As provided by the Companies Act, 2013, under corporate governance, out of
the total number of directors, at least two of them should be independent directors
in case of :
(A) Unlisted public companies having turnover of `100 crores or more
(B) Unlisted public companies having paid up capital of `10 crores or more
(C) Unlisted public companies with aggregate outstanding loans, debentures
and deposits exceeding `50 crores
37. Compliance Report on Corporate Governance in Annexure II format shall be
given :
(A) On quarterly basis
(B) On half yearly basis
(C) At the end of each financial year
(D) On monthly basis
38. According to value added concept, gross value added is distributed to :
(A) Shareholders
(B) Employees
(C) Government
39. EC Ltd., has an Economic Value addition of `40,000 as on 31st March, 2022.
During the year, its net operating profit before tax is `72,00,000 and Weighted
Average Cost of Capital is 12.5%. If the assessable tax rate of the company is
30%, the amount of capital employed would be :
(A) `4,00,00,000
(B) `3,76,00,000
(C) `3,32,00,000
(D) `2,67,46,000
40. Which of the following is a corrective measure to increase the Economic Value
Added of a business concern ?
(A) Introduction of higher cost debt instead of lower cost equity
(B) Increase Asset Turnover Ratio
(C) Generate more revenue using more capital
41. ..................... method of valuation integrates profit and loss account, balance
sheet and cash flow statement of a business entity.
(A) Shareholder Value Added
(B) Market Value Added
(C) Economic Value Added
42. Usage of Shareholder Value Added as a performance measure is advisable to :
(A) Privately held companies
(B) Publicly held companies
(C) Government owned companies
(D) Both privately and publicly held companies
43. Cash equivalents are investments :
(A) Having significant risk of change in value
(B) Held for meeting long-term cash commitments
(C) Readily convertible into known amount of cash
44. The net income reported in the income statement of the year was `1,75,000
and depreciation on fixed assets for the year was `40,000. The balances of
current assets and current liabilities are as follows:
Items Opening Balance Closing Balance
(`) (`)
Inventories 2,00,000 1,80,000
Debtors 1,90,000 2,20,000
Cash 1,60,000 1,40,000
Prepaid Expenses 20,000 15,000
Accounts Payable 1,00,000 85,000
The cash flow from operating activities would be :
(A) `2,00,000
(B) `1,95,000
(C) `2,10,000
(D) `2,25,000
45. From the following information, find out the cash flow from Investing activities.
Furniture in the beginning of the year (net) `3,50,000
Furniture at the end of the year (net) `4,10,000
Furniture having book value of `25,000 was sold for `18,000
Depreciation charged on furniture during the year was `30,000
(A) `60,000
(B) `90,000
(C) `97,000
(D) `1,45,000
46. M Ltd. provides the following details :
Items 2020 (`) 2021 (`)
Share Capital 8,00,000 12,00,000
12% Debentures 4,00,000 3,00,000
Share premium 60,000 1,00,000
Int. on debentures paid — 48,000
Dividend received — 30,000
Cash flow from financing activities would be :
(A) `3,22,000
(B) `4,70,000
(C) `3,70,000
(D) `2,92,000
47. In the following situations, when there will be a flow of fund for the purpose of
Fund Flow Statement ?
(A) If both the accounts involved are current accounts
(B) If both the account involved are non-current accounts
(C) If one account involved is a current account and other one is a non-current
account
48. You are given with the following information :
Items 2020 (`) 2021 (`)

Building 50,000 66,000
Stock 80,000 90,000
Debtors 1,20,000 1,15,000
Cash 30,000 47,000
Total 2,80,000 3,18,000
Share Capital 2,00,000 2,50,000
Retained Earnings 10,000 23,000
Creditors 70,000 45,000
Total 2,80,000 3,18,000
The net change in working capital is :

(A) Net increase ` 47,000
(B) Net decrease ` 47,000
(C) Net decrease ` 52,000
(D) Net increase ` 52,000
49. The balance in Plant & Machinery account at the beginning of the accounting
year was ` 1,80,000 and at the end was ` 2,60,000. During the year, an
old machinery which had cost of ` 12,000 (accumulated depreciation thereon
` 9,000) was sold for ` 8,000. The net/overall flow of fund from plant & machinery,
if the current year depreciation was `22,000, is :
(A) Outflow ` 97,000
(B) Outflow ` 1,05,000
(C) Inflow ` 97,000
(D) Outflow ` 1,10,000
50. In India, accounting standards are issued by :
(A) Institute of Chartered Accountants of India
(B) Insurance and Regulatory Development Authority of India
(C) Reserve Bank of India
51. When a very small proportion of the activities of an enterprise is considered to be
commercial, industrial or business in nature then the Accounting Standards
would apply to :
(A) All of its activities
(B) None of its activities
(C) Commercial, industrial or business activities only
(D) Non-commercial, non-industrial or nonbusiness activities only
52. AS 3 shall not apply to small and medium company (SMC) if it is a :
(A) One Person Company
(B) Dormant Company
(C) Small Company
53. When there is a conflict between the provisions of any applicable Act and the
Accounting Standard, then :
(A) The provisions of the Act shall prevail
(B) The provision of the Accounting Standards shall prevail
(C) The provisions of the Act or Accounting Standard shall prevail, as opted by
the company
(D) The provisions of the Act or Accounting Standard shall prevail, as decided by
the Registrar of companies.
54. As per the provisions of AS 02, inventories should be valued at :
(A) The cost price
(B) The net realizable value
(C) Cost price or net realizable value whichever is less
(D) Cost price or net realizable value whichever is more
55. The provisions of AS 19 related with leases are not applicable in accounting
relating to :
(A) Lease agreements to explore for or use natural resources
(B) Lease agreements to use lands
(C) Lease agreements for patents and copy-rights
56. The strategic objective of .................... is strengthening Public Financial
Management globally.
(A) International Public Sector Accounting Standards Board
(B) International Financial Reporting Standards Foundation
(C) Financial Reporting Council
(D) Financial Accounting Standards Board
57. Scheduled commercial banks excluding regional rural banks, are required to
apply Indian Accounting Standards (Ind ASs) for preparing their financial statements
for the period ending beginning on or after :
(A) 1 April, 2016
(B) 1 April, 2017
(C) 1 April, 2018
(D) 1 April, 2019
58. Ind AS 27 prescribes the accounting and disclosure requirements for investments
in .................. when an entity prepares separate financial statements.
(A) Subsidiaries
(B) Joint Ventures
(C) Associates
59. ..................... prohibits presentation of any item as extraordinary item in the
statement of profit and loss or in the notes.
(A) AS 01
(B) Ind AS 01
(C) Ind AS 101
(D) Ind AS 41
60. Ind AS 33 requires presentation of basic and diluted Earnings Per Share from :
(A) Continuing operations only
(B) Discontinued operations only
(C) Both continuing and discontinued operations
(D) Extraordinary operations
PART II
61. Match List-I with List-II
List-I
(a) Staff Services
(b) Current Market Price
(c) Make or buy decisions
(d) Conveniently identifiable
List-II
(i) Replacement Cost
(ii) Direct Cost
(iii) Managed Cost
(iv) Out of Pocket Cost
(a) (b) (c) (d)
(A) (i) (iii) (ii) (iv)
(B) (iii) (i) (iv) (ii)
(C) (ii) (iv) (i) (iii)
(D) (iv) (ii) (iii) (i)
62. Which of the following techniques of material control analyses items of material
based on their criticality to production ?
(A) Inventory Issue System
(B) Material Turnover Ratios
(C) ABC Analysis
(D) VED Analysis
63. Time recording is necessary in case of :
(A) Direct workers
(B) Indirect workers
(C) Workers paid on piece-basis
64. The need for classifying overheads into fixed and variable is essential to :
(A) Fix selling price
(B) Determine method of absorption of overheads
(C) Prepare flexible budget
65. If cost of production is ` 1,87,500; opening stock of finished goods is ` 72,800;
closing stock of finished goods is ` 44,000; sales return is ` 12,500 and purchase
return is ` 8,000; the value of cost of goods sold is :
(A) ` 1,58,700
(B) ` 1,95,800
(C) ` 2,03,800
(D) ` 2,16,300
66. A company specified in item (A) of Rule 3 of the Companies (Cost Records and
Audit) Rules, 2014 shall get its current year cost records audited when the
overall annual turnover of the company from all its products and services during
the immediately preceding financial year is:
(A) ` 25 crores or more
(B) ` 35 crores or more
(C) ` 50 crores or more
(D) ` 100 crores or more
67. Which of the following is not applicable to forecast?
(A) Has limited scope
(B) A tool for control
(C) Displays policy and programme to be followed
68. The difference between fixed and variable cost has a special significance while
preparing:
(A) Cash budget
(B) Key-factor budget
(C) Flexible budget
(D) Master budget
69. The budget which is very useful to identify alternative methods for utilization of
scarce resources in effective attainment of selected benefits is :
(A) Performance Budget
(B) Zero-based Budget
(C) Basic Budget
(D) Fixed Budget
70. The following details are given for March 2022 :
Budgeted production 200 units.
Actual production 250 units.
Budgeted working days 24
Actual days worked 27
Standard time per unit 1.2 hours
Actual hours worked 194
The calendar ratio is :
(A) 88.89%
(B) 125%
(C) 112.5%
(D) 154.6%
71. Which of the following techniques for analyzing financial statements shows the
nature and rate of movement of various financial items ?
(A) Common-size Statement
(B) Trend Analysis
(C) Fund Flow Analysis
72. Interest cover ratio is an example of :
(A) Profitability ratios
(B) Activity ratios
(C) Market-Test ratios
(D) Solvency ratios

73. Cash sales ` 1,50,000
Cost of goods sold ` 7,00,000
Debtors turnover ratio 2.5 times
Gross profit ` 2,00,000
If closing debtors are ` 80,000 more than the opening debtors, the average
debtors would be :
(A) ` 2,80,000
(B) ` 3,00,000
(C) ` 3,60,000
(D) ` 4,40,000
74. The following information is given :
Cost of goods sold ` 7,20,000
Sales returns ` 20,000
Capital employed ` 2,80,000
Gross profit ratio 25% on cost
Working capital ` 60,000
Fixed assets turnover ratio is :
(A) 3.4 times
(B) 4 times
(C) 5.2 times
(D) 6 times
75. If current ratio is 2.5, Acid test ratio is 1.2 and net working capital is ` 1,80,000,
the value of liquid assets would be :
(A) ` 1,44,000
(B) ` 1,24,000
(C) ` 1,20,000
(D) ` 1,38,462
76. From the following information find out the return on capital employed : Net profit
after tax ` 2,40,000 (Tax Rate 40%)
10% Convertible debentures ` 5,15,000
Fixed assets at cost price ` 11,20,000
Accumulated depreciation till date ` 1,80,000
Working capital ` 3,50,000
(A) 18.6%
(B) 22.6%
(C) 31%
(D) 35%
77. The following information is provided :
Net profit after tax ` 80,000
Tax Rate 30%
11% Preference share capital (10 each) ` 5,00,000
Equity share capital (` 100 each) ` 4,00,000
Working capital ` 1,00,000
The earnings per share is :
(A) 1.48
(B) 4.60
(C) 6.25
(D) 20
78. Middle level management needs :
(A) More frequent reports
(B) More detailed reports
(C) Summarized reports
(D) More frequent and more detailed reports
79. In marginal costing, ................ are valued at marginal cost.
(A) Stock of work-in-progress
(B) Stock of finished goods
(C) Product transferred from one process to another process
80. If a firm has low margin of safety, this can be improved by :
(A) Converting fixed costs into variable costs
(B) Converting variable costs into fixed costs
(C) Increasing Break-even level
Fixed expenses ` 1,75,000
Variable cost per unit ` 10

Selling price per unit ` 16
What should be the selling price per unit to reduce the break-even point to
25,000 units ?
(A) ` 15
(B) ` 17
(C) ` 20
(D) ` 24
82. K Ltd. has fixed expenses of ` 1,00,000, sales of ` 3,60,000 and profit of
` 80,000 during the first half of a year. In the next half year, if the company
suffers a loss of ` 40,000, then the expected sales would be, when the selling
price and fixed cost remain the same :
(A) ` 1,20,000
(B) ` 1,15,000
(C) ` 1,80,000
(D) ` 2,00,000
83. The P/V ratio and margin of safety of E Ltd. are respectively 40% and 30%. If the
sales volume is ` 40,00,000, the profit would be :
(A) ` 6,00,000
(B) ` 5,20,000
(C) ` 4,80,000
(D) ` 4,00,000
84. AK Ltd. produces a component B by using a machine working to full capacity.
One unit of B takes 5 hours to produce and has a selling price of ` 50 and
variable cost of ` 25. Another component C required to produce product D could
be made by using the same machine in 2 hours p.u. at a marginal cost of ` 5
per unit. If one of the suppliers is ready to supply the component C, what should
be the unit price beneficial to AK Ltd. ?
(A) Less than ` 15 p.u.
(B) Less than ` 18 p.u.
(C) Less than ` 20 p.u.
(D) Less than ` 25 p.u.
85. The following information relates to production and sale of product R in April and
May 2022 :
Items April (`) May (`)

Sales 40,000 70,000
Profit/Loss (3,500) 5,500
Find out the Break-even sales in rupees.
(A) `51,667
(B) `57,667
(C) `63,333
(D) `80,000
86. The following are obtained from the records of a company :
Sales (4,000 units @ ` 25 p.u.) `1,00,000
Variable cost `72,000
Fixed cost `16,000
Find the additional units to be sold to earn the same amount of profit if the selling
price is reduced to `22.
(A) 7,000 units
(B) 5,400 units
(C) 3,000 units
(D) 2,800 units
87. If a company has a P/V ratio of 40%, by what percentage sales must be increased
to offset 10% reduction in selling price ?
(A) 4%
(B) 30%
(C) 33.33%
(D) 25%
88. In absorption costing, all of the manufacturing costs are absorbed by the total
no. of units :
(A) Produced
(B) Sold
(C) Produced/sold whichever is higher
(D) Produced/sold whichever is lower
89. Transfer price covers transactions between :
(A) Related parties
(B) Associates
(C) Holding company and subsidiary company
90. In Activity Based Costing (ABC), as many costs of production as possible are
accounted as :
(A) Direct costs
(B) Indirect costs
(C) Fixed costs
(D) Period costs
91. In Activity Based Costing (ABC), ................ is a factor that causes a change in
the cost of an activity.
(A) Cost object
(B) Cost driver
(C) Cost pool
(D) Cost unit
92. In general, among all the measures of value of a business, the value under this
measure is most likely to be least ?
(A) Economic value
(B) Market value
(C) Going-concern value
(D) Liquidation value
93. The equity shares of a company are currently selling at `80 per share and the
company is expected to pay a dividend of `5 per share. If the rate of return is
calculated as 16%, what is the growth rate ?
(A) 8.0%
(B) 9.75%
(C) 10.5%
(D) 12.75%
94. When an entity presents both, consolidated financial statements and separate
financial statements as per Ind AS; the disclosures required under Ind AS 33
shall be given in :
(A) Consolidated financial statements only
(B) Separate financial statements only
(C) Both consolidated and separated financial statements
95. Fair value as per Ind AS 113 is the price that would be received to sell an asset
or paid to transfer a liability in a transaction between market participants on the:
(A) Balance sheet date
(B) Measurement date
(C) Dividend declared date
(D) Earliest of the above three dates
96. The value of a share under yield basis is calculated by finding out the capitalization
factor. For the computation of the capitalization factor, ....................... is used
as a base.
(A) Normal Rate of Return
(B) Average Rate of Return
(C) Standard Rate of Return
(D) Expected Rate of Return
97. The total value of assets and liabilities of a firm are respectively as `24,00,000
and `10,00,000 and its average profit is `3,50,000. If the value of goodwill of the
firm is calculated as `11,00,000, the normal rate of return considered for the
calculation is :
(A) 12%
(B) 14%
(C) 16
(D) 15.5%
98. G Ltd. has initiated a share-based payment arrangement with its employees.
Accordingly, an employee who remains in service for at least five years from the
grant date can exercise the option at any time after the end of five years but
before the end of 12th year from the grant date. In this case, the vesting period of
the option is :
(A) 5 years
(B) 7 years
(C) 12 years
(D) As opted by the employee
99. Which of the following is not a disclosure required under Ind AS 102 in share
based payment arrangement ?
(A) Market share price of exercised options
(B) Valuation method used
(C) Settlement method used
(D) Average share price of exercised options
100. From the following, find out the expected rate of return when the security is
correctly priced :
Expected rate on market portfolio 16%
Risk free rate of return 7%
Beta factor of the security 1.2
(A) 24.4%
(B) 26.2%
(C) 15.4%
(D) 17.8%
ANSWER KEY
COST AND MANAGEMENT ACCOUNTING - SELECT SERIES
Q.no. Ans Q.no. Ans Q.no. Ans
PART I 34 D 67 D
1 D 35 B 68 C
2 B 36 D 69 B
3 D 37 C 70 C
4 B 38 D 71 B
5 A 39 A 72 D
6 C 40 B 73 B
7 B 41 A 74 B
8 D 42 B 75 A
9 D 43 C 76 D
10 B 44 B 77 C
11 D 45 C 78 D
12 C 46 D 79 D
13 A 47 C 80 A
14 B 48 A 81 B
15 B 49 A 82 A
16 A 50 A/B/C/D 83 C
17 C 51 A 84 A
18 C 52 D 85 A
19 A 53 A 86 C
20 C 54 C 87 C
21 A 55 D 88 A
22 D 56 A 89 D
23 B 57 C 90 A
24 A 58 D 91 B
25 D 59 B 92 D
26 B 60 C 93 B
27 B PART II 94 C
28 C 61 B 95 B
29 D 62 D 96 A
30 C 63 D 97 B
31 D 64 D 98 A
32 D 65 D 99 A
33 A 66 C 100 D
WORKING NOTES
5.
Calls in Arrears = 800 × 25 = 20,000
Rate of Interest as per Table F = 10% p.a.
Duration = 3 months
Interest = 20,000 × 10% × 3/12 = 500
6.
Shares applied for by R = 200 ÷ 50,000 × 75,000 = 300 Shares
Amount Received from R on Application (to be transferred to Share Forfeiture

Account) = 300 × 3 = 900
As re-issue is at premium, there is no loss on Re-issue.
Capital Reserve = Share Forfeiture – Loss on Re-issue = 900 – 0 = 900
10.
Maximum Sweat Equity in a Financial Year = 15% of ESC or Rs. 5 Crores
whichever is higher
= 15% of 50 Crores or Rs. 5 Crores whichever is higher
= 7.5 Crores
13.
Particulars P (25%) Q (30%) R (25%)
Gross Liability 5,000 6,000 5,000
(-) Marked Applications (4,000) (3,000) (4,000)
Net Liability 1,000 3,000 1,000
Please Note: Issue is 80% underwritten. Balance 20% liability has to be borne by
company itself.
16.
Number of Debentures purchased = 15,000/1,000 = 15
Accrued Period = 1st July to 30th Sept = 3 Months
Accrued Interest = 15,000 × 8% × 3/12 = 300
Amount debited to own debentures account = amount paid – accrued interest =

(15×960) – 300 = 14,100
17.
Consideration is more than Rs. 100 Crores.
Escrow Account Deposit:
For 100 Crores @ 25%: 100 × 25% = 25 Crores
Balance above 100 Crores (200 – 100=100 Crores) @10% = 100 × 10% = 10 Crores
Total Deposit = 25 + 10 = 35 Crores
23.
“Effective Capital” means the aggregate of the paid-up share capital( excluding
share application money or advances against shares); amount, if any for the time
being standing to the credit of share premium account; reserves and surplus
(excluding revaluation reserve); long-term loans and deposits repayable after one
year (excluding working capital loans, overdrafts, interest due on loans unless
funded, bank guarantee, etc., and other short-term arrangements) as reduced by
the aggregate of any investments (except in case of investment by an investment
company whose principal business is acquisition of shares, stock, debentures or
other securities), accumulated losses and preliminary expenses not written off.
Particulars Amount in
Crores
Paid up capital 30
Long term loan repayable after 3 years 10
Accumulated Losses (7)
Share Application Money -
Preliminary Expenses (0.8)
Reserves (6 – 1) 5
Effective Capital 37.2
24.
CSR Applicability:
Turnover: 1,000 Crores or more
Net Profit: 5 Crores or more
Net Worth: 500 Crores or more
Turnover is less than 1,000 Crores, hence Turnover Criteria not applicable
Net Profit is less than 5 Crores, hence Net Profit criteria not applicable
Net worth is more than 500 Crores i.e 950 Crores (Net worth = Total Assets – Total
Outside Liabilities = 1,250 – 300 = 950 Crores)
Hence, Company is liable to constitute CSR committee as per Net worth criteria.
29.
Pre Bonus Capital = 4,00,000
Post Bonus Capital = 4,00,000 + (4,00,000 ×1/5) = 4,80,000
Pre Bonus Pre-acquisition Profits = 1,20,000

Post Bonus Pre-acquisition Profits = 1,20,000 – (4,00,000 ×1/5) = 40,000
Cost of Acquisition = 4,80,000

(-) Share Capital (4,80,000 × ¾) = 3,60,000
(-) Pre Acquisition Profits (40,000 × ¾ ) = 30,000
Cost of Control = 90,000
39.
NOPAT = 72,00,000 – 30% = 50,40,000
EVA = NOPAT – Cost of Capital
Cost of Capital = NOPAT - EVA
Cost of Capital = 50,40,000 – 40,000
Cost of Capital = 50,00,000
Cost of Capital = Capital * WACC
50,00,000 = Capital × 12.5%
Capital = 50,00,000 ÷ 12.5% = 4,00,00,000
44.
Particulars Amount
Net Income 1,75,000
+ Depreciation 40,000
Profit before Working Capital Changes 2,15,000
+ Decrease in Inventories 20,000
- Increase in Debtors (30,000)
+ Decrease in Prepaid Expenses 5,000
- Decrease in Accounts Payable (15,000)
Cash Flow from operating Activities 1,95,000
45.
Furniture Account
Particulars Amount Particulars Amount
Opening Balance 3,50,000 Depreciation 30,000
Purchase (balancing figure) 1,15,000 Book Value of Furniture 25,000
Sold
Closing Balance 4,10,000
4,65,000 4,65,000
Net Cash Flow from Investing Activities =

Inflow from Sale of Furniture (Actual Sale Price) = 18,000
Outflow from Purchase of Furniture = (1,15,000)
Net Cash Flow = 97,000
46.
Cash Flow from Financing Activities:
Particulars Amount
Issue of Shares at a Premium (12,00,000 – 8,00,000) + (1,00,000 – 4,40,000
60,000)
Redemption of Debentures (4,00,000 – 3,00,000) (1,00,000)
Interest Paid (48,000)
Cash Flow from Financing Activities 2,92,000
Please Note: Dividend Received Comes under Investing Activities and not Financing
Activities.
48.
Net Change in Working Capital (not Cash Flow)
Working Capital 2020 = (80,000 + 1,20,000 + 30,000) – 70,000 = 1,60,000
Working Capital 2021 = (90,000 + 1,15,000 + 47,000) – 45,000 = 2,07,000
Increase in Working capital = 2,07,000 – 1,60,000 = 47,000 (Increase in WC)
49.
Plant & Machinery Account

Opening Balance 1,80,000 Depreciation 22,000
Purchase (balancing figure) 1,05,000 Book Value of P& M Sold 3,000
(12,000 – 9,000)
Closing Balance 2,60,000
2,85,000 2,85,000
Net Flow from P & M:

Inflow from Sale of P & M = 8,000
Outflow from Purchase = (1,05,000)
Net = (97,000)
65.
COGS = Op FG + Cost of Production – Cl FG
COGS = 72,800 + 1,87,500 – 44,000 = 2,16,300
70.
Calendar Ratio = Actual working day / Budgeted working days × 100
Calendar Ratio = 27/24 × 100 = 112.5%
73.
Total Sales = COGS + GP = 7,00,000 + 2,00,000 = 9,00,000
Credit Sales = Total Sales – Cash Sales = 9,00,000 – 1,50,000 = 7,50,000
Debtor Turnover Ratio = Credit Sales/Average Debtors

2.5 = 7,50,000/Average Debtors
Average Debtors = 7,50,000/2.5 = 3,00,000
74.
Gross Sales = Cost + 25% = 7,20,000 + 25%= 9,00,000
Net Sales = Sales – Sales return = 9,00,000 – 20,000 = 8,80,000
Fixed Assets = Capital Employed - Working Capital = 2,80,000 – 60,000 = 2,20,000
Fixed Asset Turnover Ratio = Net Sales/ Fixed Assets = 8,80,000/2,20,000 = 4

Times
75.
CR = CA/CL
2.5=CA/CL
CA = 2.5 CL……(1)
WC= CA-CL
1,80,000=CA-CL…..(2)
Putting value of CA, we get
1,80,000 = 2.5CL – CL
1,80,000 = 1.5 CL
CL = 1,80,000/1.5 = 1,20,000
CA = 2.5 CL = 2.5 × 1,20,000 = 3,00,000
Acid Test Ratio = Liquid Assets/CL

Liquid Assets = Acid Test Ratio × CL
Liquid Assets = 1.2 × 1,20,000 = 1,44,000
76.
ROCE = EBIT/Capital Employed
EBIT = PAT/(1 - Tax Rate) + Interest
EBIT = [2,40,000 / (1 – 0.4)] + (5,15,000 × 10% ) = 4,00,000 + 51,500 = 4,51,500
Capital Employed = Fixed Asset + WC = (11,20,000 – 1,80,000) + 3,50,000 =

12,90,000
ROCE = 4,51,500 / 12,90,000 × 100 = 35%
77.
EPS = Earnings available for Equity shareholders ÷ Number of equity shares
Earnings Available for Equity = PAT – Pref. Dividend = 80,000 – (5,00,000 × 11%) =
25,000
EPS = 25,000 ÷ 4,000 = 6.25 per share
81.
BEP = Fixed Cost / Contribution per unit
BEP = Fixed Cost / (SP – VC)
25,000 = 1,75,000 / (SP – 10)
25,000 SP – 2,50,000 = 1,75,000
SP = (1,75,000 + 2,50,000)/25,000 = 17 per unit
82.
Contribution = Fixed Cost + profit = 1,00,000 + 80,000 = 1,80,000
PV Ratio = C/S × 100 = 1,80,000 /3,60,000 = 50%
Contribution for next half year = Fixed Expenses – Loss = 1,00,000 – 40,000 =
60,000
Estimated Sales for next half year = Contribution/PV Ratio = 60,000/50% =
1,20,000
83.
MOS = Profit / PV Ratio
Profit = MOS × PV Ratio
Profit = (40,00,000 × 30%) × 40%
Profit = 4,80,000
84.
Unit price beneficial = Marginal Cost + Profit made by alternative use of machine to
produce Product B (Opportunity Cost)
Product B:
Contribution per unit = SP – VC = 50 – 25 = 25 per unit
Contribution per Hour of Machine = Contribution per unit / Hours required = 25/5
hours = 5 per hour.
So, if We don’t produce Product D, we can produce Product B.

