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Do you want 100% Marks with less
effort? Then prepare the YSA Guess. Especially
designed for Karachi Board of Secondary Education (New
Pattern).
GUESS
PAPER (PRINCIPLE OF ACCOUNTING PAPER-I)
(Commerce Group Regular/Private)
TIME: 3 HOURS
MAX. MARKS: 100
General
Instructions
SECTION "A"
It contains 20 Multiple Choice Questions
(MCQs) and all of them are to be answered.
SECTION "B"
It consists of 6 short answer questions
of which 4 questions are to be answered.
SECTION "C"
It comprises 1 detailed answer question
which is Compulsory.
SECTION
"A" (MULTIPLE CHOICE QUESTIONS)
(20 MARKS)
NOTE
Attempt all questions from this Section.
Q.1. Choose the correct answer for each
from the given options.
i. Which of the following statement is incorrect?
a) Assets - Capital = Liabilities
b) Liabilities + Capital = Assests
c) Liabilities + Assets = Capital
d) Assets - Liabilities = Capital
ii. Which of the following is a liability?
a) Machinery
b) Building
c) Loan from X
d) Cash
iii. Which of the following best describes the meaning of
Purchases?
a) Items bought
b) Goods bought on credit
c) Goods bought for resale
d) Goods paid for
iv. Which of the following is correct?
a) Profit does not alter capital
b) Profit reduces capital
c) Capital can only come from profit
d) Profit increases capital
v. Which of the following best describes
a Trial balance?
a) Shows the financial position of the
business
b) It is a special account
c) Shows all the entries in the books
d) It is a list of balances of the
ledger accounts.
vi. Gross profit is
a) Excess of sales over cost of goods
sold
b) Sales less purchases
c) Cost of goods sold + opening
inventory
d) Net profit less operating expenses.
vii. Which is the definition of the Balance Sheet?
a) An account proving the book's balance
b) A record of closing entries
c) A statement of Assets
d) Contains balances of Assets and
Equities
viii. Which is the best description of fixed Assets?
a) They are about to be used in business
b) They are an expensive item bought for
business
c) They are of long, life and are not
bought specifically for resale
d) They are items which will not wear
out quickly.
ix. The sales journal is best described as
a) Part of the double entry system
b) A list of the credit sales
c) Containing asset accounts
d) Containing customers account
x. When depositing money in your bank account you should
always use
a) a cheque book
b) a cash book
c) a general ledger
d) a paying-in slip
xi. A credit balance of Rs. 200 on the cash columns of the
cash book would mean
a) We have Rs. 200 cash in hand
b) Some one has stolen Rs. 200 cash
c) We have spent Rs. 200 more than we
have received.
d) The book keeper has made a mistake
xii. Posting the transactions in accounting means
a) making the first record of double
entry transaction
b) entering items in cash book
c) making the second entry of double
entry trasaction
d) something other than the above
xiii. Sales invoices are first entered in
a) The sales account
b) The cash book
c) The sales journal
d) The purchases journal
xiv. Credit notes issued by us will be entered in our
a) Sales account
b) Purchases returns and allowances
journal
c) Purchases Journal
d) Sales returns and allowances journal
xv. On the date of balance sheet the balance on accumulated
depreciation account is
a) Transferred to depreciation account
b) Simply deducted from the asset in the
balance sheet
c) Transferred to income summary account
d) Transferred to asset account
xvi. All the following accounts normally have debit balance
except
a) Cash
b) expense
c) purchase
d) purchase returns and allowances
xvii. By adding the purchases during the period to the
beginning inventory and deducting the ending inventory we
obtain an amount called the
a) net sales
b) cost of goods sold
c) gross profit
d) operating expenses
xviii. The purchases journal is a book of original entry
used to record the
a) purchase of tangible assets on credit
b) purchase of merchandise for cash
c) purchase of merchandise on credit
only
d) sales of merchandise on credit
xix. If a journal entry recognizes revenue the other part of
the entry might
a) increase an Asset account
b) increase a Liability account
c) decrease an Asset account
d) decrease a Capital account
xx. Which expense may be shown in the income statement?
a) Prepaid Expense
b) Accrued expense
c) Salary Expense
d) Preliminary expense
SECTION
"B" (SHORT ANSWER QUESTIONS)
(50 MARKS)
NOTE
Attempt any Four questions from this
Section. All questions carry equal marks.
Q.2 The following transactions relate to
Mr. Akbar a sole trader.
i. Mr. Akbar invested into the business cash Rs. 10,000
& furniture worth Rs. 5,000.
ii. Purchase Merchandise for cash Rs.
5,000 and on credit Rs. 3,000 from Mr. Asif.
iii. Sold merchandise for cash Rs.
80,000 and on credit Rs. 4,000 to Mr. Asghar.
iv. Returned Merchandise to Mr. Asif Rs.
500.
v. Returned Merchandise by Mr. Asghar Rs.
600
vi. Paid shop rent Rs. 600
vii. Withdrew cash for personal use Rs.
2,000
viii. Paid cash to Mr. Asif Rs. 1,000
and collected from Mr. Asghar Rs. 1,200 cash.
Required
Make Journal entries in standard form.
Q.3 A trader uses three column cash book. On September 01,
2007 he had cash on hand Rs. 50,000 and cash at Bank Rs.
