Search Previous Year Questions

The correct answer is three years.

Key Points

• Under the Payment of Wages Act, 1936, every employer is required to maintain registers and records related to wages paid and deductions made.
• These records must be preserved for a period of three years from the date of the last entry in the register.
• The purpose of maintaining these records is to ensure transparency and accountability in wage disbursement.
• The Act applies to establishments where less than 1,000 employees are working, and wages are disbursed to ensure compliance with the law.
• Failure to maintain these records or preserve them for the mandated period may result in penalties under the Act.

Additional Information

• Payment of Wages Act, 1936:
• Enacted to regulate the payment of wages to certain classes of workers employed in industry and other establishments.
• Aims to prevent unauthorized deductions and ensure timely payment of wages.
• Authorized Deductions:
• The Act permits deductions for fines, absence from duty, damage to property, or advances paid to employees.
• Unauthorized deductions are strictly prohibited.
• Employer Obligations:
• Employers must ensure wages are paid before the 7^th or 10^th day of the succeeding month, depending on the number of employees.
• Maintenance of wage records is mandatory to ensure compliance with the Act.
• Penalties for Non-compliance:
• Failure to comply with provisions of the Act may attract fines, imprisonment, or both.
• Penalties are imposed to ensure fair treatment of workers and adherence to labor laws.

Given:

7 hemispherical containers, each radius R, each fully filled.

One hemispherical container of radius 1.5R is to be filled by transferring water.

Formula used:

Volume of a hemisphere = \(\dfrac{2}{3}\pi r^3\)

Calculations:

⇒ Small hemisphere volume: \(\dfrac{2}{3}\pi R^3\)

⇒ Large hemisphere radius = 1.5R = \(\dfrac{3}{2}R\)

⇒ Large volume: \(\dfrac{2}{3}\pi\big(\dfrac{3}{2}R\big)^3 = \dfrac{2}{3}\pi \times \dfrac{27}{8}R^3 = \dfrac{9}{4}\pi R^3\)

⇒ Ratio (large / small): \(\dfrac{\tfrac{9}{4}\pi R^3}{\tfrac{2}{3}\pi R^3} = \dfrac{9}{4}\times\dfrac{3}{2} = \dfrac{27}{8} = 3\ \dfrac{3}{8}\)

⇒ Large needs 27/8 small volumes = 3 full small + 3/8 of another small.

⇒ Fully emptied small containers = 3; one more is partly used.

⇒ Fully filled small remaining = 7 - 3 - 1 = 3

∴ Number of smaller containers that remain fully filled = 3.

Given:

Circle passes through (0,0), (0,3), (2,0)

Formula used:

Centre = (−g, −f), Radius = \(\sqrt{g^2 + f^2 - c} \)

Calculations:

Substitute (0,0): ⇒ c = 0

Equation: \(x^2 + y^2 + 2gx + 2fy = 0\)

(0,3): ⇒ 9 + 6f = 0 ⇒ f = -1.5

(2,0): ⇒ 4 + 4g = 0 ⇒ g = -1

Centre = (1, 1.5)

Radius = distance from centre to (0,0):

⇒ √((1−0)² + (1.5−0)²)

⇒ √(1² + (3/2)²)

⇒ √(1 + 9/4)

⇒ √(13/4)

⇒ \(\frac{\sqrt{13}}{2}\)

∴ The correct answer is Option (4).

Given:

x, y ∈ {1, 2, 3, 4, 5, 6}, x ≠ y

Expression: E = xy + x + y

Formula used:

Parity rule:

Odd + Odd = Even

Even + Even = Even

Odd + Even = Odd

Calculations:

E = xy + x + y = (x+1)(y+1) - 1

⇒ E is even ⇔ (x+1)(y+1) is odd

⇒ (x+1) and (y+1) both odd

⇒ x and y both even

Even numbers in {1,2,3,4,5,6} = {2,4,6} (3 choices)

Pick 2 distinct evens for (x,y): 3×2 = 6 ordered pairs

Total ordered pairs (x,y), x ≠ y: 6×5 = 30

Probability = 6 ÷ 30 = 1 ÷ 5

∴ The correct answer is Option (4).

Given:

Equation: x² + ax + b = 0

a > 0, b > 0

Roots: α, β

Formula used:

Sum of roots (α + β) = -Coefficient of x / Coefficient of x² = -a

Product of roots (αβ) = Constant term / Coefficient of x² = b

Calculations:

Given a > 0 and b > 0:

⇒ Sum of roots (α + β) = -a (negative as a > 0)

⇒ Product of roots (αβ) = b (positive as b > 0)

Case for real roots:

For two real roots (α, β), if their sum is negative (α + β < 0) and their product is positive (αβ > 0), one root must be positive and the other must be negative.

∴ The correct answer is option (3).

Given:

Present age ratio (Kumar : Son) = 5 : 3

15 years ago ratio = 2 : 1

Calculations:

Let present ages = 5x (Kumar), 3x (Son)

15 years ago:

Kumar = 5x − 15

Son = 3x − 15

Ratio = 2 : 1 ⇒ (5x − 15) / (3x − 15) = 2 / 1

⇒ 5x − 15 = 2(3x − 15)

⇒ 5x − 15 = 6x − 30

⇒ 6x − 5x = 15

⇒ x = 15

Present ages: Kumar = 5 × 15 = 75, Son = 3 × 15 = 45

When son was born, Son = 0 ⇒ Kumar’s age = 75 − 45 = 30

∴ Mr. Kumar was 30 years old when his son was born.