Opportunity Cost is 5 per hour of machine.
Unit Price of C = Marginal Cost + Opportunity Cost per unit

= 5 + (5 Per Hour × 2 hours required) = 5 + 10 = 15
So, if outside supplier is supplier at price less than 15 then only it will be beneficial
for AK ltd.
85.
PV Ratio = Change in Profit/Change in Sales = 5,500 – (3,500)/70,000 – 40,000 =
9,000 / 30,000 × 100 = 30%
For the month of May:

Fixed Cost = Contribution – Profit = (70,000 × 30%) – 5,500 = 21,000 – 5,500 =
15,500
BEP Sales in Rs. = Fixed Cost / PV Ratio = 15,500/30% = 51,667
86.
VC per unit = 72,000/4,000 = 18
Existing profit = Sales – Variable Cost – Fixed Cost = 1,00,000 – 72,000 – 16,000 =
12,000
Required Contribution = Existing Profit + Fixed Cost = 12,000 + 16,000 = 28,000
New Sales Units = 28,000/(22-18) = 7,000 Units
Additional Units = 7,000 – 4,000 = 3,000 Units
Please Note: Additional Units to be sold is asked.
93.
Po = D1/Ke – g
80 = 5/16% - g
12.8 – 80g = 5
G = (12.8 – 5)/80
G = 0.0975 i.e 9.75%
97.
Actual Capital = Total Assets – Liabilities = 24,00,000 – 10,00,000 = 14,00,000
Goodwill = Normal Capital – Actual Capital
Normal Capital = Goodwill + Actual Capital
Normal Capital = 11,00,000 + 14,00,000 = 25,00,000
Normal Capital = Actual Profit/ NRR
25,00,000 = 3,50,000/NRR
NRR = 3,50,000/25,00,000 = 0.14 i.e 14%
100.
CAPM = Rf + B(Rm – Rf)
CAPM = 7% + 1.2 (16% - 7%)
CAPM = 17.8%
1 EP–CMA–June 2022
JUNE 2022
PART I
1. Who originated the accounting concept based on double entry system ?
(A) Luco Fernandis
(B) Luca Pacioli
(C) Eric Kohler
(D) Eric Pacioli
2. Which of the following is an example of fictitious asset ?
(A) Provision for taxation
(B) Provision for depreciation
(C) Cash discount to customers
(D) Discount on issue of shares
3. What is the nature of a Cash Book ?
(A) a Journal
(B) a Ledger
(C) both a Journal and a Ledger
(D) neither a Journal nor a Ledger
4. In the context of filing of financial statements by a company, the term “XBRL”
means ..................... .
(A) Xavier Business Rules and Law
(B) Extensible Business Reporting Language
(C) Xavier Business Reporting Language
(D) Extensible Business Rules and Law
5. As per ICAI Guidance Note on ESOP, Share Options Outstanding Account
should be shown in the Balance Sheet of a company as follows :
(A) Separate line item under Reserves and Surplus
(B) Separate line item under Share Capital
(C) Separate line item under Other Reserves
(D) Separate line item under Current Liabilities
1
EP–CMA–June 2022 2
6. According to Section 128(1) of the Companies Act, 2013 every company shall
prepare and keep its books of account and other relevant books and papers and
financial statements for every financial year which give a true and fair view of
the state of the affairs of the company at its ..................... .
(A) Corporate office
(B) Registered office
(C) Every Regional office
(D) Every Branch office
7. As per Companies Act, 2013, the prescribed form for Statement of Profit and
Loss is given in :
(A) Part I of Schedule II
(B) Part I of Schedule III
(C) Part II of Schedule III
(D) Part I of Schedule V
8. The nature of shares of a company is considered as a/an .................... .
(A) Movable property
(B) Immovable property
(C) Fictitious property
(D) Hypothetical property
9. What will be the rate of interest on calls-in-advance in the absence of any
provision in the Articles of Association of a company ?
(A) 12% per annum
(B) Rate decided by the Annual General Meeting
(C) Any rate decided by the Board of Directors
(D) Rate decided by the Board of Directors subject to a maximum of 12% per
annum
10. Rule 12 of the Companies (Share Capital and Debentures) Rule, 2014 is related
to ...................... .
(A) Issue of sweat equity shares
(B) Issue of right shares
(C) Employee stock option plan
(D) Buy-back of shares and other securities

11. Bonus shares cannot be issued by a company out of ................... .
(A) Free reserves account
(B) Capital redemption reserve account
(C) Securities premium account
(D) Revaluation reserve account
12. The maximum amount of discount on re-issue of forfeited shares shall be
................. .
(A) Not exceeding the called-up amount of shares
(B) Equal to or exceeding the forfeited amount
(C) Not exceeding the amount credited to Shares Forfeited Account
(D) Amount of premium received on original issue of shares
13. X applied for 200 shares of `10 each in ABC Ltd., but he was allotted only 160
shares. After having paid `1 on application he did not pay the allotment money
of `2 per share and first call money of `3 per share. His shares were forfeited.
What amount will be credited to share allotment account at the time of entry for
forfeiture ?
(A) `400
(B) `320
(C) `280
(D) `800
14. P Ltd. has a total subscribed capital of `10,00,000 in equity shares of `10 each
of which `7.50 were called up. A final call of 2.50 was made and all amounts
paid except the two calls of `2.50 each in respect of 200 shares held by A.
These shares were forfeited and re-issued at `8.00 per share. What amount will
be transferred to capital reserve account on re-issue of forfeited shares ?
(A) `500
(B) `600
(C) `1,000
(D) `1,600
15. When debentures are issued as collateral security, the account to be debited to
record in the books of account is .................... .
(A) Debenture Account
(B) Debenture Reserve Account
(C) Debenture Suspense Account
(D) Provision for Debenture Account
16. When there is profit on cancellation of debentures, the amount of profit is
transferred to .................... .
(A) General Reserve Account
(B) Capital Reserve Account
(C) Securities Premium Account
(D) Profit and Loss Account
17. As per Section 68(2) of the Companies Act, 2013, post buy-back debt-equity
ratio should be .................. .
(A) 1 : 1
(B) 1.5 : 1
(C) 2 : 1
(D) 2.5
18. Every buy-back shall be completed within a period of .................... from the
date of the resolution or special resolution, as the case may be, passed by the
Board of Directors.
(A) Three months
(B) Six months
(C) One year
(D) Two years
19. A company cannot issue a prospectus or make an offer or invitation to ..............
for subscribing to debentures unless the company has before issuing such a
prospectus, appointed one or more debenture trustees.
(A) more than 100 persons
(B) more than 200 persons
(C) more than 300 persons
(D) more than 500 persons
20. X Ltd. purchased a building worth `4,50,000 and furniture worth `2,50,000 from
Z Ltd. for an agreed purchase consideration of `6,60,000 to be satisfied by
issue of 8% debentures of `100 each at a premium of 10%. What is the amount
to be transferred to capital reserve account ?
(A) `20,000
(B) `40,000
(C) `60,000
(D) `66,000
21. ABC Ltd. issued 10%, 10,000 debentures of `100 each at a discount of 8% and
which are redeemable at a premium of 5%. What is the amount of loss on issue
of debentures ?
(A) `80,000
(B) `30,000
(C) `50,000
(D) `1,30,000
22. As per the provisions of the Companies Act, 2013, it is required that if the
company is not able to collect .................. of the offer amount, then it needs to
compulsorily return the money to those who have subscribed to the shares.
(A) 75%
(B) 51%
(C) 85%
(D) 90%
23. In 2016, A Ltd. issued 12% `50,00,000 debentures at a discount of 8%; the
debentures were redeemable in 2020. In 2020, the company gave the debenture-
holders the option of converting the debentures into equity shares at a premium
of 25%. One debentureholder, holding `2,00,000 debentures want to exercise
the option. What is the face value of the shares that he will get ?
(A) `2,50,000
(B) `1,60,000
(C) `2,25,000
(D) `1,75,000
24. In case of buy-back of shares, passing of special resolution by a company is
not required if :
(A) the buy-back is 10% or less of the total paid-up equity share capital
(B) the buy-back is 10% or less of the total paid-up equity share capital and
free reserves
(C) the buy-back is 25% or less of the total paid-up equity share capital
(D) the buy-back is 25% or less of the total paid-up equity share capital and
free reserves
25. The Escrow account under Regulation 9(xi) of SEBI (Buy-Back of Securities)
Regulations, 2018, does not include :
(A) Cash deposited with a scheduled commercial bank
(B) Bank guarantee in favour of the merchant banker
(C) Deposit of acceptable securities with appropriate margin, with the merchant
banker
(D) Deposit of acceptable securities with appropriate margin, with a scheduled

commercial bank
26. In case of issue of equity shares with differential rights as to dividend, voting or
otherwise, the shares with differential rights shall ....................... of the total
post-issue paid up equity share capital, including equity shares with differential
rights issued at any point of time.
(A) not exceed ten percent
(B) not exceed fifty one percent
(C) not exceed twenty five percent
(D) not exceed twenty six percent
27. Public companies are required to issue audited financial statements to the public
at least ..................... .
(A) every month
(B) every quarter
(C) every half-year
(D) every year
28. Financial statements are prepared with an objective to provide information about
the .................... .
(A) financial position of the entity
(B) performance and changes in financial position of the entity
(C) cash flows during the year
(D) all of the above
29. When the effective capital of a company is `5 crore and above but less than
100 crore, the maximum remuneration payable by the company to its managerial
personnel when the company has inadequate profits or no profits, will be
.................... .
(A) `42 lakhs
(B) `60 lakhs
(C) `84 lakhs
(D) `120 lakhs

30. Every company having turnover of ................ during the immediately preceding
financial year shall constitute a Corporate Social Responsibility Committee of
the Board.
(A) `100 crore or more
(B) `200 crore or more
(C) `500 crore or more
(D) `1,000 crore or more
31. A company in which only the majority of shares (more than 50%) are owned by
the holding company, it is said to be a/an ................... .
(A) Associate company
(B) Joint venture company
(C) Partly owned subsidiary company
(D) Limitedly owned subsidiary company
32. The main purpose of the preparation of consolidated statements is :
(A) the compliance of AS-21
(B) to satisfy the legal provisions of the Companies Act, 2013
(C) to reflect a true and fair view of the position and the profit or loss of the
holding company ‘group’
(D) to reflect a true and fair view of the position and the profit or loss of the
holding company
33. If the holding company’s year-end stock includes `2,70,000 goods invoiced to it
by its 60% owned subsidiary at cost plus 25%, what is the amount of unrealized
profit ?
(A) `54,000
(B) `67,500
(C) `32,400
(D) `40,500
34. Company Auditor’s Report Order (CARO), 2016 was issued by .................. .
(A) The Institute of Chartered Accountants of India
(B) The Comptroller and Auditor General of India
(C) The Ministry of Finance, Government of India
(D) The Ministry of Corporate Affairs, Government of India
35. CARO, 2016 applies to a private limited company which has a total revenue
disclosed in Schedule III to the Companies Act, 2013, including revenue from
discontinuing operations exceeding ....................... during the financial year
as per the financial statements.
(A) `10 crore
(B) `15 crore
(C) `25 crore
(D) `100 crore
36. Every non-listed public company must have at least one woman director, if it
has :
(A) paid-up share capital of at least `100 crore
(B) turnover of at least `100 crore
(C) paid-up share capital of at least `50 crore
(D) turnover of at least `50 crore
37. Debenture interest paid is `1,20,000, Provision for taxation is `1,10,000,
Preference share dividend paid is `80,000, Proposed dividend on equity shares
is `1,80,000, then the Cash Flow from Financing Activities is :
(A) `2,00,000
(B) `2,60,000
(C) `3,80,000
(D) `4,90,000
38. Plant and machinery original costing `13,55,000 (accumulated depreciation
`7,28,000) was sold at a profit of `1,59,000 during the year 2019-20. The amount
of cash flow from this transaction would be :
(A) `6,27,000
(B) `7,86,000
(C) `15,14,000
(D) `8,87,000
39. Z Ltd. had the investment of `34 lakh as on 31st March, 2020 and that of `40.50
lakh as on 31st March, 2021. During the year the company sold 30% of its
original investments at a profit of `4.80 lakh. The Cash Inflow and Cash Outflow
from the investment are :
(A) `10.20 lakh and `16.70 lakh

(B) `15 lakh and `16.70 lakh
(C) `15 lakh and `21.50 lakh
(D) `16.70 lakh and `15 lakh
40. Cash inflow before working capital changes is `12,00,000, decrease in inventory
is `1,50,000, increase in receivables position is `2,00,000 and increase in
payables position is `1,75,000, then Cash Flow from Operating Activities is :
(A) `10,75,000
(B) `13,25,000
(C) `13,75,000
(D) `14,25,000
41. X Ltd. purchased goods at the cost of `60 lakh in November, 2020. Till March,
2021, 75% of the stock was sold. The company wants to disclose stock at `15
lakh. The expected sale value is `16.50 lakh and a commission at 10% on sale
value is payable to the agent. What is the correct closing stock to be disclosed
as at 31st March, 2021 as per AS-2?
(A) `15 lakh
(B) `16.50 lakh
(C) `14.85 lakh
(D) `18.15 lakh
42. AS-7 issued by the ICAI deals with ................. .
(A) Government grants
(B) Construction contracts
(C) Revenue recognition
(D) Disclosure of accounting policies
43. Stakeholders Grievance Committee is headed by ................. .
(A) an executive director
(B) a non-executive director
(C) a senior most director
(D) the managing director
44. Shareholder Value Added (SVA) is equal to :
(A) Book value of equity – Cost of equity

(B) Economic profits of a business – Minimum return required by equity
shareholders
(C) Economic profits of a business – Minimum return required by all shareholders
(D) Economic profits of a business – Minimum return required by all providers
of capital
45. Excess of Company’s total market value over Capital invested is .....................
(A) Gross Value Added
(B) Economic Value Added
(C) Market Value Added
(D) Net Value Added
46. X Ltd. has a cash sales of `15,00,000. Cash expenses are `7,00,000 and
depreciation `1,25,000. Cash from Operating Activities of the company is :
(A) `5,75,000
(B) `9,25,000
(C) `6,75,000
(D) `8,00,000
47. In case of financial enterprises, cash flows arise from interest paid should be
classified as cash flow from :
(A) Operating Activities
(B) Investing Activities
(C) Financing Activities
(D) Cash Activities
48. Which of the following Section of the Companies Act, 2013, requires that the
auditor has to report whether in his opinion the financial statements comply with
the Accounting Standards referred in Section 133 of the Companies Act, 2013 :
(A) Section 141(3)(e)
(B) Section 141(3)(b)
(C) Section 143(3)(e)
(D) Section 145(3)(b)
49. Which of the following International Accounting Standard (IAS) is related to
Employee Benefits ?
(A) IAS–8
(B) IAS–12
(C) IAS–19
(D) IAS–23
50. The IFRS Advisory Council is the formal advisory body to the :
(A) International Accounting Standards Board
(B) Trustees of the IFRS Foundation
(C) IFRS Foundation Monitoring Board
(D) Both (A) and (B)
51. The Association of International Certified Professional Accountants launched in
2017, bringing together the expertise and capabilities of the ..................... .
(A) CIMA and FASB
(B) AICPA and CIMA
(C) AICPA and FASB
(D) IFRS Foundation and FASB
52. External Reporting Board (XRB) belongs to :
(A) The UK
(B) The USA
(C) Australia
(D) New Zealand
53. Public Interest Committee (PIC) established by International Public Sector
Accounting Standards Board (IPSASB) consists of individuals from the :
(A) International Monetory Fund
(B) International Organization of Supreme Audit Institutions
(C) World Bank Group
54. Financial Reporting Council (FRC) of the UK is a/an ..................... .
(A) Unlimited company
(B) Company limited by guarantee
(C) Subsidiary company of IFRS
(D) Associate company of the Institute of Chartered Accountants of England &
Wales
55. Who notified the adoption and applicability of Indian Accounting Standards (Ind
ASs) to Indian companies ?
(A) Ministry of Finance, GOI
(B) Ministry of Commerce, GOI
(C) Ministry of Corporate Affairs, GOI
(D) Accounting Standards Board, ICAI
56. Ind AS 110 deals with :
(A) Operating Segments
(B) Consolidated Financial Statements
(C) Fair Value Measurement
(D) Business Combinations
57. For the accounting period beginning on or after 1st April, 2019, all unlisted
NBFCs whose net worth is more than or equal to ................... but less than
................. shall mandatorily follow the Ind ASs.
(A) `100 crore; `500 crore
(B) `250 crore; `500 crore
(C) `300 crore; `600 crore
(D) `400 crore; `800 crore
58. Ind AS 34 requires the following in the contents of an interim financial report in
addition to what was required under previous standard AS 25 :
(A) A condensed balance sheet
(B) A condensed cash flow statement
(C) A condensed statement of profit and loss
(D) A condensed statement of changes in equity
59. Govind is the holder of 200 shares of `10 each. He had paid on these shares
application money of `2 each, allotment money of `2 each and first call money
of `3 each. He has failed to pay the final call amount, hence all his holdings
were forfeited. Out of them 100 shares were re-issued at `11 each. The amount
to be transferred to Capital Reserve Account would be :
(A) `1,400
(B) `1,500
(C) `800
(D) `700
60. The opportunity cost of the equity capital invested in a business is considered
in the computation of .................. .
(A) Shareholder value added
(B) Market value added
(D) Gross value added
PART II
61. .................... is a process to ensure that appropriate action is taken if costs
exceed a pre-set allowance or actions to be taken if costs are expected to
exceed the expected levels.
(A) Cost Management
(B) Cost Audit
(C) Cost Control
(D) Cost Reduction
62. Primary packing material is an example of .................... .
(A) Direct material
(B) Indirect material
(C) Direct expenses
(D) Selling and distribution overhead
63. Which of the following is the purpose of ‘Time Recording’ ?
(A) Time-keeping
(B) Time-booking
(C) Time-keeping and Time-booking
(D) Time management
64. Companies (Cost Records and Audit) Rules, 2014, came into force on ...........
(A) 1st April, 2014
(B) 30th April, 2014
(C) 30th June, 2014
(D) 1st January, 2014
65. Which of the following is the social purpose of Cost Audit ?
(A) Inculcation of cost consciousness
(B) Determination of inventory valuation
(C) Promoting corporate governance
(D) Improvement in productivity of human, physical and financial resources of
the enterprise
66. Which of the following is the General Information attached with the Annexure to
the Cost Audit Report ?
(A) Reconciliation of indirect taxes
(B) Distribution of earnings
(C) Cost accounting policy
(D) Details of industry specific operating expenses
67. Which of the following Form is used for filing Cost Audit Report with the Central
Government ?
(A) CRA–1
(B) CRA–2
(C) CRA–3
(D) CRA–4
68. ................... is a budget which can be attained under standard conditions.
(A) Basic Budget
(B) Long-term Budget
(C) Current Budget
(D) Short-term Budget
69. If the Activity Ratio and Efficiency Ratio of a factory are 80% and 66.67%
respectively, then the Capacity Ratio will be :
(A) 75%
(B) 94%
(C) 100%
(D) 120%
70. The following information is estimated for the year 2022 :
* Normal loss in production will be 5% of input
* Sales (in units) as per Sales Budget 76,700 units
* Closing stock will be 13200 units which has been estimated 10% more than
previous year’s quantity. The input for required production will be :
(A) 79,276 units
(B) 79,474 units
(C) 81,796 units
(D) 82,000 units
71. Which of the following would be found in a Cash Budget ?
(A) Accrued expenditure
(B) Outstanding expenditure
(C) Capital expenditure
72. The Budgeted Sales for the next 4 months are – `96,000; `1,44,000; `1,44,000
and `1,68,000 respectively. It is estimated that sales will be paid for as follows
: 75% of the sales will be paid in the month in which sales were made. Of the
balance, 50% will be paid in the month after the sales was made. The remaining
50% will be paid in the month after this. The amount of cash received in the 3rd
month will be :
(A) `1,38,000
(B) `72,000
(C) `1,62,000
(D) `1,20,000
73. The ideal norm preferred by Banks for current ratio is .................... .
(A) 2 : 1
(B) 2.2 : 1
(C) 1.33 : 1
(D) 1.5 : 1
74. If Gross Profit is 1/4th of cost, Sales is 4,00,000 and Indirect Expenses are
24,000, what will be the Net Profit Ratio ?
(A) 14%
(B) 19%
(C) 20%
(D) 25%
Current Ratio : 3
Acid Test Ratio : 1.8
Current Liabilities : `20 lakh
What is the value of Inventory ?
(A) `36 lakh
(B) `30 lakh
(C) `24 lakh
(D) `60 lakh
76. ...................... examines the policy of the company regarding dividend and
retained earnings.
(A) Return on Investment
(B) Price Earnings Ratio
(C) Dividend Payout Ratio
(D) Earnings Per Share (EPS)
77. Interest Coverage Ratio = 7. It indicates that .................. .
(A) Assets are 7 times of interest
(B) Sales are 7 times of interest
(C) EBIT is 7 times of interest
(D) Profit after tax is 7 times of interest
78. Which of the following is NOT included in the activity ratios ?
(A) Proprietary Ratio
(B) Debtors Turnover Ratio
(C) Sales to Capital Employed Ratio
(D) Working Capital Turnover Ratio
79. Which of the following set of reports is classified according to their contents ?
(A) Routine reports and Special reports
(B) Descriptive reports, Tabular reports and Graphical reports
(C) Production reports, Sales reports, Cost reports and Finance reports
(D) Graphical presentation, Special reports and Cost reports
80. Which of the following is NOT an advantage of effective Management Reporting
System ?
(A) Improves decision-making
(B) Improves efficiency of resources
(C) Improves responsiveness to issues
(D) Economical
81. Selling price of a product is `40 per unit. Variable cost ratio is 50%. Fixed cost
is `1,20,000 and units sold are 10,000. What is the Margin of Safety in
percentage?
(A) 40%
(B) 60%
(C) 50%
(D) 20%
82. Which of the following is a method of transfer pricing considered when the
supplier division is a monopoly producer ?
(A) Negotiated transfer pricing
(B) Cost based transfer pricing
(C) Opportunity cost transfer pricing
(D) Standard cost transfer pricing
83. If Break Even Sales is 60% of current sales and profit is `4,000, then what is
the amount of contribution ?
(A) `12,000
(B) `10,000
(C) `16,000
(D) `24,000
84. From the following information, calculate the amount of profit :
Sales `16,00,000; Fixed cost `4,00,000; P/V Ratio 30%.
(A) `1,00,000
(B) `80,000
(C) `70,000
(D) `90,000
85. P/V Ratio of A Ltd. is 50% and Margin of Safety is 40%. What is the amount of
Break Even Point and Net Profit if the sales volume is `50 lakh ?
(A) `30 lakh and `20 lakh
(B) `20 lakh and `20 lakh
(C) `10 lakh and `30 lakh
(D) `30 lakh and `10 lakh
86. If total cost is `30,000 for the sales of `50,000 and `22,000 for the sales of
30,000, then the Profit Volume (P/V) Ratio is :
(A) 30%
(B) 40%
(C) 50%
(D) 60%
87. Ind AS 33 deals with .................. .
(A) Earnings per share
(B) Fair value measurement
(C) Value added statement
(D) Financial instrument presentation
88. Which of the following is NOT a valuation approach ?
(A) Income Approach
(B) Assets Approach
(C) Expenditure Approach
(D) Market Approach
89. A Ltd. has the following details :
Return on Equity 15%
Expected Earnings per share `5
Expected Dividend per share `3
Required Rate of Return 10% p.a.
What is the expected growth rate and its price per equity ?
(A) 4% and `60
(B) 6% and `60
(C) 4% and `75
(D) 6% and `75
90. Average profits, Super profits and Capital employed of Z Ltd. are `7,80,000;
`2,40,000; and `45,00,000 respectively. Normal rate of return is 12%. The Value
of Goodwill on the basis of Capitalization of ‘Super profits’ will be :
(A) `20 lakh
(B) `45 lakh
(C) `85 lakh
(D) `65 lakh
91. Under Section 247 of the Companies Act, 2013, a Registered Valuer shall be
appointed by the .................. .
(A) Company Secretary
(B) Company Auditor
(C) Board of Directors
(D) Jointly by all the above three
92. Which of the following methods of valuation of shares is suitable for ascertaining
the market value of shares which are quoted in a recognized stock exchange ?
(A) Based on rate of earnings method
(B) Based on rate of dividend method
(C) Based on price earning ratio method
(D) Based on price dividend ratio method
93. With reference to Ind AS 102, what does SBP stand for ?
(A) Sum Based Payment
(B) Share Based Payment
(C) Share Based Proportion
(D) Share Based Profit
94. Beta of market portfolio is always ............. .
(A) 0
(B) 1
(C) Less than 1
(D) More than 1
95. The relationship between risk and return established by the security market line
is called as :
(A) Economic value model
(B) Earnings based model
(C) Arbitrage pricing model
(D) Capital asset pricing model
96. Under Arbitrage Pricing Theory, it is assumed that the markets are frictionless
because of the fact that there are :
(A) No transaction costs
(B) No taxes
(C) Infinite number of securities are available
97. An investor expects a dividend of `8 per share for each of 5 years and a selling
price of `120 at the end of 5th year. If his required rate of return is 10%, the
share is a good buy now at a price of (PVFA 10, 5 = 3.791 and PVF 10, 5 =
0.621) :
(A) `100
(B) `108
(C) `110
(D) `115
98. Among all measures of business value, the ................. of business is likely to
be the least value.
(A) Market value
(B) Replacement value
(C) Book value
(D) Liquidation value

