Q1. What do you understand by Internal Audit ? How do the functions of an internal auditor differ from that of External Auditor ?
Q2. Explain the consistency concept and Accrual Concept of Accounting. How is the Accrual Concept adhered to while preparing the final accounts of a company ?
Q3. What are intangible assets of a firm ? Why are they shown in the Balance Sheet ? What is meant by amortisation of such assets ? Give reason for the same.
Q4. What do you understand by Appropriation of profit of a company? How are the profits appropriated ? How will the profits to be appropriated, affected, if the company issues debentures, instead of equity shares to finance its activities ? Discuss how?
Q5. Distinguish between:
- FIFO and LIFO methods of Inventory valuation.
- Rights Shares and Bonus Shares
- Direct Material Price Variance and Direct Material Usage Variance
- Imputed Costs and Opportunity Costs.
Q6. What do you understand by Break-even analysis ? Discuss the assumptions underlying the break-even analysis. How do these assumptions make the break-even analysis unrealistic ? Explain and prepare a Break-even chart assuming relevant figures.
Q7. What do you understand by Flexible Budget ? How does it differ from a Fixed Budget ? Explain its utility to a business organisation.
Q8. What do you mean by Control Ratios ? Explain the three important control ratios and discuss their significance.
Q9. Explain fully the following statements :
a. Operating cycle plays a decisive role in estimating the working capital requirement of a firm.
b. As there is no explicit cost of retained earnings, they are free of cost.
c. Depreciation acts as a tax shield
d. An investor in shares considers not only its E.P.S. but also P.E. ratio.