CHAPTER-3 BASICS OF F/S & THEORETICAL PORTION

QUESTIONS
Q.1 Which of the following is not an external user of �inancial statements?
(a) Shareholder (b) Managers/Directors
(c) Suppliers (d) Auditor
Q.2 Which of the following statements are true?
1. Accounting can be described as the recording and summarizing of transactions
2. Financial accounting describes the production of a statement of �inancial position and
Statement of Pro�it or Loss for internal use
(a) 1 only (b) 2 only
(c) 1 and 2 both (d) Neither 1 nor 2
Q.3 The main aim of �inancial accounting is to:
(a) Record all transactions in the books of account.
(b) Provide management with detailed analyses of costs.
(c) Present the �inancial results of an organization by mean of �inancial statements.
(d) Calculate pro�it.
Q.4 Which of the following is not a business transaction?
(a) Incurring interest on a business loan (b) Hiring a new employee
(c) Purchasing of�ice supplies (d) Receiving fees for services
Q.5 Expenditures which provide bene�its in future period are called:
(a) Revenue expenditure (b) Outstanding expenditure
(c) Current expenditure (d) Capital expenditure
Q.6 Which one is a capital transaction?
(a) Purchase of goods (b) Payment of wages
(c) Sale of goods (d) Purchase of machinery
Q.7 Which of the following is not true:
(a) Revenue – Expenses = pro�it (b) Revenue – Pro�it = Expenses
(c) Sales + Gross Pro�it = Revenue (d) Revenue = Pro�it + Expenses
Q.8 Which of the following user groups require the most detailed �inancial information from �inancial
statements?
(a) The management (b) Investors & potential investors
(c) Government agencies (d) Employees
(The management also has access to even more detailed information from internal sources but investor
and potential investors is the most appropriate solution)
Q.9 Which of the following explains why lenders are interested in �inancial statements of a business?
(a) Lenders need information about �inancial stability of business
(b) Lenders need information about pro�itability of business
(c) Lenders want to assess the entity’s capacity to pay interest and repay loan on time
(d) All of the above
Q.10 Who is responsible to prepare �inancial statements in a company?
(a) Shareholders (b) Managers
(c) Directors (d) All of the above
Q.11 Who is responsible to prepare �inancial statements of a partnership?
(a) Partner (for public disclosure)
(b) There may be no obligation to prepare �inancial statements of a partnership (other than for
tax purpose)
(c) Manager (d) Accountant
Q.12 Which one of the following not an external user of �inancial statements?

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(a) Lender (b) Investor

(c) Customer (d) Management
Q.13 Which one of the following not an internal user of �inancial statements?
(a) Employees (b) Management
(c) Supplier (d) Executive Director
Q.14 How many elements are there in the Statement of Financial Position.
(a) 2 (b) 3
(c) 4 (d) 5
Q.15 Which of the following is an example of an item of revenue expenditure?
(a) Insurance of goods in transit to customers.
(b) Import duties charged on a new non-current asset for the business.
(c) Delivery and installation costs of a new non-current asset.
(d) A new delivery van.
Q.16 Which of the following best explains what is meant by 'capital expenditure'?
Capital expenditure is expenditure
(a) On non-current assets, including repairs and maintenance
(b) On expensive assets
(c) Relating to the issue of share capital
(d) Relating to the acquisition or improvement of non-current assets
Q.17 Which of the following transactions is a capital transaction?
(a) Depreciation of plant and equipment (b) Expenditure on rent
(c) Payment of interest on loan stock (d) Buying shares as an investment
Q.18 Which of the following is an example of revenue expenditure?
(i) Purchase of a second hand delivery van
(ii) Purchase of stocks for resale
(iii) Repairs to the delivery van
(iv) Insurance of the delivery van
(a) (i), (ii) and (iii) (b) (i); (ii) and (iv)
(c) (ii), (iii) and (iv) (d) (iii) and (iv)
Q.19 Which of the following types of expenditure should be classi�ied as capital expenditure?
(a) Painting and decoration of the of�ice (b) Purchase of a delivery van
(c) Capital introduced (d) Drawings
Q.20 A Credit Note is issued to a:
(a) Customer for return of goods (b) Supplier for return of goods
(c) Customer to accept the goods (d) Supplier to accept the goods
Q.21 Which of the following documents serves as a notice to the customer to inform them that the goods
have been dispatched?
(a) Quotation (b) Sales order / order con�irmation
(c) Goods dispatched note (d) Delivery note
Q.22 On 20th July, goods with list price of Rs. 80,000 were sold. The customer has been offered 2% trade
discount and 3% (of list price) further discount if he pays within 15 days. It is reasonably expected that
customer will pay within 15 days. At which amount sales should be recognised on 20th July?
(a) Rs. 80,000 (b) Rs. 78,400
(c) Rs. 76,048 (d) Rs. 76,000
(Rs 80,000 less 2% of Rs 80,000 less 3% of 80,000 = 76,000)
Q.23 In the books of Faizan; Sarmad has a debit balance of Rs. 3,000 and credit balance of Rs. 1,500. Sarmad
has requested to adjust debit balance with credit.

