PRC 4 Sir Mohsin Last Assignment March 2023

PRC-4 March 2023
Assignment
Sir Mohsin Final Assignment
Mohsin [Date] PRC 4

SC E-Learning
PRC-04
1. Which of the following statement is correct about Business transaction
a. an interaction between a business and customer, supplier or any other party with
b. whom they do business
c. an event that must not be recorded by the accounting system
d. Business started without investment
e. None of above
A option
2. Accounting is a process of
a. Recording, classifying, summarizing the information of financial nature & interpreting the result
b. Recording financial transaction in the accounting records of an entity
c. Activity involving two things that reciprocally affect each other
d. None of above
A option
3. Accrual basis of accounting records revenue when they are

a) Collected
b) Earned
c) Contracted
d) Readily available for use
4. Which of the following statement is correct about trail balance

a. Every credit balance represents incomes
b. Return inward has debit balance
c. Opening stock as well as closing balance both appear in trail balance
d. Trail balance is a book of prime entry
(b option)
5. Entry to record bad debt for the period is

Bad debt (dr) to allowance for bad debt (cr)
Bad debt (dr) to debtor acount (cr)
allowance for bad debt (dr) to bad debt (cr)
None of above
0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
SC E-Learning
(A)
6. Which of the following statement is/are correct
1) Higher closing prepaid balance than previous period means that payment for the year exceeds
the expense for the year
2) Higher closing accrued income balance than previous period means that receipts for the year
exceeds the income for the year
Only 1 is correct
Only 2 is correct
Both of above
None of above
7. 2) Which of the following should not be shown as an intangible non-current asset?

a) Purchased goodwill
b) Non-purchased goodwill
c) Development cost meeting the
criteria in IAS 38
d) Other intangible assets having
readily ascertainable market
value
b) Non-purchased goodwill
8. Statement of comprehensive income is prepared for

a) Last day of accounting year
b) For whole year
b) For whole year
9. Statement of financial position is prepared for

c) Last day of accounting year
d) For whole year
c) Last day of accounting year
10. Prime Cost is

a) All direct costs
b) Production Overheads
c) Direct labor cost+ direct expense
d) Indirect labor
a) All direct costs
11. As at 1/01/2010 salary outstanding was Rs. 128,400. Though during the year ended 31/12/2010
Rs. 598,800 was paid as salary, as at 31/12/2010 salary amounting to 142,900 remained unpaid.
What is the salary expense to be written off in the Statement of Income for the year 31/12/2010?
a. 613,300
b. 598,800
c. 741,700
0331 4435703
SC E-Learning
d. 584,300
12. The matching concept matches
e) assets with liabilities
f) income with expenses
g) capital with reserves
h) expenses with capital
f) income with expenses
13. If the Cheque issued by the entity gets dishonoured for insufficient funds
a. It increase back the liability
b. It decrease the bank balance
c. It decrease the liability
d. None of above
A option
14. The funds of petty cash book is recorded in
a) Only petty cash book
b) Both petty cash & cash book
c) Only cash book
d) General ledger
Both petty cash & cash book
15. The purpose of depreciation is to

a) allocate the depreciable cost on a systematic basis over the asset’s useful life
b) write the asset down to its realizable value each period
c) accumulate a fund for asset replacement
d) recognize that assets lose value over time
a) allocate the depreciable cost on a systematic basis over the asset’s useful life
16. Which elements have same nature

a. Assets & Equity
b. Assets & Expense
c. Capital & Liabilities
d. Incomes & Expense
Both a & b
Both b & c
Both c & d
A& c
17. If one asset is decreased than what will be increased?
A) Asset
B) Liability
C) Expense
D) None of these
Asset, Expense
0331 4435703
SC E-Learning
18. Debit always means

a) left side of an account
b) right side of an account
c) increase
d) increase in assets
a) left side of an account
19. International Financial Reporting Standards are issued by:

a) Financial Accounting Standards Board
b) International Accounting Standards Board
c) International Accounting Standards Committee
d) Generally Accepted Accounting Principles Board
b) International Accounting Standards Board
20. Double entry for the reversal of dishonoured cheques is