The correct answer is - Going concern assumption

Key Points

• Going concern assumption
• This concept assumes that a business will continue to operate for the foreseeable future.
• As a result, assets are valued based on their intrinsic value or utility to the business rather than their realizable or liquidation value.
• The assumption eliminates the need to value assets at their breakup or liquidation value, as the business is not expected to cease operations.
• It allows for the spreading of costs over their useful life, reflecting the long-term perspective of the business.

Additional Information

• Money measurement concept
• This concept states that only transactions measurable in monetary terms are recorded in the books of accounts.
• It does not deal with how assets are valued but focuses on the inclusion of measurable transactions.
• Matching concept
• This concept emphasizes that expenses should be matched with revenues in the same accounting period.
• It is more concerned with income measurement than asset valuation.
• Consistency principle
• It ensures that accounting methods and practices remain consistent over time to allow for comparability.
• While important for financial reporting, it is unrelated to the valuation of assets based on their intrinsic value.

The correct answer is - Option 4: Rs. 3,30,000

Key Points

• Calculation of Bad Debts
• The Trial Balance shows bad debts already written off as Rs. 40,000.
• Additional bad debts during the year are given as Rs. 2,00,000.
• Total bad debts to be charged = Rs. 40,000 + Rs. 2,00,000 = Rs. 2,40,000.
• Calculation of Provision for Doubtful Debts
• Trade receivables are given as Rs. 25,00,000.
• Provision for doubtful debts is maintained at 10% of trade receivables.
• Provision = 10% × Rs. 25,00,000 = Rs. 2,50,000.
• Total Amount Charged to Profit and Loss A/c
• The total amount charged includes bad debts and the provision created.
• Total = Rs. 2,40,000 (bad debts) + Rs. 90,000 (provision adjustment).
• Final amount charged to P&L = Rs. 3,30,000.

Additional Information

• Provision for Doubtful Debts
• A provision is an accounting adjustment made to account for expected losses.
• The provision for doubtful debts is created to account for the possibility of non-recovery of trade receivables.
• It is calculated as a percentage of trade receivables based on past experience.
• Profit and Loss Adjustment
• All amounts related to bad debts and provision are charged to the Profit and Loss Account.
• This ensures that expected losses are accounted for in the correct reporting period.
• Impact on Financial Statements
• The creation of a provision reduces the net value of trade receivables in the Balance Sheet.
• Bad debts written off directly impact the firm's profitability and are shown as an expense in the Profit and Loss Account.

The correct answer is - Consistency

Key Points

• Consistency is not a major consideration in the selection and application of accounting policies.
• Consistency refers to the uniform application of accounting policies over time to ensure comparability of financial statements across periods.
• It is more relevant after an accounting policy has been selected and applied, rather than during the process of selecting the policy.
• When selecting accounting policies, other principles such as prudence, substance over form, and materiality play a more critical role.

Additional Information

• Prudence
• Prudence ensures that assets and income are not overstated, and liabilities and expenses are not understated.
• It is a key consideration to provide a true and fair view of financial performance and position.
• Substance over form
• This principle ensures that transactions and events are accounted for based on their economic substance rather than their legal form.
• It is critical in cases where legal structures do not reflect the true nature of transactions.
• Materiality
• Materiality ensures that only information that could influence the decision-making of users is included in the financial statements.
• It helps in omitting immaterial details that do not impact the overall financial picture.

The correct answer is - Rs. 10,600

Key Points

• Perpetual Inventory System:
• In a perpetual inventory system, inventory records are updated continuously as transactions occur.
• Each purchase and sale is recorded immediately to ensure real-time tracking of inventory levels.
• LIFO Method:
• Under the Last-In-First-Out (LIFO) method, the most recent inventory purchased is issued first for sale.
• Older inventory remains in stock and is used to calculate the closing inventory value.
• Calculation:
• Initial Inventory: 200 units at Rs. 7 = Rs. 1,400
• Purchases:
• Jan 8: 1,100 units at Rs. 8 = Rs. 8,800
• Jan 25: 300 units at Rs. 9 = Rs. 2,700
• Sales:
• Jan 6: 100 units issued from Jan 25 purchases (LIFO) = 100 x Rs. 9 = Rs. 900
• Jan 9: 200 units issued from Jan 25 purchases and Jan 8 purchases:
• 200 units issued from Jan 25 at Rs. 9 = Rs. 1,800
• Remaining Inventory:
• Jan 25: 300 - 100 - 200 = 0 units
• Jan 8: 1,100 - 200 = 900 units at Rs. 8 = Rs. 7,200
• Jan 1: 200 units at Rs. 7 = Rs. 1,400
• Total Value: Rs. 7,200 + Rs. 1,400 = Rs. 10,600

Additional Information

• Inventory Valuation Methods:
• FIFO (First-In-First-Out): Older inventory is issued first, and the closing inventory consists of the most recent purchases.
• Weighted Average: Calculates average cost per unit of inventory based on total cost and quantity.
• LIFO: Most recent inventory is issued first, and the older inventory remains for valuation.
• Why LIFO is used:
• It matches current costs with current revenues, reflecting the cost of goods sold more accurately.
• Commonly used in environments with fluctuating prices.
• Limitations of LIFO:
• LIFO is not allowed under International Financial Reporting Standards (IFRS).
• Results in lower closing inventory value during inflationary periods.