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What is the contra entry to be passed to adjust the balance?

(a) Dr Accounts receivable a/c Rs. 3,000 Cr Accounts payable a/c Rs. 3,000
(b) Dr Accounts payable a/c Rs. 3,000 Cr Accounts receivable a/c Rs. 3,000
(c) Dr Accounts receivable a/c Rs. 1,500 Cr Accounts payable a/c Rs. 1,500
(d) Dr Accounts payable a/c Rs. 1,500Cr Accounts receivable a/c Rs. 1,500
Q.24 A debit note is issued to a:
(a) Customer for return of goods (b) Supplier for return of goods
(c) Customer to accept the goods (d) Supplier to accept the goods
Q.25 Which of the following document is prepared when an item is needed in the business but it is not
available in stock?
(a) Purchase requisition (b) Quotation and approval
(c) Purchase order (d) Goods received note
Q.26 Which of the following statements is correct with reference to cash/settlement discount received from
suppliers?
(a) It is recognised as reduction of revenue.
(b) It is recognised and presented as other income
(c) It is recognised as reduction in cost of purchases
(d) It is recognised as operating expenses of the business
Q.27 A businessman maintains petty cash book under imprest system. The imprest amount is Rs. 500.
During a month, payments totalling Rs. 300 were made. How much amount will be reimbursed at the
end of the month to restore the petty cash to the imprest amount?
(a) Rs. 200 (b) Rs. 300
(c) Rs. 500 (d) Rs. 800
Q.28 Which of the following statement describes the nature of weekly imprest system for petty cash?
(a) Maximum amount of weekly petty cash expense is de�ined
(b) For maintaining a �ixed �loat; an amount equal to weekly expenses incurred is reimbursed
(c) Proper authorization is required for all expense
(d) Business transfers an equal amount to petty cash balance at regular intervals
Q.29 A business made following transactions during a certain period:
Credit purchases Rs. 12,000; out of which Rs. 2,000 were rejected and subsequently returned to the
supplier.
Supplier allowed a discount of 1% on settlement of amount.
What is the net amount of cash paid to the supplier and amount of net purchases to be reported in
�inancial statements?
(a) Rs. 10,000 amount paid and Rs. 10,000 net purchases.
(b) Rs. 10,000 amount paid and Rs. 10,000 net purchases
(c) Rs. 9,900 amount paid and Rs. 9,900 net purchases
(d) Rs. 9,900 amount paid and Rs. 11,880 net purchases
Q.30 Sadia maintains an imprest system of petty cash. Float is maintained at Rs. 1,000. During February
2019 Sadia has made payments of Rs. 650. At end of February it is decided to increase �loat by Rs. 100.
What amount is needed to achieve the required �loat?
Rs. _____750____
Q.31 A business has opening inventory of Rs.12,000 and closing inventory of Rs.18,000. Purchase returns
were Rs.5,000. The cost of goods sold was Rs.111,000.
Purchases were
(a) Rs.100,000 (b) Rs.110,000
(c) Rs.116,000 (d) Rs.122,000

Q.32 Which one of the following is not a component of �inancial statement of a business?

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(a) Income statement (b) Statement of �inancial position

