Reviewing Kerala Syllabus Plus Two Accountancy AFS Previous Year Question Papers and Answers Pdf March 2023 helps in understanding answer patterns.
Kerala Plus Two Accountancy AFS Previous Year Question Paper March 2023
Time: 2 Hours
Maximum Score: 60
Part – II
(Analysis of Financial Statements) (40 Scores)
VII. Answer any 4 questions from 17 to 21. Each carries 1 score. (4 × 1 = 4)
Question 17.
Interest on calls in arrears is charged according to ‘Table F’ at
(a) 5%
(b) 6%
(c) 8%
(d) 10%
Answer:
(d) 10%
Question 18.
The debentures which are transferable by mere delivery, are:
(a) Registered debenture
(b) First debenture
(c) Bearer debenture
(d) Convertible debenture
Answer:
(c) Bearer debenture
Question 19.
Find the odd one.
(a) Fixed assets
(b) Tangible assets
(c) Intangible assets
(d) Long-term borrowings
Answer:
(d) Long-term borrowings
Question 20.
Identify the ratio which provides the information critical to the long run operation of the firm:
(a) Liquidity ratio
(b) Activity ratio
(c) Solvency ratio
(d) Profitability ratio
Answer:
(c) Solvency ratio
Question 21.
Identify the cash outflows from the following information:
(a) Commission received
(b) Procurement of loan
(c) Purchase of plant
(d) Dividend received
Answer:
(c) Purchase of plant
VIII. Answer all questions from 22 to 23. Each carries 2 scores. (2 × 2 = 4)
Question 22.
Issue of 15,000, 8% debentures of ₹ 100 each as collateral security for bank loan of ₹ 15,00,000. Give journal entry.
Answer:
Debenture Suspense A/c Dr 15,00,000
To 8% Debentures A/c 15,00,000
Question 23.
List out any two limitations of ratio analysis.
Answer:
Limitations of ratio analysis:
- Non-monetary aspects not considered.
- Price-level changes are not taken into consideration.
- Lack of adequate standards.
- Inherent limitations of accounting.
IX. Answer any 2 questions from 24 to 26. Each carries 3 scores. (2 × 3 = 6)
Question 24.
Write the three differences between Shares and Debentures.
Answer:
Difference between Share and Debenture
- Share is an ownership security. But debenture is a creditorship security.
- Dividend is paid on shares. But interest is paid on debentures.
- The rate of dividend on a share may vary yearly. But the rate of interest on debenture is fixed.
- Shareholders are the owners of the company. But debenture holders are the creditors of the company.
Question 25.
Give journal entry:
(a) 5000, 8% debenture of ₹ 100 issued at par.
(b) 5000,8% debenture of ₹ 100 issued at premium of 10% and redeemable at par.
Answer:
(a) 5000, 8% debenture of ₹ 100 issued at par:
(b) 5000, 8% debenture of ₹ 100 issued at premium of 10% and redeemable at par:
Question 26.
Classify the following transactions into a firm’s operating, investing, and financing activities.
(a) Sale of property
(b) Redemption of debenture
(c) Pay operating expenses
(d) Receipts for Royalties
(e) Purchase of furniture
(f) Procurement of loan
Answer:
Operating Activities
(c) Pay operating expenses
(d) Receipts for Royalties
Financing Activities
(b) Redemption of debenture
(f) Procurement of loan
Investing Activities
(a) Sale of property
(e) Purchase of furniture
X. Answer all questions from 27 to 28. Each carries 4 scores. (2 × 4 = 8)
Question 27.
Describe the purpose for which a company can use the amount of securities premium.
Answer:
According to Section 52 of the Act, securities premium can be used for the following purposes:
- The issue of fully paid bonus shares.
- To write off preliminary expenses of the company.
- To write off the expenses of or commission paid or discount allowed on issue of shares or debentures.
- To pay a premium on the redemption of redeemable debentures or preference share capital of the company.
- Buying back shares.
Question 28.
Explain the 4 objectives of financial statements.
Answer:
Objectives of Financial Statements:
- To provide information about assets and liabilities of the business.
- To provide information about the earning capacity of the business.
- To provide information about cash flows.
- To Judge the effectiveness of management.
XI. Answer all questions from 29 to 30. Each carries 5 scores. (2 × 5 = 10)
Question 29.
From the following statement of Profit & Loss of Kashi Traders, prepare comparative statement of Profit and Loss for the year ended on 31-03-2021 and 2022:
Answer:
Question 30.
From the following information, calculate cash flow statements from financial activities:
During the year, the company repaid a loan of 1,50,000.
Answer:
Calculation of cash flows from financial activities:
Proceeds from long term borrowings – 2,00,000
Repayment of long term borrowings – (1,50,000)
Net cash flow from financing activities – 50,000
Working note:
Long term Loan A/c
XII. Answer any one question from 31 to 32. Carries 8 scores. (1 × 8 = 8)
Question 31.
Anil Associates invited application for 10,000 shares of ₹ 100 each payable as follows:
On Application ₹ 40
On Allotment ₹ 30
On 1st and 2nd call ₹ 30
Applications were received for 12,000 shares and excess application money refunded.
Suku, who applied for 500 shares, failed to pay the 1st and 2nd call and his shares were forfeited. These shares were re-issued to Thomas at ₹ 60 per share. Give journal entries.
Answer:
Journal
Question 32.
The following is the Balance Sheet of Lechu Ltd. as on 31-3-2022:
Calculate:
(a) Current Ratio
(b) Quick Ratio
(c) Proprietary Ratio
(d) Inventory to Working Capital
Answer:
(a) Current Ratio = \(\frac{Current Assets}{Current Liabilities}\)
Current assets = 2,50,000 + 50,000 + 15,000 = 3,15,000
Current liabilities = 1,00,000 + 40,000 = 1,40,000
Current ratio = \(\frac{3,15,000}{1,40,000}\) = 2.25 : 1
(b) Quick Ratio = \(\frac{Quick Assets}{Current Liabilities}\)
Quick Assets = Current Assets – Inventory
= 315000 – 250000
= 65,000
Quick Ratio = \(\frac{65,000}{1,40,000}\) = 0.46 : 1
(c) Proprietary Ratio = \(\frac{Shareholders fund}{Total assets}\)
Shareholders’ fund = Share capital + Reserves and surplus
= 1,00,000 + 5,00,00 + 50,000
= Rs. 2,00,000
Proprietary Ratio = \(\frac{2,00,000}{8,40,000}\) = 24 : 1
(d) Inventory to working capital ratio = \(\frac{Inventory}{Working Capital}\)
Working Capital = Current Assets – Current Liabilities
= 3,15,000 – 1,40,000
= 1,75,000
Inventory to working capital ratio = \(\frac{2,50,000}{1,75,000}\) = 1.43 : 1