SAP 1 - 16.02 - KS Academy
Transcript of SAP 1 - 16.02 - KS Academy
SAP 1 - 16.02.2020
INTERMEDIATE (NEW SYLLABUS) GROUP I
PAPER 3: COST AND MANAGEMENT ACCOUNTING
Time Allowed – 135 Minutes Maximum Marks –75
Marks
Answer all the Questions
1) (A) In a manufacturing company factory overheads are charged as fixed percentage
basis on direct labour and office overheads are charged on the basis of percentage
of factory cost. The following information are available related to the year ending
31st March, 2014:
Product A Product B
Direct Materials Rs. 19,000 Rs. 15,000
Direct Labour Rs. 15,000 Rs. 25,000
Sales Rs. 60,000 Rs. 80,000
Profit 25% on cost 25% on sales price
You are required to find out:
(i) The percentage of factory overheads on direct labour.
(ii) The percentage of office overheads on factory cost.
(5 Marks)
Answers:
1) (B) The following information is given by Star Ltd.:
Margin of Safety Rs. 1,87,500
Total Cost Rs. 1,93,750
Margin of Safety 3,750 units
Break-even Sales 1,250 units
Required:
CALCULATE Profit, P/V Ratio, BEP Sales (in Rs.) and Fixed Cost
(5 Marks)
Answers:
1) (C) M/s. H.K. Piano Company showed a net loss of Rs. 4,16,000 as per their financial
accounts for the year ended 31st March, 20X8. The cost accounts, however,
disclosed a net loss of Rs. 3,28,000 for the same period. The following information
was revealed as a result of scrutiny of the figures of both the sets of books:
S.No PARTICULARS AMOUNT (RS)
1 Factory overheads under-recovered 6,000
2 Administration overheads over-recovered 4,000
3 Depreciation charged in financial accounts 1,20,000
4 Depreciation recovered in cost 1,30,000
5 Interest on investment not included in cost 20,000
6 Income - tax provided 1,20,000
7 Transfer fees (credit in financial books) 2,000
8 Stores adjustment (credit in financial books) 2,000
Prepare a Memorandum reconciliation accounts.
(5 Marks)
Answers:
2) (A) A product passes through three processes ‘X’, ‘Y’ and ‘Z’. The output of process ‘X’ and ‘Y’ is transferred to next process at cost plus 20 per cent each on transfer price and the output of process ‘Z’ is transferred to finished stock at a profit of 25 per cent
on transfer price. The following information are available in respect of the year
ending 31st March, 2014:
Process-X Process-Y Process-Z
Finished Stock
(Rs.) (Rs.) (Rs.) (Rs.)
Opening Stock 15,000 27,000 40,000 45,000
Material 80,000 65,000 50,000 -
Wages 1,25,000 1,08,000 92,000 -
Manufacturing Overheads 96,000 72,000 66,500 -
Closing Stock 20,000 32,000 39,000 50,000
Inter process profit included in Opening Stock
Nil 4,000 10,000 20,000
Stock in processes is valued at prime cost. The finished stock is valued at the price at which it is received from process ‘Z’. Sales of the finished stock during the period was Rs. 14,00,000.
You are required to prepare:
(i) Process accounts and finished stock account showing profit element at each stage.
(ii) Costing Profit and Loss account
(iii) Show the relevant items in the Balance Sheet. (14 Marks).
Answers:
2) (B) A company’s plant processes 1,50,000 kg. of raw material in a month to produce two products, viz, ‘P’ and ‘Q’. The cost of raw material is Rs. 12 per kg. The processing costs per month are:
The loss in process is 5% of input and the output ratio of P and Q which emerge
simultaneously is 1:2. The selling prices of the two products at the point of
split off are: P Rs. 12 per kg. and Q Rs. 20 per kg. A proposal is available to process P further by mixing it with other purchased materials. The entire current output of the plant can be so processed further to obtain a new product ‘S’. The price per kg. of S is Rs. 15 and each kg of output of S will require one kilogram of input P. The cost of processing of P into S (including other materials) is Rs. 1,85,000 per month.
You are required to prepare a statement showing the monthly profitability based
both on the existing manufacturing operations and on further processing.