a. Receivable A/c (debit) to Bank A/c (credit)
b. Bank A/c (debit) to Receivable A/c (credit)
c. Receivable A/c (debit) to Liability A/c (credit)
d. None of above
A option
21. Which of the following errors will create balance in a suspense account?
a) Repairs expense was considered as purchase of asset
b) Purchase of inventory was considered as purchase of non-current asset
c) An invoice of Rs. 2,500 was totally omitted from the books
d) Petty cash expenses of Rs. 500 were only credited to bank account
Petty cash expenses of Rs. 500 were only credited to bank account
22. When a company writes a check for more than the amount available in the checking amount is an
example of
a. Bank overdraft
b. Amount prepaid
c. Drawings
d. None of above
(Bank overdraft)
23. Which of these TWO transactions would cause immediate change in equity:
a) Delive1y truck bought on credit
b) Bono wing from bank @ 12%
c) Repayment of loan from personal cash to save interest expense
d) Written down of inventory to its NRV.
B,D
0331 4435703
SC E-Learning
24. Which of these TWO transactions would cause immediate change in equity
a) It will be paid out of current asset
b) It is payable within one year or the normal operating cycle, whichever is shorter.
c) if the entity has a right to defer settlement of liability for at least 12 months
d) it is payable within one year or the normal operating cycle, whichever is longer.
It is payable within one year or the normal operating cycle, whichever is shorter.
25. Which items influence the trail balances agreement

a. Compensating errors
b. Complete omission of transaction
c. Partial omission of transaction
d. None of above
Partial omission
26. Trail balance is used to check the accuracy of

a. Balance sheet balances
b. Ledger accounts balances
c. Cashflow statement balances
d. Income statement balances
Ledger accounts balances
27. Items returned by credit customers are recorded in

a. Sale day book
b. Purchase day book
c. Return inward journal
d. Return outward journal
Both a & b
Both a & c
Both b & c
Both b & d
A&c
28. Dishonoured cheques (received) goes to the

a. Debit side of adjusted cashbook
b. Credit side of adjusted cashbook
c. Both of above
d. None of above
29. Items are returned to credit suppliers on the basis of

a. Debit note issued
b. Credit note issued
0331 4435703
SC E-Learning
c. Debit note received

d. Credit note received
30. Sc-e learning purchased an asset. The cost of the asset was Rs. 15000. Sc-e learning depreciates such
assets over useful life of 10 years on SLM basis. After the first year of operating the asset i.e. in the
second year Sc-e learning revised its method for depreciation such type of asset on reducing balance
method. Sc-e learning estimates residual value at Rs. 3000.
You are required to calculate the depreciation for the 3rd year
a. 1721
b. 1690
c. 9754
d. 11.475
Ans (1721)
31. Which of the following cost formula gives the highest balance of closing inventory
a. FIFO
b. AVCO
c. Both of the above
d. None of above
Ans (FIFO)
32. Calculate adjusted balance of cash book as on 31 Dec. 2012 & balances appearing on the gives date
are
-Balance as per cashbook Rs 66,000
-Bank charges amounted to Rs. 15,000 & interest income of Rs. 25,000 is not yet recorded in books
-Payment made against standing order Rs. 35,000 not yet recorded in cashbook
-Direct collection by the bank Rs. 36,000 but not yet recorded in cash book
-Cheques amounting to Rs. 25,000 were issued but recorded in cash book twice
-Cheque of Rs. 50,000 received from debtors but entered twice in cashbook
a. 42,000
b. 74,000
c. 52,000
d. 50,000
Ans (52k)
33. What is an asset?

a) An asset is a present economic resource controlled by the entity as a result of past event.
34. Why is it necessary to account for accrued expenses?
a) So that current liabilities are not overstated
b) So that current assets are not understated
0331 4435703
SC E-Learning
c) So that profit is not understated