60,000. During September he completed the following
transactions.
September 02 Purchased merchandise for cash Rs. 5,000
September 05 Cash sales deposited into
bank Rs. 8,000
September 08 Received a cheque for Rs.
5,000 for sales
September 11 Deposited the cheque
received on September 08
September 12 Received a cheque of
Rs.3,800 after a discount of 5% and deposited it into Bank.
September 15 Issued a cheque for Rs.
2450 in full settlement of Rs. 2,500
September 20 Withdrew from bank for
office use Rs. 500 and personal use Rs. 1500
September 25 Purchased merchandise by
cheque Rs. 5,000 for cash Rs. 3,000
Required
a) Enter the above mentioned information
in three column cash book and balance it on 30th September
2007
b) Set up standard ledger accounts for
discount # 5003 & 4003 make postings of discounts from
cash book Page No. 9
Q.4 The following transactions relates to a trader:
May 03 Purchased merchandise on account
from Baqi & Co. Rs. 5,000
May 09 Purchased merchandise on credit
from Daud Sons Rs. 8,000
May 10 Returned merchandise to Daud Sons
Rs. 1,000 and Baqi & Co. Rs. 500
May 15 Purchased furniture on account
from Akhtar Sons Rs. 10,000
May 17 Purchased merchandise on account
from Iqbal Bros. Rs. 15,000
May 23 Purchase merchandise on account
from Mukhtar Co. Rs. 17,000
May 25 Returned merchandise to Iqbal
Bros. Rs. 1,500
Required
a) Record the above transactions to
appropriate Special Journal.
b) Post to ledger accounts.
Q.5 A comparison of cash book and bank statement for the
month of June 30. 2006 revealed the following:
i. Balance as per Bank Statement | Rs. 8470
ii. Balance as per Cash Book | Rs. 6000
iii. Outstanding Cheques | Rs. 4222
iv. Deposit in transit | Rs. 3837
v. Direct deposit by Customer | Rs. 2000
vi. The bank credits profit | Rs. 90
vii. Collection charges | Rs. 05
Required
a) Record the journal entries in proper
form to correct the cash balance.
b) Prepare a bank reconciliation as on
June 30, 2006.
Q.6 Pick up information from Q.2 and show the effect of each
transaction on
a) Posting in T accounts
b) A trial balance in sequence.
Q.7 Give entries in General Journal to correct each of the
following errors detected before closing the book.
i. Depreciation on furniture Rs. 1,500
was not recorded.
ii. Office furniture purchased for Rs.
20,000 was incorrectly debited to office supplies expense
account.
iii. Purchase of office supplies for Rs.
4,500 cash was recorded and posted as Rs. 5,000
iv. Drawing of Rs. 9,000 for personal
use of the proprietor was debited to capital account.
v. Rs. 2,500 spent on the repair of old
furniture was debited to furniture account.
vi. Purchase of equipment Rs. 10,000 was
debited to purchase account.
vii. Sales of office furniture Rs. 6,000
was credited to sales account.
viii. Purchases return of Rs. 2,000 was
credited to purchases account.
SECTION
"C" (DESCRIPTIVE ANSWER QUESTIONS)
(30 MARKS)
NOTE
Attempt the following question.
Q.8 The account balances of ABC are as
follows:
Cash Rs. 10,000, Merchandise Inventory
Rs. 8,000, Office Equipment Rs. 30,000, Purchases Rs.52,000,
Salaries Expense Rs. 5,500, Rent Expense Rs. 5,000, Office
Supplies Rs. 500, Un-expired Insurance Rs. 1,500, Accounts
Receivable Rs. 17,000, Sales Returns & Allowances Rs.
500, Furniture Rs. 20,000, ABC Drawings Rs. 5,000, Sales Rs.
75,000, Purchases Returns & Allowances Rs. 500, ABC
Capital Rs. 60,000, Accumulated Depreciation-Office
Equipment Rs. 2,500, Accounts Payable Rs. 17,000
Adjustments
i. Ending Merchandise Inventory Rs.
10,000
ii. Accrued Salaries Rs. 500
iii. Unused Office Supplies Rs. 200
iv. Insurance Expired Rs. 800
v. Provide depreciation charge @ 10% of
Cost on office equipment.
vi. Provide for bad debts @ 5% of
Accounts Receivables.
Required
a) Prepare income statement and a
classified balance sheet for the year ended 30th June 2006.
b) Prepare adjusted trial balance OR
Prepare adjusting entries in proper form.
Other Details
i. The question on General Journal
comprises a maximum of Ten Transactions Only.
ii. The question on ledger and trial
balance, cash book, petty cash book, Bank Reconciliation,
special journals and Correction of errors should comprise a
maximum of Eight Transactions only.
iii. The Comprehensive question will
comprise the contents of 4th, 5th, 6th title of the present
syllabus and only the following adjustments will be covered
in the paper.
Adjustment for
i. Prepayments and supplies initially
recorded as Assets.
ii. Unearned Revenue initially recorded
as liability.
iii. Accrued Expense
iv. Accrued Revenue
v. Depreciation
vi. Bad debts computed on the basis of
sales (income statement approach). Adjusted Trial Balance.
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