Will you recommend further processing? (6 Marks)
Answers:
(Rs.)
Direct Materials 90,000
Direct Wages 1,20,000
Variable Overheads 1,00,000
Fixed Overheads 1,00,000
3) From the following data of A Ltd., CALCULATE (i) Material Consumed; (ii) Prime
Cost and (iii) Cost of production.
S.No Particulars Amount (Rs.)
(i) Repair & maintenance paid for plant & machinery 9,80,500
(ii) Insurance premium paid for inventories 26,000
(iii) Insurance premium paid for plant & machinery 96,000
(iv) Raw materials purchased 64,00,000
(v) Opening stock of raw materials 2,88,000
(vi) Closing stock of raw materials 4,46,000
(vii) Wages paid 23,20,000
(viii) Value of opening Work-in-process 4,06,000
(ix) Value of closing Work-in-process 6,02,100
(x) Quality control cost for the products in manufacturing process
86,000
(xi) Research & development cost for improvement in production process
92,600
(xii) Administrative cost for:
- Factory & production 9,00,000
- Others 11,60,000
(xiii) Amount realized by selling scrap generated during the manufacturing process
9,200
(xiv) Packing cost necessary to preserve the goods for further processing
10,200
(xv) Salary paid to Director (Technical) 8,90,000
(10 Marks)
Answers:
4) X Ltd. supplies spare parts to an air craft company Y Ltd. The production capacity
of X Ltd. facilitates production of any one spare part for a particular period of time.
The following are the cost and other information for the production of the two
different spare parts A and B:
Part A PART B
Per unit
Alloy usage 1.6 KGS 1.6 KGS
Machine Time: Machine A
Machine Time: Machine B
0.6 hours
0.5 hours
0.25 hours
0.55 hours
Target price (RS) 145 115
Total Hours Available:
Machine A – 4,000 Hours
Machine B – 4,500 Hours
Alloy available is 13,000 kgs @ Rs.12.5 per kg
Variable overheads per machine hours:
Machine A – Rs 80
Machine B – Rs 100
Required
(i) IDENTIFY the spare part which will optimize contribution at the offered price.
(ii) If Y Ltd. reduces target price by 10% and offers Rs. 60 per hour of unutilized machine hour, CALCULATE the total contribution from the spare part identified above?
(10 Marks)
Answers:
5) (A) M/s. NOP Limited has its own power plant and generates its own power.
Information regarding power requirements and power used are as follows:
Production Dept. Service Dept.
A B X Y
(Horse power hours)
Needed capacity production 20,000 25,000 15,000 10,000
Used during the quarter ended September 2018
16,000 20,000 12,000 8,000
During the quarter ended September 2018, costs for generating power amounted to
Rs. 12.60 lakhs out of which Rs. 4.20 lakhs was considered as fixed cost.
Service department X renders services to departments A, B, and Y in the ratio of
6:4:2 whereas department Y renders services to department A and B in the ratio of
4: 1. The direct labour hours of department A and B are 67500 hours and 48750 hours respectively.
Required:
1 Prepare overheads distribution sheet.
2 Calculate factory overhead per labour hour for the dept. A and dept. B.
(5 Marks)
Answers:
5) (B) Deccan Manufacturing limited have three departments which are regarded as
production department. Service departments’ cost are distributed to these
production department using the “Step Ladder Method” of distribution. Estimates of factory overheads cost to be incurred by each department in the forthcoming year as
follows.
Data required for distribution is also known against each department:
Department Factory
overhead (Rs.) Direct Labour
hours No. of
employees Area in sq.m.
Production:
X 1,93,000 4,000 100 3,000
Y 64,000 3,000 125 1,500
Z 83,000 4,000 85 1,500
Service:
P 45,000 1,000 10 500
Q 75,000 5,000 50 1,500
R 1,05,000 6,000 40 1,000
S 30,000 3,000 50 1,000
The overhead costs of the four service departments are distributed in the same order, viz., P, Q, R and S respectively on the following basis.
Department Basis
P Number of employees
Q Direct labour hours
R Area in square metres
S Direct labour hours
You are required to:
(a) PREPARE a schedule showing the distribution of overhead costs of the four service departments to the three production departments; and
(b) CALCULATE the overhead recovery rate per direct labour hour for each of the three production departments.