d) So that profit is not overstated
d) So that profit is not overstated
35. Which two of the following transactions will affect the assets and liabilities of the business at the
same time?
a) Purchase of office furniture on credit
b) Credit sale of inventory
c) Receipt of cash from customer
d) Repayment of principal amount of a loan
both a & d
36. Balance of which of the following groups of items would appear on opposite sides of a trial balance?
a) Inventory and drawings
b) Carriage in and carriage out
c) Sales and return outwards
d) Trade receivables and return outwards.
d) Trade receivables and return outwards.
37. n an account if credit side < debit side then the resulting balance is:
a) Debit
b) Positive
c) Negative
d) Credit
a) Debit
38. Direct cost is?
a) Directly attributable to a cost unit
39. Which of the following is not in the trial balance of perpetual inventory system?
a) Cost of goods sold
b) Inventory
c) Sales return
d) Purchase return
d) Purchase return
40. Doubtful debt allowance account is
a) Asset account
b) Liability account
c) Contra asset account
d) Expense account
c) Contra asset account
41. Which of the following is taken as a test of arithmetical accuracy?
a) General Journal
b) General ledger
c) Books of prime entry
d) Trial balance
d) Trial balance
42. in which book of prime entry drawings is initially recorded?
a) Purchase day book
b) Sales day book
0331 4435703
SC E-Learning
c) Cash book
d) General Journal
c) Cash book
43. Equity is residual interest in the assets of business after deducting current liabilities. Is this definition
correct?
a) Yes
b) No
44. Son received money Rs 1,000,000 from his father. Is this a business transaction?
a) Yes
b) No
45. What are the generally accepted accounting principles in Pakistan?
a) IFRSs
b) Companies Act 2017.
c) Both a and b
d) None of these
c) Both a and b
46. If credit side< debit side in asset account, then difference is
a) Positive balance
b) Negative balance
c) Credit balance
d) None of these
a) Positive balance
47. Which of the following elements have same nature?
a) Assets and liabilities
b) Capital and liabilities
c) Assets and capital
d) Capital and expenses
b) Capital and liabilities
48. Increase in liability and increase in capital results in
a) Asset Increase
b) Assets Decrease
c) No impact
d) None of these.
a) Asset Increase
49. Which of the following transaction will affect the receivable account?
a) Bad debts expense
b) Allowance for bad debts
c) Purchase return
d) Trade discount
a) Bad debts expense
50. Royalty paid is
a) Direct expense
b) Indirect expense
c) Capital expenditure
d) Admin expense
0331 4435703
SC E-Learning
a) Direct expense
51. Bad debts recovered is recognized as:
a) Increase in allowance
b) other income
c) An expense
d) None of these
b) other income
52. Discount received is recognized as:
a) Reduction from purchases in general journal.
b) Expense in profit or loss statement
c) In purchase return journal
d) Deduction in purchase day book
a option
53. The process of classifying amounts from books of prime entry to ledgers is called
a) Posting
b) Recording
c) Summarizing
d) Presentation
a) Posting
54. When market prices are declining, which method give less profit?
a) FIFO
b) Weighted average
c) Both of these
d) None of these
a) FIFO
55. What is the entry of dishonored cheques?
a) Debit: Receivables Credit: bank Account
b) Debit: Bank Account Credit: Receivables
c) Debit: Receivables Credit: Cash Account
d) Debit: Payables Credit: bank Account
a option
56. What is the entry of stock given in Charity under perpetual system?
a) Debit: charity expense Credit: Purchases
b) Debit: charity expense Credit: inventory
c) Debit: charity expense Credit: supplier
d) Debit: charity expense Credit: purchases return
b option
57. What is the entry of stock given in Charity under periodic system?
a) Debit: charity expense Credit: Purchases
b) Debit: charity expense Credit: inventory
c) Debit: charity expense Credit: supplier
d) Debit: charity expense Credit: purchases return
a option
58. In output method, Depreciation is charged on which basis?
a) Usage of asset basis
0331 4435703
SC E-Learning
b) Value of asset basis

