ACCOUNTMICS I.

COM(1) ACCOUNTING All subjects home tuitions available for

Prepared by Sir Irfan Jan TARGET PAPER I.COM, B.COM, BBA & M.A Economics
M.Phil. (Economics) YEAR-2023 Cell # 0347-3643211

FIRST YEAR COMMERCE

PRINCIPLE OF ACCOUNTING
PREPARATION/SOLVED TARGET PAPER (2023)

By SIR IRFAN

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ACCOUNTMICS I.COM(1) ACCOUNTING All subjects home tuitions available for
Prepared by Sir Irfan Jan TARGET PAPER I.COM, B.COM, BBA & M.A Economics
M.Phil. (Economics) YEAR-2023 Cell # 0347-3643211

IMPORTANT NOTE:
• PAID answers to this target paper are available.
• If any student desire to get answers of this paper contact sir Irfan via WhatsApp number
is 0347-3643211

To get the Answers (PDF) via WhatsApp: Click here

SHORT (QUESTIONS/ANSWERS)
Q#1: Define Accounting. Enlist the various steps involved in the accounting cycle. Describe any four of
them.

Q#2: ACCOUNTING EQUATION:

For each of the following determine the underlined missing item.

i. The liabilities of a business entity having assets of Rs.400,000 and owner's equity of Rs. 1 80,000
ii. The assets of a business entity having liabilities of Rs.100,000 and owner's equity of Rs.200,000
iii. The Owner's equity of a business entity having assets of Rs.200,000 and liabilities of Rs.70,000
iv. The revenues of a business entity having expenses of Rs. 120,000 and Net Income of Rs.30,000.
v. The expenses of a business entity having revenue of Rs.180,000 and Net loss of Rs.16,000.

Q#3: GENERAL JOURNAL ENTRIES:

On March 01, 2022 Mr. Junaid Khan started a business with cash investment of Rs.300000. The following
transactions were completed during the month:
March 05: Opened a bank account with Rs.100.000.
March 12: Purchased merchandise from Mr. Shameer Rs. 50000 under credit term 2/10 n/30.
March 18: Paid a cheque of Rs. 48900 to Mr. Shameer in full settlement of his account
March 24: Sold merchandise on account to Mr. Shahbaaz Rs. 18000.
March 30: The customer Mr. Shahaaz returned defective merchandise of Rs. 2000 sold on credit.

Required:
Record the above transactions in the standard form of General Journal

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ACCOUNTMICS I.COM(1) ACCOUNTING All subjects home tuitions available for
Prepared by Sir Irfan Jan TARGET PAPER I.COM, B.COM, BBA & M.A Economics
M.Phil. (Economics) YEAR-2023 Cell # 0347-3643211

Q#4: GENERAL JOURNAL ENTRIES:

The following are transactions completed by Zain ul abideen real state for the month of Apr 2022:

April 01: Invested Cash Rs.720,000 & shop equipment worth Rs.860000.

April 11: Paid shop rent for the month Rs.80000.

April 14: Received commission income cash Rs.20,000 for the Service rendered during the last t

April 22: Received Commission in advance Rs. 55000 for the sale of Flat in Nazimabad.

April 25: Paid salaries Rs. 20000 for the month of April to the employees.

Required:
Record the above transactions in the standard form of General Journal.

Q#5: GENERAL LEDGER:

The Trial Balance of M/S Minahil showed the following balances as on December 31, 2022.

Cash Rs. 10,000, Accounts Receivable Rs.5.000, Merchandise Inventory Rs. 3,000, Bank overdraft Rs.4000

Notes Payable Rs. 8,000 Minahil’s Capital Rs. 10,000

The transactions for the month of December 2022 were as follows:

Dec. 08: Purchase merchandise on account from Razia & Co. for Rs. 7,000

Dec. 12: Sold merchandise to Mubeen Rs. 4500

Dec. 18: Returned merchandise to Razia & Co. Rs. 1,100

Dec. 28: Purchased office equipment on account for Rs. 5,000

Required:
Enter the opening balances and post the above transaction in General Ledgers.

Q#6: CORRECTION OF ERROR:

The following errors were found in the books of Mr. Mushtaq before closing of books
A. Expense on Repair of machinery Rs 5000 are entered in Machinery account.
B. Received cash from Usman & Sons but entered in Usman Brothers Rs 10000
C. Purchase of Office Equipment Rs 15500 recorded as Purchases
D. Credit sales to Amjad Rs 12000 recorded as Cash Sales

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ACCOUNTMICS I.COM(1) ACCOUNTING All subjects home tuitions available for
Prepared by Sir Irfan Jan TARGET PAPER I.COM, B.COM, BBA & M.A Economics
M.Phil. (Economics) YEAR-2023 Cell # 0347-3643211

E. Depreciation was overcharged by Rs 2100

F. Rent of owners house paid by cheque Rs 15000 recorded as Rent Expense

Q#7: CASH BOOK:

M/S Jabbar & Co. use three column cash book in their business. On March 1, 2022, they had cash in hand
Rs. 50,000 and cash at Bank Rs. 90,000. The following transaction was completed by them during March.