(5 Marks)
Answers:
6) (A) Write a short note on Margin of safety?
(3 Marks)
Answers:
6) (B) Differentiate between cost allocation and cost absorption
(3 Marks)
Answers:
6) (C) What are the reasons for disagreements of profits as per cost accounts and financial
accounts?
(4 Marks)
Answers:
SAP 1 (16.02.2020)
INTERMEDIATE (NEW SYLLABUS) GROUP
PAPER 2: CORPRATE AND OTHER LAWS
Time Allowed – 45 MINUTES Maximum Marks - 25Marks
1. XP Ltd declared 12% dividend to its Equity Shareholders. However Company missed to
transfer unpaid dividend to bank account even after 40 days from declaration of Dividend.
In such case how much interest will be payable?
(a) 8% p.a.
(b) 16% p.a.
(c) 10% p.a.
(d) 12% p.a.
(2 Marks)
2. Extra Limited is a growing Company and requires additional funds for expansion from time
to time. They are following the same process for making an offer to public and then issue
those shares. This is very time and energy consuming for them. Kindly advise them if there
is any way out.
(a) During first offer they shall file prospectus with a validity on one year, so
subsequent offer issued during the period of validity of that prospectus, no further
prospectus is required;
(b) During first offer they shall file prospectus with a validity on two years, so
subsequent offer issued during the period of validity of that prospectus, no further
prospectus is required;
(c) During first offer they shall file shelf prospectus with a validity on one year, so
subsequent offer issued during the period of validity of that prospectus, no further
prospectus is required;
(d) During first offer they shall file shelf prospectus with a validity on two years, so
subsequent offer issued during the period of validity of that prospectus, no further
prospectus is required;
(1 Mark)
3. Morgan Limited decided to make an offer for purchase of securities. Application Forms for
the purchase were issued to public. However, it was not accompanied by an abridged
prospectus. For this default Company is liable for penalty. How much penalty Company has
to bear?
(a) Rs. 25,000
(b) Rs. 50,000
(c) Rs. 100,000
(d) Rs. 500,000
(2 Marks)
4. Mr. X is a shareholder of Mark Pvt Ltd. He transferred his shares to his daughter Ms. D, in
the month of February. Registration of such instrument of transfer is still pending by the
Company. In this scenario, Companies Act, 2013 state certain provisions which have to be
kept in mind by the Company. Which provision mentioned below in this regard is correct?
(a) Company has to transfer the dividend in relation to such shares to the Unpaid
Dividend Account;
(b) Company has to transfer the dividend in relation to such shares in the name of
transferee;
(c) Company has to issue fully paid-up bonus shares in the name of transformer;
(d) Company has to issue fully paid-up bonus shares in the name of transferee;
(1 Mark)
5. Sumitra Healthcare and Hospitality Limited had issued 9% non-convertible debentures
which matured four years back. However, 1000 such debentures of Rs. 100 each are still
remaining unclaimed and unpaid even after the maturity. State the period after which the
company needs to transfer them to Investor Education and Protection Fund (IEPF) if they
remain unclaimed and unpaid.
(a) After the expiry of five years from the maturity date.
(b) After the expiry of six years from the maturity date
(c) After the expiry of seven years from the maturity date
(d) After the expiry of eight years from the maturity date.
(1 Mark)
6. Delight Sports Garments Limited is contemplating to raise funds through issue of
prospectus in which, according to the directors, a sum of Rs. 50 crores should be stated as
the minimum amount that needs to be subscribed by the prospective subscribers. The funds
shall be raised in four instalments consisting of application, allotment, first call and second
& final call. Advise the company by which instalment it should receive the minimum
subscription stated in the prospectus.
(a) Along with amount subscribed as application money.
(b) Along with amount subscribed as final call money.
(c) Along with amount subscribed as first call money.
(d) Along with amount subscribed as second and final call money.
(1 Mark)
1 D 2 C 3 B
4 A 5 C 6 A
Answer all the questions
1. Vyas owned a land with fifty tamarind trees. He sold his land and the timber (obtained after
cutting the fifty trees) to Yash. Vyas wants to know whether the sale of timber tantamounts
to sale of immovable property. Advise him with reference to provisions of "General Clauses
Act, 1897”.
