2015-RP
2015 – Regular & Private
XI – ACCOUNTING SOLUTION
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ACCOUNTING – 2015
REGULAR & PRIVATE
Time: 20 Minutes
Max. Marks: 20
SECTION “A” (MULTIPLE CHOICE QUESTIONS)
Note: (i) This section contains of 20 part questions and all are to be answered. Each question
carries equal marks.
(ii) Do not copy down the part question in your answer book. Write only the
answer in full against the proper number of the question and its part. (iv) The code of your
question paper must be mentioned in bold letters in the beginning.
Q.No.1
Choose the correct answer for each from the given options:
(1) This is a merchandising business:
(a) Motor workshop.
(b) Estate agency.
(c) Medical store.
(d) Beauty parlour.
(2) This is not an asset:
(a) Accounts receivable.
(b) Cash.
(c) Unearned commission.
(d) Unexpired rent.
(3) Normally, this account has a debit balance:
(a) Loan to Ahmed.
(b) Loan from Ali.
(c) Bank overdraft.
(d) Purchase discount.
(4) Capital + Liabilities – Assets = :
(a) 0.
(b) 1.
(c) 2.
(d) 3.
(5) Assets are equal to the sum of liabilities plus:
(a) Profit.
(b) Owner’s equity.
(c) Expenses.
(d) Revenue.
(6) The right of outsiders on assets of business is called:
(a) Capital.
(b) Liability.
(c) Asset.
(d) Income.
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(7) Unearned revenue is a/an:
(a) Liability.
(b) Asset.
(c) Owner’s equity.
(d) Income.
(8) Accrued income appears in balance sheet as a/an:
(a) Liability.
(b) Capital.
(c) Contra asset.
(d) Asset.
(9) Ending inventory in balance sheet is shown as:
(a) Liability.
(b) Income.
(c) Asset.
(d) Capital.
(10) Unsold goods at end are called:
(a) Purchases.
(b) Cost of goods sold.
(c) Closing inventory.
(d) Opening inventory.
(11) The arithmetic accuracy of accounts is verified by:
(a) Balance sheet.
(b) Income statement.
(c) Journal.
(d) Trial balance.
(12) This is not shown in balance sheet:
(a) Cash.
(b) Inventory.
(c) Building.
(d) Rent expense.
(13) The process of recording transaction in journal is called:
(a) Posting.
(b) Balancing.
(c) Footing.
(d) Journalizing.
(14) Advertisement paid in advance is debited to the account for:
(a) Prepaid advertisement.
(b) Advertisement expenses.
(c) Accrued advertisement.
(d) Selling expenses.
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(15) Rs.500 withdrawn by the owner for private use is credited to:
(a) Drawing account.
(b) Expense account.
(c) Cash account.
(d) Capital account.
(16) Under the imprest system, petty cash fund is periodically:
(a) Closed.
(b) Opened.
(c) Replenished.
(d) Reduced.
(17) This is a book of secondary entry:
(a) Trial balance.
(b) Subsidiary ledger.
(c) Sales journal.
(d) General journal.
(18) Allowance for bad debts is:
(a) Revenue.
(b) Contra asset.
(c) Liability.
(d) Expense.
(19) Contra entries are recorded in:
(a) Sales journal.
(b) Cash book.
(c) General journal.
(d) Petty cash book.
(20) Outstanding cheque is:
(a) Unpresented cheque.
(b) Dishonoured cheque.
(c) Deposit in transit.
(d) Cheque in clearing.
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ACCOUNTING – 2015
REGULAR & PRIVATE
Time: 2 Hours 40 Minutes
Max. Marks: 80
SECTION “B” (SHORT – ANSWER QUESTIONS) (50)
Note: Attempt any Four questions. All questions carry equal marks. The use of calculator is
allowed.
Q.No.2
ACCOUNTING EQUATION
For each of the following determine the underlined missing item:(a) The liabilities of a business entity having assets of Rs.400,000 and owner’s equity of Rs.180,000.
(b) The assets of business entity having liabilities of Rs.100,000 and owner’s equity of Rs.200,000.
(c) The owner’s equity of business having assets of Rs.200,000 and liabilities of Rs.70,000.
(d) The revenues of business entity having expenses of Rs.120,000 and net income of Rs.30,000.
(e) The expenses of a business entity having revenues of Rs.180,000 and net loss of Rs.16,000.