March 05: Sold merchandise for Rs. 36,000.

March 10: Received a cheque from Younus for Rs. 24,500. The cheque was deposited into the bank on

the same day.

March 15: Paid cash to Muneer Rs. 22,700 in settlement of his account of Rs. 23,000.

March 17: The cheque of Younus was dishonored by the bank.

March 26: Withdrew from Bank Re. 2,000 to pay the residential flat's rent and Rs. 6000 for office rent.

Required:

a) Prepare a Three Column Cash Book. Balance it on March 31 and bring down the balances as on
April 1, 2022.

b) Prepare General Ledger of Purchase discount and Sales discount.

Q#8: CASH BOOK:

Mr. Shehzad uses three-column cash book. On April 1, 2022, he had cash in hand Rs. 40,000/- and balance
at bank Rs. 50,000/- (Bank Overdraft) during the month he completed the following transaction:

April 01: Cash sale Rs. 60,000/-

April 03: Mr. Rafay a customer deposited Rs. 15,500/- deposit into bank account in full settlement of

his account of Rs. 16,000/-

April 05: Paid Rs. 2800/- to a supplier by cash.

April 16: Sold Furniture to Mr. Mateen Rs. 24000/-

April 18: Paid salaries by cheque Rs. 11,000/-

April 25: Drew cash for personal use Rs. 1,000/

April 30: Drew from bank for office use Rs. 4,000/-

Required:
Prepare a Three Column Cash Book. Balance it on March 31 and bring down the balances as on May 01, 2022.

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ACCOUNTMICS I.COM(1) ACCOUNTING All subjects home tuitions available for
Prepared by Sir Irfan Jan TARGET PAPER I.COM, B.COM, BBA & M.A Economics
M.Phil. (Economics) YEAR-2023 Cell # 0347-3643211

Q#9: PETTY CASH BOOK

A firm completed the following petty cash transactions during December of the current year:

December 01. Drew a Rs. 1,500 cheque to the petty cashier.

December 03. Purchased computer paper for Rs. 288.

December 06. Paid Rs. 56 delivery expenses and Rs. 30 wages on merchandise purchased.

December 09. Paid Rs. 75 parcel post charges

December 10. Paid Rs. 200 to the son of the proprietor from petty cash for personal use.

December 18. Paid Rs. 95 delivery, charges on merchandise purchased.

December 22. Paid a service station for servicing the personal car of the proprietor Rs.75

December 25. Paid delivery expenses Rs. 155.

December 30. Paid Rs. 445 for the repair of computer.

December 31. Paid for entertainment Rs. 55

Required:
Prepare petty cash book for the month ended Dec 31 2021

Q#10: SPECIAL JOURNAL

The following are the selected transactions completed by Asad Traders during March 2021.

March 07: Sold goods on account to Haider sons for Rs. 9,000

11: Sold goods on account to Ismail brothers for Rs. 13,000

17: Purchased merchandise on credit from Sattar & co. for Rs. 4,000

26: Sold merchandise on account to Haider sons for Rs. 6,000

27: Sold merchandise for cash to Sattar sons Rs. 3,400

29: Sold Old Furniture to Shamim Sons, Rs.34,800 paying cash.

Required:
a) Record the above transactions in the appropriate journals.

b) Make postings to the account payable subsidiary ledger. Use three column ledger accounts.

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ACCOUNTMICS I.COM(1) ACCOUNTING All subjects home tuitions available for
Prepared by Sir Irfan Jan TARGET PAPER I.COM, B.COM, BBA & M.A Economics
M.Phil. (Economics) YEAR-2023 Cell # 0347-3643211

Q#11: BANK RECONCILIATION STATEMENT

A study of cash records and the bank statement of Mukeem Traders for the month of April 2022 revealed
the following information:

Balance as per Cash Book Rs. 22,500/-

Balance as per Bank Statement Rs. 27,000/-
i. April 30, deposit not shown in bank statement Rs. 5,000/-
ii. Cheque issued but not presented for payments Rs. 7,000/-
iii. Cheque deposited by a customer directly in the firm’s bank account for Rs. 6,000/- which was not
Recorded in the firm’s cash book.
iv. With-holding tax charges of Rs. 500/- not recorded in the cash book.
v. The bank had credited the firm’s account for mark up of Rs. 4,000/- which was not recorded in cash
book.
vi. The customer's cheque for Rs. 7,000/- was dishonored by his bankers.

Required:
a) Prepare a Bank Reconciliation Statement as of April 30, 2022.
b) Make adjusting entries in General Journal

Q#12: BANK RECONCILIATION STATEMENT

A study of Cash book (Bank Column) and the Bank Statement of Faraz and Company for the month of July
2021 revealed the following.

1. Balance as per Cashbook (Cr). Rs. 6,300.

2. Balance as per Bank Statement (Dr.) Rs. 14,600.
3. Cheque Rs. 10,000 deposits on July 31s, 2021, not shown by the bank.
4. Debit memo for a cheque Rs. 1,700 of Mr. Yasir Aziz marked NSF.
5. Cheques deposit into the bank Rs. 32,600. The bank cleared only Rs. 10,000 cheques.
6. Advice received from bank that a customer Mr. Faizaan had made a direct deposit in the bank Rs.
7,200.
7. Unpresented Cheques Rs. 8,000.
8. Issued a Cheque of Rs. 1,200 purchase of Furniture was recorded as Rs. 12,000 by company's
Cashier.

