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Name:__________________________________ Id. No:___________________Section No________

Birla Institute of Technology and Science, Pilani
First Semester 2022-23
Comprehensive Examination (PART A)
Course Name: Fundamentals of Finance and Accounting (ECON F212)
Total Marks: 120 (40%) Date: 23/12/2022
Duration: 60 Min. Type: Closed Book
Instructions for the students
1. Write your name, BITS Id, and section No in the space provided on the top of this page
2. This paper consists of 30 multiple choice questions (choose the most appropriate answer-2 marks
each). All questions are compulsory. (Combined weight-age of PART A and PART B is 40%). Part A and
B are of 60 marks each.
3.There is No negative marks for incorrect answers.
4.Carefully write your answers in the table provided against the appropriate question numbers. Please
note that answers written elsewhere or in incorrect order will not be evaluated.
5. Write your answer clearly and legibly. Overwritten/ambiguous answers will not be evaluated.
1 2 3 4 5 6 7 8 9 10

11 12 13 14 15 16 17 18 19 20

21 22 23 24 25 26 27 28 29 30

1. What amount of cash was paid to suppliers in 2011 if the ABC corporation reports the
following data during 2011: COGS Rs40000; Beginning inventory Rs10000; Ending inventory
Rs20000; beginning account payable 20,000; ending account payable 30,000; Allowance for
uncollectible accounts Rs10,000.
A. Rs60000 B.40000 C. Rs50000 D.10,000 E. None of the above
2. Which of the following intangible asset is recorded only as part of the acquisition of another
company.
A. Trademarks. B. Patents. C. Copyrights. D. Goodwill. E. None of the above.
3. The cost of goods sold of Bhushan Steel Limited for 2021 was Rs65,000. The beginning and
ending inventory of the company were Rs12,000 and Rs14,000, respectively. What is the
inventory turnover for 2021?
A. 4.6 B. 5 C. 5.2 D. 4.2 E. None of the above
4. One of the main problems of using the specific write-off method is that it does not follow
A. perpetual inventory control B. matching principle. C. time value of
money. D. None of the above.
5 Which of the following accounts is not an expense?
A. depreciation. B. sales commissions. C. dividends. D. delivery expense. E.
None of the above.
6. Payments of dividends to stockholders:
A. increase paid-in capital. B. decrease paid-in capital.
C. increase retained income. D. decrease retained income. D. None of the above

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7. If a company capitalizes expenditures, then the expenditure is recognized on the balance sheet
by:
A. Debit. B. Credit. C. No entry.
8. Merchandise with a list price of Rs100, subject to a trade discount of 40 percent and sold with
credit terms of 2/10, n/60, would cost the buyer Rs_____ if payment is made within the
discount period.
A. 98 B. 60.20. C. 58.80. D. None of the above
9. Assume that XYZ company needs to estimate the ending inventory balance. The company
reported the beginning inventory of Rs84,000, net purchases totalled Rs645,000, and sales came
to Rs830,000. The company's gross profit percentage is 45%.
A. Can't estimate B.456500 C. 272500 D.272000 E. None of the above
10. Which of the following would cause the ratio to rise If a current ratio has been increasing
over the past several years?
A. An increase in accounts payable. B. An increase in equity capital.
C. An increase in short-term borrowings. D. A decrease in prepaid rent. E.
None
11. On January 1, 2010, LMT corporation had the following balances in its stockholders' equity
accounts: Common stock, Rs100,000 (10,000 shares of Rs10 par value stock); contributed
capital in excess of par, Rs20,000; and retained earnings, Rs50,000. During 2010, the company
issued 2,000 additional shares of common stock for Rs15 per share, reported net income of
Rs60,000 and paid cash dividends of Rs20,000. What amount of retained earnings would the
company report on its December 31, 2010 balance sheet?
(A). Rs110,000 (B). Rs90,000 (C). Rs210,000 (D). Rs240,000
E. None
12. MRX company's annual report contains the following information: Current ratio, 3; Quick
ratio, 2.25; Current liabilities, Rs 3000; Inventory turnover ratio, 10. Based on the above data,
compute the inventory of the company?
A. Rs9000 B. Rs2250 C. Rs6750 D. 675 E. None of the above
13. If earnings per share is Rs6.50 and the number of shares of capital stock outstanding is
12,000, then what would net income be?
A. Rs30,000 B. 4200 C. 8.16 D. None of the above
14. When a company issues stock at an amount over the par value, what account is used to record
that amount received over par?
(A) Common stock (B) Cash (C) Additional paid in capital (D) Retained
earnings (E). None of the above
15 Tata Company showed net income before preferred dividend Rs8000 million in 2018. The
average number of common shares outstanding during 2018 was 1030 million shares. The
company paid Rs500 million in dividends on preferred stock, which was convertible into 50
million shares of common stock in the same year. What is the basic earnings per share amount
for 2018?
(A). Rs7.77 (B). Rs7.41 (C). Rs7.44 (D). Rs7.28 (E) None
16. Find the diluted earnings per share amount for the year 2018, given the following data during
the same year. Net income after tax Rs4,200 million, average number of common shares
outstanding was 1020 million shares. The company paid Rs210 million in dividends on preferred
stock, which was convertible into 120 million shares of common stock.?
(A). Rs412 (B). Rs4.0 (C). Rs3.5 (D). Rs3.91 (E). None of the above

