Financial Accounting, Dec 2025 Assignment

Description

Financial Accounting

NMIMS Internal Assignment Applicable for Dec 2025 Examination

 

Q1. A national retail chain is experiencing rapid growth, opening 50 new stores in a single financial year and launching several promotional campaigns that offer deferred payment options to customers. The finance team is struggling to determine the correct timing for recognizing revenue from sales made under these promotions and matching related expenses, as cash inflows and outflows do not always align with the delivery of goods and services. The CFO is concerned that improper application of accounting principles could distort the company’s reported profitability and mislead stakeholders. Based on the scenario, how should the finance team at a rapidly expanding retail chain apply the accrual and realisation concepts to ensure accurate revenue and expense recognition during a period of aggressive store openings and promotional campaigns? (10 Marks)

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Q2 (A) TechGen Inc., a leading technology company, recently undertook a comprehensive review of its accounting practices for the fiscal year ending December 31, 2023. The company meticulously followed each step of the accounting cycle, from recording transactions in subsidiary books to preparing financial statements, with the goal of improving transparency and regulatory compliance. However, the CFO is concerned about potential gaps in the process that could affect stakeholder trust and is seeking your critical assessment of their current approach. Critically evaluate TechGen Inc.’s approach to ensuring accuracy and transparency in its accounting cycle, particularly in the context of regulatory compliance and stakeholder trust. Considering the multiple stages from transaction recording to financial statement preparation, what improvements or alternative strategies could be justified to further enhance the reliability of its financial reporting? (5 Marks)

 

Q2(B) From the following Trial Balance of Gupta & Sons for the years ended December 31,

2018, Prepare:

1. Trading Account
2. Profit & Loss Account
3. Balance Sheet as on that date

Name of the Account	Debit Balances	Credit Balances
	Rs.	Rs.
Capital		5,00,000
Sales		10,00,000
Sales Returns	25,000
Purchases	5,00,000
Purchases Returns		15,000
Inventory as on 1.1.18	60,000
Land & Buildings	4,00,000
Plant & Machinery	3,00,000
Furniture	1,00,000
Wages	50,000	–
Carriage Inwards	10,000
Provision for Bad Debts		7,000
Carriage Outwards	5,000
Cartage	5,000
Salaries	40,000
Loan		2,60,000
Debtors	1,50,000
Creditors		70,000
Rent		8,000
Bills Receivable	40,000
Acceptances		10,000
General Expenses	20,000
Rent & Rates	10,000
Investments	50,000
Cash in hand	50,000
Bank Overdraft		10,000
Discount	4,500
Bad Debts	5,000	–
Interest on Investments		5,000
Interest on Bank Overdraft	500
Goodwill	60,000
Total	18,85,000	18,85,000
Additional Information
1. The value of inventory onDecember 31, 2018 was Rs.	1,00,000
2. Depreciation is to be provided on: Land & Building @ 5% p.a. Furniture @ 10% p.a. Plant & Machinery Rs. 50,000.
3. Provision for Bad Debts is to be maintained @ 5% on debtors.
4. Wages are outstanding to the extent of Rs. 4,000 and Salaries to the extent of Rs. 3,000.
5. Rent and Rates are prepaid to the extent of 1/4th of the amount paid.
6. Interest on Investment outstanding is Rs. .	1,000
7. Rent to the extent of Rs. 2,000 has been received in advance.