Required:
Prepare a Bank Reconciliation Statement as of July 2021.

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 ACCOUNTMICS I.COM(1) ACCOUNTING All subjects home tuitions available for
Prepared by Sir Irfan Jan TARGET PAPER I.COM, B.COM, BBA & M.A Economics
M.Phil. (Economics) YEAR-2023 Cell # 0347-3643211

LONG (QUESTIONS/ANSWERS)

Q#3: FINANCIAL STATEMENT

GIVEN: The following are trail balance and adjustment data for Aslam Company on December 31,2021:

Debit Balances Credit Balances

Cash 5000 Capital 150000

Bank 30000 Salaries payable 5000

Office Equipment 25000 Commission revenue 40000

Office Furniture 15000 Unearned commission 10000

Prepaid advertisement 7000 Allowances for depreciation – O/E 1000

Office salaries expenses 15000 Allowances for depreciation – O/F 3000

Commission receivable 5000

Office supplies 7000

Investments 100000

Total 209000 Total 209000

Data for Adjustment on December 31, 2021:

(i) Service provided against Unearned Commission Rs.7000.

(ii) Commission receivable Rs.8000.

(iii) Commission revenue includes an amount of Rs.1000 advance payment by a customer.

(iv) Advertisement expense Rs.5000.

(v) Unused office supplies Rs.2000

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ACCOUNTMICS I.COM(1) ACCOUNTING All subjects home tuitions available for
Prepared by Sir Irfan Jan TARGET PAPER I.COM, B.COM, BBA & M.A Economics
M.Phil. (Economics) YEAR-2023 Cell # 0347-3643211

(vi) Interest on investment receivable Rs.5000

(vii) Depreciation expense on Office Equipment Rs.2400 and Office Furniture Rs.1200

Required:

1) Prepare Income Statement for the year ended on December 31, 2021.

2) Prepare Balance Sheet as on December 31, 2021.

Q#2: FINANCIAL STATEMENT

The following balances has been extracted from the books of Sameer & Co

Debit Balances: Cash Rs. 90000, Account, Receivable Rs. 40000, Office Supplies Rs. 12000, Office
Equipment Rs. 150000, Merchandise Inventory Rs. 70000, Prepaid Rent Rs. 30,000, Office Furniture
Rs.120000, Purchases Rs. 200000, Salaries Expense Rs. 40000, Carriage Rs. 3000, Sales Discount Rs. 5000
Total = Rs. 760000.

Credit Balances: Accounts Payable Rs. 48000, Notes Payable Rs. 33000, Unearned Interest Rs. 20000,
Bank Loan Rs. 242000, Purchase Discount Rs. 10000, Purchase Return Rs. 3000, Sales Rs. 250000,
Accumulated Depreciation (Office Furniture) Rs. 20000, Sameer's Capital Rs. 134000 Total = Rs. 760000

Data for Adjustment on December 31, 2021:

i) Merchandise Inventory was valued at Rs. 50000

ii) Rent Expired for the year Rs. 6000
iii) Bad Debts estimated Rs. 800
iv) Outstanding Salaries Rs. 6000
v) Depreciation on Office Furniture for the year was estimated Rs. 4000
vi) Interest Earned Rs. 10000

Required :
• Income Statement for the year ended December 31, 2021.
• Balance Sheet as on December 31, 2021.
• Closing Entries on December 31, 2021.

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ACCOUNTMICS I.COM(1) ACCOUNTING All subjects home tuitions available for
Prepared by Sir Irfan Jan TARGET PAPER I.COM, B.COM, BBA & M.A Economics
M.Phil. (Economics) YEAR-2023 Cell # 0347-3643211

Q#3: FINANCIAL STATEMENT

Given: Balance extracted from the ledger of Mujahid Traders on Dec 31, 2021 before adjustment are as
follows:

Debit Balances:

Cash Rs.100,000; Merchandise Inventory (Beginning) Rs.80,000; Office Equipment Rs.300,000; Purchase
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 & Allowance Rs.5,000; Furniture Rs. 173,000; Mujahid Drawings
Rs,50,000; Transportation-in Rs.4,000; Rent Expense Rs.50,000 Total=Rs. 15,54,000

Credit Balances:

Sales Rs.750,000; Purchase Returns & Allowance Rs.5,000; Mujahid Capital Rs.600,000; Allowance for
Depreciation (Office equipment) Rs.25,000; Accounts payable Rs. ? , Commission Income Rs.4,000 Total
= Rs. 15,54,000.

Data for Adjustment on Dec 31, 2021:

i. Merchandise Inventory was valued at Rs.100,000.

ii. Salaries payable Rs.5,000.

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 :
1- Prepare Income Statement for the year 2021.

2- Prepare Classified Balance Sheet for the year 2021.

3- Prepare necessary Adjusting entries

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