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17. An examination of the financial statements of a business to ensure that they conform with
generally accepted accounting principles is called
(A) A certification. (B) An audit. (C) A verification. (D) A validation.
(D). None of the above
18. J C Manufacturing purchased inventory for Rs 5300 and also paid a Rs 260 freight-in bill.
The company returned 45% of the goods to the seller and later took a 2% purchase discount.
What is JC Manufacturing's final cost of the inventory that it kept? (Round your answer to the
nearest whole number)
(A). Rs 2,997 (B). Rs 2,337 (C). Rs 3,117 (D). Rs 2,857. (E). None of the above
19. What is the annual interest rate of a sales discount of 3/10, n/60?
(A). 21.9% (B). 22.6% (C). 18.8% (D). 14.6% (E). None of the above
20. If a company XX owes company X Rs 4000, company XX would reflect this on its
A. Statement of cash flows. B. income statement. C. Balance sheet.
D. Statement of stockholders' equity E. None of the above
21. Manaksia Steel Limited showed gross sales were Rs25000; Sales returns and allowances,
Rs1200, cash discounts on sales Rs 800. Using the above information, find out the net sales of
the company?
A. Rs23800. B. Rs23000. C. Rs27000 D. Rs26200. E. None of the above
22. For the year ended March 31, 2017, Jaypee Infratech limited had cash payments for
dividends on stock of Rs20,000, cash paid for interest of Rs6,000, cash paid to suppliers of
Rs9,000 and cash payments for equipment of Rs10,000. Cash used by investing activities for
2017 is: A.Rs10000. B.Rs16000. C.Rs36000. D.Rs30000. E. None of the above
23. MMS Limited reported operating expenses in 2016 of Rs765000 (including Rs80,000 of
depreciation expense). Prepaid expenses increased Rs25000 while accrued liabilities increased
Rs43000. How much cash was paid for operating expenses in 2016?
A. 56%. B. 38%. C. 25%. D. 18%. E. None of the above
24. Bold Company's 2009 income statement reported total sales revenue of $250,000. The 2008-
2009, comparative balance sheets showed that accounts receivable decreased by $20,000. The
2009 "cash receipts from customers" would be
A. $230,000. B. $270,000. C. $250,000. D. $ 40,000 E. None of the above

25. KK Manufacturing Limited reported 2016 net income of Rs240000 including the effects of
depreciation expense, Rs20000 and amortization expense on a patent, Rs10000. Also, cash of
Rs50000 was borrowed on a 5-year note payable. The total cash inflow from operating activities
for 2016
A.270000 B. 220000 C. 240000 D. 210000 E. None of the above

26. If you want to record the cash that you received as interest in advance, how do you record it?
(A) Debit to unearned interest. (B) Credit to interest revenue.
(C) Credit to Cash. (D) Credit to prepaid interest (E) None of the above

27. On February 1, Tata Motors paid a Rs1400 bill for advertising done in January.
Additionally, the company paid Rs12,200 during February for expenses incurred in that month.
On March 2, the Company paid Rs9200 payroll to employees for work done in February. Based
on these facts, total expenses for the month of February were
(A) 22800 (B) 10600

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(C) 13600 (D) 12200 (E) None of the above

28. How many accounts are affected by a business transaction

(A) One account only (B) Two accounts at least
(C) More than two accounts (D) Three accounts at least (E) None of the above

29. Which of the following accounts is (are) closed at the end of the year?
(A) Interest receivable (B) Cost of goods sold
(C) Depreciation expense (D) Both B and C (E) None of the above

30. Accrued expenses which must be recorded in adjusting entries represent expenses
(A) Paid in advance. (B) Paid in advance and not recorded.
C. Incurred but not paid. (D) Incurred and paid. (E) None of the above

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