Mid Term Examination (23-24)

Accounting 100 marks

X1 Commerce

Section A (multiple Choice Question)

1. Nature of sales discount is ________
a) Revenue b) expense c) contra Asset d) Contra revenue
2. List of all account balance is called -______
a) Journal b) trail balance c) Ledger d) equations
3. Rent collected in advance is recorded as ______
a) Prepaid rent b) rent income c) unearned rent d) Rent Expense
4. Cost of goods sold plus gross profit is equal to _____
a) Net sales b) net profit c) operating expense d) net loss
5. If assets of bussiness amounts it RS 240,000 and liabilities are 1/3 of the assets then the amount of
liability will be
a) 120,000 b) 80,000 c) 60,000 d) 180,000
6. Journals are also called _______
a) ledger b) books of final entry b) books of primary entry d) financial statement
7. This account will be credit when Mr. A starts bussiness
a) Cash b) drawing c) capital d) expense
8. Unearned income is a/an ______
a) Asset b) Liability Owners equity d) Expenses
9. The arithmetic accuracy of accounts is verified by
a) Balance sheet b) income statement c) journal d) trail balance
10. The process of recoding in transaction in journal is called
a) Posting b) balancing c) footing d) journalizing
 Section B (Short Answer Questions) (90 marks)
Note any 6 questions from the given questions (each question carry 15 marks)
Q#1 on September 01, 2023 Mr. Amin started business with the name of Amin enterprises by investing
370,000 Cash and furniture worth Rs 90,000
Sept 05. Purchased goods costing 100,000 with 40,000 paid in cash and remaining will pay later
Sept 11. Sold merchandise worth Rs 95,000 of which 20% received by cash and the balance on credit
Sept 19. Paid cash to supplier Rs 20,000 as part payment
Sept 24 Mr. Amin withdraws cash worth 20,000 and merchandise worth 8,000 for personal use
Sept 30. Paid salary worth Rs 15,000 and advertising worth Rs 20,000
Required record the above transaction into a standard form of general journal
Q#2 Pick the above data from question no 1
Required prepare general ledger also show foot and balance of the data with trail balance
Q#3 on January 30, 2013 the ledger of Ahmad Rajpoot shows the following balances after closing process
cash Rs 74,000 Merchandise inventory Rs 145,000 Accounts Payable Rs 30,000 and Capital Rs 190,000
During the month of January 2013 he made the following entries in his journal
Ahmad Rajpoot
General journal

Date Particular P/R Debit Rs Credit Rs

January 02 Accounts Payable 24,000

Cash 24,000

05 Purchases 28,500
Accounts payable 20,000
Cash 85,000

11 Cash 22,000
Sales 22,000

18 Accounts payable 3,800

Purchases Return and allowance 3,800

26 Rent Expense 24,000

Cash 24,000
Q#4 Aslam Traders Company maintains its books on a monthly basis. The bank statement for the month of
January 2023 shows a balance of PKR 75,000, while the company's Cash account in the ledger reflects a
balance of PKR 68,500.
Upon comparing the bank statement with the company's records, the following information is gathered:

1. Outstanding Checks:
 Check #101 for PKR 5,000.
 Check #105 for PKR 3,500.
2. Deposits in Transit:
 A deposit of PKR 7,800 made on January 31st is not included in the bank statement.
3. Bank Charges:
 The bank charged a fee of PKR 200 for various services.
4. Interest Earned:
 The bank credited PKR 150 as interest

5. Return of a Customer's Check:

 A customer's check for PKR 2,000 was returned by the bank due to insufficient funds (NSF).

Required: Using the information provided, prepare a bank reconciliation statement for XYZ Company and
determine the adjusted cash balance.
Q#5 Babu Bhai and company Stationery Store uses a three column cash book. The following transactions
occurred during the month of February 2023:
Feb 1: Started business with cash - PKR 20,000.
Feb 5: Purchased stationery on credit from XYZ Suppliers - PKR 5,000.
Feb 10: Sold stationery for cash - PKR 8,000.
Feb 15: Paid rent for the shop - PKR 2,000.
Feb 18: Received cash from a customer - PKR 3,500.
Feb 20: Purchased a computer for cash - PKR 10,000.
Feb 25: Paid salary to the shop assistant - PKR 1,500.
Feb 28: Closing balance in cash - PKR 11,000.
Required Using the information provided, record these transactions in the three column cash book for the
month of February.
Q#6 Malik Trading Company encountered the following complex transactions during the month of March
2023. Record the necessary journal entries for each transaction:
March 1: Started business with cash, PKR 50,000.
March 5: Purchased machinery on credit from Aslam bros Machinery Co., PKR 30,000.
March 10: Sold goods to Aalim Retailers on credit, PKR 20,000.
March 15: Received a utility bill for the month, paid in cash, PKR 5,000.
March 20: The owner withdrew cash for personal use, PKR 7,000.
March 25: Purchased office supplies on credit from Akram enterprise Stationers, PKR 10,000.
March 28: Received cash from Aalim Retailers, settling their outstanding balance, PKR 18,000.
March 31: Depreciation on machinery for the month is estimated at PKR 1,000.
Required: Ensure to consider all aspects of each transaction and provide the journal entries with appropriate
explanations.
Q#7 Karachi Trading Company had the following transactions during the month of May 2023. Record the
necessary journal entries and post them to the general ledger accounts. Assume the business uses a general
ledger with the following accounts: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable,
Capital, Revenue, Wages Expense, and Utilities Expense.

1. May 1: Started business with cash, PKR 50,000.

2. May 5: Purchased office supplies on credit, PKR 2,000.
3. May 10: Sold goods for cash, PKR 10,000.
4. May 15: Paid utility bill in cash, PKR 1,500.
5. May 20: Received cash from customers on credit sales, PKR 5,000.
6. May 25: Purchased equipment on credit, PKR 8,000.
7. May 30: Paid wages in cash, PKR 3,000.
Required Ensure to include all necessary explanations and calculate the ending balances of each account.
Q#8 Accounting equations
a) Define the following Terms (1) Accounting (2) transaction (3) Payables (4) narrations
b) If a company starts with cash of PKR 10,000, receives cash from customers (revenue) of PKR 5,000, and
pays expenses of PKR 3,000, what is the final cash balance?
c) Rules of debit and credit
d) The owner, Ali, invested a computer system worth PKR 25,000 (market value) into the business. Ali
values the computer at PKR 30,000 in the accounting records. Additionally, the business issued a
promissory note to Ali, acknowledging the investment, with an agreement to repay PKR 25,000 in two
years.
Required analyze the data and show this data will add +¿ , subtract −¿ , or no changes0