KSLU Solved Question Papers
Financial Accounting
Previous Year Question Paper with Solution
B.B.A. LL.B. (Five Years) · Sem 1
2012 Dec Examination
munotes.in
Mumbai
B.B.A. LL.B. (Five Years) Sem 1 Financial Accounting 2012 Dec Question Paper with Solutions
First published on munotes.in on 21 October 2026.
Published by munotes.in, Mumbai.
Model answers written and edited by the munotes.in editorial desk.
Passages from this volume may be quoted, in print, online or by an AI system, with credit: name munotes.in and link to this volume's page. The volume may not be reproduced as a whole. Full terms at munotes.in/content-license.
munotes.in is an independent study resource for students of Karnataka State Law University. It is not affiliated with Karnataka State Law University, and is not endorsed by it.
The University does not publish an official answer key for this paper. The answers in this volume are model answers, written to show how a full-mark answer is built. They are a study aid, not an authority on what an examiner marked.
The question paper reproduced here is the paper as set by Karnataka State Law University at the 2012 Dec examination.
Contents
The questions below are the paper as Karnataka State Law University set it at the 2012 Dec examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2012 Dec examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 100 · 20 questions answered
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1
Unit I
(a)What is accounting ? Explain the various objectives of book-keeping.[15]
Answer
For full marks, cover: what accounting is, with a recognised definition, and how book-keeping fits inside it; the meaning of book-keeping; then the objectives of book-keeping one by one, each explained with an example of the record that serves it; how the objectives are met in practice; and the limits of book-keeping that accounting takes up.
What is accounting?
Accounting is the art of recording business transactions in money terms, classifying and summarising them, and interpreting the results. The American Institute of Certified Public Accountants put it this way in 1941: "the art of recording, classifying and summarising in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character, and interpreting the results thereof".
The definition holds two stages. Recording, classifying and summarising build the books. Interpreting the results turns them into knowledge an owner or a lender can act on. The first stage is book-keeping; the whole is accounting.
What is book-keeping?
Book-keeping is the systematic recording of the money transactions of a business in the proper books, in the order in which they occur. Each transaction is written in a book of original entry, posted to the ledger, and the accounts are balanced. Its output is a set of complete, accurate and orderly books. Every objective below is something those books make possible.
Objectives of book-keeping
1. A permanent and complete record. A trader may make hundreds of sales and payments in a month. Memory cannot hold them, and the law and good sense both require a record. The day books, the cash book and the ledger keep every transaction, dated and supported by a voucher, for as long as they are needed. Years later the books still show who paid what and when.
2. Knowing the profit or loss. The owner's first question is whether the business is earning. Book-keeping collects every sale, purchase and expense in its own account. At the year end the trading and profit and loss accounts are prepared from them. Without the record of each sale and each expense, the profit could only be guessed.
3. Knowing the financial position. A business needs to know what it owns and what it owes on any date. The ledger keeps an account for each asset and each liability, and their balances give the balance sheet. A shopkeeper can then see that stock, debtors and cash together exceed the creditors and the bank loan, and by how much.
4. Knowing amounts due from customers and to suppliers. Every credit customer and supplier has a personal account. At any moment the business knows that a customer owes ₹ 12,000 and has not paid for two months. It also knows that a supplier's bill falls due next week. Collection and payment can then be planned, and disputes are settled from the account itself.
5. Control over cash. The cash book shows what the cash in hand should be. Counting the till against it each day brings shortages, mistakes and theft to light early. Bank balances are checked against the pass book in the same way.
6. Detecting errors and frauds. Under double entry every debit has a matching credit, so a trial balance that does not agree points to an error. Regular balancing, together with vouchers for every entry, makes it hard to hide a false payment or a missing receipt.
7. Comparison and planning. The books of one year can be compared with those of earlier years. A rise in sales but a fall in profit, or a steady growth in wages, shows up in the comparison. Budgets for the next year can be built from the figures of this one.
8. Evidence for tax and the law. Income tax and indirect tax returns are prepared from the books, and the tax authorities may examine them. In a dispute in court, properly kept books are accepted as evidence of the transactions they record. A company must also keep books of account under the Companies Act, 2013, which requires them to give a true and fair view.
9. Information for outsiders. A bank considering a loan, an investor considering a share, or a buyer considering the purchase of the business will ask for the accounts. These can be produced only if the books have been kept.
10. Valuing the business. When a business is sold, a partner retires or a firm is converted into a company, its assets, liabilities and past profits must be valued. The books supply the figures from which goodwill and the price are worked out.
How the objectives are met in practice
- Books of original entry. The cash book, purchases book, sales book, returns books, bills books and journal proper capture each transaction once.
- The ledger. Posting groups like with like: all wages in one account, all of one customer's dealings in another.
- Balancing and the trial balance. Totals are checked and the balances listed, ready for the final accounts.
- Vouchers and filing. Every entry has a document behind it, filed so that it can be traced.
One month in a shop's books
Take Prakash, who runs a small hardware shop. In April the cash book records every cash sale and every payment of rent and wages. The sales book lists each credit sale to the local builders, and the purchases book each supply bought on credit from the wholesalers. At the end of the month each entry is posted to the ledger.
The books now serve several objectives at once. The cash book total is checked against the cash in the drawer, and a shortage of ₹ 300 is traced to a sale entered twice. The personal account of one builder shows ₹ 18,000 unpaid since February, so Prakash stops further credit until it is cleared. The purchases account shows that the month's buying rose sharply, and the stock register explains why: cement was bought ahead of a price rise. At the year end the same records give the profit, the balance sheet and the figures for the tax return. None of this needs a single new record; it needs only the books kept day by day.
The objectives at a glance
| Objective | The record that serves it |
|---|---|
| Permanent record | Day books, cash book, ledger |
| Profit or loss | Nominal accounts of incomes and expenses |
| Financial position | Real and personal account balances |
| Debtors and creditors | Personal accounts |
| Cash control | Cash book checked against the till and pass book |
| Errors and frauds | Double entry, trial balance, vouchers |
| Comparison and planning | Books of successive years |
| Objective | The record that serves it |
|---|---|
| Tax and legal evidence | The books and vouchers themselves |
| Outsiders' information | Accounts prepared from the books |
| Valuation of the business | Asset, liability and profit records |
Where book-keeping stops
Book-keeping produces the record but does not explain it. It does not decide how to value closing stock, how much to provide for doubtful debts, or why the profit fell. Those judgments, and the reports built on them, belong to accounting. So book-keeping serves its objectives fully only when accounting takes its records further.
Conclusion. Accounting records, classifies, summarises and interprets money transactions. Book-keeping is its recording stage. The objectives of book-keeping are a permanent record, and knowledge of the profit and the financial position. It also keeps track of debtors and creditors and controls cash. It detects errors and frauds, allows comparison and planning, and supplies evidence for tax and the law. It gives outsiders the figures they need and supports the valuation of the business. Each objective is met by a particular book or account, kept by double entry and supported by vouchers.
The rest of the answers
The first answer is free. The rest come with the KSLU B.B.A. LL.B. Semester 1 solved papers.
You have read the question paper and its first answer in full. Buy the solved papers once and you can read every answer of every solved paper in this semester.
Solved papers: ₹499 Already bought it? Sign in
The question paper itself stays free, and so does the syllabus.
Found an error in this volume? Report it and we will check it against the paper.