99. Current market rate of X Ltd.’s equity share is `80 per share. The company is
expected to pay a dividend of `4 per share with an annual growth of 10%. In this
case the rate of return would be :
(A) 5.5%
(B) 10.5%
(C) 12%
(D) 15%
100. As per Sec. 54 of the Companies Act, 2013, a company can issue sweat equity
shares of a class of shares already issued only after ..................... from the
date of commencement of business.
(A) One year
(B) Two years
(C) Three years
(D) 180 days
ANSWER KEY
Q.No. Ans Q.No. Ans Q.No. Ans

PART I 34 D 67 D
1 B 35 A 68 A
2 D 36 A 69 D
3 C 37 A 70 D
4 B 38 B 71 C
5 A/B 39 B 72 A
6 B 40 B 73 C
7 C 41 C 74 A
8 A 42 B 75 C
9 D 43 B 76 C
10 C 44 D 77 C
11 D 45 C 78 A
12 C 46 D 79 C
13 C 47 A 80 D
14 B 48 C 81 A
15 C 49 C 82 C
16 B 50 D 83 B
17 C 51 B 84 B
18 C 52 D 85 D
19 D 53 D 86 D
20 B 54 B 87 A
21 D 55 C 88 C
22 D 56 B 89 D
23 B 57 B 90 A
24 B 58 D 91 C
25 D 59 D 92 C
26 * 60 C 93 B
27 D PART II 94 B
28 D 61 C 95 D
29 C 62 A 96 D
30 D 63 C 97 A
31 C 64 C 98 D
32 C 65 D 99 D
33 A 66 C 100 A
WORKING NOTES
13. Amount Credited to Share Allotment Account is the Amount not received on
Allotment.
Amount Not Received on Allotment = Allotment Due – Excess Application Money
Amount Not Received on Allotment = (160 × 2) – [(200 *1) – (160*1)]
Amount Not Received on Allotment = 320 – 40 = 280
14. Amount Received = Total Called up value after final Call – 2 Calls not received
= 10 – 2.5 – 2.5 = 5
Loss on Re-issue = 10 – 8 = 2
Amount to be transferred to Capital Reserve = Amount Received on Forfeiture –

Loss on Reissue
= (200 × 5) – (200 × 2)
= 1000 – 400
= 600
20. Amount transferred to Capital Reserve = Assets Taken over – Consideration

Paid
= (4,50,000 + 2,50,000) – 6,60,000
= 40,000
21. Loss on Issue of Debentures = Discount on Issue + Premium on Redemption

= (10,000 × 100 × 8%) + (10,000 × 100 × 5%)
= 80,000 + 50,000
= 1,30,000
23. Number of shares to be issued = Amount payable on Redemption ÷ Issue price

= (2,00,000 × 10) ÷ 12.5
= 1,60,000
Please Note:
 Face Value of 1 Debenture is not given in the Question
 Face Value of 1 Share to be issued for redemption is also not given
26. Q. 26 is wrong. It is based on old provision of law, which has been

amended. As per the old provisions, answer will be not exceed 26%.
33. 2,70,000 ÷ (100 + 25) × 25 = 54,000
37. Cash Flow from Financing Activities = - 1,20,000 – 80,000 = -2,00,000
Please Note:
 As per me, there should be a Negative Sign in the Options as the question asked
in Cash Flow not cash outflow.
 Provision for taxation & proposed dividend have no effect as they are not cash
flows.
38. Cash Flow = Inflow = Sale Amount
Sale Amount = WDV of Asset + Profit
= (Original Cost – Accumulated Depreciation) + Profit
= (13,55,000 – 7,28,000) + 1,59,000
= 7,86,000
39.
Investment Account
Particulars ` Lakhs Particulars ` Lakhs
To Balance b/d 34 Cost of Investments Sold 10.20
(34 × 30%)
To Bank A/c (Purchase of 16.7 By Balance c/d 40.50
Investments) (B.F)
50.70 50.70
Cash Inflow = Sale Value of Investments = 10.20 + 4.80 = 15 lakhs

Cash Outflow = Purchase Value of Investments = 16.7 Lakhs
40. Cash Flow from Operating Activities = 12,00,000 + 1,50,000 – 2,00,000 +

1,75,000 = 13,25,000
41. As per AS 2, Inventory is valued at lower of Cost or NRV.

Cost = 60 × 25% = 15 Lakhs
NRV = 16.50 – 10% = 14.85 Lakhs
Lower is 14.85 Lakhs
46. Cash Flow from Operating Activities = 15,00,000 – 7,00,000 = 8,00,000
Please Note: Depreciation is not added back in Direct Method of Operating

Activities.
59. Amount Received = 2 + 2 + 3 = 7

Loss on Re-issue = 0 (as reissue is above face value)
Amount to be transferred to Capital Reserve = Shares Reissued × (Amount Received

– Loss)
= 100 (7-0)
= 700
70.
72. Cash Received in 3rd Month:
From 1st Month = 96,000 × 12.5% = 12,000
From 2nd Month = 1,44,000 × 12.5% = 18,000
From 3rd Month = 1,44,000 × 75% = 1,08,000
Total=1,38,000
74. Gross Profit = 4,00,000 ÷ (100 + 25) × 25 = 80,000

Net Profit = GP – Indirect Expenses = 80,000 – 24,000 = 56,000
Net Profit Ratio = Net Profit ÷ Net Sales ×100 = 56,000 ÷ 4,00,000 ×100 = 14%
75. Current Ratio = CA/CL

Current Assets = 3 × CL = 3 × 20 = 60
Acid Test Ratio = CA – Stock / CL

1.8 = 60 – Stock / 20
Stock = 60 – (20×1.8) = 24
81. PV% = 100 – VC% = 100 – 50 = 50%

BEP = Fixed Cost/PV% = 1,20,000 / 50% = 2,40,000
BEP% = 2,40,000/(10,000×40)= 60%
MOS% = 100 – BEP = 100 – 60 = 40%
Please Note: There can be multiple ways of calculating MOS%. Student can follow
any approach.
83. MOS% = 100 – BEP% = 100 – 60 = 40%
Contribution = Profit / MOS% = 4,000/40% = 10,000
84. Profit = Contribution – Fixed Cost = (Sales × PV%) – Fixed Cost = (16,00,000 ×
30%) – 4,00,000
= 80,000
85. BEP% = 100 – MOS = 60%

BEP = Sales × 60% = 50 × 60% = 30 Lakhs
Net Profit = MOS × PV% = (50 × 40%) × 50% = 10 Lakhs

86. Profit 1 = 50,000 – 30,000 = 20,000
Profit 2 = 30,000 – 22,000 = 8,000
PV% = Change in Profit/Change in Sales × 100

PV% = (20,000 – 8,000)/ (50,000 – 30,000) ×100
PV% = 60%
89. Payout Ratio = DPS/EPS × 100 = 3/5 ×100=60%

Retention Ratio = 100 – Payout = 40%
G = br = 15% × 40% = 6%
Price = D1/Ke – g = 3/10% - 6% = 75
90. Goodwill = Super Profits / NRR = 2,40,000 / 12% = 20 Lakhs
97. Value = (8 × 3.791) + (120 × 0.621) = 104.85

If price is less than this value then it is a good buy. Among the options only one
option has price less than 104.85.
99. P = D1/Ke – g
80 = 4/Ke – 10%
80 Ke – 8 = 4
Ke = (4+8)/80=0.15
i.e 15%
100. Q. 100 is wrong. It is based on old provision of law, which has been
amended. As per the old provisions, answer will be 1 year.
DECEMBER 2021
PART I
1. When complete sequence of accounting procedure is done, which happens
frequently, and repeated in same directions during an accounting period, it is
called an ............ .
(A) Accounting Cycle
(B) Accounting Period
(C) Accounting Process
(D) Accounting Tools
2. While preparing a trial balance, in which method are totals of both the sides of
the accounts written in the separate columns ?
(A) Total Method
(B) Balance Method
(C) Compound Method
(D) Pure Method
3. If the owner’s equity is `5,00,000 and outsiders’ equity is `3,00,000, calculate
total equity.
(A) `5,00,000
(B) `2,00,000
(C) `8,00,000
(D) `3,00,000
4. Statement I : It may be prepared on a loose sheet of paper.
Statement II : The ledger accounts are balanced at first. They will have either
“debit-balance” or “credit balance” or “nil-balance”.
Statement III : The accounts containing debit-balance are written on the debit
column, and those with credit-balance are written on the credit column.
All the above three statements are relevant for :
(A) Ledger
(B) Cash Book
1
(C) Trial Balance
(D) Financial Statement
5. Purchase goods of the list price of `25,000 from Mohan less 20% trade discount
and 2% cash discount. The amount of cash discount is .................... .
(A) `160
(B) `240
(C) `400
(D) `500
6. If the Company’s Issued Capital is more than the Authorized Capital, and approval
of increase in Authorized Capital is pending, the amount of Share Application
Money received over and above the Authorized Capital should be shown under
the head :
(A) Other Current Liabilities
(B) Other Long-Term Liabilities
(C) Reserve and Surplus
(D) Short-Term Provision
7. The term “Continuing Default” is used with respect to :
(A) Short-term borrowing
(B) Medium-term borrowing
(C) Long-term borrowing
(D) None of the above
8. According to the rules for the purposes of Sub-section (1) of Section 129, the
class of companies as may be notified by the Central Government from time to
time, shall mandatorily file their financial statements in :
(A) Extensible Business Reporting Language (XBRL) format
(B) Extensible Business Reporting (XBR) format
(C) Extensible Business Presentation Language (XBPL) format
(D) Extensible Business Presentation (XBP) format
9. Section 68(4); Every buy-back shall be completed within a period of…….from
the date of passing of the special resolution, or as the case may be, the resolution
passed by the Board.
(A) 6 months
(B) One year
(C) Two years
(D) 5 years
10. According to section 68(1) of the Companies Act 2013, a company cannot
purchase its own shares or other specified securities (referred to as buy-back)
out of :
(A) Free reserves
(B) Securities premium account
(C) The proceeds of the issue of any shares or other specified securities
(D) The proceeds of an earlier issue of the same kind of shares or same kind of
other specified securities
11. XYZ Ltd. issued 60,000, 12% debentures of `100 each. 70% of the issue was
underwritten by ABC Ltd. Applications for 56,000 debentures were received by
the XYZ Ltd. The liability of ABC Ltd. is :
(A) 2,800 debentures
(B) 3,800 debentures
(C) 4,000 debentures
(D) 4,200 debentures
12. P Ltd. issued 12%, 10,000 debentures of `100 each at a discount of 10% on 1st
April 2016. The company pays interest half yearly on 30th June and 31st
December every year. On 31st March 2020 the amount shown as ‘Interest accrued
but not due’ in the balance sheet will be :
(A) `30,000
(B) `60,000
(C) `1,20,000
(D) `1,50,000
13. Debenture can be issued :
(i) For Cash
(ii) For Consideration other than Cash
(iii) As Collateral Security
(A) (i)
(B) (i), (ii)
(C) (i), (iii)
(D) (i), (ii) and (iii)
14. Financial statements include :
(A) Income Statement, Balance Sheet, Statement of Stockholders Equity,
Statement of Cash Flow
(B) Income Statement, Balance Sheet, Statement of Fund Flow, Statement of
Cash Flow
(C) Income Statement, Balance Sheet, Statement of Cash Flow, Statement of
Trend Analysis
(D) Income Statement, Balance Sheet, Statement of Stockholders Equity,
Statement of Trend Analysis
15. Corporate Social Responsibility Committee of the Board consisting of ................
(A) Five or more directors, out of which at least one director shall be an
independent director
(B) Three or more directors, out of which at least one director shall be an
(C) Five or more directors, out of which at least two directors shall be an
(D) Three or more directors, out of which at least two directors shall be an
16. A .................. is a business segment or a geographical segment identified on
the basis of foregoing definitions for which segment information is required to be
disclosed
(A) Business segment
(B) Geographical segment
(C) Reportable segment
(D) Area segment
17. The amount set aside out of profits is called ................ .
(A) Provision
(B) Reserve
(C) Surplus
(D) Income
18. LMN Ltd. allotted 20,000 shares to the applicants of 28,000 shares on pro-rata
basis. The amount payable on application is `25 per share. Kanika applied for
700 shares, the number of shares allotted to Kanika will be :
(A) 500 shares
(B) 700 shares
(C) 800 shares
(D) 900 shares
19. At the time of forfeiture of shares the share capital account is debited with :
(A) Face value
(B) Called up value
(C) Paid up value
(D) Issued value
20. A Ltd. forfeited 1,000 shares of `10 each fully called up for non-payment of first
& final call of `3 per share. 600 of these shares were reissued at `9 per share,
fully paid up. What is the amount to be transferred to Capital Reserve Account?
(A) `7,000
(B) `4,200
(C) `6,400
(D) `3,600
21. If any director contravenes the provision of this section 197 (i.e. Recovery of
Remuneration received by director in contravention of section 197 of the
Companies Act, 2013), shall be punishable with :
(A) fine which shall not be less than ten thousand rupees but which may extend
to one lakh rupees.
(B) fine which shall not be less than ten thousand rupees but which may extend
to two lakh rupees.
(C) fine which shall not be less than one lakh rupees but which may extend to
two lakh rupees.
(D) fine which shall not be less than one lakh rupees but which may extend to
five lakh rupees.
22. Match the List I with items in List II :
List I List II
(a) AS 06 (i) Employee Benefits
(b) AS 09 (ii) Revenue Recognition
(c) AS 12 (iii) Depreciation Accounts
(d) AS 15 (iv) Accounting for Government Grants
(a) (b) (c) (d)
(A) (ii) (iv) (i) (iii)
(B) (i) (iv) (ii) (iii)
(C) (ii) (iii) (i) (iv)
(D) (iii) (ii) (iv) (i)
23. The standard-setting procedure of Accounting Standards Board cannot be outlined
as :
(A) Identification of broad areas by ASB for formulation of AS
(B) Constitution of study groups by ASB to consider specific projects and to
prepare prelininary drafts of the proposed Accounting Standards. The draft
normally includes objective and scope of the standard, definitions of the
terms used in the standard, recognition and measurement principles,
wherever applicable, and presentation and disclosure requirements.
(C) Consideration of the preliminary draft prepared by the study group of ASB
and revision, if any, of the draft on the basis of deliberations.
(D) Presentation of transactions and events in the financial statements in a
manner that is meaningful and understandable to the reader.
24. As per IFRS disclosure to be made in only consolidated financial of the parent
company for :
(A) Intangible Assets
(B) Earnings Per Share
(C) Market Price Per Share
(D) Dividends
25. In case there is any conflict between provisions of any applicable Act and
Accounting Standards, the _______ shall prevail.
(A) Accounting Standard
(B) Provisions of the Act
(C) Above (A) & (B), both
26. Trustees of IFRS Foundation have been appointed for a :
(A) Renewable period of 5 years
(B) Non-renewable period of 5 years
(C) Renewable period of 3 years
(D) Non-renewable priod of 3 years
27. Members of the IFRS Advisory Council are appointed by the :
(A) Board of Directors
(B) Trustees
(C) Board of Directors and Trustees jointly
(D) Chairperson of the Foundation
28. Ind AS shall be adopted by specific classes of companies based on their :
(A) Net worth
(B) Listing Status
(C) Net worth or Listing Status
(D) Net worth and Listing Status
29. From 1st April 2019, if Net worth is more than or equal to 250 crore but less than
500 crore it becomes mandatory to apply Ind AS for ................... .
(A) NBFC
(B) All Banks
(C) Insurance Companies
(D) Listed Companies
30. Pro-rata allotment of shares is made when there is :
(A) Under subscription
(B) Over subscription
(C) Equal subscription
(D) As and when desired by directors
31. ABC Ltd. issued 10,000 equity shares of `100 each at par payable as under :
On application `30; on allotment `20; on first and on final call `50 per share.
Applications were received for 30,000 shares.
Applications for 5,000 shares were rejected and pro-rata allotment was made to
the applicants for 25,000 shares. Excess application money is adjusted towards
amount due on allotment and calls.
How much amount will be received in cash on first call ?
(A) `1,00,000
(B) `1,50,000
(C) `2,00,000
(D) `2,50,000
32. The company shall not issue sweat equity shares for more than……..of the
existing paid up equity share capital in a year or shares of the issue value of
rupees ........................ whichever is higher.
(A) 5%, 1 Crore
(B) 10%, 2 Crore
(C) 15%, 5 Crore
(D) 20%, 10 Crore
33. As per section 149(1) of the Companies Act, 2013, at least one-woman director
is to be appointed by :
(A) Non-listed public comanies having paid up share capital of `100 crore or
more, or having turnover of `100 crore or more
(B) Non-listed public comanies having paid up share capital of `100 crore or
(C) Non-listed public comanies having paid up share capital of `100 crore or
(D) Non-listed public comanies having paid up share capital of `100 crore or
34. The escrow amount shall be payable in the following manner :
(i) if the consideration payable does not exceed `100 crores; 25 per cent of
the consideration payable
(ii) if the consideration payable exceeds `100 crores; 25 per cent up to `100
crores and 10 per cent thereafter
(iii) if the consideration payable does not exceed `10 crores; 25 per cent of the
consideration payable
(iv) if the consideration payable exceeds `100 crores; 5 per cent up to `100
crores and 2.5 per cent thereafter
(A) (i)
(B) (i) and (ii)
(C) (i), (ii) and (iii)
(D) (i), (ii), (iii) and (iv)
35. When the holding company purchases the shares at a price above the nominal
value, the excess price paid represents :
(A) Cost of control or Goodwill
(B) Capital Reserve
(C) Reserve and Surplus
(D) Business Assets
36. Ind AS 104 on Insurance Contract will not be applicable to :
(A) Insurance Contracts
(B) Reinsurance Contracts
(C) Financial Instruments that it issues with a discretionary participation features
(D) Product warranties issued directly
37. The net profit after tax for the year was `30,00,000. Working capital increased
during the year by `5,00,000. Depreciation for the year was `5,00,000 and tax
expenses was `7,50,000. Amount paid towards income tax based on self-
assessment and demand from tax department for earlier year was `10,00,000.
Cash flow from operating activities is :
(A) `47,50,000
(B) `40,00,000
(C) `37,50,000
(D) `30,00,000
38. Interest Payment by non-financial enterprises is classified as :
(A) Operating activity
(B) Investing activity
(C) Financing activity
(D) Operating as well as Financing activity
39. Which of the following is not an investing cash flow ?
(A) Purchase of marketable securities for `5,00,000 by cheque
(B) Sale of land for `30,00,000
(C) Sale of 10,000 equity shares @ `100 each
(D) Purchase of Property Plant and Equipment for `10,00,000 for cash
40. Following is the comparative information of PQ Ltd. for 2 consecutive years :
31st March 2020 31st March 2021
` `
Inventory 10,00,000 6,00,000
Accounts Payable 24,00,000 30,00,000
Cost of Goods Sold — 1,00,00,000
Based on the above information, the net cash paid to supplier of inventory
during the year ended on 31st March 2021 is :
(A) `90,00,000
(B) `98,00,000
(C) `1,02,00,000
(D) `1,10,00,000
41. MN Ltd. reported income tax expenses of `6, 10,000 on its income statement
for the year ended on 31st March 2020. The comparative balance sheet of the
company showed that income tax payable on 31st March 2019 and 31st March
2020 was `80,000 and `1,30,000 respectively. Based on the above information,
cash payment for the income tax during the year ended on 31st March 2020
was :
(A) `6,60,000
(B) `6,10,000
(C) `5,60,000
(D) `4,80,000
42. The land account was debited by `60,00,000 and credited by `25,00,000
during the current year. The income statement reported a profit on sale of land
in the amount of `2,00,000. All transactions related to land account were cash
transactions. These transactions would be shown in the statement of cash flow
as :
(A) `60,00,000 cash provided by investing activities, and `25,00,000 cash
disbursed for investing activities.
(B) `27,00,000 cash provided by investing activities, and `60,00,000 cash
(C) `25,00,000 cash provided by investing activities, and `60,00,000 cash
(D) `23,00,000 cash provided by investing activities, and `60,00,000 cash
43. CARO 2016 is applicable on small companies, if :
(A) Paid up capital less than or equal to `50 lakh and last reported turnover less
than or equal to `200 lakh
(B) Paid up capital less than or equal to `25 lakh and last reported turnover less
(C) Paid up capital less than or equal to `50 lakh and last reported turnover less
(D) Paid up capital less than or equal to `100 lakh and last reported turnover
less than or equal to `500 lakh
44. As per section 138 of the Companies Act 2013, Internal Audit is compulsory if
in the preceding financial year turnover :
(D) `500 crore or more
45. A Ltd. paid `9,00,000 for 70% of equity in B Ltd. on 1st April, 2019. On this date
B Ltd. had share capital of `10,00,000 and retained earnings of `5,00,000. All of
the assets and liabilities of B Ltd. were recorded at fair value. A Ltd. interest in
the B Ltd. would be:
(A) `6,30,000
(B) `7,00,000
(C) `10,50,000
(D) `15,00,000
46. P Ltd. issues 10,000, 7% debentures of `100 each at a discount of 5% redeemable
at the end of 7 years at a premium of 6%. Loss on issue of debenture account
will be debited by :
(A) `50,000
(B) `60,000
(C) `90,000
(D) `1,10,000
47. As per guidelines issued by SEBI, what percentage of the amount of debentures
must be transferred to “Debenture Redemption Reserve” before the
commencement of redemption of debenture, in case of convertible debenturres:
(A) 0%
(B) 25%
(C) 50%
(D) 100%
48. In case of buy back of own shares, a company shall make a public
announcement within two working days from the date of special resolution/
Board of directors resolution in :
(A) at least one English National Daily, one Hindi National Daily and two Regional
language daily
(B) at least one English National Daily, one Hindi National Daily and one Regional
language daily
(C) at least one English National Daily, two Hindi National Daily and one Regional
language daily
(D) at least two English National Daily, one Hindi National Daily and one Regional
language daily
49. ABC Ltd. issued 1,00,000 equity shares of `100 each, payable as under :
On application `30; On allotment `30, On final call `40
1,45,000 applications were received as under :
Applicants applied for 25,000 shares, allotted full.
Applicants applied for 1,00,000 shares, allotted 75,000 shares on pro-rata basis.
Remaining applications were rejected.
Amount received at the time of application is .................
(A) `50,00,000
(B) `43,50,000
(C) `37,50,000
(D) `25,00,000
50. In the question number of 49, how much excess money received on application:
(A) `13,50,000
(B) `30,00,000
(C) `27,50,000
(D) `15,00,000
51. In the question number of 49, amount to be refunded ................... .
(A) `3,50,000
(B) `4,50,000
(C) `5,00,000
(D) `6,00,000
52. In the question number of 49, amount of excess application money available for
adjustment against allotment money ............ .
(A) `7,50,000
(B) `13,50,000
(C) `15,50,000
(D) `17,50,000
53. When debenture is issued as collateral security, the final entry for recovering
the collateral debenture in books is :
(A) Dr. Cash a/c, Cr. Debenture a/c
(B) Dr. Debenture Suspense a/c, Cr. Cash a/c
(C) Dr. Debenture Suspense a/c, Cr. Debenture a/c
(D) Dr. Cash a/c, Cr. Debenture Suspense a/c
54. Wind Ltd. issued 30,000 12% debentures of `10 each at par which are redeemable
after 5 years at a premium of 10%. The amount of loss on redemption to be
written off every year will be :
(A) `15,000
(B) `7,500
(C) `6,000
(D) `4,500
55. If the purchase price for the debentures includes interest for the expired period,
the quotation is said to be.................. .
(A) Ex-interest
(B) Cum-interest
(C) Net-interest
(D) Gross-interest
56. The managerial remuneration shall be payable to a person appointed within the
meaning of...................
(A) Section 196 of the Companies Act, 2013
(B) Section 129 of the Companies Act, 2013
(C) Section 131 of the Companies Act, 2013
(D) Section 136 of the Companies Act, 2013
57. If the sinking fund is non-cumulative, the interest received on Sinking Fund
Investment is not invested and not credited to Sinking Fund A/c. The amount of
interest is :
(A) debited to Profit & Loss statement
(B) credited to Profit & Loss statement
(C) added in reserve in balance sheet
(D) added in assets in balance sheet
58. A company after the completion of the buyback under this sections, shall file
with the Registrar a return in ................... .
(A) Form No. SH. 9
(B) Form No. SH. 10

