Principles of Accounting Papers I Objective Type

Time: 20 Minutes Marks: 15

Group 1
Note: Four possible, answers A, B, C and D to each question are given. The choice which you think is correct, fill that
circle in front of that question with Marker or Pen ink. Cutting or filling two or more circles will result in zero mark in
that question.
All indirect expenses charged to
(A) Trading account

(B) Profit & loss account

(C) Balance sheet

(D) None of these

Debts or obligations of the business are known as

(A) Expenses

(B) Revenue

(C) Assets

(D) Liabilities

Gradual decrease in the value of fixed assets

(A) Depreciation

(B) Drawing

(C) Doubtful debts

(Di None of these

A bill of exchange is accepted by1

(A) Creditor

(B) Debtor

(C) Holder

(D) None of these

Cash account is kind of

(A) Personal account

(B) Real account

(C) Nominal account

(D) None of these

What type of cheque. The holder can cash at the counter of Bank
(A) Order cheque
 (B) Crossed cheque

(C) Bearer cheque

(D) Both A & B

While making an adjusting entry in respect of closing stock we debit.

(A) Closing stock

(B) Trading account

(C) Purchases account

(D) None of these

Redecoration of Auditorium is
(A) Capital expense

(B) Revenue expense

(C) Deferred revenue expense

(D) Capital loss

Cash brought by the owner to start business is

(A) Capital

(B) Loan

(C) Drawing

(D) None of these

Net profit or net loss is determined by

(A) Balance sheet

(B) Trading account

(C) Profit & Loss account

(D) None of these

Prepaid expense is an
(A) Expense

(B) Asset

(C) Liabilities

(D) Income

Endorsement of a bill means to

 (A) Transfer the bill to third party

(B) Accepts the bill

(C) Draw the bill

(D) Honor the bill

If any transaction is wrongly recorded in books of account it is called

(A) Error of omission

(B) Error of commission

(C) Error of principle

(D) None of these

Bank Reconciliation is
(A) Journal

(B) Cash book

(C) Ledger

(D) Statement

Transaction having two aspects in the book of account is called

(A) Single entry system

(C) Modern system

(B) Double entry system

(0) American system

Principles of Accounting Subjective Group 1 I Com Part 1 Past Paper 2014

Lahore Board
Inter Part 1 Lahore Board 2014
Principles of Accounting Papers I Essay Type
Time: 2.10 Hours Marks: 60
Group 1
(SECTION 1)
Write short answers to any SIX (6) questions

Define Business.
Define Voucher.
What is Transaction?
Define Journal.
What are Real Accounts?
What is Simple Entry?
 Define Double Entry System.
Define Ledger.
What is Trial Balance?2

Write short answers to any SIX (6) questions

What is meant by gross profit?

Define indirect expenses.
Define credit sale.
What is meant by term 2/10 N/30
Define Bank Statement.
What is meant by cheque dishono1r?
Define bill of exchange.
Draw sketch of accounting cycle.
Paine owners equity.

Write short answers to any SIX (6) questions

What is trading account?

Define net loss.
What are direct expenses?
Define unearned income.
What adjusting entry will be passed for outstanding wages?
Define capital receipts.
What is meant by deterred revenue expenditures?
Define error of omission.
What is meant by error of posting?

(SECTION 2)

Note: Attempt any three of the following questions:

Record the following business transaction into journal

Fraz commenced business with cash Rs.80000

Purchase furniture Rs. 15000
Purchased goods on credited Rs.20000
Sold goods for cash Rs.18000
Purchases return Rs. 1000
Paid rent Rs.2000
 Qasim purchased goods from Khalid Rs. 15000. He paid Rs.5000 in cash and accepted 3 months bill for balance.
Khalid kept bill till due date but dishonor by Qasim. Record entries in the books of Qasim and Khalid.

From the following particular prepare a Bank Reconciliation. Statement of Aslam as on 31st October 2011

Bank Balance as per cash book (Dr) Rs.50000

Cheque deposited into Bank:but not yet credited Rs. 15000
Cheque issued but not yet paid by Bank RS. 10000
Interest credited by Bank but-not recorded in cash book 500
Bank charges debited in the Bank Statement but not in cash book Rs. 100

State with reasons whether the following items are capital or revenue:

Paid cost of building.

Legal fee paid for purchase of land.
Discount on issue of shares.
Interest paid on debentures.

Prepare Trading and Profit and Loss Account and a Balance Sheet of Bilal for 31st December 2010:

Goodwill 50000

Debtors 5000

Bank overdraft 4.000

Purchases 10000

Sales 60000

Wages 5000

Salaries 4000

Capital 10000

74000 74000

Adjustments:
Closing stock Rs. 10000

Outstanding wages. Rs. 1000

Prepaid salaries Rs. 500