(4 Marks)
Answer:
1. “Immovable Property” [Section 3(26) of the General Clauses Act, 1897]: ‘Immovable
Property’ shall include:
(i) Land,
(ii) Benefits to arise out of land, and
(iii) Things attached to the earth, or
(iv) Permanently fastened to anything attached to the earth.
It is an inclusive definition. It contains four elements: land, benefits to arise out of
land, things attached to the earth and things permanently fastened to anything
attached to the earth. Where, in any enactment, the definition of immovable property
is in the negative and not exhaustive, the definition as given in the General Clauses
Act will apply to the expression given in that enactment.
In the instant case, Vyas sold Land along with timber (obtained after cutting trees) of
fifty tamarind trees of his land. According to the above definition, Land is
immovable property; however, timber cannot be immovable property since the
same are not attached to the earth.
2. Prakhar Ltd. intends to raise share capital by issuing Equity Shares in different stages over a certain period of time. However, the company does not wish to issue prospectus each and
every time of issue of shares. Considering the provisions of the Companies Act, 2013, discuss
what formalities Prakhar Ltd. should follow to avoid repeated issuance of prospectus?
Answer:
1. Shelf prospectus means a prospectus in respect of which the securities or class of
securities included therein are issued for subscription in one or more issues over a
certain period without the issue of a further prospectus
(1) According to Section 31 of the Company Act, 2013 any class or classes of
companies, as the Securities and Exchange Board may provide by regulations
in this behalf, may file a shelf prospectus with the Registrar at the stage—
(A) of the first offer of securities included therein which shall indicate a period
not exceeding one year as the period of validity of such prospectus which
shall commence from the date of opening of the first offer of securities
under that prospectus, and
(B) in respect of a second or subsequent offer of such securities issued during the
period of validity of that prospectus, no further prospectus is required.
(2) The other formalities related to such repeated/subsequent issue of shares- A
company filing a shelf prospectus shall be required to file an information
memorandum containing all material facts relating to new charges created,
changes in the financial position of the company as have occurred between the
first or previous offer of securities and the succeeding offer of securities and
such other changes as may be prescribed, with the Registrar within the
prescribed time, prior to the issue of a second or subsequent offer of securities
under the shelf prospectus.
Thus, Prakhar Ltd. can follow the above provisions and can issue a shelf prospectus
(5 Marks)
3. The Director of Happy Limited proposed dividend at 12% on equity shares for the financial year 2016-17. The same was approved in the annual general meeting of the company held on 20th September, 2017. The Directors declared the approved dividends. Analysing the provisions of the Companies Act, 2013, give your opinion on the following matters:
(i) Mr. A, holding equity shares of face value of ` 10 lakhs has not paid an amount of ` 1 lakh towards call money on shares. Can the same be adjusted against the dividend amount payable to him?
(ii) Ms. N was the holder of 1,000 equity shares on 31st March, 2017, but she has transferred the shares to Mr. R, whose name has been registered on 20th May, 2017. Who will be entitled to the above dividend?
Answer:
1. (i) The given problem is based on the proviso provided in the section 127 (d) of the
Companies Act, 2013. As per the law where the dividend is declared by a
company and there remains calls in arrears and any other sum due from a
member, in such case no offence shall be deemed to have been committed
where the dividend has been lawfully adjusted by the company against any
sum due to it from the shareholder.
As per the facts given in the question, Mr. A is holding equity shares of face value of
` 10 Lakhs and has not paid an amount of ` 1 lakh towards call money on shares. Referring to the above provision, Mr. A is eligible to get ` 1.20 lakh towards dividendout of which an amount of ` 1 lakh can be adjusted towards call money due on his shares. ` 20,000 can be paid to him in cash or by cheque or in any electronic mode.
According to the above mentioned provision, company can adjust sum of ` 1 lakh due towards call money on shares against the dividend amount payable to Mr. A.