(C) Form No. SH. 11
(D) Form No. SH. 12
59. Which of the following is false :
(A) Rate of interest on debenture is fixed
(B) Equity shareholders are owners and debentureholders are lenders
(C) At the time of liquidation debentureholders get their payment before equity
shareholders
(D) Interest on debentures is an appropriation of profit
60. Which of the following is true with regard to, 12% debentures issued at a discount
at 10%?
(A) The carrying amount of debentures will reduce each year at a rate of 10%
(B) Issue price and carrying amount of debentures are equal
(C) The face value and carrying amount of debentures are equal
(D) At the time of redemption, the debenture holder will be paid the issue price
PART II
61. Recording of workers’ time spent on different jobs or processes for determining
labour cost of jobs/processes is called :
(A) Time Booking
(B) Time Keeping
(C) Time Charging
(D) Time Management
62. According to CIMA, prime cost is ............. .
(A) Direct material, direct labour and direct expenses
(B) Direct and indirect material and direct and indirect labour
(C) Direct material and direct labour
(D) Only direct material
63. Rent of own factory premises is an example of :
(A) Indirect expenses
(B) Direct expenses
(C) Revenue expenses
(D) Notional expenses
64. The aspects of material control are ............ .
(A) Accounting aspect and Operational aspeect
(B) Accounting aspect and Production aspect
(C) Costing aspect and Operational aspect
(D) Costing aspect and Production aspect
65. Rule 6 of the Companies (Cost Records and Audit) Rules, 2014 requires the
companies prescribed under t he said rules t o appoint an auditor
within.......................of the commencement of every financial year.
(A) 90 days
(B) 45 days
(C) 180 days
(D) 60 days
66. The cost auditor shall submit the cost audit report along with his or its reservations
or qualifications or observations or suggestions, if any, in Form .................... .
(A) CRA-3
(B) CRA-2
(C) CRA-4
(D) CRA-1
67. As per CCRA – Rules 2014 every regulated industry (Category – A) is required
to maintain cost records if overall turnover exceeds or equals to :
(A) `25 crore
(B) `35 crore
(C) `50 crore
(D) `100 crore
68. The requirement for cost audit rules shall not apply to a company which is
covered in rule 3; and (i) whose revenue from exports, in foreign exchange,
exceeds seventy-five per cent of its total revenue; or (ii) which is operating from
a special economic zone; (iii) which is engaged in generation of electricity for
captive consumption through Captive Generating Plant.
(A) (i)
(B) (ii)
(C) (i) and (ii)
(D) (i), (ii) and (iii)
69. PQR factory produces two units of a commodity in one standard hours. Actual
production during a particular year is 34,000 units and budgeted production for
the year is 40,000 units. Actual hours are 16,000. Activity ratio is ..................
(A) 40%
(B) 80%
(C) 85%
(D) 106.25%
70. Using the information from Q. No. 69, Capacity ratio is .....................
(A) 40%
(B) 80%
(C) 85%
(D) 106.25%
71. Using the information from Q. No. 69, Efficiency ratio is ................
(A) 40%
(B) 80%
(C) 85%
(D) 106.25%
72. From the following data :
Volume of production (units) 1,20,000 1,50,000
Maintenance expenses (`) 84,000 1,02,000
The variable cost per unit is :
(A) 0.60 per unit
(B) 0.68 per unit
(C) 0.70 per unit
(D) 0.78 per unit
73. Using the information from Q. No. 72, the total fixed cost is ...............
(A) 6,000
(B) 12,000
(C) 18,000
(D) 24,000
74. Using the information from Q. No. 72, what is the total variable overheads at the
level of output 1,40,000 units ?
(A) 84,000
(B) 95,200
(C) 98,000
(D) 1,09,200
75. Which is not the method of preparation of cash budget ?
(A) Receipts and payments method
(B) Adjusted profit and loss account method
(C) Balance sheet method
(D) Cash flow method
76. From the following information, calculate debtor’s turnover ratio :
Closing debtors `2,00,000, Cash sales 25% of credit sales;
Excess of closing debtors over opening debtors `80,000, Total sales `12,00,000
(A) 3 times
(B) 4 times
(C) 6 times
(D) 5 times
77. Using the information in Q. No. 76, calculate average collection period.
(A) 3 times
(B) 2 times
(C) 1 time
(D) 4 times
78. Proprietary Funds is ................
(A) Equity share capital + Preference share capital + Reserves
(B) Equity share capital + Preferene share capital
(C) Equity share capital + Preference share capital + Reserves – Fictitious
Assets
(D) Equity share capital + Preference share capital + Reserves + Fictitious
Assets
79. Match the List-I with items in List-II :
List-I
(a) All items on the statement are expresed as a percentage of the base item
(b) Index number of the movements of the various financial items in the financial
statements for a number of periods
(c) A statement of ‘‘Source and Application of Funds’’
(d) A study of different items of financial statements
List-II
(i) Fund Flow Analysis
(ii) Common Size Statement
(iii) Trend Analysis
(iv) Comparative Statement
(a) (b) (c) (d)
(A) (ii) (iv) (i) (iii)
(B) (i) (iv) (ii) (iii)
(C) (ii) (iii) (i) (iv)
(D) (i) (ii) (iv) (iii)
80. Which is not a form of reporting ?
(A) Descriptive reporting
(B) Subjective reporting
(C) Tabular reporting
(D) Graphic presentation
81. The following figures are available from the records of ABC Enterprises as at
31st March :
Year 2020 2021
(` Lakh) (` Lakh)
Sales 150 200
Profit 30 50
The P/V ratio is ....................
(A) 20%
(B) 25%
(C) 40%
(D) 50%
82. Using the information from Q. No. 81, the total fixed expenses is .................
(A) `20 lakh
(B) `30 lakh
(C) `40 lakh

(D) `50 lakh
83. Using the information from Q. No. 81, the break-even sales is ......................
(A) `50 lakh
(B) `75 lakh
(C) `100 lakh
(D) `125 lakh
84. Using the information from Q. No. 81, Sales required to earn a profit of `90 lakh
is ...................
(A) `275 lakh
(B) `300 lakh
(C) `325 lakh
(D) `50 lakh
85. Using the information from Q. No. 81, Profit or loss that would arise if the sales
were `280 lakh is ..................
(A) `52 lakh
(B) `62 lakh
(C) `72 lakh
(D) `82 lakh
86. Match the List-I (Activity) with items in List-II (Cost Pool).
List-I
(a) Facility-level
(b) Product-level
(c) Batch-level
(d) Unit-level
List-II
(i) Purchasing
(ii) Quality Control
(iii) Human Resources
(iv) Parts Management
(a) (b) (c) (d)
(A) (ii) (iv) (i) (iii)
(B) (i) (iv) (ii) (iii)
(C) (i) (iv) (ii) (iii)
(D) (iii) (iv) (i) (ii)
87. A Ltd. invested `500 lakh in assets. There are 50,00,000 shares outstanding.
The par value of share is `10. It earns a rate of 15% on its investment and has
a policy of retaining 60% of the earning. Growth rate is .....................
(A) 6%
(B) 7.5%
(C) 9%
(D) 10%
88. D Ltd. has the following details :
Return on equity : 10%
Expected earnings per share : `10
Pay-out ratio : 30%
Required rate of return : 5% per annum
Price of share of D Ltd. is ..................
(A) `37.5
(B) `87.5
(C) `125
(D) `140
89. An increase in earnings per share or a reduction in loss per share resulting from
the assumption that convertible instruments are converted, that options or warrants
are exercised or that ordinary shares are issued upon the satisfaction of specified
conditions is..............................
(A) Diluted earnings per share
(B) Anti-diluted earnings per share
(C) Weighted earning per share
(D) Basic earnings per share
90. Following are the objectives of :
(1) To determine Fair Value.
(2) To set out a single Ind AS framework for measuring fair value.
(3) To require disclosures with respect to fair value measurements.
(A) Financial instrument presentation
(B) Market based approach
(C) Principal market measurement
(D) Fair value measurement
91. ‘‘When a business is non-operating or has been generating losses, and the
company’s focus is holding investments or real estate.’’ Which method of
valuation is best used in this case?
(A) Discounted cash flow model
(B) Asset approach
(C) Earning based model
92. ABC Ltd. has `50,00,000 in long term debts, `10,00,000 in preferred stock and
`40,00,000 in common equity. All the values are on market value. The before
tax cost of debts 10%. Cost of preferred stock are 11% and cost of common
equity is 15%. Assume a tax rate of 40%. The overall cost of capital is ................
(A) 10.90%
(B) 10.46%
(C) 11%
(D) 12.90%
93. Gas oil and company has two divisions : Transportation and Refining.
Transportation division sales crude oil to Refining division. The cost of one
barrel of crude is `50, direct labour is `15, variable overheads `3 and fixed
overheads 35. Transportation division sets its profit margin 20% of the variable
cost. If Transporting division operating at full capacity, the transfer price will be:
(A) `65
(B) `116.6
(C) `123.6
(D) `158.6
94. Achieve goal congruence, Realistic performance evaluation and Maintain
autonomy of the divisions are the objectives meet by which method of transfer
pricing ?
(A) Cost based transfer pricing
(B) Negotiated transfer pricing
(C) Market based transfer pricing
(D) Opportunity cost transfer pricing
95. If profit is `20,000, BEP is `2,00,000 and P/V Ratio is 40%. What will be margin
of safety?
(A) `50,000
(B) `80,000
(C) `8,000
(D) `12,000
96. A firm has a total capital investment of `2,25,000. The firm earned net profit
during the last four years `35,000, `40,000, `60,000, `50,000. The fair return
on the net capital employed is 15%. The Super profit is ..........................
(A) `45,000
(B) `37,500
(C) `12,500
(D) `7,500
97. Which is not the approach for valuing of intangible assets ?
(A) Cost approach
(B) Super-Value approach
(C) Market-Value approach
(D) Economic-Value approach
98. The date on which the company and employees agree to the terms of an employee
share-based payment plan is :
(A) Vesting date
(B) Exercise date
(C) Grand date
(D) Next date
99. The relevant details of the company are :
Equity share capital : `25,00,000; Face value of shares : `100; Profit for equity
shareholders : `5,15,000; Dividend payout ratio : 40%; P/E ratio : 30.
Calculate Earnings Per Share (EPS).
(A) `20.60
(B) `2.06
(C) `3.06
(D) `13.60
100. Equity share capital : `25,00,000;Face value of shares : `100; Profit for equity
shareholders : 5,15,000; Dividend pay-out ratio : 40%; P/E ratio : 30.
The dividend per share is .............. .
(A) `4.59
(B) `8.24
(C) `26.60
(D) `30.24
ANSWER KEY
Q.No. Ans Q.No. Ans Q.No. Ans

1 A 34 B 67 C
2 C 35 A 68 D
3 C 36 D 69 C
4 C 37 C 70 B
5 C 38 C 71 D
6 A 39 C 72 A
7 C 40 A 73 B
8 A 41 C 74 A
9 B 42 B 75 D
10 D 76 C
43 A
77 B
11 A 44 C
78 C
12 A 45 C
79 C
13 D 46 D
80 B
14 A 47 A
81 C
15 B 48 B
82 B
16 C 49 B 83 B
17 B 50 A 84 B
18 A 51 D 85 D
19 B 52 A 86 D
20 D 53 C 87 C
21 D 54 C 88 *
22 D 55 B 89 B
23 D 56 A 90 D
24 B 57 B 91 B
25 B 58 C 92 *
26 C 59 D 93 B
27 B 60 C 94 C
28 D 61 A 95 A
29 A 62 C 96 C
30 B 63 D 97 B
31 D 64 A 98 C
32 C 65 C 99 A
33 C 66 A 100 B
WORKING NOTES
My Explanations on Wrong Questions
WQ 43: As per me, Question should be “CARO 2016 is not applicable to Small
Companies, if” but Actual Question is asked on Applicability and you might be
knowing CARO 2016 is not applicable on Small Companies. Also all the options
have the wording “Less than or Equal to”.
WQ 53: Final Entry for recovered Collaterals is Debenture Dr to Debenture

Suspense which is not given in the options.
WQ 92:
Source Amt. Weight Cost W C
Equity 40,00,000 0.4 5% 6%
Preference Shares 10,00,000 0.1 11% 1.1%
Debt 50,00,000 0.5 6% [10% (1-0.4) 3%
1,00,00,000 10.1%
As per me, Answer should be 10.1% which is not given in the question.
WQ 88: Retention Ratio = (1 – Pay-out) = 1 – 0.3 = 0.7

g = b r = 0.7 10% = 7%
Question is wrong as
Required Rate should be 15%

If we take Required Rate as 15% then we can find the answer as under:
= 37.5
WORKING NOTES
5.
( )
11.
Gross liability (60,000 70%) 42,000
(-) Unmarked Application (56,000 70%) (39,200)
Net Liability 2,800

12.
Accrued but not due period is from 1st January to 31st March (3 months)
( )
18.
20.
Amt. Received on 600 shares (600 7) 4200
(-) Loss on Re-issue of 600 shares (600 1) (600)
Capital Reserve 3600
31.
Amt. Received (25,000 30) 7,50,000
(-) Application (10,000 30) (3,00,000)
(-) Allotment (10,000 20) (2,00,000)
Excess 2,50,000
F & F Call Received = (10,000 50) – 2,50,000 = 2,50,000
37.
CF from operating activities
NP after tax 30,00,000
(-) WC increased (5,00,000)
(+) Depreciation 5,00,000
(+) Tax provision 7,50,000
37,50,000
40.
Op. Stock + Purchase – Cl. Stock = COGS
Purchase = (COGS + Cl. Stock) – Op.
= (1,00,00,000 + 6,00,000) – 10,00,000
= 96,00,000
A/c Payable
C/B 90,00,000 Op. 24,00,000

Cl. 30,00,000 Pur. 96,00,000
41.
Tax Payable
C/B (Bal. Fig) 5,60,000 Op. Bal. 80,000
Cl. Bal. 1,30,000 P & L 6,10,000
Total 6,90,000 Total 6,90,000
45.
Interest = 70% (Share Capital & Pre-Acqn. Reserves)
= 70% (10,00,000 + 5,00,000)
= 10,50,000
46.
( ) ( )
49.
Amount received on Application = Number of Application * Application money per
Application = 1,45,000 * 30 = 43,50,000
50.
Excess Money on Application = Total Application Money Received – Amount of
Share Capital Allotted = (1,45,000 * 30) – (1,00,000 * 30) = 13,50,000
51.
Amount to be refunded = Rejected Application * Application money per share =
(1,45,000 – 25,000 – 1,00,000) * 30 = 6,00,000
52.
Excess Amount for Adjustment in Allotment Money = Amount Received on Pro-rate
Applications – Amount of Share Capital Allotted = (1,00,000 * 30) - (75,000 * 30) =
7,50,000
54.
( )
69.
= 85%
Please Note:- 2 units are produced in 1 hour, so 1 unit is prepared in 0.5 hour.
70.
= 80%
71.
= 106.25%
72.
( )
( )
= 0.6/u
73.
Total Fixed Cost = Total Cost – Variable Cost
= 84,000 – (1,20,000 0.6)
= 12,000
74.
TVC at 14,000 units = 0.6 1,40,000
= 84,000
76.
Credit Sale be x.
x + (x 25%) = 12,00,000
1.25x = 12,00,000
x = 9,60,000
Opening Debtor = 2,00,000 – 80,000 = 1,20,000

= 6 times
77.
= 2 months
81.
= 40%
82.
TFC = Sales – Profit – VC
P/V % = 40% So; VC % = 60%
150 – 30 – (150 60%)
150 – 30 – 90
= 30
83.
84.
= 300 Lakhs
85.
Particulars Amount
` Lakhs
Sales 280
(-) VC (60%) (168)
Contribution 112
(-) FC (30)
Profit 82
87.
Growth Rate = b r
= 60% 15%
= 9%
93.
As transportation division is working at full capacity we will have to take full cost
including fixed overheads.
Transfer Price = VC + Profit + FC
= (50 + 15 + 3) + (68 20%) + 35
= 68 + 13.6 + 35
= 116.6
Please Note:- Profit is to be taken on Variable cost only as given in the question.
95.
96.
= 46,250
Super Profit = Average Profit – Normal Profit

= 46250 – (2,25,000 15%)
= 46,250 – 33750
= 12,500
99.
= 20.6
100.
= 20.6 40%
= 8.24
JUNE 2021
PART I
1. For the purpose of Cash Flow Statement, ‘Cash Equivalents’ include :

(A) bank fixed deposit for 30 days
(B) money market instruments
(C) treasury bills
2. A Company has a Net Cash Sale of `6,00,000, Cash Expenses ` 2,80,000 and
Depreciation ` 50,000. Cash from Operating Activity should be :
(A) ` 1,60,000
(B) ` 1,20,000
(C) ` 2,40,000
(D) ` 3,20,000
3. Cash Inflow before working capital changes is ` 4,80,000, decrease in inventory

is ` 60,000, increase in receivables position is `80,000 and increase in payables
position is `70,000, then cash flow from operating activity is :
(A) `5,50,000
(B) `4,30,000
(C) `5,70,000
(D) `5,30,000
4. Debentures interest paid is `80,000, Proposed dividend on equity shares is

