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Financial Accounting
Previous Year Question Paper with Solution
B.Com. (Programme) · Sem 1
Jan 2025 Examination
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Mumbai
B.Com. (Programme) Sem 1 Financial Accounting Jan 2025 Question Paper with Solutions
First published on munotes.in on 26 October 2026.
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The question paper reproduced here is the paper as set by University of Delhi at the Jan 2025 examination.
Contents
The questions below are the paper as University of Delhi set it at the Jan 2025 examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the Jan 2025 examination, reproduced as University of Delhi set them, in the order it set them. Nothing has been reworded, added or left out. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 90 · 17 questions answered
Instructions printed on the paper
- N.B. (1) Write your Roll No. on the top immediately on receipt of this question paper. (2) Attempt all questions. (3) All questions carry equal marks. (4) Use of a simple calculator is allowed. (5) Answers may be written either in English or Hindi; but the same medium should be used throughout the paper.
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Q1
a and b · 18 Marks
(a)State with reasons whether the following statements are true or false (any six).[12]
- (i) Relevance is one of the quantitative characteristics of the financial statements.
- (ii) Provisions can't be made when a reliable estimate of the amount can't be made.
- (iii) Contingent items are always probable items.
- (iv) The convention of materiality recommends that there should be full, fair, and adequate disclosure of the financial information.
- (v) Input IGST can be utilized to offset the outstanding liabilities of output IGST before output CGST and SGST, respectively.
- (vi) Loss due to fire is an extraordinary item.
- (vii) Accounting concepts and accounting conventions are not different.
- (viii) Prior period items are those that are occurred and got settled in the past.
Answer
For full marks, cover: any six statements, each with a verdict and a two or three sentence reason, citing the standard or GST rule where one applies. All eight are answered here.
(i) Relevance is one of the quantitative characteristics of the financial statements
False. Relevance is a qualitative characteristic. The qualitative characteristics of financial statements are understandability, relevance, reliability and comparability. Information is relevant when it can influence the economic decisions of users, by helping them evaluate past, present or future events.
(ii) Provisions can't be made when a reliable estimate of the amount can't be made
True. Under AS 29, a provision is recognised only when three conditions are met. There must be a present obligation from a past event, a probable outflow of resources, and a reliable estimate of the amount. If a reliable estimate cannot be made, no provision is recognised. The obligation is disclosed as a contingent liability instead. AS 29 adds that such cases are extremely rare, as a range of possible outcomes can usually be estimated.
(iii) Contingent items are always probable items
False. A contingent liability is a possible obligation whose existence will be confirmed only by uncertain future events. It also covers a present obligation where an outflow is not probable or cannot be measured reliably. So contingent items are, by nature, not probable or not certain. If an outflow were probable and measurable, a provision would be made instead.
(iv) The convention of materiality recommends full, fair and adequate disclosure
False. That describes the convention of full disclosure. The convention of materiality says that items which are significant enough to affect users' decisions must be shown properly. Items that are insignificant may be ignored or merged with others. For example, a stapler may be charged as an expense rather than shown as an asset.
(v) Input IGST is used against output IGST before CGST and SGST
True. Under section 49(5)(a) of the CGST Act, 2017, input tax credit of IGST is first used to pay IGST. Any balance may then be used to pay CGST and SGST. Rule 88A allows that balance to be used for CGST and SGST in any order. Also, CGST and SGST credit may be used for IGST only after the IGST credit has been fully used.
(vi) Loss due to fire is an extraordinary item
True, ordinarily. Under AS 5, extraordinary items are incomes or expenses from events clearly distinct from the ordinary activities of the enterprise. They are not expected to recur frequently or regularly. A fire is usually such an event for a trading or manufacturing business. The loss is then disclosed separately in the Statement of Profit and Loss, so that its effect on profit is seen.
(vii) Accounting concepts and accounting conventions are not different
False. Accounting concepts are the basic assumptions on which accounts are prepared, such as the business entity, money measurement, going concern and accrual concepts. Accounting conventions are customs and practices that guide how those concepts are applied. Examples are conservatism, consistency, materiality and full disclosure. Concepts are the theoretical foundation; conventions are practical guides.
(viii) Prior period items are those that occurred and got settled in the past
False. Under AS 5, prior period items are incomes or expenses that arise in the current period from errors or omissions in earlier periods. The errors were made in preparing the financial statements of one or more prior periods. They are not items that were settled in the past. They are corrections made now, disclosed separately in the current Statement of Profit and Loss.
Conclusion. Statements (ii), (v) and (vi) are true. Statements (i), (iii), (iv), (vii) and (viii) are false. The reasons rest on the qualitative characteristics of financial statements, AS 29 and AS 5. They also rest on the GST rules on credit utilisation and the difference between concepts and conventions.
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