(ii) According to section 123(5), dividend shall be payable only to the registered shareholder of the share or to his order or to his banker. Facts in the given case state that Ms. N, the holder of equity shares transferred the shares to Mr. R whose name has been registered on
20th May 2017. Since, he became the registered shareholder before the declaration of the
dividend in the Annual general meeting of the company held on 20th September 2017, so, Mr. Raj will be entitled to the dividend
(4 Marks)
4. ) A company issued a prospectus. All the statements contained therein were literally true. It also stated that the company had paid dividends for a number of years, but did not disclose the fact that the dividends were not paid out of trading profits, but out of capital profits. An allottee of shares wants to avoid the contract on the ground that the prospectus was false in material particulars. Discuss can he do so?
Answer:
(a) The non disclosure of the fact that dividends were paid out of capital profits is a concealment of material fact as a company is normally required to distribute dividend only from trading or revenue profits and under exceptional circumstances can do so out of capital profits. Hence, a material misrepresentation has been made. Hence, in the given case the allottee can avoid the contract of allotment of shares
(3 Marks)
SAP 1 - 16.02.2020
INTERMEDIATE (NEW SYLLABUS) GROUP II
PAPER 8: FINANCIAL MANAGEMENT & ECONOMICS FOR FINANCE
Time Allowed – 135 Minutes Maximum Marks – 75 Marks
Answer all the questions
1) (A) With the help of following figures CALCULATE the market price of a share of a
company by using:
(i) Walter’s formula
(ii) Dividend growth model (Gordon’s formula)
Earnings per share (EPS) Rs. 10
Dividends per Share Rs. 6
Cost of Capital (Ke) 20%
Interest rate of return on investments 25%
Retention Ratio 40% (5 Marks)
Answers:
1) (B) Calculate the cost of equity from the following data using realized yield approach:
Year 1 2 3 4 5
Dividend per share 1.00 1.00 1.20 1.25 1.15
Price per share (at the beginning) 9.00 9.75 11.50 11.00 10.60
(5 Marks).
Answers:.
1) (C) EXPLAIN “Wealth maximisation” and “Profit maximisation” objectives of financial management
(5 Marks)
2) (A) Following data is available in respect of two companies having same business risk:
Capital employed = Rs. 2,00,000, EBIT = Rs. 30,000
Sources Levered Company (Rs.) Unlevered Company(Rs.)
Debt (@10%) 1,00,000 Nil
Equity 1,00,000 200000
Ke 20 % 12.5%
Investor is holding 15% shares in Unlevered company. CALCULATE increase in annual earnings of investor if he switches his holding from Unlevered to Levered Company.
(6 Marks)
Answers:
Valuation of firms
Particulars Levered Firm (`) Unlevered Firm(`)
EBIT 30,000 30,000
Less: interest 10,000 Nil
Earnings available to Equity
Shareholder/Ke
20,000 30,000
20% 12.5%
Value of Equity 1,00,000 2,40,000
Debt 1,00,000 Nil
Value of Firm 2,00,000 2,40,000
Value of Unlevered company is more than that of Levered company
therefore investor will sell his shares in unlevered company and buy
shares in levered company. Market value of Debt and Equity of Levered
company are in the ratio of ` 1,00,000 : `1,00,000, i.e., 1:1. To maintain
the level of risk he will lend proportionate amount (50%) and invest
balance amount (50%) in shares of Levered company.
2. Investment & Borrowings `
Sell shares in Unlevered company (240000x15%) 36,000
Lend money (36000 x50%) 18,000
Buy shares in Levered company (36000 x50%) 18,000
Total 36,000
3. Change in Return
Income from shares in Levered company `
(18000 x 20%) 3,600
Interest on money lent (18000 x 10%) 1,800
Total Income after switch over 5,400
Income from Unlevered firm (36000 x 12.5%) 4,500
Incremental Income due to arbitrage 900
2) (B) Ganapati Limited is considering three financing plans. The key information is as follows:
(a) Total investment to be raised ` 2,00,000
(b) Plans of Financing Proportion:
Plans Equity Debt Preference Shares
A 100% - -
B 50% 50% -
C 50% - 50%
(c)Cost of debt - 8%, Cost of preference shares - 8%
(d)Tax rate 50%
(e) Equity shares of the face value of Rs. 10 each will be issued at a premium of Rs. 10 per share.
(f) Expected EBIT is Rs. 80,000.
