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THE INSTITUTE OF BAI\I(ERS, BANGLADESH (IBB)

93rd Banking Diploma Examination, 2022
JAIBB
Accounting for Financial Services (AfS)
Time{ hours
Full marks-I00
Pass marks-S0
lN.B. The figures in the right margin indicate full marl$. Answer any fle questions including question
9. Dffirent parts of a question should be answered in a same place.f
Marks
'a; "Accounting consists of three basic activities-it identifies, records, and communicates the 6
economic events."-Explain the statement.
(b) "Accounting information is for various users like management, tax authority, creditors, 6
investor's lenders sfs."-S1isfly describe how management, tax authority and lenders are
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benefi ted from accounting information.

(c) the qualitative characteristics of accounting information. 6
rBiscuss
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2. @f Wnut is accounting equation? How the impacts of transactions can be shown in accounting 6
/ equation?
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(b) What are the advantages of double entry system of accounting? 5

(c) What type of transactions are recorded in journal proper? J
(d) Distinguish between current account and capital account of a partnership firm. 4
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3. (a) Expenses, losses and distributions to owners are all decreases in net assets. What are the 6
distinctions among them?
(6) The bookkeeper for Karim equipment repair made a number of errors in journalizing and t2
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posting, as described below :

(1) A credit posting of Tk. 525 to accounts receivable was omitted.
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(2) A debit posting of Tk. 750 for prepaid insurance was debited to insurance expense.
(3) A collection from a customer of Tk. 100 in payment of its account owed was journalized
and posted as a debit to cash Tk. 1 00 and a credit to service revenue Tk. I 00.
(4) A credit posting of Tk. 415 to property taxes payable was made twice.
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(5) A cash purchase of supplies for Tk. 250 was journalized and posted as a debit to supplies
Tk. 25 and a credit to cash Tk.25.
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(6) A debit of Tk. 625 to advertising expense was posted as Tk. 652.
Required :
(r)
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. lndicate whether the trial balance will balance.

(ii) If the trial balance will not balance, indicate the amount of the difference.
(rd) Indicate the trial balance column that will have the larger total.
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Note : Consider each error separately. Use the following form, in which error (l) is given an
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Error In balance (i) Difference (il) Larger column (iii)

(1) No Tk. 525 Debit
4. (a)
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Explain the accrual basis of accounting and the reasons for adjusting entries. 4
(6) Kanta Industries collected Tk. 10,00,000 from customers in2016. Of the amount collected, l0
Tk. 2,50,000 was for services performed in 2015. In addition, Kanta performed services
worth Tk. 3,60,000 in2016, which will not be collected until20l7.
Kanta Industries also paid Tk. 7,20,000 for expenses in 2016. Of the amount paid, Tk. 3,00,000
was for expenses incurred on amount in 2015. In addition, Kanta incurred Tk. 4,20,000 of
expenses in2016, which will not be paid until 2017.
Required :
(r) Compute 2016 cash-basis net income.
(il) Compute 2016 accrual-basis net income.
(c) Lily Company pays salaries of Tk. 12,000 every Monday for the preceding 5 day week
(Monday through Friday). Assume December 31, falls on a Tuesday, so Lily's employees
have worked 2 days without being paid.
Required:
Assume the company does use reversing entries. Prepare the December 31 adjusting entry,
the January 1 reversing entry and the entry on Monday, January 6, when Lily pays the payroll.
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Marks
8. (a) Briefly discuss the importance of ratio analysis. 4
(6) From the following information relating to Ehsan Ltd. , prepare a Balance Sheet of the 14
company:
Current ratio 2'5:l
Acid test ratio l'5: 1
Net working capital Tk. 3,00,000
Inventory turnover 6 times
Gross profit ratio 20%
Ratio of cost of goods sold to fixed assets 2:l
Average collection period 2 months
Fixed assets to net worth 0.80 : I
Reserve and surplus to share capital 0'50 : I
9. The following are the balances of XYZ Bank Ltd. at 31 Decembe\2020 : I4+14=28
Particulars Debit Credit
(Taka) (Taka)
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Share capital (88,750 shares ofTk. 10 each) 8,87,500

Reserve 5,00,000
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Current accounts 25,81,343

Deposit accounts 6,85,135
Acceptance and endorsement for customers 3,40,216
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Reserve for final dividend 56,005

Profits & loss A/c (01-01-2019) 1,28,139
Interest received 1,4 1,0 I 0
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Discount charges 38,461

Commission charges 1,54,859
Dividend received less tax 86,251
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Cash in hand 3,41,644

Cash with Bangladesh Bank 6,21,858
Money at call and short notice 2,79,416
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Bills discounted 8,33,483

Advances to customers 13,42,120
Liability of customers for acceptance and endorsement 3,40,216
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Bank premises 2,60,000

Investment in shares of Joint Stock Companies (at cost) 2,48,000
Investment in national defense bond (at cost) 1,68,000
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Balances with other banks 2,24,220

Government securities (at cost) 6,18,358
Interest paid 42,048
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General expenses 91,363

Salaries & allowances 1,00,000
Interim dividend 32,188
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Final dividend 56,005

Total: 5588,919 55,98,919
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You are required to prepare a profit and loss account for the year ended 3-t o.""rrrb" r,ffi
the Balance Sheet as atthat date after taking into account the following adjustments :
(r) Unexpired discount amounted to Tk. 4,200; while interest and dividends accrued and
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outstanding were Tk. 40,000 and 35,000 respectively.

(il) Salaries paid Tk. 10,000 included in general expenses.
(iir) Provide Tk. 17,500 for depreciation on bank premises.
(lv) The market value of investment in shares ofjoint stock companies was Tk. 2,55,000.
(v) Provide bad debts to the extent ofTk. 5,500.
10. Wrig,sfi'ort notes on any six of the following : 3 x6:1 8
@{Call money
CAMELS rating
/ (c) Imprest system of petty cash book
^b)
(d) Cash discount and trade discount
(e) Depreciation, depletion and amortization
$ Horizontal analysis
(g) Accounting cycle
(ft) Statutory reserve
(r) Intangible assets.
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