| Auditing and Cost Accounting |
| Time: 3 Hours |
March – 2002 |
Marks: 100 |
|
| |
| N.B.: |
(1) |
Question NO.1 and 6 are compulsory and answer any two questions each from the rest from each section. |
|
| |
(2) |
Figures to the right indicate full marks. |
|
|
| |
(3) |
Working notes should form part of your answer. |
|
|
| |
(4) |
Answers of both the sections should be written in the same answer book. |
|
|
| |
|
|
|
| |
|
Section I --- (Auditing) |
|
| |
|
|
|
| Q.1. |
a) |
Define & explain the term Auditing. |
4 |
| |
b) |
What are the principles of Auditing? |
6 |
| |
c) |
Distinguish between Auditing and Investigation |
8 |
| |
|
|
|
| Q.2. |
a) |
What are the objectives of verification? |
4 |
| |
b) |
How would you verify the following:
i) Cash at Bank ii) Plant & Machinery iii) Public Deposits |
12 |
| |
|
|
|
| Q.3. |
a) |
What is Deferred Revenue Expenditure? What are the duties of an auditor as regards Deferred Revenue Expenditure? |
8 |
| |
b) |
What is the procedure of physical stock-taking? |
8 |
| |
|
|
|
| Q.4. |
a) |
What are the provisions of Company’s Act, 1956 regarding appointment of first & subsequent auditors? |
8 |
| |
b) |
What are the duties of an auditor in respect of internal check? |
8 |
| |
|
|
|
| Q.5. |
|
Write short notes on any four : |
16 |
| |
|
| (i) |
Window Dressing |
(iv) |
Causes of Depreciation |
| (ii) |
Continuous Audit |
(v) |
Auditing in Computer Environment |
| (iii) |
Statutory Auditor |
(vi) |
Audit Planning |
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
Section II --- (Costing) |
|
| |
|
|
|
| Q.6. |
|
Super Vision company furnishes you with the following information about its 1000 TV sets manufactured and sold during the year :-
| |
Rs. |
|
Rs. |
| Materials |
18,00,000 |
Office & Administration Expenses |
6,80,000 |
| Direct Wages |
10,00,000 |
Selling & Distribution Expenses |
1,20,000 |
| Power and Stores |
2,40,000 |
Sale of scrap |
40,000 |
| Indirect wages |
3,00,000 |
Sale of 1000 TV sets |
62,00,000 |
| Factory Lighting |
1,20,000 |
Repairs and depreciation of Machinery |
2,00,000 |
| Cost of rectifying defective work |
60,000 |
|
|
Prepare the cost sheet for the above year, showing the elements of cost per unit. Prepare also the estimated cost sheet for the next year assuming that:-
- Materials cost and direct wages cost will increase by 10% and 15% respectively.
- Factory-overheads will be recovered as a percentage of direct wages, as last year.
- Office-overheads and selling overheads will be recovered as a percentage of works cost, as last year, and,
- 1500 TV sets will be produced and sold at Rs. 6,600/- each in the next year.
|
20 |
| |
|
|
|
| Q.7. |
|
Reliable construction Ltd. Entered into a contract to construct a building. The contract value is Rs. 13,00,000 to be realized in installments on the basis of the value of work certified by the architect subject to a retention of 10%. The work commenced on 1-4-2000 but it remained incomplete on 31-12-2000 when the final accounts are to be prepared. The facts and figures of the contract are:-
| Plant charged to contract at the commencement |
64,000 |
| Materials charged to contract |
3,60,000 |
| Wages paid |
1,74,000 |
| Expenses incurred on the contract |
77,500 |
Total establishment expenses amounted to Rs. 82,000 out of which 25% is attributable to this contract. Out of the materials issued to the contract, materials costing Rs. 8,000 were sold for Rs. 10,000. A part of the plant (costing Rs. 4,000) was damaged on 1-10-2000 and the scrap realized Rs. 600 only. Plant costing Rs. 6,000 was transferred to another contract site on 31-12-2000.
| Plant is to be depreciated @ 10% p.a. |
| Materials in hand on 31-12-2000 |
35,000 |
| Cash received from contractee |
6,12,000 |
| Cost of work yet to be certified |
60,000 |
Prepare contract account showing there in the amount of profit or loss to be transferred to Profit and Loss account. |
15 |
| |
|
|
|
| Q.8. |
|
A product passes through three processes. In January, 2001 the cost of production were as given below:-
| Particulars |
Processes |
| |
I |
II |
III |
| Direct material |
12,000 |
18,120 |
20,772 |
| Wages |
21,000 |
25356 |
30,000 |
| Production overheads |
9000 |
12000 |
15000 |
| 6000 units were issued to Process I @ Rs. 15/- each |
|
|
|
| Normal Loss |
10% |
5% |
10% |
| Wastages realized |
Rs. 6 per unit |
Rs. 15 per unit |
Rs. 18 per unit |
| Actual production (in units) |
5520 |
5220 |
4800 |
Prepare :-
- Process account I, II, III.
- Normal loss account
- Abnormal loss account
|
15 |
| |
|
|
|
| Q.9. |
|
Write short notes on any three of the following:-
- Limitations of budgetary control system
- Batch costing
- Techniques of standard costing
- Characteristics of marginal costing
- Importance of break-even.
|
15 |
|