You are required to determine for each plan:-
(i) Earnings per share (EPS)
(ii) The Financial break-even Point.
(iii) Indicate if any of the plans dominate and compute the EBIT range among the plans for indifference.
(6 Marks)
Answers:
3) (A) DETERMINE the cost of capital of Best Luck Limited using the book value (BV) and
market value (MV) weights from the following information
SOURCE BOOK VALUE MARKET VALUE
Equity Shares 1,20,00,000 2,00,00,000
Retained earnings 30,00,000 --
Preference shares 36,00,000 33,75,000
Debentures 9,00,000 10,40,000 Additional Information:
I. Equity: Equity shares are quoted at Rs. 130 per share and a new issue priced at Rs. 125 per share will be fully subscribed; flotation costs will be Rs. 5 per share.
II. Dividend: During the previous 5 years, dividends have steadily increased from Rs. 10.60 to Rs. 14.19 per share. Dividend at the end of the current year is expected to be Rs. 15 per share.
III. Preference shares: 15% Preference shares with face value of Rs. 100 would realiseRs. 105 per share.
IV. Debentures: The company proposes to issue 11-year 15% debentures but the yield on debentures of similar maturity and risk class is 16%; flotation cost is 2%.
V. Tax: Corporate tax rate is 35%. Ignore dividend tax
(6 Marks)
Answers:
3) (B) H Ltd. is considering a new product line to supplement its range of products. It is
anticipated that the new product line will involve cash investments of Rs.70,00,000 at
time and Rs.1,00,00,000 in year 1. After-tax cash inflows of Rs. 25,00,000 are expected
in year 2, Rs.30,00,000 in year 3, Rs.35,00,000 in year 4 and Rs.40,00,000 each year
thereafter through year 10. Although the product line might be viable after year 10,
the company prefers to be conservative and end all calculations at that time.
(i) If the required rate of return is 15 per cent, FIND OUT the net present value of
the project? Is it acceptable?
(ii) COMPUTE NPV if the required rate of return were 10 per cent?
(iii) COMPUTE the internal rate of return? (6Marks)
Answers:
4) (A) The following figures are collected from the annual report of XYZ Ltd.:
Net Profit `30 lakhs
Outstanding 12% preference shares `100 lakhs
No. of equity shares 3 lakhs
Return on Investment 20%
Cost of capital i.e. (Ke) 16%
CALCULATE price per share using Gordon’s Model when dividend pay-out is (i) 25%;
(ii) 50% and (iii) 100%.
(6 Marks)
Answers:
4) (B) Suppose in an economy:
Consumption Function C = 150 + 0.75 Yd
Investment spending I = 100
Government spending G= 115
Tax Tx = 20 + 0.20 Y
Transfer Payments Tr = 40
Exports X = 35
Imports M = 15 + 0.1 Y
Where, Y and Yd are National Income and Personal Disposable Income
respectively. All figures are in rupees.
Find:
(i) The equilibrium level of National Income
(ii) Consumption at equilibrium level
(iii) Net Exports at equilibrium level
(6 Marks)
Answers:
5) (A) Find Gross Domestic Product at market price (GDPMP) and Gross National Product
at market price (GNPMP) from the following data (in Crores of Rs) using income
method. Show that it is the same as that obtained by expenditure method.
Personal Consumption 7,314
Depreciation 800
Wages 6,508
Indirect Business Taxes 1,000
Interest 1,060
Domestic Investment 1,442
Government Expenditures 2,196
Rental Income 34
Corporate Profits 682
Exports 1,346
Net Factor income from Abroad 40
Mixed Income 806
Imports 1,408 (6 Marks)
Answers:
5) (B) In a two sector model Economy, the business sector produces 7500 units at an
average price of Rs. 7.
(i) What is the money value of output?
(ii) What is the money income of Households?
(iii) If households spend 75 of their Income, what is the total consumer expenditure?
(iv) What is the total money revenue received by the business sector?
(v) What should happen to the level of output? (6 Marks)
Answers:
6) (A) Using suitable diagram, explain, how the nominal exchange rate between two
countries is determined'?
(3 Marks)
Answers:
6) (B) The table below shows the number of labour hours required to produce wheat and
cloth in two countries X and Y.