(c) Trial balance (d) Statement of changes in equity
Q.33 Calculate cost of sales from the following items:
Rs.
Opening inventory 130,000
Closing inventory 40,000
Purchases 200,000
Transportation in 10,000
Purchase return 20,000
(a) Rs. 580,000 (b) Rs. 480,000
(c) Rs. 380,000 (d) Rs. 280,000
Q.34. This is the excess of sales over the cost of goods sold in period
(a) Gross loss (b) Gross balance
(c) Gross hoper (d) Gross pro�it
Q.35 Which accounts shows the drawings, opening capital, net pro�it and closing capital in an account
(a) Loss (b) Expense
(c) Asset (d) Capital
Q.36 It contains the detail of asset, liabilities and capital
(a) Pro�it and loss statement (b) Trading account
(c) Balance sheet (d) Comprehensive Income
Q.37 Carriage inwards is shown as an expense item in
(a) Trading account (b) Pro�it account
(c) Balance sheet (d) No name
Q.38 Carriage outwards is shown as an expense in the
(a) Trading account (b) Balance sheet
(c) Ledgers (d) Pro�it and loss account
Q.39 Net pro�it plus expenses equals to
(a) Purchases (b) Cost of goods sold
(c) Capital (d) Gross pro�it
Q.40 Sales are equal to
(a) Cost of goods sold + Gross pro�it (b) cost of goods sold – Gross pro�it
(c) Gross pro�it – Cost of goods sold (d) Gross pro�it only
Q.41 Which of the following is not an information need for the 'Investor' group?
(a) Assessment of repayment ability of an entity
(b) Measuring performance, risk and return
(c) Taking decisions regarding holding investments
(d) Taking buy/sell decisions
Q.42 The following totals appear in the day books for December 2021.
Rs.
Sales 40,000
Purchases 20,000
Returns outward 4,000
Opening and closing inventories are both 3,000
Gross Pro�it 22,000
What are the Return Inwards for December 2021?
(a) Rs 2,000 (b) Rs 6,000
(c) Rs 4,000 (d) Rs 8,000
Q.43 Discounts allowed Rs.1,244 were treated as discounts received when a traders' income statement was
prepared. Therefore?

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 CHAPTER-3 BASICS OF F/S & THEORETICAL PORTION

(a) Pro�its were understated by Rs.1,244

(b) Pro�its were overstated by Rs.2,488
(c) Pro�its were understated by Rs.2,488
(d) Pro�its were overstated by Rs.1,244
Q.44 Undertaker has dispatched goods amounting to Rs. 90,000 to Triple H. Triple H returned goods
amounting to Rs. 2,700. Which note to be received by Undertaker and Triple H?
(a) Triple H and Undertaker received debit note
(b) Undertaker and Triple H received credit note
(c) Undertaker received credit note and Triple H received debit note
(d) Undertaker received debit note and Triple H received credit note
Q.45 Undertaker has dispatched goods amounting to Rs. 90,000 to Triple H. Triple H returned goods
amounting to Rs. 2,700. Which note to be issued by Undertaker and Triple H?
(a) Triple H and Undertaker issued debit note
(b) Undertaker and Triple H issued credit note
(c) Undertaker issued credit note and Triple H issued debit note
(d) Undertaker issued debit note and Triple H issued credit note
Q.46 The following totals appear in the day books for December 2021.
Rs.
Sales 60,000
Purchases 25,000
Returns outward 6,000
Opening and closing inventories are both 10,000
Gross Pro�it 23,000
What are the Return Inwards for March 2022?
(a) Rs 6,000 (b) Rs 18,000
(c) Rs 24,000 (d) Rs 13,000
Q.47 Which is the most appropriate double entry of Discount received.
(a) Dr. Creditor, Cr. Income (b) Dr. Creditor, Cr. Revenue
(c) Dr. Creditor, Cr. Purchases (d) Dr. Debtor, Cr. Income
(Discount allowed (trade or settlement) both should be deducted from sales)
Q.48 Which is the most appropriate double entry of Discount allowed.
(a) Dr. Discount allowed, Cr. Creditor
(b) Dr Discount allowed/Sales, Cr. Debtor
(c) Dr Debtor, Cr. Discount allowed
(d) Dr. Creditor, Cr. Income
Discount allowed(Trade or settlement) both should be deducted from sales.
Q.49 Which TWO of the following are not part of a complete set of component of �inancial statement?
(a) Notes to the Financial Statement (b) Statement �inancial position
(c) Director report (d) Auditor's report
Q.50 Which TWO of the following are business transactions?
(a) A businessman purchased a vehicle for his private use; however, be also uses it for coming to
the of�ice.
(b) Furniture & �ixtures lying in the of�ice were destroyed by �ire. Furniture was owned by one of
the partner and it was not in the use of business.
(c) Electricity bill of one of �irm's partners was paid from business cash.
(d) The proprietor provides a generator to the of�ice. The generator is presently not working and
it would have to be repaired before it can be used.
Q.51 ABC & Co sold goods on credit costing Rs.200,900 and expected that customer will not avail discount
of 2%. What entry required if expectation goes wrong?

