Roll Number: ________________

Thapar Institute of Engineering & Technology

Deemed-to-be-University, Patiala (Derabassi Campus)
L M Thapar School of Management
Mid Semester Test I
MBA (I Semester) Subject: Financial Accounting and Reporting (AC5302)
Time: 1.0 hour; Max. Marks: 15 Faculty: Dr. Pradeep Kumar Gupta

Instructions:
1. Attempt all questions. Marks are indicated against each question.
2. Answering the questions in sequences either ascending or descending order is required
compulsorily. The penalty of five marks in total score is levied if it is not followed.
3. Use of calculator is allowed.
4. Working notes should form a part of your answers.
5. To the point answers of theoretical questions are expected.
6. No clarifications should be sought during the exam. The appropriate assumptions can be
written in case of doubt in any question.
7. Very neat and clean answers are desirable.

Q1:

a. Identify the category (Non-current assets, Current assets, Current Liabilities, Non-current
Liabilities, Equity, and Reversals) of each Account balance appeared in the books of ABC Ltd. as
on 31.03.2019. (3)

S. No. Particulars Dr. Balances Cr. Balances

Amount (₹ in Lakhs) Amount (₹ in Lakhs)
1 Equity Share Capital 50.00
2 Term Loan 30.00
3 Long-Term Investment 1.00
4 Fixed assets 15.00
5 Sundry creditors 7.20
6 Purchases 7.65
7 Purchases returns 0.65
8 Sales 70.70
9 Cash in Hand 0.72
10 Cash in Bank 120.55
11 Sales returns 2.00
12 Discount Allowed 2.70
13 Rent paid 5.00
14 Debtors 15.70
15 Discount Received 0.27
16 Salaries & Wages 3.00
17 Bad debts 1.00
18 Insurance 7.00
19 Commission Earned 10.00
20 Deposits from Public 20.00

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 21 Advertising expense 6.00
22 Interest expense 1.50

b. Ms. P Smith commenced a business on 31st January 2019 by transferring ₹5000 as capital from
her personal bank account into the business bank account opened on the same date. (3)

During the first week of February 2019 the following transactions occurred:

February 1: Business bought a motor van costing ₹800 paying by Cheque

February 2: Business bought goods on account from
J Jones ₹400
E Holmes ₹250
February 3: The goods costing ₹400 were sold for cash ₹600
February 4: Paid J Jones ₹400 in cash
February 5: Business again bought goods on account from
J Jones ₹200
A Turner ₹300

You are required to show the accounting equation at the end of each day’s transactions.

Q2:

a. Write the debit and credit rules of Assets, Liabilities and Equity. (2)
b. Why accounting is not done on cash basis? (2)

Q3:
a. Explain one of the recognition criteria of elements of financial statements - “the item
meeting the definition of an element has a cost or value that can be measured with
reliability”. (3)

b. Define the elements (Incomes and Expenses) directly related to the measurement of financial
performance, profit or loss, of a company. (2)

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