CAF – 01 INTRODUCTION TO ACCOUNTING

ACCRUALS & PRE-PAYMENTS

Question :1

Dr. Pakao started his profession on 1.1.2003 as a medical practitioner. His incomes and
expenses for the year 2003 relating to his profession were as under:
Particulars Amount Particulars Amount
Fees received in cash 24000 Salary to staff paid 6000
Accrued fees 6000 Misc. expenses paid 200
Rent (for Chamber) paid 6000 Salary paid in advance 1000
Outstanding rent 2000 (included in the above)

You are required to compute the income of Dr. Pakao from his profession under:
1) Cash Basis and 2) Accrual Basis

Question :2

From the following particulars, determine the net income of Ms. Rukhsana Khala for
the year ended 31.12.2002 under 1) Cash Basis and 2) Accrual Basis.
Particulars Amount Particulars Amount
Fees received in cash for 2002 42120 Fees received in advance in 2002 780
Outstanding fees for 2002 2470 Exp. incurred in adv. In 2002 650
Expenditure incurred for 2002 11050 (included in the above)
Outstanding expenses for 2002 1300

Question :3
Mr. Hawa Hawai is a lawyer. Particulars of his incomes and expenses for the year ended
31.12.2002 are:
Fees received from clients in cash Rs. 64800; Salary of clerks and assistants paid Rs.24000;
Rent of chamber paid Rs. 25200; Salary of clerks and assistants outstanding Rs. 2160;
Accrued fees Rs. 14400; Rent of Chamber paid in advance Rs. 1800; Misc. exp. Rs. 5040;
Telephone charges Rs. 2880.

Required:
 You are required to compute the income of Mr. Hawa Hawai from his profession under:
1) Cash Basis and 2) Accrual Basis

Question :4
Ascertain the net income of Mr. Laloo Parsad for the year ended 31.12.2002 on accrual
basis from the following information:
Particulars Amount Particulars Amount
Net income on cash basis 33460 Expenses outstanding on 31.12.01 840
Outstanding fees for 31.12.01 2240 Expenses paid in adv. in 31.12.01 1120
Outstanding fees for 31.12.02 1400 Expenses paid in adv. in 31.12.02 1680
Expenses outstanding on 31.12.02 1680 Fees received in advance 31.12.02 2800
[[

Question :5

Question :6
Question :7

Question :8

Question :9
Question :10

Question :11

Question :12
Question :13

Question :14
 Question :15

Question :16

Question :17
Following information relates to Deluxe enterprise. Determine the amount to be reported in
statement of comprehensive income and statement of financial position for each of the
following scenario. Year end is 31 December 2014:
(i) The Fuel account for the year ended 31 December 2014 was as follows:
Rs.
Fuel expense accrued at 1 January 2014 250
Payments made during the year in relation to:
Quarter ending 31 March 2014 400
Quarter ending 30 June 2014 350
Quarter ending 30 September 2014 425
Quarter ending 31 December 2014 450
 (ii) The company pays for its electricity by a standing order of Rs.100 per month. On 1
January 2014 the statement from the electricity supplier showed that the company
had overpaid by Rs.25. It received electricity bills for the four quarters starting on
1 January 2014 and ending on 31 December 2014 for Rs.350, Rs.375, Rs.275 and
Rs.300 respectively.
(iii) At 1 January 2014 Company had a prepayment of Rs.200 in respect of rent. He paid
annual rent in advance 10% higher than previous year on 1 March 2014 in respect
of the year end 28 February 2015.
(iv) At 31 December 2013 Company had accrued Rs.240 in respect of light and heat for
the quarter ending 31 December 2013. In January 2014 he discovered that he had
under accrued by Rs.10.

The bills for the next four quarters were as follows (Q.E. = Quarter ended):
Amount Relating to Date paid
Rs.260 Q.E. 31 March 2014 15 April 2014
Rs.220 Q.E. 30 June 2014 17 July 2014
Rs.210 Q.E. 30 September 2014 14 October 2014
Rs.230 Q.E. 31 December 2014 19 January 2015
Stationery paid for during the year amounted to Rs.1,350. At the beginning of the year there
was an inventory of stationery on hand of Rs.165 and an outstanding stationery invoice for
Rs.80. At the end of the year there was an inventory of stationery on hand of Rs.140 and an
outstanding stationery invoice for Rs.70.

Question :18
Question :19