(f) Sales revenue of a business entity having cost of goods sold Rs.210,000 and gross loss of
Rs.10,000
SOLUTION 2
(i) Liabilities = Assets – Owner’s equity
Liabilities = 400,000 – 180,000
Liabilities = 220,000
(ii) Assets = Liabilities + Owner’s equity
Assets = 100,000 + 200,000
Assets = 300,000
(iii) Owner’s equity = Assets – Liabilities
Owner’s equity = 200,000 – 70,000
Owner’s equity = 130,000
(iv) Revenue = Expenses + Profit
Revenue = 120,000 + 30,000
Revenue = 150,000
(v) Expenses = Revenue + Loss
Expenses = 180,000 + 16,000
Expenses = 196,000
(vi) Sales revenue = Cost of goods sold – Gross loss
Sales revenue = 210,000 – 10,000
Sales revenue = 200,000
Q.No.3
GENERAL JOURNAL
The following are transactions completed by Ali Air Conditioners:
2014
Dec. 01
Invested cash Rs.120,000 and shop equipment worth Rs.80,000.
Dec. 03
Paid shop rent for the month Rs.10,000.
Dec. 15
Received repair income in cash Rs.20,000 for the service rendered during the first
fortnight.
Dec. 25
Rendered services for Rs.30,000 on credit.
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Dec. 28
Paid salaries Rs.10,000.
Dec. 30
Received cash Rs.20,000 on account.
Dec. 31
Rendered services for cash Rs.50,000 during the last fortnight.
REQUIRED
Record the above transactions in General Journal (standard form).
SOLUTION 3
Date
Dec. 01
Dec. 03
Dec. 15
Dec. 25
Dec. 28
Dec. 30
Dec. 31
ALI AIR CONDITIONER
GENERAL JOURNAL
FOR THE MONTH OF DECEMBER 2014
Particulars
P/R
Cash
Shop equipment
Capital
(To record the investment by owner)
Prepaid shop rent
Cash
(To record the rent paid in advance)
Cash
Repair income
(To record the repair income received)
Repair income receivable
Repair income
(To record the services rendered on account)
Salaries expense
Cash
(To record the salaries paid to employees)
Cash
Repair income receivable
(To record the cash collected from customer)
Cash
Repair income
(To record the repair income received)
Debit
120,000
80,000
Credit
200,000
10,000
10,000
20,000
20,000
30,000
30,000
10,000
10,000
20,000
20,000
50,000
50,000
Q.No.4
TRIAL BALANCE
The following balances appeared in the accounts of Raza Traders on April 01, 2015:
Bank Rs.220,000; Office supplies Rs.2,000; Office equipment Rs.32,000; Advertising payable
Rs.2,000; Raza Capital Rs.?
The transactions completed during the month were as follows:
Apr. 01:
Purchased office equipment on credit from A.B. & Co. Rs.10,000.
Apr. 05:
Returned office equipment purchased on 1st April Rs.2,000.
Apr. 15:
Issued cheque in payment of accounts payable Rs.5,000.
Apr. 20:
Received consulting fee income and deposited in bank Rs.1,900.
Apr. 25:
Issued cheque against advertising payable Rs.1,500.
REQUIRED
(a) Compute Raza capital on April 1.
(b) Prepare trial balance on April 30.
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SOLUTION 4 (a)
Computation of Capital:
Assets:
Bank
Office supplies
Office equipment
Total assets
Less: Liabilities:
Advertising payable
Capital
220,000
2,000
32,000
254,000
(2,000)
252,000
SOLUTION 4 (b)
NO.
1
2
3
4
5
6
7
RAZA TRADERS
TRIAL BALANCE
FOR THE MONTH ENDED APRIL 30, 2015
PARTICULARS
P/R
DEBIT
Bank
215,400
Office supplies
2,000
Office equipment
40,000
Advertising payable
Accounts payable
Raza Capital
Consulting fee income
Total
257,400
CREDIT
500
3,000
252,000
1,900
257,400
Additional Working:
Date
Apr. 01
Apr. 05
Apr. 15
Apr. 20
Apr. 25
RAZA TRADERS
GENERAL JOURNAL
FOR THE MONTH OF APRIL 2015
Particulars
P/R
Office equipment
Accounts payable (A.B. & Co.)
(To record the purchase of equipment on account)
Accounts payable (A.B. & Co.)