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(a) Debit: Cash Rs.200,900 Credit: Receivable Rs.200,900

(b) Debit: Cash Rs.196,882, Debit: Sales Rs.4,018 Credit: Receivable Rs.200,900
(c) Debit: Receivable Rs.200,900, Credit: Sales Rs.4,018 Credit: Cash Rs.196,882
(d) Debit: Cash Rs.200,900 Credit: Sales Rs.4,018 Credit: Receivable Rs.196,882
Q.52 Entry of sales is recorded when following document is issued/received
(a) Sales order (b) Goods dispatch note
(c) Delivery note (d) Sales invoice
Q.53 Crescent has established an imprest system of Rs. 20,000. Invoices of the Rs. 2,000 has been received.
Further, payment of Rs. 5,000 has been made for petty expenses out of which amount of Rs. 250 has
been returned.
Calculate amount required to be reimbursed at end of the accounting period to maintain balance equal
to the imprest system?
(a) Rs. 7,000 (b) Rs. 7,350
(c) Rs. 6,750 (d) Rs. 15,000
Q.54 On 5-July-2021 Sales during the year is Rs. 800,000 while sales return is Rs 100,000. Discount of 2/10,
n/45 is available if customer would able to pay within 10 days. Customer made payment on 13-July-
2021.
(a) Debit: Cash Rs.686,000 Credit: Receivable Rs. 686,000
(b) Debit: Cash Rs.700,000 Credit Receivable Rs.800,000
(c) Debit: Cash Rs.686,000 Credit: Sales Rs.14,000 Credit: Debtor Rs.700,000
(d) Debit: Cash Rs.786,000 Credit: Sales Rs.14,000 Credit: Receivable Rs.786,000
Q.55 On 5-July-2021 Sales during the year is Rs 700,000. Discount of 2/10, n/45 is available if customer
would able to pay within 10 days. Supplier expects that customer will pay on 13-July-2021. So, cash
entry will be recorded at which amount?
(a) Rs. 600,000 (b) Rs.700,000
(c) Rs. 630,000 (d) Rs. 686,000
Q.56 Debit note is received due to
(a) Sales (b) Return outward
(c) Purchases (d) Return inward
Q.57 H M Umer has dispatched goods amounting to Rs. 90,000 to Sir Adnan Rauf (Murshad). Murshad
returned goods amounting to Rs. 2,700. Which note to be received by H M Umer and Murshad?
(a) H M Umer and Murshad received debit note
(b) H M Umer and Murshad received credit note
(c) H M Umer received debit note and Murshad received credit note
(d) H M Umer received credit note and Murshad received debit note
Q.58 On June 1. Rs. 800,000 of goods are sold with credit terms of 1/10, n/30. How much should the seller
expect to receive if the buyer pays on June 8
(a) 720,000 (b) 768,000
(c) 792,000 (d) No change
Q.59 Which of the following statements are correct?
(i) Directors are responsible for preparation of �inancial statements of a company for public
disclosure.
(ⅱ) Partners are required to prepare �inancial statement of a partnership for public disclosure.
(a) Both statements are correct (b) Only statement (i) is correct
(c) Only statement (ii) is correct (d) Both statements are not correct

Q.60 Nader traders keeps an analyzed petty cash book using the imprest system. The imprest amount is
Rs.15,000. The following information is available for the month of December 2021.

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 CHAPTER-3 BASICS OF F/S & THEORETICAL PORTION

Date Description Rs.

