GOVERNMENT BOYS DEGREE COLLEGE (M) GULISTAN-E-JOHAR, KARACHI

(Preliminary Exams)
ACCOUNTING PAPER-I

Time: 1 Hour 30Minutes

SECTION “B” (SHORT-ANSWER QUESTIONS) (30 Marks)

Q.2. Following are the transactions performed by Kashif & Company during the month of
October 2020.
(i) Owner started his business with Cash Rs.250000, Veh icle worth Rs.1
50000 and office equipment worth Rs.25000
(ii) Open a bank account with Rs.5000
(iii) Purchase merchandise on cash Rs.56000
(iv) Purchase merchandise on cash Rs.25000 and on credit Rs.37500 form S.C
(v) Paid transportation expense Rs.1500 and insurance expense Rs.I000
(vi) Deposit cash into bank Rs.40000
(vii) Cash sale Rs.20000.
(viii) Sold merchandise on account Rs.20000 to W.S
(ix) Returns some merchandise to S.C Rs.1500
(x) Cash sales Rs.20000 out of which Rs.1 6000 deposited i nto bank
(xi) Paid salaries Rs.12500 and telephone charges Rs.1600 through cheque.
Required:
Make journal entries in standard form.

Q.3 Take the transactions contained in question no.2 of this paper and

Required:
Setup necessary T-accounts in the general ledger and post the transactions there-in. Foot and
Balance the accounts.

Q.4 A trader uses three-column cash book. On May\01/5/ 2021 he had cash on hand Rs. 50000
And cash at bank Rs. 60000. During May he completed the following
transactions:
September 2. Purchase merchandise for cash Rs. 5000.
5. Cash sales deposited into bank Rs. 8000.
8. Received a cheque of Rs. 5000 for sales.
11. Deposited the cheque received on May 08.

12. Received a cheque of Rs. 3800 after a discount of 5% and

deposited it into bank.
15. Issued a cheque for Rs. 2450 in full settlement of Rs. 2500.
20. Withdrew from bank for office use Rs. 500 and personal use Rs. 1500.
25. Purchased merchandise by cheque Rs. 5000 for cash Rs.3000.
 Required:
a) Prepare a three-column cash book and record the above transactions.
b) Balance the Cash Book on May 31. Bring down the balances on June 1, 2020
Q.5. The following transactions are to be recorded in Special journals of FIVE STAR & CO.
01.06.2021 Sold merchandise on credit to Ahmed & Sons Rs. 2000
05.06.2021 Sold merchandise to Hamza sons Rs. 4000
08.6.2021 Ahmed &sons returned defective goods worth RS. 250
15.06.2021 Sold merchandise to Usman & company RS. 1500
20.06.2021 10% Allowance given to Hamza sons on defective goods of RS. 2000 sold to
them on April5.
28.06.2021 Sold merchandise on credit Ahmed & sons Rs. 3000
Required:
a. Record the above transactions in appropriate journals
b. Post the total of Special Journals to General Ledger, giving posting reference

Q.6 From the following particulars prepare a Bank Reconciliation Statement to find out the
causes of difference in two balances as on February 28, 2020 for XYZ COMPANY.

 Bank statement contains an ending balance of $300,000 on February 28, 2018, whereas the
company’s ledger shows an ending balance of $260,900
 Bank statement contains a $100 service charge for operating the account
 Bank statement contains interest income of $20
 XYZ issued cheques of $50,000 that have not yet been cleared by the bank
 XYZ deposited $20,000 but this did not appear on the bank statement
 A check for the amount of $470 issued to the office supplier was misreported in the cash
payments journal as $370.
 A note receivable of $9,800 was collected by the bank.
 A check of $520 deposited by the company has been charged back as NSF.
 SECTION “C” (DETAILED-ANSWER QUESTION) (20 Marks)

Note: Attempt the following questions which is compulsory.

Q.7. The following balances taken from the pre-closing trial balance of
Ahmed Traders as on December 31, 2020:

Cash Rs.42,000, Accounts Receivable Rs.48,000, Merchandise Inventory (01-

01-20) Rs.18,000, Furniture Rs.130,000, Allowance for depreciation-furniture
Rs.13,000, Accounts Payable Rs.17,000, Capital-Raza Rs.160,000, Sales
Rs.210,000, Purchases Rs.106,000, Prepaid Insurance Rs.16,000, Salaries
Expense 20,000, Sales returns Rs.10,000, Drawing – Ahmed Rs.10,000.

Supplementary data for adjustments:

1. Salaries outstanding Rs.5, 000

2. Insurance unexpired Rs.9, 000

3. 5% Depreciation was estimated on furniture

4. Provide bad debts @ 3% of net sales.

5. Merchandise Inventory on Dec. 31 Rs.12, 000

Required: Prepare any two of the following:

a) Adjusting Entries

b) Income Statement

c) Balance Sheet