Advanced Financial Accounting Question Paper 2022
Dibrugarh University BCOM 5th SEM HONS
5 SEM TDC DSE COM (CBCS) 502 GR-I – 2022 (Nov / Dec)
COMMERCE (Discipline Specific Elective)
(For Honours and Non-Honours)
Paper: DSE-502 (Group-I)
(Advanced Financial Accounting)
Full Marks: 80
Pass Marks: 32
Time: 3 hours
The figures in the margin indicate full marks for the questions.
1. (a) Fill in the blanks: 1 x 4 = 4
(1) Schedule-1 of banking companies deals with _______.
(2) Life insurance business is carried on by Life Insurance Corporation of India since _______.
(3) In case of fire insurance, the provision for unexpired risk is maintained at _______% of net premium.
(4) Period of holding is a type of _______.
(b) Write True or False: 1 x 4 = 4
(1) Substandard, doubtful and loss assets are types of non-performing assets.
(2) Life insurance contracts are contracts of indemnity.
(3) General insurance policies are normally issued for long terms.
(4) Cum-dividend price is not the real price of investment.
2. Write short notes on (any four): 4 x 4 = 16
(a) Slip system of posting in bank.
(b) Insurance regulatory and development authority.
(c) Double insurance and reinsurance.
(d) Reserve for unexpired risks.
(e) Cum-dividend and ex-dividend.
3. (a) Discuss the following items relating to a banking company: 3½ x 4=14
(1) Rebate on Bills Discounted.
(2) Cash Reserve Ratio.
(4) Standard Assets.
(b) From the following information, prepare Profit & Loss A/c of Bharat Bank Ltd. for the year ended on 31st March, 2022:
Interest on Loans
Interest on Fixed Deposits
Exchange and Brokerage
Salaries and Allowances
Discount on Bills Discounted
Interest on Temporary Overheads in Current A/cs
Interest on Cash Credit
Interest on Savings Bank Deposits
Printing & Stationery
Taxes and Licenses
Adjustments to be made:
(1) Rebate on bills discounted = Rs. 30,000.
(2) Salary to managing director = Rs. 30,000.
(3) Bad debts = Rs. 40,000.
(4) Provision for income tax to be made @ 40% (to be rounded off to nearest thousands)
(5) Interest of Rs. 4,000 on doubtful debts was wrongly credited to interest on Loans Accounts.
4. (a) Explain the following relating to Life Insurance Company: 3½ x 4=14
(1) Surrender Value.
(2) Consideration for Annuities Granted.
(3) Valuation Balance Sheet.
(4) Life Assurance Fund.
(b) (1) Following figures are extracted from the books of Bright Life Assurance Co. Ltd. for the year ended on 31st March, 2022: 10
Premium less Reinsurance Premium
Claims less Reinsurance Claims
Consideration for Annuities Granted
Surplus on Revaluation of Reversions
Interest, Dividends and Rents
The net liability on all contracts in force as on 31st March, 2022 was Rs. 72,00,000 and on 31st March, 2021, the liability was Rs. 63,00,000.
You are required to prepare Revenue A/c according to the IRDA Regulations, 2013.
(Note: Schedules need not be prepared)
(2) Distinguish between Life Insurance and General Insurance. 4
5. (a) From the following information as on 31st March, 2022 of Luit Fire Insurance Co. Ltd., prepare Revenue A/c reserving 40% of the net premiums for unexpired risks and an additional reserve of Rs. 3,50,000: 14
Reserve for unexpired risk on 31st March, 2021
Additional reserve on 31st March, 2021
Estimated liability in respect of outstanding claim on 31st March, 2021
Estimated liability in respect of outstanding claims on 31st March, 2022
Expenses of management (including Rs. 45,000 in connection with claims)
Reinsurance premium paid
Interest and dividend (gross)
Profit on sale of investments
(b) (1) Point out the main features of accounts of General Insurance Companies. 4
(2) What are statutory books required to be maintained by a General Insurance Company under the Insurance Act? 5
(3) How is the profit or loss of a General Insurance Company ascertained? 5
6. (a) (1) What is an Investment A/c? How is it prepared? Point out the special features of an Investment A/c. 2+3+3=8
(2) How are stock exchange transactions (sale and purchase of securities) recorded in books? 6
(b) Mr. Manohar furnishes the following details relating to his holding in 6% Government Bonds of Rs. 100 each:
Opening balance face value Rs. 60,000 cost of which Rs. 59,000.
100 units purchased ex-interest at Rs. 98.
Sold 200 units ex-interest out of the original holding at Rs. 100.
Purchased 50 units at Rs. 98 cum-interest.
Sold 200 units ex-interest at Rs. 99 out of the original holdings.
Interest dates are 30th September and 31st March. Mr. Manohar closes his books every 31st December.
Show Investment A/c as it would appear in his books. 14