Dec 1 Balance 15,000
Dec 5 Bought of�ice stationery 2,500
Dec 7 Paid for of�icial Travel – Careem Invoice 1,250
Dec 9 Paid for re�illing of printer cartridges from market to procurement staff. 5,000
Dec 10 Received from procurement staff remaining balance – re�illing of printer cartridges 1,500
Dec 15 Paid for biscuits for owner’s guests 700
Dec 29 Purchased stamp papers from market 2,000
Petty cash balance as on 31 December 2021 before replenishment would be?
(a) Rs. 5,750 (b) Rs. 2,050
(c) Rs. 5,050 (d) Rs. 9,950
Q.61 A business is offering a settlement discount to customers. In which TWO of the following situations,
the revenue is required to be recorded at the full amount at the time of sale?
(a) The customer is not expected to pay early and does not pay early as expected
(b) The customer is expected to pay early and pays early as expected
(c) The customer is not expected to pay early but pays early
(d) The customer is expected to pay early but does not pay early
Q.62 Term n/30 means
a) Business normally sales goods on 30 days credit
b) Represents discount % while denominator represents No. of credit days
c) Both a & b
d) None of above
Q.63 Initially, supplier expects that customer will NOT avail the discount but expectations goes wrong. What
entry is required to pass on settlement date.
(a) Cash 10,000 (b) Cash 10,000
Sale 400 Debtors 10,000
Debtors 9,600
(c) Cash 96,00 (d) Cash 9,600
Debtors 9,600 Sale 400
Debtors 10,000
Q.64 Initially, supplier expects that customer will avail the discount but expectations goes wrong. What
double entry is required to pass on settlement date.
(a) Cash 10,000 (b) Cash 10,000
Sale 400 Debtors 10,000
Debtors 9,600
(c) Cash 96,00 (d) Cash 9,600
Debtors 9,600 Sale 400
Debtors 10,000
Q.65 Initially, supplier expects that customer will the avail discount but expectations goes right. What entry
is required pass on settlement date.
(a) Cash 10,000 (b) Cash 10,000
Sale 400 Debtors 10,000
Debtors 9,600
(c) Cash 96,00 (d) Cash 9,600
Debtors 9,600 Sale 400
Debtors 10,000
Q.66 Initially, supplier expects that customer will NOT avail the discount but expectations goes right. What
entry is required to pass on settlement date.
(a) Cash 10,000 (b) Cash 10,000

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 CHAPTER-3 BASICS OF F/S & THEORETICAL PORTION

Sale 400 Debtors 10,000

Debtors 9,600
(c) Cash 96,00 (d) Cash 9,600
Debtors 9,600 Sale 400
Debtors 10,000
Q.67 3/10,2/20,/4/30 means
a) 3/10 means 3% discount is available if customer pays within 10 days
b) 2/20 means 2% discount is available if customer pays within 20 days
c) 4/30 means 4% discount is available if customer pays within 30 days
d) All of above
Q.68 What is meant by 2/10, n/30
(a) 10% discount if payment made within 2 days otherwise full payment will be made by
customer
(b) 2% discount if payment made within 2 days otherwise full payment will be made by customer
(c) 2% discount if payment made within 10 days otherwise full payment will be made by
customer
(d) None of the above
Q.69 Pro�it which is obtained after deducting all the operating expenses is
(a) Gross Pro�it (b) Operating pro�it
(c) Net pro�it (d) Both b & c
Q.70 On 1st July business sild goods of Rs.781,121 with credit terms 4/10, n/30. Goods amounting Rs.3,781
were returned by the customer. How much business receive if customer pay on 6 July?
(a) Rs. 746,246 (b) Rs.777,340
(c) Rs. 749,876 (d) Rs. 781,121
Q.71 What is the main objective of accounting?
a) Recording timely transactions into the books
b) Recording transactions and make decision making
c) To provide accurate and relevant �inancial information to the stakeholders to help them make
informed decisions.
d) None of the above
Q.72 Mr. Alpha sold goods amounting Rs. 500,000 to Mr. Beta. Mr. Alpha offered 5% settlement discount to
Beta. If Beta availed the discount what will be the entry in the books of Alpha if �irstly it was recorded
at full/gross amount ?
(a) Cash 500,000 (b) Cash 500,000
Sale 25,000 Debtors 500,000
Debtors 475,000
(c) Cash 475,000 (d) Cash 475,000
Debtors 475,000 Sale 25,000
Debtors 500,000
Q.73 Which of the following statements are correct?
(i) Purchase order is issued by seller to buyer.
(ii) When an invoice is received from a supplier, it should be checked with goods received note.
(a) Both statements are correct (b) Only statement (i) is correct
(c) Only statement (ii) is correct (d) Both statements are not correct

Q.74 Which of the following statements are correct?

(i) Accounting is a broader term than book-keeping.
(ii) Book-keeping and accounting are two different but inter-connected functions.

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(a) Both statements are correct (b) Only statement (i) is correct
(c) Only statement (ii) is correct (d) Both statements are not correct
Q.75 Which of the following statements will not have an effect on business?
(i) Goods purchased on cash were returned to the supplier.
(ii) Owner purchased furniture for personal use on credit.
(a) Both statements (b) Only statement (i)
(c) Only statement (ii) (d) Both statements will effect
Q.76 It sales are Rs.8,000 and the gross pro�it 30% what it's the cost of sales'
(a) Rs.10,400 (b) Rs.5,600
(c) Rs.6,000 (d) Rs. 6,600
Q.77 A cash discount given to a customer should be recorded by ...
Debit Credit
(a) Customer s account Discount received account
(b) Customer’s account Discount allowed account
(c) Discount allowed account Customer’s account
(d) Discount received account Customer’s account