`1,50,000, Preference dividend paid is `1,20,000, Provision for tax is `90,000,
then cash outflow from financing activity is :
(A) `3,50,000
(B) `4,40,000
(C) `2,00,000
(D) ` 2,80,000
1
5. The original cost at which an asset or liability is acquired is known as .............
(A) Carrying cost
(B) Replacement cost
(C) Amortization
(D) Historical cost
6. AS-11 issued by ICAI deals with ...........
(A) Accounting for Government grants
(B) Accounting for foreign exchange transaction
(C) Cash Flow Statement
(D) Fund Flow Statement
7. Cash flows arising from the purchase and sale of dealing or trading securities
are classified as :
(D) Extraordinary Activities
8. Ravi Ltd. purchased goods at the cost of `40 lakh in October, 2019. Till March
2020, 75% of the stocks were sold. The Campany wants to disclose closing
stock at `10 Lakh. The expected sale value is `11 Lakh and a commission at
10% on sale is payable to the agent. What is the correct closing stock to be
disclosed as at 31.3.2020 as per AS-2 ?
(A) 10 Lakh
(B) 9.9 Lakh
(C) 11 Lakh
(D) 12 Lakh
9. Ind AS-2 provides for reversal of the write-down of inventories to :
(A) Cost
(B) Replacement Cost
(C) Net realizable value
(D) Net realizable value limited to the amount of original write-down
10. The IFRS foundation has a .................. governance structure.
(A) Three-tier
(B) Two-tier
(C) Four-tier
(D) Five-tier
11. Financial Reporting Council (UK) is a :
(A) Company limited by guarantee
(B) Unlimited Company
(C) Subsidiary company of IFRS
(D) Associate company of the Institute of Chartered Accountants of England
12. A corporate balance sheet is also known as :
(A) Statement of changes in assets and liabilities
(B) Statement of sources and application of funds
(C) Statement of financial condition
(D) Statement of object and reason
13. If we add ‘Cost of Capital’ to ‘Economic Value Added’ we get .....................
(A) Profit After Tax
(B) Net Operating Profit After Tax
(C) Gross Value Added
(D) Earnings before Interest and tax
14. CARO, 2016 applies to a private limited company being a subsidiary or holding
company of a public company, having a paid up capital and reserves and surplus
not more than .................. as on the balance sheet date.
(A) ` 5 Crore
(B) ` 1 Crore
(C) ` 2 Crore
(D) ` 10 Crore
15. CARO, 2016 applies to a private limited company which has a total revenue as
disclosed in Schedule III to the Companies Act, 2013 including revenue from
discoutinuing operations exceeding .......... during the financial year as per the
financial statements.
(A) ` 15 Crore
(B) ` 100 Crore
(C) ` 10 Crore
(D) ` 25 Crore
16. A copy of the financial statements and Board’s report duly adopted at the AGM
shall be filed with the Registrar within ........... of the date of AGM.
(A) 60 days
(B) 30 days
(C) 90 days
(D) 21 days
17. As per Rule 8 of the Companies (Accounts) Rules, 2014, the Report of the
Board shall contain the particulars of contracts or arrangements with related
parties under Section 188 (1) in the ..................
(A) Form AOC-1A
(B) Form AOC-2
(C) Form AOC-3
(D) Form AOC-4A
18. CSR and corporate governance represent a ............... between business and
society.
(A) Social climate
(B) Special contract
(C) Special climate
(D) Social contract
19. Which type of director should be the head of the Stakeholders Grievance
Committee ?
(A) Executive director
(B) Non-executive director
(C) Seniormost director
(D) Chairman appointed for shareholder’s meetings
20. Rishabh Ltd. earns a profit after tax ` 3,96,000. Corporate tax is 0.4. Its capital
structure consists of equity shares ` 9,60,000; 15% Term Loan ` 4,80,000; Cost
of equity is 0.12. Its economic value added is ............
(A) ` 2,66,400
(B) ` 2,80,800
(C) ` 2,08,800
(D) ` 2,80,008
21. What is the amount of the unrealized profit to be eliminated, if the parent’s year-
end inventory includes at `5,40,000 goods invoiced to it by its 60% owned
subsidiary at cost plus 25% ?
(A) `35,000
(B) `1,08,000
(C) ` 64,800
(D) ` 81,000
22. Pre-acquisition profit in subsidiary company is considered as :
(A) Revenue Profit
(B) Capital Profit
(C) Goodwill
(D) Cost of control
23. If cost of acquisition of shares in the subsidiary company is more than intrinsic
value of the shares of subsidiary company on the date of acquisition, then resultant
figure will be :
(A) Minority Interest
(B) Capital Reserve
(C) Goodwill
(D) Significant cost
24. Unrealized profit on goods sold and included in stock is deducted from :
(A) Capital Profit
(B) Revenue Profit
(C) Fixed Assets
(D) Minority interest
25. Manager of Malabar Ltd. is entitled to a commission @ 3% on net profit after
charging such commission. Calculate the commission payable to the manager.
Net profit before tax and managerial remuneration is ` 8,80,000, Depreciation as
provided in books of account is `1,10,000 and Depreciation as per the Companies
Act, 2013 is `1,32,000.
(A) `25,740
(B) `24,990
(C) `42,900
(D) ` 23,330
26. Computers taken on hire by a business for a period of twelve months should be
classified as :
(A) Current assets
(B) Intangible assets
(C) Deferred revenue expenditure
(D) Not an asset
27. The arrangement of assets and liabilities in accordance with a particular order is
known as .................. of balance sheet.
(A) Tallying
(B) Marking
(C) Ruling
(D) Marshalling
28. Provisions are ........................
(A) Nominal accounts
(B) Personal accounts
(C) Real accounts
(D) Representative personal accounts
29. Which of the following is capital reserve ?
(A) Profit prior to incorporation
(B) Profit on sale of fixed assets
(C) Profit on reissue of forfeited shares
30. As per the provisions of the Companies Act, 2013, companies must maintain
their accounts under ............................
(A) Double account system
(B) Single entry system
(C) Double entry system
(D) Duplicate account system
31. Provisions of Corporate Social Responsibility (CSR) are applicable to the company
having net profit of .......................
32. ................... shall mean any amount written off or retained by way of providing
for depreciation, renewals or diminution in value of assets, or retained by way of
providing for any known liability of which the amount cannot be determined with
substantial accuracy.
(A) Provision
(B) Reserves
(C) Appropriation
(D) Transfer
33. Unmarked application has to be distributed to underwriters in the ratio of
...................
(A) Gross Liability Ratio
(B) Last Agreed Ratio
(C) Net Liability Ratio
(D) Equal Ratio
34. Applications bearing the stamp of the respective underwriter are called as
.............
(A) Firm applications
(B) Stamped applications
(C) Underwritten application
(D) Marked applications
35. Underwriting is a contract of :
(A) Indemnity
(B) Bailment
(C) Guarantee
(D) Pledge
36. There shall be a minimum vesting period of .................. in case of Employee
Stock Option Scheme (ESOS).
(A) 3 months
(B) 1 year
(C) 6 months
(D) 3 years
37. Where the right to obtain Shares or Stock options expires unexercised, the
balance standing to the credit of Employee Stock Option Outstanding A/c should
be transferred to :
(A) Profit & Loss A/c
(B) General Reserve A/c
(C) Share Based Payment Reserve A/c
(D) Securities Premium A/c
38. Under the ............... employees are given an option to purchase shares on the
spot at a discount price.
(A) Employees Stock Purchase Scheme
(B) Employee Stock Option Scheme
(C) Stock Appreciation Rights Scheme
(D) Preferential Allotment Scheme
39. ‘‘Interest accrued & due on debentures’’ is shown ...................... .
(A) Under debentures
(B) As other current liabilities
(C) As provisions
(D) As a reduction of bank balance
40. Discount on issue of debentures is a :
(A) Revenue loss to be charged in the year of issue
(B) Capital loss to be written off from capital reserve
(C) Capital loss to be written off over the tenure of the debentures
(D) Capital loss to be shown as goodwill
41. Tax deducted at source on interest on debenture is shown as ......................
(A) Expense
(B) Asset
(C) Liability
(D) Income
42. T Ltd. purchased machinery from N Company for a book value of ` 4,00,000.
The consideration was paid by issue of 10% debentures of ` 100 each at a
premium of 25%. The debenture account was credited with .............................
(A) ` 4,00,000
(B) ` 5,00,000
(C) ` 3,20,000
(D) ` 4,80,000
43. K Ltd. issued 5,000, 12% debentures of ` 100 each at a premium of 10%,
which are redeemable after 10 years at a premium of 20%. The amount of loss
on redemption of debentures to be written off every year is ......................
(A) ` 80,000
(B) ` 40,000
(C) ` 10,000
(D) ` 8,000
44. As per Section 68 of the Companies Act, 2013, post buyback, debt equity ratio
should not exceed ....................
(A) 1
(B) 1.5
(C) 2
(D) 3
45. Where a company buys back own shares or other specified securities, it shall
extinguish and physically destroy the shares or securities so brought back within
............... of the last date of completion of buy-back ?
(A) 3 days
(B) 8 days
(C) 7 days
(D) 9 days
46. Declaration of solvency in relation to buy back of shares has to be filed in .............
(A) Form SH-6
(B) Form SH-9
(C) Form SH-4
(D) Form SH-8
47. Paid-up equity shares capital of Novel Ltd. is ` 50,00,000 having face value of
`10 each fully paid-up. Other details :
General Reserve = ` 15,00,000
Capital Redemption Reserve = ` 4,00,000
Profit & Loss Account = ` 1,00,000
Statutory Reserve = ` 6,40,000
Securities Premium = ` 1,00,000
The board of directors passed resolution in board meeting to buy back maximum
number of shares as allowed by law. What is the maximum no. of shares that
can be bought back ?
(A) 55,000 shares
(B) 67,000 shares
(C) 1,25,000 shares
(D) 78,000 shares
48. Negi Ltd. had 90,000 equity shares of ` 100 each, fully paid up. The company
decided to buy back 10% shares at par by the issue of sufficient number of
preference shares. Company do not have any reserves. How much preference
shares are required to be issued, if new preference shares are to be issued at `
10 each ?
(A) 9,00,000 shares
(B) 90,000 shares
(C) 1,00,000 shares
(D) 1,20,000 shares
49. Which of the following cannot be used for the purpose of creation of capital
redemption reserve account ?
(A) Profit and Loss A/c (credit balance)
(B) General Reserve A/c
(C) Dividend Equalization Reserve A/c
(D) Unclaimed Dividends A/c
50. According to section 52 of the Companies Act, 2013, the amount in the Securities
Premium A/c cannot be used for the purpose of :
(A) Issue of fully paid bonus shares
(B) Writing off losses of the company
(C) For purchase of own securities
(D) Writing off commission or discount on issue of shares
51. Which of the following statements is correct ?
(A) Preference shares and debentures have priority right for a reward over ordinary
shares
(B) Debentures will not receive interest in a year when the company makes an
operating loss
(C) Preference shares will get dividend only when ordinary shares too receive
them
(D) Ordinary shares could be paid dividend even when a company has negative
retained earnings
52. Capital Redemption Reserve Account may be applied to issue ...................
(A) Right shares
(B) Bonus debentures
(C) Bonus to employees of the company
(D) Bonus shares
53. Preference shares amounting to ` 2,00,000 are redeemed at a premium of 5%
by issue of equity shares amounting to ` 1,00,000 at a premium of 10%. What
is the amount to be transferred to capital redemption reserve ?
(A) ` 1,05,000
(B) ` 1,00,000
(C) ` 2,00,000
(D) ` 1,11,000
54. J Ltd. had 3,000, 12% Redeemable Preference Shares of `100 each, fully paid
up. The company issued 25,000 equity shares of ` 10 each at par and 1,000
14% Debentures of ` 100 each. The amount to be transferred to Capital Redemption
A/c will be .....................
(A) Nil
(B) ` 50,000
(C) ` 2,00,000
(D) ` 3,00,000
55. The notice relating to offer for right issue shall be dispatched through registered
post or speed post or through electronic mode to all the existing shareholders at
least ....... before the opening of the issue.
(A) 3 days
(B) 5 days
(C) 7 days
(D) 10 days
56. If company makes bonus issue at 2 : 3, then it means :
(A) For every two shares three bonus shares will be allotted
(B) For every three shares two bonus shares will be allotted
(C) For every five shares three bonus shares will be allotted
(D) For every five shares two bonus shares will be allotted
57. .............. are shares issued by a company free of cost to its existing
shareholders.
(A) Right shares
(B) Bonus shares
(C) Stock options
(D) Warrants
58. ........... refers to that part of the authorized capital which has actually been
offered to the public for subscription.
(A) Called up capital
(B) Subscribed capital
(C) Issued capital
(D) Nominal or authorized capital
59. Premium on issue of shares must be treated as ........................
(A) Revenue Receipt
(B) Deferred Revenue Receipt
(C) Capital Receipt
(D) Capital Loss
60. Premium on issue of shares must be credited to a separate account called
..................
(A) Share Premium Account
(B) Securities Premium Account
(C) Discount on Issue of Shares
(D) Securities Profit Account
PART II
61. Amount received as calls-in-advance is a ................ of the company.
(A) right
(B) asset
(C) debt
(D) revenue
62. Amount due on calls made but not paid is known as .....................
(A) Calls-in-Advance
(B) Calls-in-Arrear
(C) Unpaid amounts
(D) Defaulting amounts
63. ............... may be said to be the compulsory termination of membership by
way of penalty for non-payment of allotment and/or any call money.
(A) Surrender of shares
(B) Forfeiture of shares
(C) Transfer of shares
(D) Transmission of shares
64. A company has a subscribed capital of 2,00,000 equity shares of ` 25 each,`20
per share called up. The directors forfeited 200 equity held by a shareholder who
failed to pay the first call made @ ` 10 per share. Later, the directors reissued
these shares as ` 20 per share paid up at `15 per share. On reissue, amount to
be transferred to capital reserve account is ....................
(A) ` 1,000
(B) ` 1,400
(C) ` 1,500
(D) ` 1,100
65. One Person Company (OPC) shall file a copy of the financial statements duly
adopted by its member, along with all the documents which are required to be
attached to such financial statements, within .................. from the closure of
the financial year.
(A) 30 days
(B) 60 days
(C) 120 days
(D) 180 days
66. Declared dividend must be paid within .......... of declaration.
(A) 5 days
(B) 10 days
(C) 30 days
(D) 60 days
67. The following information is pertaining to A Ltd.
Current ratio : 4
Acid Test ratio : 2.8
Current liabilities : 31.00 Lakh
Find out the value of Inventory.
(A) ` 62 Lakh
(B) ` 43 Lakh
(C) ` 37.2 Lakh
(D) ` 105.4 Lakh
68. P Ltd. furnished the following information :
Cost of Goods Sold : ` 6 Lakh
Net Profit : ` 3 Lakh
Sales Return : ` 1 Lakh
If the net profit margin of P Ltd. was 25%, then the gross profit margin was :
(A) 55%
(B) 60%
(C) 40%
(D) 50%
69. Which of the following is classified as liquidity ratio ?
(A) Return on equity
(B) Return on Investment
(C) Acid Test ratio
(D) Debt Equity ratio
70. A Liquid ratio lower than 1 : 1 shows :
(A) Under trading
(B) Under Investment
(C) Over Trading
(D) Over Investment
71. If a concern has a very high stock turnover ratio, which of the following statement
is False ?
(A) Stock Velocity Ration is Low
(B) Stock has many fast moving items
(C) There is under trading

(D) Funds blocked in working capital are less
72. ................... examine the policy of the company regarding of dividend and retain
earning.
(A) Earnings Per Share (EPS)
(B) Price Earnings Ratio
(C) Dividend Payout Ratio
(D) Return on Investment
73. The focus of Management accounting is on :
(A) Tax Preparation
(B) External Reporting
(C) Internal Reporting
(D) Auditing
74. Cost of Goods ............................
(A) Opening Stock + Purchases – Direct Expenses + Closing Stock
(B) Opening Stock + Purchases + Direct Expenses – Closing Stock
(C) Sales – Opening Stock + Purchases – Direct Expenses – Closing Stock
(D) Opening Stock + Purchases – Direct Expenses – Closing Stock
75. S Ltd. has fixed cost of ` 60,000 P.A. It manufactures a single product which it
sells for ` 20 per unit. Its P/V ratio is 40%. S. Ltd. Break-even Point in Units is:
(A) 1800
(B) 3000
(C) 5000
(D) 7500
76. Activity based cost system would probably provide the greatest benefits for
organization that use ...........................
(A) Job Order Costing
(B) Process Costing
(C) Standard Costing
(D) Historical Costing
77. In marginal costing, stock is valued at .......................
(A) Fixed Cost
(B) Semi-variable Cost
(C) Variable Cost
(D) Market Price
78. An increase in selling price ...................
(A) Increase the break-even point
(B) Decrease the break-even point
(C) Does not affect the break-even point
(D) Optimizes the break-even point
79. Fixed Cost = ` 2,00,000, Sales = ` 8,00,000, P/V Ratio = 30%; the amount of
profit is ............................
(A) ` 50,000
(B) ` 40,000
(C) ` 35,000
(D) ` 45,000
80. A Budget that gives a summary of all the functional budget and projected Profit
& Loss Account is known as ......................
(A) Capital Budget
(B) Flexible Budget
(C) Master Budget
(D) Discretionary Budget
81. The difference between fixed cost and variable cost has significance in preparation
of .............................
(A) Flexible Budget
(B) Master Budget
(C) Cash Budget
(D) Capital Expenditure Budget
82. Which of the following would be found in a Cash budget ?
(A) Capital Expenditure
(B) Provision for doubtful debts
(C) Depreciation
(D) Accrued expenditure
83. Reliable Ltd. has given the following data :
Budget Production = 800 Units
Standard hours per unit = 25
Actual production = 576 units
Actual Working = 12,000 hours
What is the Efficiency Ratio ?
(A) 110%
(B) 120%
(C) 100%
(D) 125%
84. When the required rate of return is equal to the coupon rate, then the market
value of a bond is ..............................
(A) Above Face Value
(B) Face Value
(C) Below Face Value
(D) Book Value
85. The (Beta) of a risk free stock is :
(A) 10
(B) –1
(C) 1
(D) 0
86. Which of the following investment decision is required to be taken for a stock, if
its intrinsic value is greater than its market value ?
(A) Sell
(B) Hold
(C) Buy
(D) Indifferent
87. Earnings Per Share (EPS) is equal to :
(A) Profit before tax/No. of shares in authorized capital
(B) Profit after tax/No. of shares in issued capital
(C) Profit after tax/Net Worth
(D) Profit before tax/Net Worth
88. Interest coverage ratio = 6, indicates :
(A) Sales are 6 times of interest
(B) Profit after tax is 6 times of interest
(C) EBIT is 6 times of interest
(D) Interest is 6 times after tax
89. Debtors turnover ratio reflects :
(A) Collection period
(B) Number of times debtors against credit sales
(C) Aging of the debtors
(D) Number of times debtors against total sales
90. XYZ. Ltd. books of accounts show profit from operation (EBDIT) at 500 Lakh. It
paid 12% on a debt of 1,000 Lakh. Depreciation is ` 100 Lakh and Tax is 35%,
PAT will be :
(A) `184 Lakh
(B) `182 Lakh
(C) `178 Lakh
(D) `180 Lakh
91. The Budget sales for the next 4 quarter are – `1,92,000, ` 2,88,000, ` 2,88,000
and ` 3,36,000 respectively. It is estimated that sales will be paid for as follows:
75% of the sales will be paid in the quarter in which sales were made. Of the
balance 50% will be paid in the quarter after the sales was made. The remaining
50% will be paid in the quarter after this. The amount of cash received in quarter
3rd will be .............
(A) 2,76,000
(B) 1,44,000
(C) 3,24,000
(D) 2,40,000
92. The base of cost audit report is ...........
(A) Efficiency and propriety
(B) Profitability and liquidity
(C) True & Fair view
(D) Reliability and propriety
93. P Ltd. issue ` 50,000 8% Debenture at a discount of 5%. The tax rate is 50%.
The cost of debt capital is .......................
(A) 5.42%
(B) 5.1%
(C) 4.42%
(D) 4.21%
94. In case of rising prices (Inflation), FIFO method will .........................
(A) Provide lowest value of closing stock and profit
(B) Provide highest value of closing stock and profit
(C) Provide highest value of closing stock but lowest value of profit
(D) Provide highest value of profit but lowest value of closing stock
95. A management consultancy recovers overheads on chargeable consulting hours.
Budget overheads were `6,15,000 and actual consulting hours were 32,150.
Overhead were under recovered by `35,000. If actual overhead were `6,94,075,
what was the budgeted overhead absorption rate per hour.
(A) `19.13
(B) `20.50
(C) `21.59
(D) `22.68
96. Every specified company including all units and branches thereof shall maintain
cost records in ..................... in respect of each financial year.
(A) Form CRA-5
(B) Form CRA-1
(C) Form CRA-4
(D) Form CRA-2
97. Cost Auditor is appointed by the ...........
(A) Central Government
(B) Audit Committee
(C) Board of Director
(D) Shareholders
98. Find out the goodwill of the company from the following information :
Total Capital Employed = `8,00,000
Reasonable Rate of return = 15%
Profits for the year = `12,00,000
Use capitalization method :
(A) `82,00,000
(B) `12,00,000
(C) `72,00,000
(D) `42,00,000
99. Which of the following is not a method of business valuation ?
(A) Asset Based
(B) Earning based
(C) Market based
(D) Equity based
100. Which of the following is not the method of valuation of Goodwill ?
(A) Average profit method
(B) Superprofit method
(C) Capitalization method
(D) Straight line method
ANSWER KEY

PART I 34 D 67 C
1 D 35 B 68 D
2 D 36 B 69 C
3 D 37 B 70 B
4 C 38 A 71 C
5 D 39 B 72 C
6 B 40 C 73 C
7 A 41 C 74 B
8 B 42 C 75 D
9 D 43 C 76 A
10 A 44 C 77 C
11 A 45 C 78 B
12 C 79 B
46 B
80 C
13 B 47 B
81 A
14 B 48 B 82 A
15 C 49 D 83 B
16 B 50 B 84 B
17 B 51 A 85 D
18 D 52 D 86 C
19 B 53 B 87 B
20 B 54 B 88 C
21 B 55 A 89 B
22 B 56 B 90 B
23 C 57 B 91 A
24 B 58 C 92 A
25 B 59 C 93 D
26 D 60 B 94 B
27 D PART II 95 B
28 A/B/C 61 C 96 B
29 D 62 B 97 C
30 C 63 B 98 C
31 D 64 A 99 D
32 A 65 D 100 D
33 A 66 C
WORKING NOTES
2.
Cash from Operating Activity:
Net Cash Sale 6,00,000
(-) Cash Expenses 2,80,000
Net Cash Flow 3,20,000
3.
Cash inflow before WCC 4,80,000
+ Decrease in Inventory 60,000
- Increase in receivable (80,000)
+ Increase in Payables 70,000
Cash Flow from Operating Activity 5,30,000
4.
Cash Flow From Financing Activity:
Debenture Interest paid (80,000)
Preference Dividend Paid (1,20,000)
Cash Outflow (2,00,000)
8.
As per AS -2, Valuation of Inventory , Inventory should be valued at lower of cost or
NRV.
Cost = 40,00,000 × 25% = 10,00,000

NRV = 11,00,000 – 10% = 9,90,000
Valuation = 9,90,000
20.
EVA = PAT – (Equity × Ke) = 3,96,000 – (9,60,000 × 12%) = 2,80,800
21.
Unrealized Profit = [5,40,000 ÷ (100% + 25%)] × 25% = 1,08,000
25.
Net Profit 8,80,000
(+) Depreciation Charged 1,10,000
(-) Depreciation as per Companies Act (1,32,000)
Net Profit before Commission 8,58,000
Commission = 3% × (8,58,000÷103%) = 24,990
42.
No. of Debentures = Purchase Consideration ÷ Issue Price
No. of Debentures = 4,00,000 ÷ 125
No. of Debentures = 3,200
Debentures Account will be credited by 3,200 × 100 = 3,20,000
43.
Total Loss = redemption at premium = 5,000 × 100 × 20% = 1,00,000
Loss to be written off Every Year = Total Loss ÷ Life = 1,00,000 ÷ 10 = 10,000
47.
10%*(50,00,000+15,00,000+1,00,00+1,00,000)/10 = 67,000 Shares
Please Note: it is assumed that Buy Back price is Rs. 10.

