Association of Accounting Technicians of Sri Lanka
Level II Examination - July 2024
Suggested Answers
(201) ADVANCED FINANCIAL ACCOUNTING & COSTING (AFC)
Association of Accounting Technicians of Sri Lanka
No.540,Ven. Muruththettuve Ananda Nahimi Mawatha,
Narahenpita, Colombo 05.
Tel : 011-2-559 669
A publication of the Education and Training Division
, THE ASSOCIATION OF ACCOUNTING TECHNICIANS OF SRI LANKA
Level II Examination - July 2024
(201) ADVANCED FINANCIAL ACCOUNTING & COSTING
SUGGESTED ANSWERS
Objective Test Questions (OTQs) SECTION - A
(Total 25 Marks)
Suggested Answers to Question One:
1.1 (4)
(02 marks)
1.2 (3)
Bal. At the
Year beginning of the Annual Dep. Acc. Dep WDV
year
2021/22 1,200,000 120,000 120,000 1,080,000
2022/23 1,080,000 108,000 228,000 972,000
2023/24 972,000 97,200 325,200 874,800
(02 marks)
1.3 (1)
(02 marks)
1.4 (2)
(02 marks)
1.5 (4)
Sun Ltd
Profit Reconciliation Statement
Profit as per Cost Account 352,000
Add: Under Valuation of Closing R/M in Costing 10,000
Over Valuation of Opening F/G stocks in Costing 15,000 25,000
Less: Under Valuation of Opening R/M stocks in Costing 7,000
Over Valuation of Closing F/G stocks in Costing 8,000 (15,000)
Profit As per Financial Accounts 362,000
(02 marks)
201/AFC 1 (201) Advanced Financial Accounting
& Costing
, 1.6 ABC costing stands for Activity-Based Costing. It is a method of accounting that identifies
and assigns costs to specific activities within an organization and then allocates those
costs to products or services based on their usage of those activities.
(02 marks)
1.7 (i) Remuneration to Partners: Partners are not entitled for remuneration
(ii) Introduction of capital to partnership: Partners are entitled to introduce capital
equally
(iii) An admission of a new partner: can be done only with the consent of all the existing
partners. (03 marks)
1.8
In Respect of Financial Accounting Cost Accounting
Purpose It is prepared to present It aims to help the management
operational results and the with proper planning, control
financial position of the and decision-making.
business.
Coverage of It covers transactions of the It covers only a part of the
Transactions whole business. transactions.
Ex: manufacturing
Stock Valuation Stocks are valued at “Cost Stocks are valued at cost.
Price” or “Net Realizable Value”
whichever is less.
(03 marks)
1.9 Full marks can be awarded for any three of the below. (Page. 120 of the study text)
1. Debentures are debt instruments, and debenture holders are creditors of the company.
2. The date of redemption and the specific value paid upon the redemption are indicated
in the debenture.
3. Debentures have a specific fixed interest rate, mainly paid annually or semi-annually.
4. Debenture holders do not have the right to vote.
5. The interest paid for the debentures is charged against the profit, and therefore, even
when the company incurs a loss, the interest on debentures is debited to the profit and
loss account.
(03 marks)
201/AFC 2 (201) Advanced Financial Accounting
& Costing
Level II Examination - July 2024
Suggested Answers
(201) ADVANCED FINANCIAL ACCOUNTING & COSTING (AFC)
Association of Accounting Technicians of Sri Lanka
No.540,Ven. Muruththettuve Ananda Nahimi Mawatha,
Narahenpita, Colombo 05.
Tel : 011-2-559 669
A publication of the Education and Training Division
, THE ASSOCIATION OF ACCOUNTING TECHNICIANS OF SRI LANKA
Level II Examination - July 2024
(201) ADVANCED FINANCIAL ACCOUNTING & COSTING
SUGGESTED ANSWERS
Objective Test Questions (OTQs) SECTION - A
(Total 25 Marks)
Suggested Answers to Question One:
1.1 (4)
(02 marks)
1.2 (3)
Bal. At the
Year beginning of the Annual Dep. Acc. Dep WDV
year
2021/22 1,200,000 120,000 120,000 1,080,000
2022/23 1,080,000 108,000 228,000 972,000
2023/24 972,000 97,200 325,200 874,800
(02 marks)
1.3 (1)
(02 marks)
1.4 (2)
(02 marks)
1.5 (4)
Sun Ltd
Profit Reconciliation Statement
Profit as per Cost Account 352,000
Add: Under Valuation of Closing R/M in Costing 10,000
Over Valuation of Opening F/G stocks in Costing 15,000 25,000
Less: Under Valuation of Opening R/M stocks in Costing 7,000
Over Valuation of Closing F/G stocks in Costing 8,000 (15,000)
Profit As per Financial Accounts 362,000
(02 marks)
201/AFC 1 (201) Advanced Financial Accounting
& Costing
, 1.6 ABC costing stands for Activity-Based Costing. It is a method of accounting that identifies
and assigns costs to specific activities within an organization and then allocates those
costs to products or services based on their usage of those activities.
(02 marks)
1.7 (i) Remuneration to Partners: Partners are not entitled for remuneration
(ii) Introduction of capital to partnership: Partners are entitled to introduce capital
equally
(iii) An admission of a new partner: can be done only with the consent of all the existing
partners. (03 marks)
1.8
In Respect of Financial Accounting Cost Accounting
Purpose It is prepared to present It aims to help the management
operational results and the with proper planning, control
financial position of the and decision-making.
business.
Coverage of It covers transactions of the It covers only a part of the
Transactions whole business. transactions.
Ex: manufacturing
Stock Valuation Stocks are valued at “Cost Stocks are valued at cost.
Price” or “Net Realizable Value”
whichever is less.
(03 marks)
1.9 Full marks can be awarded for any three of the below. (Page. 120 of the study text)
1. Debentures are debt instruments, and debenture holders are creditors of the company.
2. The date of redemption and the specific value paid upon the redemption are indicated
in the debenture.
3. Debentures have a specific fixed interest rate, mainly paid annually or semi-annually.
4. Debenture holders do not have the right to vote.
5. The interest paid for the debentures is charged against the profit, and therefore, even
when the company incurs a loss, the interest on debentures is debited to the profit and
loss account.
(03 marks)
201/AFC 2 (201) Advanced Financial Accounting
& Costing