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CHAPTER-3 BASICS OF F/S & THEORETICAL PORTION

MULTIPLE CHOICE QUESTIONS (MCQS)

ANSWERS
A.1 (b) Managers/Directors
A.2 (a) 1 only
A.3 (c) Present the �inancial results of an organization by mean of �inancial statements.
A.4 (b) Hiring a new employee
A.5 (d) Capital expenditure
A.6 (d) Purchase of machinery
A.7 (c) Sales + Gross Pro�it = Revenue
A.8 (b) Investors & potential investors
A.9 (c) Lenders want to assess the entity’s capacity to pay interest and repay loan on time
A.10 (c) Directors
A.11 (b) There may be no obligation to prepare �inancial statements of a partnership (other than for
tax purpose)
A.12 (d) Management
A.13 (c) Supplier
A.14 (b) 3
A.15 (a) Insurance of goods in transit to customers.
A.16 (d) Relating to the acquisition or improvement of non-current assets
A.17 (d) Buying shares as an investment
A.18 (c) (ii), (iii) and (iv)
A.19 (b) Purchase of a delivery van
A.20 (a) Customer for return of goods
A.21 (c) Goods dispatched note
A.22 (d) Rs. 76,000
A.23 (d) Dr Accounts payable a/c Rs. 1,500Cr Accounts receivable a/c Rs. 1,500
A.24 (b) Supplier for return of goods
A.25 (a) Purchase requisition
A.26 (c) It is recognised as reduction in cost of purchases
A.27 (b) Rs. 300
A.28 (b) For maintaining a �ixed �loat; an amount equal to weekly expenses incurred is reimbursed
A.29 (c) Rs. 9,900 amount paid and Rs. 9,900 net purchases
A.30 750
A.31 (d) Rs.122,000
A.32 (c) Trial balance
A.33 (d) Rs. 280,000
A.34 (d) Gross pro�it
A.35 (d) Capital
A.36 (c) Balance sheet

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A.37 (a) Trading account

A.38 (d) Pro�it and loss account
A.39 (d) Gross pro�it
A.40 (a) Cost of goods sold + Gross pro�it
A.41 (a) Assessment of repayment ability of an entity
A.42 (a) Rs 2,000
A.43 (b) Pro�its were overstated by Rs.2,488
A.44 (d) Undertaker received debit note and Triple H received credit note
A.45 (c) Undertaker issued credit note and Triple H issued debit note
A.46 (b) Rs 18,000
A.47 (c) Dr. Creditor, Cr. Purchases
A.48 (b) Dr Discount allowed/Sales, Cr. Debtor
A.49 (c) Director report
A.50 (c) Electricity bill of one of �irm's partners was paid from business cash.
(d) The proprietor provides a generator to the of�ice. The generator is presently not working
and it would have to be repaired before it can be used.
A.51 (b) Debit: Cash Rs.196,882, Debit: Sales Rs.4,018 Credit: Receivable Rs.200,900
A.52 (d) Sales invoice
A.53 (c) Rs. 6,750
A.54 (c) Debit: Cash Rs.686,000 Credit: Sales Rs.14,000 Credit: Debtor Rs.700,000
A.55 (d) Rs. 686,000
A.56 (d) Return inward
A.57 (c) H M Umer received debit note and Murshad received credit note
A.58 (c) 792,000
A.59 (b) Only statement (i) is correct
A.60 (c) Rs. 5,050
A.61 (a) The customer is not expected to pay early and does not pay early as expected
(c) The customer is not expected to pay early but pays early
A.62 (c) Both a & b
A.63 (d) Cash 9,600
Sale 400
Debtors 10,000
A.64 (a) Cash 10,000
Sale 400
Debtors 9,600
A.65 (c) Cash 96,00
Debtors 9,600
A.66 (b) Cash 10,000
Debtors 10,000
A.67 (d) All of above

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A.68 (c) 2% discount if payment made within 10 days otherwise full payment will be made by
customer
A.69 (b) Operating pro�it
A.70 (a) Rs. 746,246
A.71 (c) To provide accurate and relevant �inancial information to the stakeholders to help them
make informed decisions.
A.72 (d) Cash 475,000
Sale 25,000
Debtors 500,000
A.73 (c) Only statement (ii) is correct
A.74 (a) Both statements are correct
A.75 (c) Only statement (ii)
A.76 (b) Rs.5,600
A.77 (c) Debit Credit
Discount allowed account Customer’s account

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H. M. UMER 12