It is assumed that SR is not passed.
48.
No. of Preference Shares = (90,000 × 100 × 10%) ÷ 10 = 90,000 Preference Shares
53.
CRR = Nominal Value Redeemed – Capital Increase by Issue of Equity
CRR = 2,00,000 – 1,00,000
CRR = 1,00,000
54.
CRR = Nominal Value Redeemed – Capital Increase by Issue of Equity
CRR = 3,00,000 – 2,50,000
CRR = 50,000
64.
Amount Received = Called up – Amount Not received = 20 – 10 = 10
Loss on Reissue = 20 – 15 = 5
Capital Reserve = Amount Received – Loss on reissue
Capital Reserve = (200 × 10) – (200 × 5)
Capital Reserve = 1,000
67.
Current Ratio = CA ÷ CL
CA = Current Ratio × CL
CA = 4 × 31
CA = 124
Acid Test Ratio = (CA – Stock) ÷ CL

Stock = CA – (Acid Test Ratio × CL)
Stock = 124 – (2.8 × 31)
Stock = 37.2
68.
NP % = NP ÷ Net Sales
Net Sales = NP ÷ NP% = 3 ÷ 25% = 12
GP % = GP ÷ Net sales = (12 – 6) ÷12 = 50%

75.
BEP = Fixed Cost ÷ Contribution per unit = 60,000 ÷ (20×40%) = 7,500 Units
79.
Profit = Contribution – Fixed Cost
Profit = (8,00,000 × 30%) – 2,00,000
Profit = 40,000
83.
Efficiency Ratio = Actual Output ÷ Standard Output = 576 ÷ (12,000÷25) = 120%
90.
EBDIT 500
- Depreciation (100)
- Interest (1,000 × 12%) (120)
PBT 280
- Tax @ 35% (98)
PAT 182
91.
Amount received in Quarter 3:
From Quarter 3: (2,88,000 × 75%) = 2,16,000
From Quarter 2: (2,88,000 × 12.5%) = 36,000
From Quarter 1: (1,92,000 × 12.5%) = 24,000
Total = 2,76,000
93.
Kd = I(1-t)/NP = 8(1-0.5)/95 = 4.21%
95.
Absorbed OH = Actual OH – Under recovery of OH = 6,94,075 – 35,000 = 6,59,075
Absorbed OH = Budgeted OH Absorption Rate × Actual Consulting Hours

6,59,075 = Budgeted OH Absorption Rate × 32,150
Budgeted OH Absorption Rate = 6,59,075 ÷ 32,150 = 20.5
98.
Normal Capital Employed = Profits ÷ Capitalization Rate = 12,00,000 ÷ 15% =
80,00,000
Goodwill = Normal Capital Employed – Actual Capital Employed = 80,00,000 –
8,00,000 = 72,00,000
DECEMBER 2020
PART I
1. Current Assets are those assets :
(A) Which can be converted into cash within 12 months
(B) Which can be converted into cash within a period normally not exceeding
12 months
(C) Which can be converted into cash within an operating cycle which normally
does not exceed 12 months.
(D) Which are held for their conversion into cash within an operating cycle or a
period of 12 months
2. The figures appearing in the Financial Statements may be rounded off to the
nearest crore, only if Turnover is ..............
(A) less than `100 crore
(C) more than `100 crore
(D) more than `500 crore
3. Which of the following is correct?
(A) The company shall not issue sweat equity shares for more than 15% of the
rupees five crore, whichever is higher.
(B) The company shall not issue sweat equity shares for more than 15% of the
rupees 5 crore, whichever is lower.
(C) The company shall not issue sweat equity shares for more than 25% of the
rupees 5 crore, whichever is higher.
(D) The company shall not issue sweat equity shares for more than 25% of the
rupees 5 crore, whichever is lower.
4. Financial statements are used by:
(A) Investors
(B) Creditors
(C) Regulators
1
5. The Escrow account under Regulation 9(xi) of SEBI (Buy back of securities)
Regulations, 2018 does not include :
(A) Cash deposited with a scheduled commercial bank
(B) Bank guarantee in favour of the merchant banker
(C) Deposit of acceptable securities with appropriate margin, with the merchant
banker
(D) Deposits of acceptable securities with appropriate margin, with the company
6. Every Company having Net Worth of ` .......... shall constitute a corporate social
responsibility committee of the Board.
(A) 100 crore or more
(B) 200 crore or more
(C) 500 crore or more
(D) 1000 crore or more
7. On 30th June, 2018, two-third of the shares of S Ltd. (with total capital of `
48,00,000) was acquired by H Ltd. The balance sheet of S Ltd. showed a debit
balance ` 24,00,000 on 1st January, 2018 and a credit balance of ` 14,40,000
on 31st December, 2018. The investment by H Ltd. in shares of S Ltd. is `
36,00,000. Calculate the ‘‘cost of control’’ in this acquisition :
(A) `7,20,000
(B) `6,20,000
(C) `3,60,000
(D) `1,80,000
8. CARO 2016 is applicable to :
(A) Banking Companies and Insurance Companies
(B) One Person Company and Small Companies
(C) Companies registered for Charitable Purposes
(D) Foreign Companies
9. On 31st March, 2019, X Ltd. has 8% fixed Deposit (Date of FD 1st March, 2019,
maturing on 31st May, 2019) of `3,00,000. Interest is received on monthly basis.
While preparing Cash Flow Statement as per AS-3 :
(A) `2,000 (interest) will be added to net profit while calculating net cash inflow
after tax from operating activities
(B) `3,00,000 will be treated as cash outflow in investing activities
(C) Both (A) and (B)
10. Which of the following is a Small and Medium Sized Company (SMC) as per the
Companies (Accounting standards) Rules, 2006 :
(A) X Ltd. has appointed Merchant bankers to prepare a Red-herring prospectus
for the purpose of filing the same with SEBI
(B) Y Pvt. Ltd. engaged only in insurance broking business has a turnover of ?
55 crore (including other income of `5 crore), GST collected of `1 crore and
shown as Unsecured Loan and Secured Loan from bank of `9 crore and
public deposits of `1 crore.
(C) Z Pvt. Ltd., acquired 51% equity in a listed company. It has a turnover of ?
50 crore and borrowings of `10 crore.
(D) W Pvt. Ltd. has a tumover of `55 crore (including other income of `5 crore)
and took Secured Loan from bank of `10 crore and public deposits of `1
crore which were fully paid before the end of the financial year.
11. ‘‘Satyam Vada, Dharam Chara’’ is :
(A) Motto of the ICSI
(B) Vision Statement of the ICSI
(C) Mission Statement of the ICSI
(D) Objective of the ICSI
12. Under Ind AS 1 , presentation of any items of income or expense as extraordinary
item is :
(A) Separately disclosed
(B) Shown as a part of statement of profit and loss
(C) Prohibited
13. A person who owes money to the business is a ..................
(A) Debtor
(B) Creditor
(C) Investor
(D) Promoter
14. A Company shall disclose by way of notes, additional information regarding
aggregate expenditure and income on any item of income or expenditure which
exceeds :
(A) 1% of the revenue from operations or `1,00,000, whichever is higher
(B) 1% of the revenue from operations or `1,00,000, whichever is lower
(C) 1% of the revenue from operations or `10,00,000, whichever is higher
(D) 1% of the revenue from operations or `10,00,000, whichever is lower
15. If the Articles of Association are silent regarding interest on calls-in-arrears, the
minimum rate of interest which can be charged on calls-in-arrears is :
(A) 12% p.m.
(B) 10% p.a.
(C) 12% p.a.
16. Which of the following is not a method of redemption of debentures ?
(A) By payment in lumpsum
(B) By payment is Instalments
(C) By purchase in open market
(D) By conversion into short term loans
17. Every company required to create/maintain Debenture Redumption Reserve shall

before the 30th day of April of each year, deposit or invest (as the case may be)
at least ............ % of the amount of its debentures maturing during the year
ending on the 31st day of March next year in the prescribed mode.
(A) 5
(B) 10
(C) 15
(D) 25
18. Every non-listed public company must have at least one woman director, if it
has:
(A) paid up share capital of at least `100 crore

(B) turnover of at least `100 crore
(C) in aggregate, outstanding loans/ borrowings/debentures/deposits of at least
`50 crore
19. The areas of corporate governance included in Companies Act, 2013 are :
(A) Independent directors and woman director and Corporate Social
Responsibility Committee
(B) Audit Committee, Internal Audit and Serious Fraud Investigation office
(C) Nomination and Remuneration Committee and Stakeholder relationship
Committee
20. Which of the following is not a cash flow for a company?
(A) Dividends
(B) Proceeds from issuance of share capital
(C) Amortisation of preliminary expenses
(D) Interest payments
21. AS 3 and AS 17 are not applicable in their entirety to :
(A) Level II Entities
(B) Level III Entities
(C) SMCs
22. IASB stands for :
(A) Indian Accounting Standard Board
(B) International Auditing Standard Board
(C) International Accounting Standard Board
(D) International Assurance Service Board
23. The structure of IFRS Foundation consists of :
(A) International Accounting Standards Board (IASB), IFRS Foundation Trustees
and IFRS Foundation Monitoring Board
(B) IFRS Foundation Trustees, IFRS Foundation Monitoring Board and IFRS
Advisory Council
(C) IFRS Foundation Monitoring Board, IFRS Advisory Council, International
Accounting Standards Board (IASB)
(D) International Accounting Standards Board (IASB), IFRS Foundation Trustees
and IFRS Advisory Council
24. Ind AS 20 requires government grants of the nature of promoters contribution :
(A) to be credited directly to capital reserve and treated as a part of shareholders
funds
(B) to be recognized as income over the periods
(C) Not to be recognized
(D) Either (A) or (B)
25. Provision is :
(A) an unknown liability but its amount and due date are determinate
(B) an unknown liability and its amount and due date are indeterminate
(C) a known liability and its amount and due date are determinate
(D) a known liability but its amount and due date are indeterminate
26. A balance sheet has two parts to it, i.e.
I. Equity and Liabilities and
II. ........................................
(A) Shareholder’s fund
(B) Trade receivables
(C) Inventories
(D) Assets
27. The maximum amount of capital a company can issue is called .............
(A) Issued Capital
(B) Paid up Capital
(C) Authorized Capital
(D) Called up Capital
28. Neel Ltd. purchased a building worth `99,00,000 and issued 12% Debentures of
`100 each at a premium of 10%. What will be the amount of premium ?
(A) `8,00,000
(B) `9,90,000
(C) `9,00,000
(D) `10,00,000
29. The Chief Accountant of TT Ltd. gives the following data regarding its six segments:
` in crore
Particulars M N O P Q R Total
Segment Assets 9 9 55 9 9 9 100
Segment Results –19 –162 18 10 –19 10 –162
Segment Revenue 161 29 29 28 27 26 300
The Reportable Segments as per AS 17 are :

(A) M, N
(B) M, N, O
(C) M, N, O, P
(D) M, N, O, P, R
30. Market Value Added is :
(A) = Market Value of equity – Book value of equity
(B) = Present value of all future EVA
(C) = Shareholder Value Added (SVA)
(D) = Both (A) and (B)
31. What is the full form of CARO ?
(A) Company Account’s Repository Order
(B) Company Account’s Reports Order
(C) Company Auditor’s Report Order
(D) Company Assets Revaluation Order
32. Cash payments to and on behalf of employees is an example of.................
(A) Cash flow from operating activities
(B) Cash flow from investing activities
(C) Cash flow from financing activities
33. AS 18 and AS 24 are not applicable in their entirety to :
(A) Level II Entities
(B) Level III Entities
(C) SMCs
34. AS-7 issued by ICAI deals with ...........
(A) Disclosure of accounting policies

(B) Revenue Recognition
(C) Construction contracts
(D) Government grants
35. The Advisory Council is the formal advisory body to the :
(A) International Accounting Standards Board
(B) Trustees of the IFRS Foundation.
(C) IFRS Foundation Monitoring Board
(D) Both (A) and (B)

36. Ind AS 11 requires contract revenue to be measured at.............
(A) Net realisable value
(B) Fair value of consideration received/ receivable
(C) Consideration received/receivable
37. Share Options Outstanding Account will be shown in the Balance Sheet of a
company under the heading
(A) Share Capital
(B) Reserves & Surplus
(C) Non-current Liabilities
(D) Current Liabilities
38. Forfeited shares can be re-issued at ..........
(A) Par
(B) Premium
(C) Discount
39. Saket Ltd. purchased a machinery worth `1,20,000 and building worth `2,00,000
from Rashmi Ltd. for an agreed purchase consideration of `3,00,000 to be satisfied
by the issue of 3,000, 10% debentures of `100 each. Calculate the amount to be
transferred to capital reserve A/c:
(A) ` 10,000
(B) ` 20,000
(C) ` 30,000
(D) ` 40,000
40. Ind AS 34 requires the following in the contents of an interim financial report in
addition to what was required under previous standard AS 25:
(A) A condensed balance sheet
(B) A condensed statement of profit and loss
(C) A condensed cash flow statement
(D) A condensed statement of changes in equity
41. Shareholder Value Added (SVA) is:
(A) = Economic profits of a business – minimum return required by all providers

of capital
(B) = Economic profits of a business – minimum return required by all
Shareholders only
(C) = Economic profits of a business – minimum return required by Equity
Shareholders only
(D) = Book value of equity – Cost of equity
42. In case of a financial enterprise, Interest received on Debentures held as
Investment is ..................
(A) Operating activity
(B) Investing activity
(C) Financing activity
43. GAAP stands for :
(A) Generally accepted accounting principles
(B) Generally accumulated adherence policy
(C) Generally accounting adherence policy
(D) Generally assisted accounting principles
44. .............. are set of accounting standards notified by the Ministry of Corporate
Affairs which are converged with International Financial Reporting Standards.
(A) International Accounting Standards
(B) Indian Accounting Standard
(C) Indian Auditing Standard
(D) International Auditing Standards
45. Public Interest Committee (PIC) established by IPSASB consists of individuals
from the :
(A) International Monetary Fund
(B) International Organization of Supreme Audit Institutions
(C) Organization for Economic Cooperation and Development and the World
Bank Group
46. No issue of bonus shares shall be made by a company out of :
(A) Its free reserves
(B) The securities premium account

(C) Capitalizing reserves created by revaluation of assets
(D) The capital redemption reserve account
47. The Association of International Certified Professional Accountants launched in
2017, bringing together the expertise and capabilities of the :
(A) AICPA and CIMA
(B) AICPA and FASB
(C) IFRS Foundation and FASB
(D) CIMA and FASB
48. Preliminary expense is a ............ asset.
(A) Current
(B) Fixed
(C) Tangible
(D) Fictitious
49. Ind AS 113 deals with :
(A) Fair value measurement
(B) Joint arrangements
(C) Financial instruments
(D) Insurance contract
50. The words ‘To Balance b/f’ or ‘By Balance b/f’ are recorded in the ‘Particulars
Column’ at the time of posting of :
(A) all compound entries
(B) an opening entry
(C) a closing entry
(D) an adjusting entry
51. Five years ago X Ltd. had issued 12% Debentures of ? 30 lakh (redeemable in
six equal annual Installments). These Debentures will be shown in the Balance
Sheet of a company under the heading :
(A) Non-current Assets
(B) Non-current Liabilities
(C) Current Assets
(D) Current Liabilities
52. The Institute of Chartered Accountants in Australia and the New Zealand Institute
of Chartered Accountants amalgamated to become one body :
(A) CA ANZ
(B) ICA ANZ
(C) ANZ CA
(D) ANZ ICA
53. Loans from banks repayable on demand will be classified in the Balance Sheet
of a company as :
(A) Short-term borrowings
(B) Long-term borrowings
(C) Other Current Liabilities
(D) Other Long-term Liabilities
54. X Ltd. has 5,000 AC in stock on 31st March, 2019. The cost of each AC amount
to `10,000. There is firm commitment of sale of 1,000 AC by the company in
April, 2019 @ `15,000 per AC. However, the general price of this AC at year end
amounts to ? 9,500 per AC. Calculate the Value of Closing Stock as per AS-2.
(A) ` 480 lakh
(B) ` 475 lakh
(C) ` 530 lakh
55. ............... prescribes the basis for presentation of general purpose financial
statement to ensure comparability both with the entity’s financial statements of
previous periods and with the financial statements of other entities.
(A) Ind AS 1
(B) Ind AS 2
(C) Ind AS 3
(D) Ind AS 4
56. In the Balance Sheet of a company which item shall be sub-classified as :
(i) Secured, considered good;
(ii) Unsecured, considered good;
(iii) Doubtful.
(A) Long-term and Short-term Trade Receivables
(B) Long-term loans and advances
(C) Short-term loans and advances

57. External Reporting Board (XRB) belongs to :
(A) New Zealand

(B) Australia
(C) USA
(D) UK
58. The total capital of subsidiary company is `3,00,000 and out of this, `2,40,000
is owned by holding company. What is the amount of minority interest, if % of
outside shareholder is 20% ?
(A) ` 2,40,000
(B) ` 60,000
(C) ` 48,000
59. Profit on revaluation of assets to be shown as ............ in the consolidated
Balance Sheet.
(A) General Reserve
(B) Capital Reserve
(C) Goodwill
60. The Board of Directors of the Company, who has to form a Corporate Social
Responsibility Committee, shall make sure that the company spends in every
financial year, minimum ............. % of the average net profits made during the 3
immediately preceding financial years as per the CSR policy.
(A) 1
(B) 2
(C) 5
(D) 10
PART II
61. Which of the following is the social purpose of Cost Audit ?
(A) Detection and correction of abnormal losses
(B) Detection of errors and frauds
(C) Determination of inventory valuation

(D) Pinpointing areas of inefficiency and mismanagement for the benefit of
shareholders and consumers
62. Following is not an advantage of effective Management reporting system :
(A) Improves decision making
(B) Improves responsiveness to issue
(C) Improves efficiency of resources
63. A company has Profit/Volume (P/V) Ratio 40 percent. By what percentage must
variable cost be decreased to offset 25% reduction in selling price, so as to
maintain the same P/V Ratio ?
(A) 15%
(B) 25%
(C) 33.33%
(D) 41.67%
64. MOON Ltd. is developing a new production process. During the financial year
ended 31st March, 20l8, the total expenditure incurred on the process was ` 60
lakh. The production process met the criteria for recognition as an intangible
asset on lst December, 2017. Expenditure incurred till this date was ` 32 lakh.
Further expenditure incurred on the process for the financial year ending 3lst
March, 2019 was ` 90 lakh. As on 31st March, 2019, the recoverable amount of
know-how embodied in the process is estimated to be `82 lakh. This includes
estimates of future cash outflows and inflows. The expenditure to be charged to
Profit and Loss Account for the year ended 3lst March, 2019 is ......................
lakh. (Ignore depreciation).
(A) `118
(B) ` 82
(C) `36
65. Risk-Free Rate of Interest on Govt. Treasury Bonds 5.5%, Average Return on
Market Portfolio 18%. Beta is 1.8. Security is said to be overpriced, if actual
return is :
(A) 29%
(B) 28%
(C) 27%
66. Production 11,000 units @ ?11.50 per unit, Closing Stock of finished Goods
3,000 units. Opening Stock 2,000 units @ `14 per unit, Selling and Distribution
Expenses 20% of Cost of Sales, Profit @ 25% on Sales. Calculate Profit per
unit :
(A) 15 per unit
(B) `10 per unit
(C) ` 5 per unit
67. Which section of the Companies Act, 2013 deals with audit of cost accounting
records ?
(A) Section 158
(B) Section 139
(C) Section 168
(D) Section 148
68. Sales Management is more concerned with :
(A) Ageing Schedule of Debtors
(B) Product Cost Variance Analysis
(C) Capital Expenditure and Forward Commitments
69. XYZ Ltd. manufactures three products X, Y and Z. The Sales Value Mix Ratio of
these products are 20%, 30% and 50% respectively. The corresponding Variable
Cost to Sales Ratio is 50%, 30% and 20%. The total fixed costs are `35,500.
Calculate Overall Break Even Point (in Value) :
(A) `50,000
(B) ` 60,000
(C) `71,000
70. Risk-Free Rate of Interest on Govt. Treasury Bonds 5%, Average Return on
Market Portfolio 17.5%. What must be the beta, if the security is correctly
priced with actual return of 25%?
(A) 1.2
(B) 1.3
(C) 1.5
(D) 1.6
71. Cost Audit Report is required to be prepared in :
(A) Form CRA-1
(B) Form CRA-2
(C) Form CRA-3
(D) Form CRA-4
72. Which of the following is not a method of Transfer Pricing?
(A) Market based transfer pricing
(B) Cost based transfer pricing
(C) Negotiated transfer pricing
73. Top Management is more concerned with :
(A) Ageing Schedule of Debtors
(B) Product Cost Variance Analysis
(C) Capital Expenditure and Forward Commitments
74. Sales (in units) : Jan. 1,000, Feb. 2,000, Mar. 3,000, Apr. 4,000. 20% of the
Sales are on cash basis and the balance on credit basis. Uniform Selling Price—
` 20 per unit. 50% of credit sales are collected in the month following the sales,
50% of the remaining in the second month and the balance in the third month.
Calculate the total amount of Cash Sales and Collection from Debtors during the
month of April :
(A) `52,000
(B) `36,000
(C) ` 50,000
75. Sales (in units): Jan. 1,000, Feb. 2,000, Mar. 3,000, Apr. 4,000, May 5,000. 25%
of the Purchases are on cash basis and the balance on credit basis. Uniform
Selling Price —` 20 per unit. This price was fixed after adding 25% to cost. No
stock remains at the end of a month. Purchases are made one month in advance
and 50% of Credit purchases are paid within one month and the balance in two
months. Calculate the total amount of Cash Purchases and Payment to Creditors
during the month of April :
(A) ` 62,000
(B) ` 46,000
(C) ` 50,000
76. A company sells two products, J and K. The sales mix is 4 units of J and 3 units
of K. The contribution margin per unit are ` 40 for J and ` 20 for K. Fixed costs
are ` 3,08,000 per month. Compute the individual break-even point of product J
and product K :
(A) 800 units and 600 units
(B) 600 units and 800 units
(C) 5600 units and 4200 units
(D) 4200 units and 5600 units
77. Which of the following is true ?
(A) The main stress of Zero base budgeting is on why a unit needs to spend.
(B) Zero base budgeting facilitates the introduction and implementation of the
system of MBO.
(C) Performance Budgeting requires Establishment of Responsibility Centres.
78. Under section 247 of The Companies Act, 2013, a Registered Valuer shall be
appointed by the Company’s :
(A) Board of Directors only
(B) Company Secretary only
(C) Director Finance and Accounts only
79. SEBI (Share Based Employee Benefits) Regulations, 2014 apply to the :
(A) Employee stock option schemes and employee stock purchase schemes
only
(B) stock appreciation rights schemes only
(C) general employee benefits schemes and retirement benefit schemes only
80. P purchased business from Q on 30th June, 2019. Profit earned by Q for the
preceding years ending on 31st December every year were :
2016—` 41,000, 2017—` 40,000 and 2018—` 42,000. It was ascertained that
profits of 2017 included a non-recurring item of ` 1,500 and profit of 2018 was
reduced by `? 2,000 due to an extraordinary loss on account of theft. The annual
premium was ` 200 per annum. P at the time of purchasing the business, was
employed with Sufitel Associates and was getting ` 500 p.m. He intends to
replace the manager who at the present is getting ` 350 p.m. The goodwill is
calculated at 2 years purchase of the average profits. Calculate the goodwill of
the business:
(A) ` 84,000
(B) ` 78,334
(C) ` 75,455
(D) `85,445
81. The relationship between the risk and return established by the security market
line is called ................
(A) Earning based model
(B) Arbitrage pricing theory
82. Ind AS 33 deals with ............
(A) Earning per share
(B) Financial Instrument Presentation
(C) Fair Value Measurement
83. Which of the following is not an objective of Activity Based Costing ?
(A) Activity Based Costing is a two-stage product costing method
(B) The cost pools in the two-stage approach now accumulate product related
cost
(C) It is based on the concept that products consume activities and activities
consume resources
84. Which of the following is also known as working capital ratio ?
(A) Current ratio
(B) Liquid ratio
(C) Debtor turnover ratio
(D) Cash reserve ratio
85. A ............. is a booklet specifying the objectives of an orgnaisation in relation to
its spending strategy.
(A) Budgetary control
(B) Budget manual
(C) Key factor
(D) Budget controller
86. From the following information, calculate net profit ratio :
Gross Profit is 1/4th of cost and sales is ` 2,00,000. Indirect expenses is `

