Set 4

Fourth Semester M.Com Degree Examination

Paper – III : CO 243F – ACCOUNTING STANDARDS
Time -3hrs Max Marks-75
Section –A

Answer all questions. Each question carries 2 marks)

1. What is GAAP?
2. What is the significance of NFRA?
3. What do you mean by Level I entities?
4. What is meant by materiality?
5. What is Cash Generating Unit?
6. What is segment revenue?
7. State two limitations of accounting standards
8. What is meant by Economic life of an asset?
9. What is Deferred Tax?
10. What is financial asset as per AS – 20?
(10×2=20)
Section –B
(Answer any 5 questions. Each question carries 5 marks)
11. Discuss the different types of accounting standards?
12. Discuss the relevance of IFRS.
13. Write a note on various standard setting institutions.
14. State the different circumstances under which different cost formulae are recommended
by AS - 2.
15. Discuss the main contents of AS – 9 relating to revenue recognition on sale of goods.
16. What are the features of operating lease.
17. Explain briefly AS – 22.
18. What procedures are identified by AS – 28 to estimate the Value in Use?

(5×5=25)

Section –C

(Answer any 2 questions. Each question carries 15 marks)

19. (a) How do you determine the period of amortisation in the case of intangible assets.
(b) A company with a turnover of Rs. 250 crores and an annual advertising budget of Rs. 2
crores had taken up the marketing of a new product. It was estimated that the company
 would have a turnover of Rs. 25 crores from the new product. The company had debited
to its P/L account the total. Expenditure of Rs. 2 crores incurred on extensive special initial
advertisement campaign for the new product. Is the procedure adopted by the company
correct?
20. (a) When do you reverse an impairment loss? What procedure is to be followed for reversing
an impairment loss to an individual asset.
(b) From the following details of an asset-
(i) Find out impairment loss
(ii) Explain the Treatment of impairment loss
(iii) Calculate Current year depreciation
Particulars of asset:
Cost of Asset Rs. 56 lakhs
Life period useful 10 years
Salvage value Nil
Current carrying value Rs. 27.30 lakhs
Life remaining useful 3 years
Recoverable amount Rs. 12 lakhs
Upward revaluation done in last year Rs. 14 lakhs
21. Summarise the requirement of the Accounting Standard - AS -1
22. (a) Explain (i) Methods of Depreciation
(ii) Depreciation amount and
(iii) Depreciation period

(b) M/s Progressive Company Limited has not charged depreciation for the year ended on
31st March, 2019, in respect of a spare bus purchased during the financial year 2018-19
and kept ready by the company for use as a stand-by, on the ground that, it was not
actually used during the year. State your views with reference to Accounting Standard 10
‘Property, Plant and Equipment.”

Further during the year company made additions to its factory by using its own workforce,
at a cost of Rs. 4,50,000 as wages and materials. The lowest estimate from an outside
contractor to carry out the same work was Rs. 6,00,000.

The directors contend that, since they are fully entitled to employ an outside contractor, it
is reasonable to debit the Factory Building Account with Rs. 6,00,000. Comment whether
the directors’ contention is right in view of the provisions of Accounting Standard 10?

(2×15=30)