Office equipment
(To record the equipment return)
Accounts payable
Bank
(To record the payment of accounts payable)
Bank
Consulting fee income
(To record the receipt of fee income)
Advertising payable
Bank
(To record the payment of advertising payable)
Debit
10,000
Credit
10,000
2,000
2,000
5,000
5,000
1,900
1,900
1,500
XI – Accounting – 2015 (Regular & Private)
1,500
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RAZA TRADERS
GENERAL LEDGER
Apr. 01
Apr. 20
Balance
Consulting fee income
May. 01
Balance b/d
Apr. 01
May. 01
Balance
Balance b/d
Apr. 01
Apr. 01
Balance
Accounts payable
May. 01
Balance b/d
Apr. 25
Apr. 30
Bank
Balance c/d
Apr. 05
Apr. 15
Apr. 30
Apr. 30
Apr. 30
Office equipment
Bank
Balance c/d
Balance c/d
Balance c/d
Bank
220,000 Apr. 15
1,900 Apr. 25
Apr. 30
221,900
215,400
Office Supplies
2,000
Apr. 30
2,000
2,000
Office Equipment
32,000 Apr. 05
10,000 Apr. 30
42,000
42,000
Advertising Payable
1,500 Apr. 01
500
2,000
May. 01
Accounts Payable
2,000 Apr. 01
5,000
3,000
10,000
May. 01
Capital
Apr. 01
252,000
252,000
May. 01
Consulting Fee Income
Apr. 20
1,900
1,900
May. 01
Accounts payable
Advertising payable
Balance c/d
Balance c/d
Accounts payable
Balance c/d
5,000
1,500
215,400
221,900
2,000
2,000
2,000
40,000
42,000
Balance
2,000
Balance b/d
2,000
500
Office equipment
10,000
Balance b/d
10,000
3,000
Balance
252,000
Balance b/d
252,000
252,000
Bank
1,900
Balance b/d
1,900
1,900
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Q.No.5
CASH BOOK
Mr. Yasir, a sole trader, uses three column cash book for his business. On June 1, 2014 he had cash
on hand Rs.25,000 and cash in bank Rs.35,000. During the month he completed the following
transactions:
June 06:
Received a cheque from Israna Co. for Rs.2,400 and allowed them discount Rs.100.
June 11:
Deposited Israna Co.’s cheque in the bank.
June 15:
Issued a cheque for Rs.2,500 to Kafeel Co. in full settlement of their account of
Rs.3,000.
June 27:
Deposited cash into bank Rs.10,000.
June 27:
Withdrew from bank for personal use Rs.3,000.
June 20:
Withdrew cash from the bank for office use Rs.5,000.
REQUIRED
(a) Enter the opening balances and record the above transactions in a three column cash book.
(b) Balance the cash book on June 30, 2014 bringing down the cash and bank balances on July
01, 2014.
SOLUTION 5
XI – Accounting – 2015 (Regular & Private)
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Balance
A/R (Israna)
Cash
(Deposited)
Cash
(Deposited)
Bank
(Withdrew)
Balance b/d
June 06
June 11
June 27
June 30
July 1
Particulars
June 01
Date
(C)
(C)
(C)
P/R
100
100
Sales
Disc.
XI – Accounting – 2015 (Regular & Private)
20000
32,400
5,000
2,400
25,000
Cash
36,900
47,400
10,000
2,400
35,000
Bank
Cash
(Withdrew)
Balance c/d
June 30
Drawings
Bank
(Deposited)
A/P (Kafeel)
Bank
(Deposited)
Particulars
June 30
June 27
June 27
June 15
June 11
Date
(C)
(C)
(C)
P/R
500
500
500
Purch.
Disc.
32,400
20000
12,400
10,000
2,400
Cash
47,400
36,900
10,500
5,000
3,000
2,500
Bank
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MR. YASIR
THREE COLUMN CASH BOOK
FOR THE MONTH OF JUNE 2014
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Q.No.6
SPECIAL JOURNALS
The following are selected transactions of Liaquat & Company for April 2015:
April 01:
Sold merchandise on account to Mr. Ahmed Rs.4,000.
April 04:
Sold merchandise on account to Mr. Basit Rs.5,000
April 08:
Merchandise returned by Mr. Ahmed Rs.100.
April 10:
Sold the old typewriter by cash Rs.500.
April 12:
Sold merchandise on account to Mr. Mubeen Rs.2,000.
April 16:
Merchandise returned by Mr. Basit Rs.800.
April 19:
Sold merchandise for cash Rs.3,000.
April 23:
Sold merchandise to Mr. Ahmed on account for Rs.6,000.
April 30:
Returned merchandise from Mr. Mubeen Rs.700.
REQUIRED
a) Record the above transactions as the case may be in:
(i) Sales journal.
(ii) Sales return and allowances journal.
b) Prepare in the running balance form the accounts of Mr. Ahmed in account receivable
subsidiary ledger.
SOLUTION 6 (a)
Date
April 01
April 04
April 12
April 23
April 30
Date
April 08
April 16
April 30
April 30
LIAQUAT & COMPANY
SALES JOURNAL
FOR THE MONTH OF APRIL 2015
Name of Customers
Mr. Ahmed
Mr. Basit
Mr. Mubeen
Mr. Ahmed
Accounts receivable Dr.
Sales Cr.
Invoice No.
Credit Note
LIAQUAT & COMPANY
SALES RETURN AND ALLOWANCE JOURNAL
FOR THE MONTH OF APRIL 2015
Name of Customers
Mr. Ahmed
Mr. Basit
Mr. Mubeen
Sales return and allowance Dr.
Accounts receivable Cr.
P/R
Amount
4,000
5,000
2,000
6,000
17,000
P/R
Amount
100
800
700
1,600
SOLUTION 6 (b)
LIAQUAT & COMPANY
SUBSIDIARY LEDGER – ACCOUNTS RECEIVABLE
FOR THE MONTH OF APRIL 2015
Date
April 01
April 08
April 23
Invoice No.
Particulars
Sales
Sales return
Sales
Mr. Ahmed
P/R
SJ
SRJ
SJ
Debit
4,000
--6,000
Credit
--100
---
XI – Accounting – 2015 (Regular & Private)
Balance
4,000
3,900
9,900
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Q.No.7
BANK RECONCILIATION
Following is the information provided by Muqeem Co. at April 30, 2015 for preparation of bank
reconciliation statement:
(i)
On April 30, bank statement showed overdraft balance of Rs.8,500 and cash book had a
balance of Rs.13,650.
(ii)
Deposit in transit Rs.80,000.
(iii)
A debit memo for Rs.1,500 accompanied the bank statement for locker rent. The bank
had erroneously charged this to Muqeem Co. instead of Muqeem Bros.
(iv)
The bank charged Rs.100 for services.
(v)
Outstanding cheque Rs.48,000.
(vi)
A direct remittance in bank account Rs.8,000 by a customer.
(vii)
Dividend collected by the bank on behalf of the company Rs.3,000 but not recorded in
cash book.
(viii)
A cheque for Rs.720 of Azeem deposited in the bank was erroneously recorded in cash
book Rs.270.
REQUIRED
Prepare bank reconciliation statement.
SOLUTION 7
MUQEEM CO.
BANK RECONCILIATION STATEMENT
FOR THE MONTH OF APRIL 2015
Particulars
Cash Book
Unadjusted balance on 30 April 2015
13,650
Add: Deposit in transit (ii)
Add: Error by bank (iii)
Less: Service charges (iv)
(100)
Less: Outstanding cheques (v)
Add: Accounts receivable (direct deposit) (vi)
8,000
Add: Dividend income (vii)
3,000
Add: Error in deposit (viii)
450
Adjusted balance
25,000
Pass Book
(8,500)
80,000
1,500
(48,000)
25,000
SECTION “C” (DETAILED – ANSWER QUESTIONS) (30)
Note: Attempt the following question which is compulsory.
Q.No.8
FINANCIAL STATEMENT AND CLOSING PROCESS
Balances extracted from the ledger of Mustafa Traders on March 31, 2015 before adjustments are as
follows:
Debit Balances: Cash Rs.100,000; Merchandise inventory April 01, Rs.80,000; Office equipment
Rs.300,000; Purchases Rs.520,000; Salaries expense Rs.55,000; Office supplies Rs.5,000; Prepaid
insurance Rs.12,000; Accounts receivable Rs.200,000; Sales returns and allowances Rs.5,000;
Furniture Rs.173,000; Mustafa drawings Rs.50,000; Transportation – in Rs.4,000; Rent expense
Rs.50,000
Total Rs.1,554,000.
Credit Balances: Sales Rs.750,000; Purchases returns and allowances Rs.5,000; Musfata capital
Rs.600,000; Allowance for depreciation (office equipment) Rs.25,000; Accounts payable Rs.170,000;
commission income Rs.4,000 Total Rs.1,554,000.
Data for Adjustment on March 31, 2015:
(i)
Merchandise inventory was values at Rs.100,000.
(ii)
Salaries payable Rs.5,000.
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(iii)
Commission accrued Rs.1,000.
(iv)
Office supplies unused Rs.2,000.
(v)
Insurance expired Rs.8,000.
(vi)
Depreciation on office equipment for the year was estimated at Rs.5,000.
REQUIRED
Prepare any two of the following:
(i) Closing entries in General Journal. (ii) Income statement.
(iii) Balance sheet.
SOLUTION 9 (i)
Date
1
2
3
4
MUSTAFA TRADERS
CLOSING ENTRIES
FOR THE PERIOD ENDED MARCH 31, 2015
Particulars
P/R
Expense and revenue summary
Merchandise inventory beginning
Purchases
Salaries expenses
Sales returns and allowances
Transportation – in
Rent expense
Office supplies expenses
Insurance expenses
Depreciation expense
(To close the various expense accounts)
Sales
Purchases returns and allowances
Commission income
Merchandise inventory ending
Expense and revenue summary
(To close the revenue account)
Expense and revenue summary
Mustafa Capital
(To close the expense and revenue summary
account)
Mustafa Capital
Mustafa Drawings
(To close the drawings account)
Debit
735,000
Credit
80,000
520,000
60,000
5,000
4,000
50,000
3,000
8,000
5,000
750,000
5,000
5,000
100,000
860,000
125,000
125,000
50,000
50,000
SOLUTION 9 (ii)
MUSTAFA TRADERS
INCOME STATEMENT
FOR THE PERIOD ENDED 31 MARCH 2015
Sales
Less: Sales returns and allowances
Net sales
Less: Cost of Goods Sold:
Merchandise inventory beginning
Add: Net Purchases:
Purchases
Add: Transportation – in
Delivered purchases
750,000
(5,000)
745,000
80,000
520,000
4,000
524,000
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Less: Purchases returns and allowances
Net purchases
Merchandise available for sale
Less: Merchandise inventory ending
Less: Cost of goods sold
Gross profit
Less: Operating Expenses:
Salaries expense (55,000 + 5,000)
Office supplies expense
Rent expenses
Insurance expense
Depreciation expense
Total operating expenses
Profit from operation
Add: Other Income:
Commission income (4,000 + 1,000)
Net profit
(5,000)
519,000
599,000
(100,000)
(499,000)
246,000
60,000
3,000
50,000
8,000
5,000
(126,000)
120,000
5,000
125,000
SOLUTION 9 (iii)
MUSTAFA TRADERS
BALANCE SHEET
AS ON 31 MARCH 2015
ASSETS
EQUITIES
Current Assets:
Cash
Accounts receivable
Merchandise inventory
Office supplies
Prepaid insurance
Commission receivable
Total current assets
Fixed Assets:
Office equipment
Less: All for depreciation
Book value of equipment
Furniture
Total fixed assets
Total assets
100,000
200,000
100,000
2,000
4,000
1,000
407,000
300,000
(30,000)
270,000
173,000
Liabilities:
Accounts payable
Salaries payable
Total liabilities
Owner’s Equity:
Capital
Add: Net profit
Less: Drawings
Total owner’s equity
170,000
5,000
175,000
600,000
125,000
725,000
(50,000)
675,000
443,000
850,000 Total equities
850,000
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Additional Working:
Date
1
2
3
4
5
6
MUSTAFA TRADERS
ADJUSTING ENTRIES
FOR THE PERIOD ENDED MARCH 31, 2015
Particulars
P/R
Merchandise inventory
Expense and revenue summary
(To close the ending inventory)
Salaries expense
Salaries payable
(To adjust the unpaid salaries)
Commission receivable
Commission income
(To adjust the accrued commission income)
Office supplies expense
Office supplies
(To adjust the office supplies)
Insurance expense
Prepaid insurance
(To adjust the prepaid insurance)
Depreciation expense
Allowance for depreciation – Office equipment
(To adjust the depreciation expense)
Debit
100,000
Credit
100,000
5,000
5,000
1,000
1,000
3,000
3,000
8,000
8,000
5,000
XI – Accounting – 2015 (Regular & Private)
5,000
Page 14