12,000:
(A) 19%
(B) 20%
(C) 14%
(D) 25%
87. Beta of Market portfolio is always .........
(A) 0
(B) 1
(C) Less than 1
(D) More than 1
88. Average profit of a firm is ` 48,000. The rate of capitalisation is 12%. Assets and
liabilities of the firm are `4,00,000 and `1,70,000 respectively. Find value of
Goodwill :
(A) ` 2,30,000
(B) ` 4,00,000
(C) ` 1,70,000
(D) ` 1,90,000
89. Value of share based on earning basis method is calculated as :
(A) (Possible rate of dividend/Normal rate of dividend) * Paid up value per share
(B) (Normal rate of dividend/possible rate of dividend) * Paid up value per share
(C) (Normal rate of dividend/dividend per share) * Paid up value per share
90. Selling price of a product is ` 32/unit. Variable cost ratio is 50%. Fixed cost is `
96,000. Units sold are 10,000. Calculate Margin of Safety in percentage :
(A) 40%
(B) 60%
(C) 50%
(D) Cannot be determined

91. From the following, calculate production for the 4th quarter :
Units Sold
Q1 12,000
Q2 15,000
Q3 16,500
Q4 18,000
Opening units 10,000 at the beginning of Q1 and closing units 12,500 at the end
of Q4. Production is 2/3rd of current quarter requirement and 1/3rd of next quarter
requirement:
(A) 12,000 units
(B) 20,500 units
(C) 18,500 units
(D) 18,000 units
92. ............ is regarded as a specialised branch of accounting which involves
classification, accumulation, assignment and control of costs.
(A) Costing
(B) Cost Accounting
(C) Cost Accountancy
(D) Cost
93. Margin of Safety may be improved by :
(A) Lowering Fixed Cost
(B) Increasing Volume of Sales
(C) Increasing Selling Price
94. Primary packaging material is an example of :
(A) Direct material
(B) Indirect material
(C) Direct expenses
(D) Indirect expenses
95. If sales in an organisation is `1,00,000, fixed cost is ` 12,000 and profit is `
8,000, Profit/ Volume ratio is ............
(A) 80%
(B) 8%
(C) 20%
(D) 12%
96. What is the General information attached in the Annexure to Cost Audit Report?
(A) Distribution of Earnings
(B) Cost Accounting Policy
(C) Details of Industry Specific Operating Expenses
(D) Reconciliation of Indirect Taxes
97. Current ratio is 2.5 : 1 and Liquid ratio is 1 : 1. Stock is ? 60,000. Calculate
current liability::
(A) ` 40,000
(B) ` 60,000
(C) ` 1,00,000
(D) Cannot be determined
98. Monsoon is an example of key factor in which of the following indsutries ?
(A) Motor car
(B) Aluminium
(C) Electro-optics
(D) Hydropower generation
99. Activity Based Costing assigns costs to products by tracing expenses to ..........
(A) Products
(B) Sales
(C) Activities
(D) Profits
100. With reference to Ind AS 102, what does SBP stand for ?
(A) Share based payment
(B) Share based proportion
(C) Sum based payment
(D) Shareholder based pricing
ANSWER KEY

1 D 34 C 67 D
2 B 35 D 68 A
3 A 36 B 69 A
4 D 37 B 70 D
5 D 38 D 71 C
6 C 39 B 72 D
7 A 40 D 73 C
8 D 41 A 74 A
9 D 42 A 75 A
10 B 43 A 76 C
11 A 44 B 77 D
12 C 45 D 78 D
13 A 79 D
46 C
80 B
14 A 47 A
81 D
15 D 48 D 82 A
16 D 49 A 83 B
17 C 50 B 84 A
18 A 51 D 85 B
19 D 52 A 86 C
20 C 53 A 87 B
21 D 54 A 88 C
22 C 55 A 89 A
23 A 56 D 90 A
24 C 57 A 91 C
25 D 58 B 92 B
26 D 59 B 93 D
27 C 60 B 94 A
28 C 61 D 95 C
29 B 62 D 96 B
30 D 63 B 97 A
31 C 64 C 98 D
32 A 65 C 99 C
33 B 66 C 100 A
WORKING NOTES
7.
Cost of Control
Cost of Investment 36,00,000
(-) Share in Net Assets of S Ltd.
Share Capital 32,00,000
Pre-Acquisition Reserves & Surplus:
Opening Loss (16,00,000)
Current Year Profit upto date of

acquisition:
Balance of P & L went from debit to

credit. That means opening was loss
and closing is profit. So total profit
during year = 24,00,000 + 14,40,000
= 38,40,000 & Pre- Acquisition profit
will be ( )
Holding share =
12,80,000 28,80,000
Goodwill 7,20,000
9.
As the duration of FD is 3 months, it will be classified as Cash & Cash Equivalent.
Hence, answer will be none of above.
28.
29.
A business segment or geographical segment is identified as a reportable segment
if:
 revenue from sales to external customers and from transactions with other
segments is 10% or more of the total revenue of all segments
 Segment result is 10% or more of the following whichever is greater in absolute

amount:
 combined result of all segments in profit
 combined result of all segments in loss
 Segment assets are 10% or more of total assets of a segment
(a) Segment Assets:- O
(b) Segment Results:- N
(c) Segment Revenue:- M
So, Reportable Segments are M, N, O.
39.
Journal Entry
Building 2,00,000
Machinery 1,20,000
To 10% Debenture 3,00,000
To Capital Reserve 20,000
54.
1,000 AC :- Cost 10,000 NRV 15,000 w.i.L = 10,000
4,000 AC :- Cost 10,000 NRV 9,500 WIL = 9,500
58.
Minority = Total Capital – Holding Share
= 3,00,000 – 2,40,000
= 60,000/-
63.
It can be Solved by Logic also.
Given below is an imaginary Example to understand the maths.
Original Reduction of SP by
25%
SP 100 75
VC (60%) 60 45
P/V (40%) 40 30
64.
Cost of Intangible Asset = (60 – 32) + 90
= 118 lakhs
Recoverable Amount = 82 lakhs
65.
66.
`
Op. Stock (2,000 14) 28,000
(+) Production (11,000 11.5) 1,26,500
(-) Cl. Stock (3,000 11.5) (34,500)
COGS. (Units sold = 10,000) 1,20,000
(+) Selling & Distribution
30,000
( )
LOS 1,50,000
(+) Profit (25% on Sales)
5,00,000
( )
Sales 2,00,000
69.
X Y Z
(a) Variable Cost % 50% 30% 20%
(b) P/V% (100% – VC % 50% 70% 80%
(c) Sale Value Mix (given) 20% 30% 50%
(d) Combined P/V % (b * c) 10% 21% 40%
71%
70.
74.
Collection Pattern:-
Following Month :- 50% of Credit Sales
Second Month Following :- 50% of remaining i. e. 50% of 50% i. e. 25% of Credit
Sale
Third Month Following: - Balance (100% – 50% - 25%) i. e. 25%.
Total Collection (April) :-

Cash Sale (4,000 20) 20% = 16,000
Credit Sale
March [(3,000 20) 80%] 50% = 24,000
Feb [(2,000 20) 80%] 25% = 8,000
Jan [(1,000 20) 80%] 25% = 4,000
52,000
75.
(i) Cash Purchase (One month in Advance) = (5,000 16) 25% = 20,000
(ii) Payment of Creditor
March(One month in Advance) [(4,000 16) 75%] 50% = 24,000
Feb [(3,000 16) 75%) 50% = 18,000
62,000
76.
80.
2016 2017 2018
Profits 41,000 40,000 42,000

(+) Non Recurring item - (1,500) -
(+) Extraordinary Loss - - 2,000
41,000 38,500 44,000
Future Maintainable Profit
Average Profits 41,167
(-) Annual Premium (200)
(+) Manager Remuneration (350 12) 4,200
(-) His Remuneration (500 12) (6,000)
39,167
86.
i.e. 20% on Sales

88.
Value of Goodwill by Capitalization Method
(b) Goodwill = Normal Capital Employed – Actual C.E.
= 4,00,000 – (Assets – Liability)
= 4,00,000 – (4,00,000 – 1,70,000)
= 4,00,000 – 2,30,000
= 1,70,000
90.
P/V % = 100% – VC %
=100% – 50%
= 50%
MOS (Units) = 10,000 – 6,000

= 4,000
91.
Total Sales = (12,000 + 15,000 + 16,500 + 18,000)
= 61,500
Total Production = (Sales + Cl. Stock) – Op. Stock
= 61,500 + 12,500 – 10,000
= 64,000
( ) ( )
( ) ( )
( ) ( )
Q = 64,000 – 13,000 – 15,500 – 17,000
= 18,500 Units
95.
97.
DECEMBER 2019

PART I
1. Mines as asset is an example of :
(A) Current Asset
(B) Vesting Asset
(C) Fictitious Asset
(D) Intangible Asset
2. At the time of preparation of Balance Sheet, Capital Work-in-progress is shown
in the head of :
(A) Share Capital
(B) Non-current Liabilities
(C) Current Assets
(D) Non-current Assets.
3. As per ICAI Guidance Note, at the end of the year, balance of Share Options
Outstanding Account should be shown under the :
(A) Current Liabilities
(B) Reserve and Surplus
(C) Current Assets
(D) Non-current Liabilities
4. Shiva Ltd. forfeited 4,500 equity shares of `10 each (which are issued on 40%
pro-rata (basis) for non-payment of allotment @ `6 (including premium of `2.50)
and first and final call `3 per share. If the excess money received on application
is used for receiving the amount due as securities premium, what amount should
be credited to ‘Shares Forfeited Account’ ?
(A) `15,750
(B) `28,125
(C) `39,375
(D) `13,500
1
5. P Ltd. forfeited 5,000 equity shares of `10 each for non-payment of first and
final call of `2.50 per share which were issued at a premium of `3 per share
receivable at allotment. Out of these, 3,200 shares are re-issued at `8 per share
as fully paid up. The amount transferred to Capital Reserve will be :
(A) `37,500
(B) `31,100
(C) `24,000
(D) `17,600
6. C Ltd. invited applications for the issue of 20 Lakh equity shares of `10 each
payable `3 on application and `7 on allotment. Applications were received for
35 Lakh equity shares. Applications for 7 Lakh shares were rejected and pro-
rata allotment was made to remaining applicants. Excess application money
was adjusted on the sums due on allotment. Ravi could not pay allotment money
on his 2500 allotted shares. The amount received on allotment will be :
(A) `1,39,92,500
(B) `1,15,92,500
(C) `1,04,86,880
(D) `1,15,85,500
7. Rule 17 of the Companies (Share Capital and Debenture) Rule, 2014, is related
to :
(A) Issue of right shares
(B) Buy-back of shares or other securities
(C) Issue of sweat equity shares
(D) Employee stock option plan
8. In case of buy-back of shares, passing of the special resolution is not required
if :
(A) the buy-back is 10% or less of the total paid-up equity capital of the company
(B) the buy-back is 25% or less of the total paid-up equity capital of the company
(C) the buy-back is 10% or less of the total paid-up equity capital and free
reserves of the company
(D) the buy-back is 25% or less of the total paid-up equity capital and free
reserves of the company
9. For the companies whose financial statements comply with the accounting
standards as prescribed in Section 133 of the Companies Act, 2013, the premium
payable on redemption of preference shares shall be provided out of :
(A) the profits of the company only
(B) the securities premium only
(C) any of either profits of the company or securities premium
(D) none of the above
10. The Capital Redemption Reserve Account may be used by the company :
(A) In the issue of fully paid-up bonus shares
(B) In conversion of partly paid-up shares into fully paid-up
(C) In writing off the preliminary expenses of the company
(D) In distribution of dividend among shareholders
11. A company offered 2,50,000 equity shares to public for subscription. 70% of
public issue was underwritten by G. Her firm underwritten was for 40,000 shares.
Public subscribed for 1,30,000 shares. What is the net liabilities of G if as per
underwriting agreement no credit is given to underwriter G for her firm underwritten
shares ?
(A) 4,000 Shares
(B) 85,000 Shares
(C) 96,000 Shares
(D) 56,000 Shares
12. The entry—‘‘Debentures Suspense A/c Dr., To Debentures A/c’’ can be passed/
done :
(A) On the issue of debentures for the consideration other than cash.
(B) On the issue of debentures as collateral security.
(C) For rectification of the error relating to balance of debentures account.
(D) On the issue of debentures at discount but redeemable at premium.
13. C Limited issued 8% Debentures of `65,00,000 at 5% discount which are
redeemable at a premium of 10%. On recording the transaction ‘‘Loss on Issue
of Debentures Account’’ will be :
(A) Debited by `3,25,000
(B) Debited by `6,50,000
(C) Debited by `9,75,000
(D) Credited by `3,25,000
14. M Ltd. issued 8% Debentures of `60 Lakh on 1st January, 2019 at a discount of
10%. The debentures are redeemable in three equal instalments of `20 Lakh
each payable on 31st December every year. The amount of discount to be
written at the end of the year on 31st March, 2021,will be :
(A) `2,00,000
(B) `1,00,000
(C) `1,50,000
(D) `1,75,000
15. S Ltd. had issued 80,000, 8% Debentures of `100 each redeemable on 31st
December, 2019 at a premium of 20%. The company offered three options to
debentureholders, out of which one is to convert their holdings into equity shares
of `10 each at a premium of `3.50 per share. This offer was accepted by the
holders of 49,275 debentures. For this, number of equity shares issued will be :
(A) 4,38,000
(B) 5,91,300
(C) 3,65,000
(D) 7,98,255
16. G Ltd. has 8,00,000, 12% Debentures of `100 each. During the year 2018-2019
the company purchased its own debentures from the open market for immediate
cancellation are as follows :
(i) Aug. 1, 2018 : 15000 Debentures @ `95.50 (ex-interest)
(ii) Jan. 1, 2019 : 25000 Debentures @ `101.50 (cum-interest)
If debenture interest is payable on 30th September and 31st March every year,
then the amount of profit or loss on cancellation of debentures will be :
(A) `30,000 (Profit)
(B) `70,000 (Profit)
(C) `67,500 (Profit)
(D) `1,05,000 (Profit)
17. The profit on cancellation of debentures should be transferred to :
(A) Securities Premium A/c
(B) Statement of profit and Loss
(C) General Reserve A/c
(D) Capital Reserve A/c
18. Every buy-back shall be completed within a period of ............. from the date of
the resolution or special resolution, as the case may be, passed by the Board.
(A) One month
(B) Three months
(C) Six months
(D) One year
19. Written down value of a machine as on 31st March 2019 is `6,65,558. Rate of
depreciation on the basis of written down value method is 15%. What will be the
cost of this machine purchased on 1st April, 2014 ?
(A) `15,00,000
(B) `12,00,000
(C) `10,00,000
(D) `8,00,000
20. In G Ltd., there is one whole-time director and three part-time directors. The
maximum rate of remuneration payable to all directors will be :
(A) 11%
(B) 8%
(C) 6%
(D) 10%
21. When the effective capital of a company is `100 crore and above but less than
`250 crore, the maximum remuneration payable as per Part-II of Schedule V of
the Companies Act, 2013, by the company to its managerial personnel when
the company has no profits or inadequate profits, will be :
(A) `42 Lakh
(B) `84 Lakh
(C) `120 Lakh
(D) `120 Lakh plus 0.01% of the effective capital in excess of `150 Lakh
22. Every company having turnover of `............ during the immediately preceding
financial year shall constitute a Corporate Social Responsibility Committee.
(A) 500 crore and more
(B) 1,000 crore and more
(C) 250 crore and more
(D) 100 crore and more
23. Which of the following is not a type of segment as per AS-17 ?
(A) Geographical segment
(B) Business segment
(C) Industrial segment
(D) Reportable segment
24. Equity holder of a company who does not have the voting control of the company,
by virtue of his or her below fifty percent ownership of the company’s equity
capital, termed as :
(A) Small shareholder
(B) Minority shareholder
(C) (A) or (B) Both
(D) None of these options
25. H Ltd. is a holding company of S Ltd. During the year 2018-19, Bills Receivable
amounted to `4,00,000, out of total bills receivable of `5,00,000 received from
S Ltd., were discounted by H Ltd. and S Ltd. had endorsed to its creditors all the
bills received from H Ltd. amounting to `3,00,000. At the end of the year the
amount of mutual debtors will be :
(A) `8,00,000
(B) `3,00,000
(C) `2,00,000
(D) `1,00,000
26. On 1st April, 2019, H Ltd. purchased 16,00,000 equity shares out of 20,00,000
equity shares of S Ltd. Following information is provided as on 31st March,
2019, by S Ltd. :
`
Equity Share Capital 2,00,00,000
General Reserve 45,00,000
Statement of Profit & Loss 32,00,000
On 1st April, 2019, a machine of S Ltd. revalued by H Ltd. 25% above its book
value of `12,50,000. The amount of minority interest will be :
(A) `40 Lakh
(B) `55 Lakh
(C) `54.775 Lakh
(D) `56.025 Lakh
27. Holding of H Ltd. was 75% in S Ltd. Other information obtained from the books
of S Ltd. were as under :
31st March, 2019 (` in Lakh)
Share Capital 150
General Reserve 25
Surplus : Statement of Profit and Loss 35
Capital Reserve 10
If the cost of investment in shares of S Ltd., for H Ltd. was `162 Lakh, the
amount of cost of control would be :
(A) `12 Lakh (Goodwill)
(B) `3 Lakh (Goodwill)i
(C) `3 Lakh (Capital Reserve)
(D) `4.50 Lakh (Goodwill)
28. The main purpose of the preparation of consolidate statements is :
(A) the compliance of AS-21
(B) to satisfy the legal provision of the Companies Act, 2013
(C) to reflect a true and fair view of the position and the profit or loss of the
holding company ‘group’
(D) All the above
29. Company Auditor’s Report Order, 2016, was issued by the :
(A) Institute of Chartered Accountants of India
(B) Ministry of Corporate Affairs of Government of India
(C) Comptroller and Auditor General of India
(D) Ministry of Finance of Government of India
30. Company Auditor's Report Order (CARO), 2016 is not applicable to :
(A) Insurance Company
(B) Company registered for charitable purpose
(C) One person company
31. As per Section 149(1) of the Companies Act, 2013, the paid-up share capital
requirement for non-listed company, having at least one woman director is :
(C) `1,000 crore or more
32. As per the concept of value added statement, "Gross value Added’’ is :
(A) Distributed to employees in the form of salaries and wages, to government
in the form of taxes and duties, to financer in the form of interest.
(B) Distributed to government in the form of taxes and duties, to financer in the
form of interest, to shareholders in the form of dividend.
(C) Distributed to employees in the form of salaries and wages, to government
in the form of taxes and duties, to financer in the form of interest.
(D) Distributed to employees in the form of salaries and wages, to government
in the form of taxes and duties, to financer in the form of interest, to
shareholders in the form of dividend and the remaining balance in the form
of retained earning.
33. The term ‘Calls in Arrears’ is shown in the company’s balance sheet :
(A) Under current liabilities
(B) Under current assets, loans and advances
(C) As deducted from called up capital
(D) Non-current liabilities
34. At the time of forfeiture of shares the share capital account will be :
(A) Debited with paid up value of share forfeited
(B) Debited with called up value of shares forfeited
(C) Debited with face value of shares forfeited
(D) Debited with issue price of shares forfeited
35. The loss/discount on re-issue of forfeited shares may be :
(A) Equal or exceed the forfeited amount
(B) Not exceed the forfeited amount
(C) Equal to amount of premium which were received at the time of original
issue
(D) Not exceed the called up value of shares
36. When the forfeited shares were originally issued at premium, the maximum
permissible discount on re-issue shall be :
(A) The amount of premium at time of original issue
(B) The amount credited to forfeited shares account
(C) The face value of forfeited shares
(D) The called up value of forfeited shares
37. Z Ltd. issued 5,000 equity shares of `10 each at 10% premium which is payable
on allotment. The company received application money @`3 per share and
allotment money received on only 4,500 shares @`4 per share. The company
forfeited 500 shares for non-payment of allotment money.
At the time of forfeiture, the Equity Shares Capital a/c will be :
(A) Debited with `5,000
(B) Debited with `3,500
(C) Debited with `3,000
(D) Credited with `3,500
38. The capital structure of KC Ltd. is :
Equity Share Capital `250 lakh
Long-term Debt `110 lakh
Bank Overdraft `40 lakh
The average rate of return on similar types of companies is 20%, while risk-free
return is 10%. Rate of interest charged by bank is 18%. Weighted Average Cost
of Capital (WACC) will be :
(A) 16%
(B) 13.55%
(C) 16.25%
(D) 17.05%
39. The difference between the Company’s total market value and Capital invested
is a :
(A) Economic Value Added (EVA)
(B) Shareholder Value Added
(C) Market Value Added
(D) Gross Value Added
40. Pooja Ltd. had the investment of `68 lakh as on 31st March, 2018 and that of
`81lakh as on 31st March, 2019. During the year the company had sold 30% of
its original investment at a profit of `9,60,000. The cash inflow and outflow from
investment will be :
(A) `20.40 lakh and `33.40 lakh
(B) `33.40 lakh and `30 lakh
(C) `30 lakh and `43 lakh
(D) `30 lakh and `33.40 lakh
41. During the year 2018-19, a company redeemed its 10% debenture of `8,00,000
at 10% premium and after some time a fresh issue was made of new 10%
debenture of `7,50,000 at a premium of 25%. The net cash flow from debenture
would be :
(A) Net cash outflow of `50,000
(B) Net cash inflow of `50,000
(C) Net cash inflow of `57,500
(D) Net cash outflow `57,500
42. In the case of financial enterprises, cash flows arises from interest paid should
be classified as cash flow from :
(D) Either (B) or (C)
43. Balance of Provision for Taxation as on 1-4-2018 and 31-3-2019 were `13,72,000
and `14,55,000 respectively. During the year `12,05,000 were paid towards
income tax.
The amount of provision made for taxation will be :
(A) `12,05,000
(B) `12,88,000
(C) `11,22,000
(D) `2,50,000
44. Plant Original Costing `1,35,500 (accumulated depreciation `72,800) was sold
at a profit of `15,900 during the year 2018-19. The amount of cash flow from the
transaction would be :
(A) `1,51,400
(B) `62,700
(C) `2,24,200
(D) `78,600
45. Mithu Ltd. had the investment as on 31-3-18 and 31-3-19 were `10,95,000 and
`10,82,000 respectively. During the year interest on investment received `77,000
which was used in writing down the book value of investments. If there were
some purchases of investment, then the cash flow from investment and from
interest would be :
(A) Cash inflow `1,300 only
(B) Cash inflow `9,000 only
(C) Cash inflow `77,000 and Cash outflow `64,000
(D) Cash inflow `9,000 and Cash outflow `77,000
46. Following information were provided by a trading company to you :
`
Net profit after tax for the year 2018-19 18,35,000
During the year 2018-19
· Depreciation written off 1,08,000
· Goodwill written off 50,000
· Provision made for taxation 5,50,000
· Income tax paid 4,80,000
· Interest on Investment credited to Profit and
Loss Account 25,000
· Interim dividend paid 2,10,000
Cash flow from Operating Activities would be :
(A) `22,73,000
(B) `20,38,000
(C) `17,23,000
(D) `20,63,000
47. The Accounting Standards Board was constituted by the Institute of Chartered
Accountants of India in the year :
(A) 1975
(B) 1977
(C) 1976
(D) 1978
48. Which of following Section of Companies Act, 2013, is required that the auditor
has to report whether in his opinion the financial statements comply with the
Accounting Standards referred in Section 133 of the Companies Act, 2013 :
(A) Section 141(3)(e)
(B) Section 145(3)(b)
(C) Section 143(3)(e)
(D) Section 144(3)(e)
49. Which of the following is not included in the conditions satisfied by the small
and medium companies (SMCS) with reference to applicability of Accounting
Standards ?
(A) Company is not a holding company or subsidiary of a non-SMC.
(B) Company is not a bank or financial institution or insurance company.
(C) Company's turnover does not exceed `10 crores in the immediately preceding
accounting year.
(D) Equity and debt securities of the company are not listed or are not in the
process of listing in any stock exchange, whether in India or outside India.
50. Which of the following International Accounting Standard (IAS) is related to
Earning per share’ ?
(A) IAS-20
(B) IAS-24
(C) IAS-33
(D) IAS-38
51. Which of the following institute formerly was established as a registered company
under the Companies Act ?
(A) The Institute of Chartered Accountants of India ( ICAI)
(B) The Institute of Company Secretaries of India (ICSI)
(C) The Institute of Cost and Works Accountants of India (ICWAI) {now it, The
Institute of Cost Accountants of India}
52. The Institute of Chartered Accounts of India is the...... professional body of
Chartered Accountants in the world.
(A) Largest
(B) Second Largest
(C) Third Largest
(D) Fifth Largest
53. ‘‘The Association of International Certified Professional Accountants’’ launched
by the :
(A) American Association of Public Accountants (AAPA)
(B) American Association of Chartered Public Accountants (AICPA)
(C) Chartered Institute of Management Accountants (CIMA)
(D) Both AICPA and CIMA
54. Mandatory applicability of Ind AS to all Banks, NBFCS (Non-Banking Finance
Companies), and Insurance Companies is from :
(A) 1st April, 2015
(B) 1st April, 2016
(C) 1st April, 2017
(D) 1st April, 2018
55. Which of the following Ind AS is related to Consolidated Financial Statements ?
(A) Ind AS-108
(B) Ind AS-110
(C) Ind AS-115
(D) Ind AS-7
56. A simplified financial statement that shows how much wealth has been created
by a company is called ...............
(A) Income statement
(B) Statement of profit and loss
(C) Value added statement
(D) Economic value added
57. The following is not an advantage of Double entry system :
(A) It prevents and minimizes frauds.
(B) Helps in decision making
(C) The trial balance doesn’t disclose certain types of errors
(D) It becomes easy for the Government to calculate the tax.
58. As per Companies Act, 2013, the prescribed form of Balance Sheet of a
Company is given in :
(A) Part II of Schedule III
(B) Part I of Schedule III
(C) Part I of Schedule II
(D) Part I of Schedule V
59. The Corporate Social Responsibility Committee shall consist of ...........directors,

