Financial & Cost Accounting---------PAPER-C

QUESTIONS

Q.1(a) What do you understand by the term Trial Balance? (Marks-5)

(b) List down any 3 errors that may occur due to tiny mistakes while preparing trial
balances? (Marks-5)

(c) Fajar Builders, a licensed real estate broker, on November-1 began the
organization of her own business, to be shown as Fajar Company. The following events
occur during October.

Nov-2. Company opened a bank account in the name of the business by

depositing personal savings of $35,000.

Nov-6. Purchased land and small office building at a total price of $98,500 of
which $64,000 was applicable to land while $34,000 to the building.

Nov-15. Sold one quarter of the land at its cost of $16,000 to a neighboring
Business-Village Medical Clinic, which wanted to expand its parking lot. No down
payment is required. Village Medical Clinic issued a Note Payable while promising
payment of the $16,000 in a series of five monthly installments of $3,200 each,
beginning October-30 (ignore Interest).

Nov-20. Purchased office equipment on credit from Paddington Company in the

amount of $5,280.

Nov-30. Paid $3,440 as partial payment of the liability to Paddington Company.

Nov-30. Received the first $3,200 monthly installment on the note receivables
from the Village Medical Clinic.

Instructions:
A- Prepare T Accounts and Trial Balance at November 30, 2021. (Marks-12)
Q.2(a)Explain 2 of the GAAP (1-for recording expense & another for recording
revenues and explain your answers with logical examples? (Marks-5)

(b) List 2 differences between Unadjusted & Adjusted Trial Balance with
logical examples? (Marks-5)

(c) Solve the following numerical? (Marks-12).

ENVIRONMENTAL SERVICES IS A WEATHER FORECASTING SERVICE

WHICH PROVIDES INFORMATION TO GROWERS & DEALERS IN
PERISHABLE COMMODITIES.ITS LEDGER ACCOUNT BALANCES AT
NOV-30 WERE AS FOLLOWS:

ACCOUNTS PAYABLE $ 7000

ACCOUNTS RECEIVABLE 16,700

VEHICLES 14,600

BUILDING 110,000

CARL FORD CAPITAL 129,650

CASH 17,650

COMPUTER 18,800

COMP.SOFTWARE 5,450

LAND 85,200

NOTES PAYABLE 145,000

NOTES RECEIVABLE 2,400

OFFICE FURNITURE 12,900

OFFICE SUPPLIES 850

PROPERTY TAXES PAYABLE 1060

SALARIES PAYABLE 3740

TECHNICAL LIBRARY 1900

Required:

Prepare a balance sheet equation.

Q.3 (a) What are the three (03) different types of accounting activities? List
them with valid examples? (Marks-7)

(b) Solve the following numerical by passing suitable/ required entries?

(Marks-15).

1.At year end, unrecorded interest expense due to creditors was Rs.
18,000 (payable in the next year). Prepare the adjusting entry at year end (31st
December).

2. Prepaid Insurance account began the year with a balance of Rs. 290. During
the year, insurance in the amount of Rs. 1770 was purchased. At the end of
the year March 31st, 2009 the amount of insurance still unexpired was Rs.
1350. Prepare the year end adjusting entry.

3. At year end, unrecorded interest receivable from the Government bonds is

Rs. 1,700. Prepare the adjusting entry.

4. On July 3, a deposit in the amount of Rs. 5,000 was received for services to
be performed. By the end of the month, services in the amount of Rs. 1,200
were performed. Prepare journal entries for the original receipt of the deposit
and the adjusting entry on 31st July.

Q.4 (a) Define depreciation. What is the common method used for its
calculation? (Marks-5)

(b) What is meant by the book vaue of an asset? (Marks-5)

(c) Solve the following numerical by passing suitable/ required entries?

(Marks-12).

1. On October 4, Smith Company rendered services valued at Rs. 11,000. The

client will pay for the services on November 1st and closing is done at the end
of each month pass this transaction at the end of October.
2. The Supplies asset account began the year with a balance of Rs. 190. During
the year, supplies in the amount of Rs. 490 were purchased. At the end of the
year the inventory of supplies on hand was Rs. 220. Prepare the year end
adjusting entry.

3. Wages are paid every Saturday for a five-day work week (Mon – Fri; two days
are unpaid and free). Wages are Rs. 2,000 per week. Prepare the adjusting
entry on June 30, assuming July 1 falls on a Wednesday:

4. Owner withdrew of worth Rs. 2,000 for personal use.

***Note: All questions carry equal marks. Attempt any 3 out of 4 questions.
This exam carries total of 66 marks.