COMMODITY COUNTRY X COUNTRY Y
1 Unit of cloths 4 1.0
1 Unit of wheat 2 2.5
(i) Compare the productivity of labour in both the countries in respect of both the commodities.
(ii) Which country has absolute advantage in the production of wheat?
(iii) Which country has absolute advantage in the production of cloth?
(iv) If there is trade, which commodity should these countries produce?
(v) What are the opportunity costs of each commodity? (3 Marks)
Answers:
6) (C) What are the main advantages of fixed rate regime in an open economy?
(3 Marks)
Answers:
6) (D) Explain the benefits of FDI?
(3 Marks)
Answers:
KS ACADEMY SAP 1 – 16.02.2020
1
SAP 1 – 16.02.2020
INTERMEDIATE (NEW) GROUP – II
PAPER-7: ENTERPRISE INFORMATION SYSTEMS & STRATEGIC MANAGEMENT
(Time Allowed – 45 Minutes) Maximum Marks - 25
Part A – ENTERPRISE INFRMATION SYSTEMS – 12 MARKS
Division A: Multiple Choice Questions (4 Marks)
1. Which of the following is not a Corrective Control?
(a) Backup Procedure
(b) Rerun Procedure
(c) Contingency Planning
(d) Hash Totals.
(1 mark)
2. While doing a concurrent audit in a bank, Mr. X noticed that some changes have been
made to advance master data files of the database. He uses an audit technique to identify
such suspicious transactions. This technique shall be defined as ___________.
(a) Continuous and Intermittent Simulation(CIS)
(b) System Control Audit Review File (SCARF)
(c) Audit Hook
(d) Integrated Test Facility (ITF).
(1 mark)
3. Which of the following is not a step involved in the Data Mining Process?
(a) Data Integration
(b) Data Selection
(c) Data Transformation
(d) Data distribution
(1 mark)
4. Under Asynchronous attacks in a telecommunication network system, involves spying
on information being transmitted over communication network.
(a) Wire-tapping
(b) Data Leakage
(c) Subversive Attacks
(d) Piggybacking
(1 mark)
1 D 2 C 3 D 4 A
Division B: Descriptive Questions - 9 Marks
5. As an Information Systems (IS)Auditor, you need to keep yourself up-to-date with
the latest Audit tools, techniques and methodology to meet the demands of the job.
Discuss about various Audit Tools that you should be aware about.
(4
marks)
Answers:
KS ACADEMY SAP 1 – 16.02.2020
2
6. What do you understand by Boundary Controls?
Explain major Boundary Control techniques in brief. (3 marks)
Answers:
KS ACADEMY SAP 1 – 16.02.2020
3
7. Discuss briefly the components of Information Systems. (2 marks)
Answers:
KS ACADEMY SAP 1 – 16.02.2020
4
PART B – STRATEGIC MANAGEMENT – 13 MARKS
Division A: Multiple Choice Questions - 4 Marks
1. According to Porter, what is usually the most powerful of the five competitive forces?
(a) Rivalry among existing firms
(b) Potential development of substitute products
(c) Bargaining power of buyers and suppliers
(d) Potential entry of new competitors.
(1 mark)
2. Michael Porter Generic strategies to gain competitive advantage include all except:
(a) Cost leadership (b) Differentiation (c) Focus (d) Revenue generation
(1 mark)
3. Differentiation Strategy can be achieved by following measures:
1. Match products with tastes and preferences of customers 2. Elevate the performance of the product. 3. Rapid product innovation Which of the above is true:
(a) (1) and (2) (b) (1) and (3) (c) (2) and (3) (d) (1), (2) and (3)
(2 marks)
1 A 2 D 3 D
Division B: Descriptive Questions - 8 Marks
4. Rahul Sharma is Managing Director of a company which is manufacturing trucks. He is worried about the entry of new businesses. What kind of barriers will help Rahul against such a threat?
(4 marks) Answers:
KS ACADEMY SAP 1 – 16.02.2020
5
5. Buyers can exert considerable pressure on business. Do you agree? Discuss.
(2 marks) Answers:
KS ACADEMY SAP 1 – 16.02.2020
6
6. What do you understand by cost leadership? How is it achieved?
(2 marks)
Answers: