Reviewing Kerala Syllabus Plus Two Accountancy AFS Previous Year Question Papers and Answers Pdf March 2022 helps in understanding answer patterns.
Kerala Plus Two Accountancy AFS Previous Year Question Paper March 2022
Time: 2 Hours
Maximum Score: 60
Section – II
Analysis of Financial Statements (40 Scores)
Part – VI
A. Answer any four questions from 25 to 30. Each carries 1 score. (4 × 1 = 4)
Question 25.
Which of the following is not a feature of a company?
(a) Body corporate
(b) Separate legal entity
(c) Unlimited Liability
(d) Perpetual succession
Answer:
(c) Unlimited Liability
Question 26.
A company issued 10000 equity shares of Rs. 10 each to the public and they received applications for 15000 equity shares. This situation is called ___________________
(a) Minimum Subscription
(b) Over Subscription
(c) Under Subscription
(d) None of these
Answer:
(b) Over Subscription
Question 27.
Shares of a public company are ___________________
(a) Not freely transferable
(b) Freely transferable
(c) Transferable with the consent of other members
(d) None of these
Answer:
(b) Freely transferable
Question 28.
Debentures which have created a charge on the assets of the company are called ___________________
(a) Secured Debentures
(b) Unsecured Debentures
(c) Redeemable Debentures
(d) Convertible Debentures
Answer:
(a) Secured Debentures
Question 29.
Commonsize analysis is also known as ___________________
(a) Horizontal
(b) Vertical Analysis
(c) Normal
(d) None of these
Answer:
(b) Vertical Analysis
Question 30.
Balance Sheet provides information about the financial position of a business organisation ___________________
(a) Over some time
(b) At a point of time
(c) For some time
(d) None of these
Answer:
(b) At a point of time
B. Answer all questions from 31 to 35. Each carries 1 score. (3 × 1 = 3)
Question 31.
Fill in the blanks:
Total Assets to Debt Ratio = \(\frac{Total Assets}{?}\)
(a) Short term debt
(b) Long term debt
(c) Total debts
(d) None of these
Answer:
(b) Long term debt
Question 32.
___________________ analyse the cost of operations about the revenue from operations.
(a) Operating profit ratio
(b) Operating ratio
(c) Gross profit ratio
(d) Net Profit ratio
Answer:
(b) Operating ratio
Question 33.
Which of the following is not a cash outflow from operating activities?
(a) Cash payment to suppliers of goods
(b) Cash payment to employees
(c) Cash payment to acquire fixed assets
(d) Cash payment to insurance premium
Answer:
(c) Cash payment to acquire fixed assets
Part – VII
A. Answer the following question carries 2 scores. (1 × 2 = 2)
Question 34.
Write a short note about an unlimited company.
Answer:
If the liability of the members in a company is unlimited, such companies are called unlimited companies.
B. Answer any one question from 35 to 36. Carries 2 scores. (1 × 2 = 2)
Question 35.
A company registered with 10000 equity shares of Rs. 10 each, offered 9000 equity shares to the public. But the company received applications for 8500 shares. Show the amount of auithorised capital and subscribed capital in the Balance Sheet.
Answer:
Note to Accounts to Balance Sheet
Question 36.
Shareholders’ fund includes share capital and ___________________ and ___________________
Answer:
Reserves and Surplus
Part – VIII
A. Answer any three questions from 37 to 40. Each carries 3 scores. (3 × 3 = 9)
Question 37.
Write the features of a private company.
Answer:
Private Company: A private company is one which by its articles:
- Restricts the right to transfer its shares.
- A private company must have at least 2 persons, except in case of a one-person company.
- Limits the number of its members to 200.
- Prohibits an invitation to the public to subscribe to its shares and debentures.
Question 38.
Ramesh, a shareholder having 500 shares of Rs. 10 each, did not pay the allotment money of Rs. 4 per share (including premium of Rs. 2/-) and the first and final call of Rs. 3/-. His shares were forfeited after the first and final call. Give journal entries for the forfeiture of shares.
Answer:
Journal
Question 39.
Write any 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 the share may vary from year to year. 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.
- A share is unsecured. But debenture is secured.
- Shareholder enjoys voting right. But debenture holder has no voting rights.
Question 40.
Write any three limitations of the cash flow statement.
Answer:
Limitations of Cash flow Statement:
- Fails to assess profitability.
- Fails to present net income.
- Inter-industry comparison is not possible.
- Fail to assess the liquidity and solvency position.
B. Answer the following question, carries 3 scores. (1 × 3 = 3)
Question 41.
ABC Ltd. purchased a machine from XYZ Ltd. for Rs. 4,40,000 and agreed to make the payment of purchase consideration by issuing 4000, 9% Debentures of Rs. 100 each at a premium of 10%. Pass Journal entries in the books of ABC Ltd.
Answer:
Journal
Issue price of debenture = Rs. 110
Part – IX
A. Answer any two questions from 42 to 44. Each carries 4 scores.
Question 42.
Quilon Ltd. issued 20000, 7% Debentures of Rs. 100 each payable Rs. 40 on application and balance on allotment. The public applied for 18000 debentures, which were fully allotted and the amount was duly received. Give journal entries in the books of Quilon Ltd.
Answer:
Journal
Question 43.
Write any four objectives of the financial statement.
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.
Question 44.
From the following information prepare a common size Income Statement for the year ended 31st March 2020, 31st March 2021.
Answer:
Common Size Statement of Profit and Loss for the year ended 31/3/2020 and 31/3/2021
B. Answer any one question from 45 to 46. Carries 4 scores. (1 × 4 = 4)
Question 45.
Monalisa Ltd. issued 20000 shares of Rs. 10 each to the public. All the shares were fully subscribed. The number of shares was payable as Rs. 30 on application, Rs. 40 on allotment and Rs. 30 on first call. Company does not make first call. One shareholder having 100 shares paid first call money at the time of allotment. Pass Journal Entries.
Answer:
Journal
Question 46.
Write the four important aspects of Analysis of Financial Statements.
Answer:
Financial analysis is useful and significant to different users in the following ways:
- Finance Manager: Financial analysis focuses on the facts and relationships related to managerial performance, corporate efficiency, financial strengths and weaknesses and creditworthiness of the company. A finance manager must be well-equipped with the different tools of analysis to make rational decisions for the firm. The tools for analysis help in studying accounting data to determine the continuity of the operating policies, investment value of the business, credit ratings, and testing the efficiency of operations.
- Top Management: Financial analysis helps the top management in measuring the success of the company’s operations, appraising the individual’s performance and evaluating the system of internal control.
- Trade Payables: Trade payables, through an analysis of financial statements, appraises not only the ability of the company to meet its short-term obligations, but also judges the probability of its continued ability to meet all its financial obligations in the future. Trade payables are particularly interested in the firm’s ability to meet their claims over a very short period. Their analysis will, therefore, evaluate the firm’s liquidity position.
- Lenders: Suppliers of long-term debt are concerned with the firm’s long-term solvency and survival. They analyse the firm’s profitability over some time, its ability to generate cash, to be able to pay interest and repay the principal, and the relationship between various sources of funds (capital structure relationships). Long-term lenders analyse the historical financial statements to assess the future solvency and profitability.
- Investors: Investors, who have invested their money in the firm’s shares, are interested about the firm’s earnings. Financial analysis helps the investors to know the present position and future profitability of the company.
Part – X
Answer any one question from 47 to 48. Carries 5 scores. (1 × 5 = 5)
Question 47.
Royal Ltd. issued 10000 equity shares of Rs. 10 each payable as Rs. 2 on application, Rs. 2 on allotment, Rs. 2 on first call, Rs. 2 on second call and Rs. 2 on final call. Company received applications, all the shares issued and amount were duly received. Pass journal entries.
Answer:
Journal
Question 48.
Calculate Current Ratio and Quick Ratio from the following information:
Answer:
(a) Current Ratio = \(\frac{Current Assets}{Current Liabilities}\)
Current Assets = 25,000 + 25,000 + 15,000 + 2,000 = 67,000
Current Liabilities = 50,000 + 2,000 = 52,000
Current Ratio = \(\frac{67,000}{52,000}\) = 1.29 : 1
(b) Quick Ratio = \(\frac{Quick Assets}{Current Liabilities}\)
Quick Assets = Current Assets – (Inventory + Advance Tax)
= 67000 – (25000 + 2000)
= 40,000
Quick Ratio = \(\frac{40,000}{52,000}\) = 0.77 : 1