out of which at least ............ director(s) shall be independent director(s).
(A) two or more; one
(B) four or more; two
(C) three or more; two
(D) three or more; one
60. Financial Reporting Council is an organisation of which country ?
(A) United States of America (USA)

(B) Canada
(C) UK
(D) Japan
PART II
61. Companies (Cost Records and Audit) Rules, 2014, came into force on :
(A) 1-04-2014
(B) 30-04-2014
(C) 30-06-2014
(D) 30-09-2014
62. Which of the following Form is used for filing Cost Audit Report with the Central
Government ?
(A) CRA-1
(B) CRA-2
(C) CRA-3
(D) CRA-4
63. Which of the following steps are required for Budgetary Control ?
(A) Organisation for Budgeting; Budget Manual; Responsibility for Budgeting;
and Budget Standard
(B) Organisation for Budgeting; Budget Manual; Responsibility for Budgeting;
and Budget Procedure
(C) Objective for Budgeting; Budget Manual; Responsibility for Budgeting; and
Budget Standard
(D) Organisation for Budgeting; Budget Objective; Responsibility for Budgeting;
and Budget Standard
64. A factor which will limit the activities of an undertaking and which is taken into
account in preparing budgets, is termed as :
(A) Limiting factor
(B) Governing factor
(C) Key factor
(D) All the above
65. Which of the following is/are purpose(s) of ‘‘Time Recording’’ ?
(A) Payroll
(B) Time-keeping
(C) Time-booking
(D) Time-keeping and Time-booking
66. If the Capacity Ratio and Efficiency Ratio of a factory are 95% and 125%
respectively, then Activity Ratio will be :
(A) 131.58%
(B) 76%
(C) 118.75%
(D) 152%
67. Following information estimated for the year 2020-21 :
· Normal loss in production will be 5% of input.
· Sales (in units) as per Sales Budget 38,350 units.
· Closing stock will be 6600 units which has been estimated 10% more than
previous year’s quantity.
The input for required production will be :
(A) 39,737 units
(B) 41,000 units
(C) 40,898 units
(D) 39,638 units
68. Puvi Ltd. provides the following information for the quarter ending 31st March,
2020 :
Expected Sales :
January, 2020 ` 25 lakh
February, 2020 ` 28 lakh
March, 2020 ` 30 lakh
Roughly 40% of the sales are for cash, 80% of credit sales are collected in the
month following the month of sales and the balance of credit sales one month
after that. The amount collected from debtors in the month of March, 2020, will
be :
(A) `10.96 Lakh
(B) `28.44 Lakh
(C) `22.96 Lakh
(D) `16.44 Lakh
69. ........... is a method of budgeting whereby all activities are re-evaluated each
time a budget is set. Discrete levels of each activity are valued and a combination
is chosen to match funds available.
(A) Master Budget
(B) Zero-Based Budgeting
(C) Performance Budgeting
(D) Flexible Budget
70. N Ltd. has Net working capital of `119 Lakh, Total Liabilities `225 Lakh and
Non-current liabilities are `140 Lakh. The Current Ratio will be :
(A) 2.4 : 1
(B) 1.85 : 1
(C) 2.46 : 1
(D) 1.15 : 1
71. A company’s purchases are `385 Lakh, Sales `510 Lakh and closing stock `58
Lakh. If the rate of gross profit is 25% on cost, then Stock Turnover Ratio will
be:
(A) 5.32 times
(B) 7.34 times
(C) 5.54 times
(D) 5.87 times
72. Mahi Ltd. has closing stock `648 Lakh and prepaid expenses `32 Lakh. Total
liquid assets were `1,830 Lakh. If the liquid ratio is 1.5 : 1, then working capital
will be :
(A) `836.67 Lakh
(B) `1,290 Lakh
(C) `1,258 Lakh
(D) `1,150 Lakh
73. Which of the following is not included in the activity ratios ?
(A) Sales to Capital Employed
(B) Debtors Turnover Ratio
(C) Proprietary Ratio
(D) Working Capital Turnover Ratio
74. The ideal norm preferred by Banks for current ratio is :
(A) 2 : 1
(B) 2.2 : 1
(C) 1.5 : 1
(D) 1.33 : 1
75. Which of the following set of report is classified according to their contents ?
(A) Descriptive reporting; tabular reports and Graphic reports
(B) Routine reports and Special reports
(C) Production reports; Sales reports; Cost reports and Finance reports
(D) Graphic presentation; Routine reports and Finance reports
76. Which of the following is not a step taken towards implementing an effective
management reporting programme ?
(A) Discovery
(B) Access point
(C) Finance
(D) Feedback
77. A low margin of safety usually indicates :
(A) High profit
(B) High fixed overheads
(C) Low fixed overheads
(D) Operation on high level of activity
78. Which of the following is not a method of transfer pricing considered in normal
course ?
(A) Full cost transfer pricing
(B) Negotiated transfer pricing
(C) Opportunity cost transfer pricing
(D) Standard cost transfer pricing
79. Following data provided by M Ltd. :
First Six Months Last Six Months
(`) (`)
Profit 10,00,000 14,00,000
Cost of Sales 70,00,000 76,00,000
Fixed cost for the year will be :
(A) `22 Lakh
(B) `34.40 Lakh
(C) `73.33 Lakh
(D) `44 Lakh
80. Which of the following are examples of key factors ?
(1) Sales value/quantity
(2) Raw material quantity
(3) Raw material quality
(4) Labour hours availability
(5) Plant capacity
(6) No. of plants used in manufacturing process
(7) Cost of production
Select the correct answer from the options given below :
(A) 1, 3, 5 and 6
(B) 1, 2, 4 and 5
(C) 2, 3, 5 and 7
(D) 1, 2, 4 and 6
81. Match the following List-I with List-II :
List-I
(P) Profit earned
(Q) Classification of costs into fixed and variable costs
(R) Both fixed and variable costs are charged to product
(S) Sum of fixed cost and profit
List-II
(1) Contribution
(2) Margin of Safety × P/V Ratio
(3) Marginal Costing
(4) Absorption Costing

(A) (P)—(2), (Q)—(4), (R)—(1), (S)—(3)
(B) (P)—(2), (Q)—(3), (R)—(4), (S)—(1)
(C) (P)—(1), (Q)—(4), (R)—(3), (S)—(2)
(D) (P)—(1), (Q)—(3), (R)—(4), (S)—(2)
82. Information provided by S Ltd. are given below :
Fixed Cost `24 lakh
Profit `12 lakh
Break-even point `60 lakh
When sales are `120 Lakh, then calculate the profit :
(A) `66 Lakh
(B) `30 Lakh
(C) `24 Lakh
(D) `21 Lakh
83. In an Activity Based Costing System, the allocation basis that are used for
applying costs to services or procedures are called :
(A) Profit centers
(B) Cost centers
(C) Cost units
(D) Cost drivers
84. Inspection of products is an example of :
(A) Unit level activities
(B) Batch level activities
(C) Product level activities
(D) Facility level activities
85. Which of the following is not a valuation approach ?
(A) Assets Approach

(B) Income Approach
(C) Expenditure Approach
(D) Market Approach
86. A deposit to be made on 1st January, 2020, into bank that will earn an interest
of 7% compound annually. It is desired to withdraw `60,000 on 31st December,
2023 and `1,00,000, on 31st December, 2025. The amount to be deposited on
1st January, 2020, will be ........... (PVF7% for 4 years = 0.7629; PVF7% for 6 years =
0.6663) :
(A) `1,30,608
(B) `1,12,404
(C) `1,22,063
(D) `1,09,582
87. Cost of Sales – Selling and Distribution Overhead + Closing Stock of Finished
Goods – Opening Stock of Finished Goods = ..............
(A) Cost of Goods Sold
(B) Works Cost
(C) Cost of Production
(D) Conversion Cost
88. Following information provided by B Ltd. :
· Last Earning Per Share (EPS) of the company = `75 per share
· Company’s dividend pay-out ratio = 40%
· Required rate of return from equity investment = 18%
By using capitalization earning method, the value of equity will be (if dividend
are expected to grow at a constant rate of 10% per annum) :
(A) `412.50
(B) `183.33
(C) `166.67
(D) `375
89. P Ltd. has 12% Debentures of `40 Lakh and 13% Debentures of `60 Lakh. If
the corporate tax rate is 30%, then combined cost of debt after tax will be :
(A) 12.60%
(B) 8.75%
(C) 8.82%
(D) 12.50%
90. Which of the following Ind AS deals with ‘‘Financial Instruments : Presentation’’?
(A) Ind AS-32
(B) Ind AS-33
(C) Ind AS-113
(D) Ind AS-109

91. Following information is provided by A Ltd. :
` in lakh
2,00,000, 8% Preference Shares of 100 each
fully paid-up 200
60,00,000 Equity Shares of `10 each fully paid-up 600
Reserves and Surplus 270
External Liabilities 480
Average profit after tax, earned every year by 169
the company
The normal return earned on the market value of fully paid-up equity shares of
the same type of the company is 15%. Assume that 2% of total assets are
worthless. The intrinsic value per equity share will be :
(A) `14.50
(B) `13.98
(C) `17.32
(D) `17.83
92. Which of the following is not a method used for valuation of shares ?
(A) Net assets method
(B) Based on rate of dividend method
(C) Based on rate of earnings method
(D) Net realizable value method
93. Which of the following method of valuation of shares is/are suitable for
ascertaining the market value of shares which are quoted on a recognized stock
exchange ?
(A) Based on rate of dividend method
(B) Based on rate of earnings method
(C) Based on price earnings ratio method
(D) All the above
94. Average profit, Superprofit and Capital employed of a firm are `15,60,000;
`4,80,000; and `90,00,000 respectively.Normal rate of return is 12%. The value
of goodwill on the basis of capitalization of ‘Average Profit’ and of ‘Superprofit’
will be :
(A) `130 Lakh and `40 Lakh
(B) `1,87,200 and `57,600
(C) `130 Lakh and `11,37,600
(D) `40 Lakh and `40 Lakh
95. As per Section 247 of the Companies Act, 2013, the Registered Valuer shall be
appointed by the :
(A) Company’s Board of Directors
(B) Central Government
(C) Registrar of Companies
(D) Company’s Audit Committee
96. The risk free rate is 8%, return on a broad market index is 15%. The actual
return provided by the security is 18%. What must be its beta, by using CAPM
if the security is correctly priced in the market ?
(A) 1.43
(B) 0.70
(C) 2.00
(D) 1.2
97. The relationship between risk and return established by the security market line
is called :
(A) Earning Based Model
(B) Capital Assets Pricing Model
(C) Discounted Cash Flow Model
(D) Arbitrage Pricing Theory

98. Following are the details of Beta Limited :
` in lakh
Equity Share Capital (Shares of `10) 1500
8% Preference Share Capital 400
12% Debentures 250
Profit before interest and tax 590
Dividend Payout
Ratio = 70%
Price-Earning (P/E)
Ratio = 25
Corporate tax rate = 30%
Earnings Per Share (EPS) will be :
(A) `3.52
(B) `2.464
(C) `2.06
(D) `2.40
99. Match the following—I with II :
I
(a) Direct Cost
(b) Indirect Cost
II
(i) Raw material
(ii) Showroom expenses
(iii) Drawing Office Expenses
(iv) Carriage inwards
(v) Carriage outwards
(vi) Primary packing
(vii) Productive wages
(viii) Oil and grease
(A) (a)—(i)(iv)(vi)(vii); (b)— (ii)(iii)(v)(viii)
(B) (a)—(i)(v)(vii); (b)—(ii)(iii)(iv)(v)(viii)
(C) (a)—(i)(iii)(iv)(vi); (b)—(ii)(v)(vii)(viii)
(D) (a)—(i)(iii)(v)(vii); (b)—(ii)(iv)(vi)(viii)
100. According to Behavioural Analysis, the overheads may be classified as :
(A) Factory overhead, administration overhead, selling and distribution overhead
(B) Fixed overhead, variable overhead, semi-variable overhead
(C) Indirect material, indirect labour and indirect expenses
(D) Normal overhead & Abnormal overhead
ANSWER KEY
Part-I 34 B 67 B
1 * 35 B 68 D
2 D 36 B 69 B
3 B 37 C 70 A
4 B 38 D 71 D
5 D 39 C 72 B
6 D 40 D 73 C
7 B 41 C 74 D
8 C 42 A 75 C
9 A 43 B 76 C
10 A 44 D 77 B
11 D 45 C 78 D
12 B 46 B 79 D
13 C 47 B 80 B
14 D 48 C 81 B
15 A 49 C 82 C
16 D 50 C 83 D
17 D 51 C 84 B
18 D 52 B 85 C
19 A 53 D 86 B
20 C 54 D 87 C
21 C 55 B 88 A
22 B 56 C 89 C
23 C 57 C 90 A
24 B 58 B 91 B
25 D 59 D
92 D
26 D 60 C 93 C
27 C Part-II 94 D
28 C 61 C 95 D
29 B 62 D 96 A
30 D 63 B 97 B
31 B 64 D 98 D
32 D 65 D 99 A
33 C 66 C 100 B
Notes
Q.No. 1 None of the given option is correct, the correct answer is 'wasting asset'
WORKING NOTES
4.
( )
( )
5.
( )
( )
6.
( )
( ) {[( ) ] ( )}
( )
11.
Underwriting Liability
Gross Liability (250000 70%) 175000
(-) Application Received (130000 70%) (91000)
(-) Firm Underwriting (28000)
(as benefit is not to be given it will be distributed in gross liability)
(40000 70%)
56000
13.
( ) ( )
14.
1.1.2019 Weights Ratio Discount

60 3
31.12.2019 40 2
31.12.2020 20 1
31.12.2021 6
( ) ( )
15.
( )
( )
16.
( ) ( )
( ) [( ) ( )]
( )
19.
25.
H Ltd. S Ltd.
Total B/R 500000 300000
(-) Discounted/Transferred (400000) (300000)
1,00,000 -
26.
Share in Share Capital & Reserves

ESC (2,00,00,000 20%) 40,00,000
GR (45,00,000 20%) 9,00,000
P & L (32,00,000 20%) 6,40,000
Profit on Revaluation 62500
( )
56,02,500
27.
Cost of Control Lakhs
Cost of Investment 162
(-) Share in Net Assets
SC/GR/P & L/CR
( ) (165)
Capital Reserve (3)
37.
( )
40.
Investment A/c
Opening 68 Sale (Cost) (68 30%) 20.4
Purchase 33.4 Closing 81
Cash Outflow = Purchase = 33.4

Cash Inflow = Sale Value =
Cost + Profit = 20.4 + 9.6 =
= 30
41.
Inflow = Issue = 750000 + 25%
= 937500/-
Outflow = Redemption = 8,00,000 + 10%
= 880000/-
Net Inflow = 937500 – 880000
= 57500/- Inflow
43.
Provision for Tax
Cash 12,05,000 Opening 13,72,000
Closing 14,55,000 P & L (Balancing Figure) 12,88,000
Total Total
44.
Cash Inflow = Sale Value = Cost + Profit
Cost = WDV = Original Cost – Acc. Depn
= 135500 – 72800
= 62700
Sale Value = Cost + Profit

= 62700 + 15900
= 78600/-
45.
Interest Received = Cash Inflow = 77000
Cash Outflow = Purchases
Revised Closing Balance = 10,82,000 + 77000
= 11,59,000
As they have wrongly credited Interest to Investment A/c.
Purchase = Closing Balance – Opening Balance
= 11,59,000 – 10,95,000
= 64000
46.
NP offer tax 18,35,000

+ Provision for tax 5,50,000
+ Depn 1,08,000
+ Goodwill w/o 50,000
- Interest (25,000)
s 25,18,000
(-) Tax Paid (4,80,000)
20,38,000
67.
( )
68.
March 2020
(i) 80% of Credit Sale of Feb. 2020 = (28 60% 80%) = 13.44 Lakhs
(ii) 20% of Credit Sale of Jan. 2020 = (25 60% 20%) = 3 Lakhs
Amount Collected from Debtors = 16.44 Lakhs
70.
71.
( )
72.
( )
79.
1st 6 m 2nd 6 m
Profit 10,00,000 14,00,000
COST 70,00,000 76,00,000
Sale (Profit + COS) 80,00,000 90,00,000
( )
This Fixed Cost is for 6 months

Annual Fixed Cost = 22,00,000 × 2 = 44,00,000
82.
( )
86.
( ) ( )
88.
( )( )
*D1 = D0(1+g)
89.
[ ( ) ] [ ( ) ]
91.
Net Asset Method
94.
/-
96.
( )
( )
98.
EBIT 590
(-) Interest (250 12%) (30)
EBT 560
(-) Tax @ 30% (168)
EAT 392
(-) Pref. Dividend (400 8%) (32)
Earnings for Equity 360

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1 EP–CMA–December 2022

EXECUTIVE PROGRAMME EXAMINATION

Time allowed : 3 hours Maximum marks : 100

Items 2020 (`) 2021 (`)

The net change in working capital is :

(B) Net decrease ` 47,000

(C) Net decrease ` 52,000

(D) Net increase ` 52,000

(A) Profitability ratios

(B) Activity ratios

(C) Market-Test ratios

(D) Solvency ratios

(C) Product transferred from one process to another process

(D) All of the above

80. If a firm has low margin of safety, this can be improved by :

(A) Converting fixed costs into variable costs

(B) Converting variable costs into fixed costs

(C) Increasing Break-even level

(D) All of the above

81. The following information is given :

Fixed expenses ` 1,75,000

Variable cost per unit ` 10

Items April (`) May (`)

(B) Indirect costs

(C) Fixed costs

(D) Period costs

(A) Cost object

(B) Cost driver

(C) Cost pool

(D) Cost unit

(A) Economic value

(B) Market value

(C) Going-concern value

(D) Liquidation value

Interest = 20,000 × 10% × 3/12 = 500

Amount Received from R on Application (to be transferred to Share Forfeiture

As re-issue is at premium, there is no loss on Re-issue.

Capital Reserve = Share Forfeiture – Loss on Re-issue = 900 – 0 = 900

Amount debited to own debentures account = amount paid – accrued interest =

Pre Bonus Pre-acquisition Profits = 1,20,000

Cost of Acquisition = 4,80,000

Net Cash Flow from Investing Activities =

Plant & Machinery Account

Net Flow from P & M:

Debtor Turnover Ratio = Credit Sales/Average Debtors

Fixed Assets = Capital Employed - Working Capital = 2,80,000 – 60,000 = 2,20,000

Fixed Asset Turnover Ratio = Net Sales/ Fixed Assets = 8,80,000/2,20,000 = 4

CA = 2.5 CL = 2.5 × 1,20,000 = 3,00,000

Acid Test Ratio = Liquid Assets/CL

Capital Employed = Fixed Asset + WC = (11,20,000 – 1,80,000) + 3,50,000 =

ROCE = 4,51,500 / 12,90,000 × 100 = 35%

EPS = 25,000 ÷ 4,000 = 6.25 per share

So, if We don’t produce Product D, we can produce Product B.

Unit Price of C = Marginal Cost + Opportunity Cost per unit

For the month of May:

BEP Sales in Rs. = Fixed Cost / PV Ratio = 15,500/30% = 51,667

Required Contribution = Existing Profit + Fixed Cost = 12,000 + 16,000 = 28,000

New Sales Units = 28,000/(22-18) = 7,000 Units

Additional Units = 7,000 – 4,000 = 3,000 Units

Please Note: Additional Units to be sold is asked.

(A) Issue of sweat equity shares

(B) Issue of right shares