Financial Accounting
Dec 2024 Examination
PLEASE NOTE: This assignment is application based, you have to apply what you have learnt in this subject into real life scenario. You will find most of the information through internet search and the remaining from your common sense. None of the answers appear directly in the textbook chapters but are based on the content in the chapter
Q1. Given the following information of ABC Ltd. as of March 31st:
- Revenue Rs. 5,00,000
- Cost of Goods Sold Rs. 3,00,000
- Operating Expense Rs. 80,000
- Depreciation Rs. 30,000
- Tax Rate 30%
Prepare the Income Statement and calculate the Net Profit after Tax. Additionally, evaluate how the inclusion of non-cash items like depreciation affects the financial position of the company, and discuss its significance in decision-making for stakeholders. (10 Marks)
Q2A. Compare and contrast the role of journal entries and ledger accounts in the accounting process. How does the relationship between these two elements ensure accurate financial reporting? Support your answer with examples. (5 Marks)
Q2B. Analyze how changes in accounting policies, such as revenue recognition, can alter the interpretation of a corporation’s financial performance and position. Discuss the potential implications and investors and creditors using real-life corporate examples. (5 Marks)