c) Useful life basis
d) All of these
a) Usage of asset basis
59. Which of the following is business transaction?
a) Electricity bill paid of owner house.
b) Payment to supplier and electricity bill of factory
c) Hiring of salesman for business
d) Selection of better-quality material for business
b Option
60. If we pay our supplier by bank overdraft, then it is
a) Decrease in asset and increase in liability
b) Decrease in asset and decrease in liability
c) Decrease in liability and increase in another liability
d) Increase in liability and increase in another liability
c Option
61. Which of the following is business transaction?
a) Electricity bill paid of owner house.
b) Wages being paid by cash
c) Hiring of salesman for business
d) Selection of better quality
b) Wages being paid by cash
material for business
62. If we issue amount to replenish petty cash book, then it is recorded in
a) General journal
b) Debit side of cash book
c) Credit side of cash book
d) General ledger.
c) Credit side of cash book
63. Which of the following cost is capitalised?
a) Interest paid on loan
b) Monthly electricity bill
c) Carriage paid on purchase of plant
d) Annual motor vehicle tax
c) Carriage paid on purchase of plant
64. sales are recorded in?
a) Sales day book
b) Sales return day book
c) General ledger
d) General Journal
c) General ledger
65. Petty expenses may exceed imprest amount.
a) True
b) False
66. Petty cash book must follow imprest system
0331 4435703
SC E-Learning
a) True
b) False
67. Accrual for Receiver is Prepayment for Payer
a) True
b) False
68. Dishonor cheques are recorded on which side of the Cash book?
a) Receipt side
b) Payment side
c) Both sides
d) None of these
b Option
69. Debit note issued is recorded in which Books of Prime Entry?
a) Purchase return Day book.
a Option
70. Debit note issued is recorded in which Books of Prime Entry?
a) Purchase return Day book.
a Option
71. Credit note issued is recorded in which Books of Prime Entry?
a) Sales return Day book.
a Option
72. Credit sales goes to which of the following books of prime entry?
a) Sales day Book
a Option
73. Seller received which note from buyer?
a) Debit note
b) Credit Note
a Option
74. Statement of Financial Position is prepared for
a) Whole year
b) Last day of accounting year
b Option
75. Statement of Comprehensive income is prepared for
a) Whole year
b) Last day of accounting year
b Option
76. In preparing its financial statement for the current year an entity closing inventory was understated
by RS. 200000. What will be the effect of this error if it remains uncorrected?
a. The current year profit will be overstated and next year profit will be understated
b. The current year profit will be understated and next year profit will be overstated
c. The current year profit will be overstated but there will be no effect on next year
profit.
d. The current year profit will be understated but there will be no effect on next year
profit.
b Option
0331 4435703
SC E-Learning
77. Bilal has started a trading business. He deals in goods where price is usually rising over the time.
Which of the following statement is correct regarding selection of FIFO and average method in this
case?
a. FIFO will result in lower reported profit
b. Average method will give more accurate profit
c. Avg. method will lead will higher cost of ending stock
d. Profit will be unaffected by the selection of inventory method
b Option
78. Which two of the following is included in cost of inventory?
a. Recoverable taxes paid on purchases
b. Normal wastages of material
c. Selling cost
d. Fixed manufacturing overheads
Both b & d
79. If a PPE remains idle for whole year the depreciation expense for the year will be NIL under:
a. Straight line method
b. Units of production method
c. Reducing balance method
d. All of the above
b. Units of production method
80. Which of the following is not an asset that falls under the scope of IAS 16 PPE?
a. Assets held for the production or supply of goods or service
b. Tangible assets
c. Assets held for sale in the normal course of business
d. Assets expected to be used for more than one period
c option
81. The purpose of depreciation is to;
a. Recognize that asset lose value overtime
b. Write the asset down to its realizable value at the end of each period
c. Allocate the depreciable cost on a systematic basis over the asset’s useful life
d. Accumulate a fund for asset replacement
c Option
82. Which two of the following items would be appearing in analysis of expenses by nature?
a. Salaries exp
b. Admin exp
c. Distribution exp
d. Finance cost
Both a & d
83. Which of the following statement is correct?
a. Credit balance as per bank statement means a bank overdraft
b. Debit balance as per bank statement means a bank overdraft
c. Debit balance as per cash book means bank overdraft
d. credit balance as per cash book means an asset
b Option
84. For reconciling bank balances unpresented cheques should be:
0331 4435703
SC E-Learning
a. Deducted from balance of bank statement or added to balance of cash book

b. Added to balance of bank statement or deducted from balance of cash book
c. Deducted from balance of bank statement and added to balance of cash book
d. Added to balance of bank statement and deducted from balance of cash book
a Option
85. An entity received electricity bill for the month of June 20. The bill will be paid on 10 July 20. The
entity financial year ends on 30 June. How would the payment be recorded?
a. Debit utilities payable and credit electricity expense
b. Debit utilities payable and credit cash
c. Debit electricity expense and credit utilities payable
d. Debit electricity expense and credit cash
d. Debit electricity expense and credit cash
86. Which two of the following would be appear in trail balance?

a. Gross profit
b. Discount allowed
c. Trade discount received
d. Acc. Depreciation
Both b & d
87. Which two of the following statement are correct regarding trial balances?
a. Opening stock as well as closing stock appear in the trail balance
b. Trail balance is not a book of prime entry
c. Every credit balance represent income
d. Return inward has debit balanc
Both b & c
88. Zee bought goods on credit from Shan traders. The goods were not according to the required
specification and therefore returned to ST. which document should zee send to ST
a. Statement of account
b. Credit note
c. Debit note
d. Invoices
c. Debit note
89. A transection not recorded in any other books of original entry is recorded in:
a. Sales day book
b. Purchase day book
c. Cash book
d. General journal
d. General journal
90. Which of the following document would require a double entry?

a. Sales order
b. Sales invoices
c. Delivery note
d. Statement of account
0331 4435703
SC E-Learning
b. Sales invoices
91. Which two of the following would be recorded in General journal?

a. Increase in provision of doubtful debts
b. Advance received from customer
c. Write off of a trade receivable balance
d. Receipt of a written off balance
Both a & c
92. Total assets of a business would be charged as a result of:

a. Non-current assets being purchased on cash
b. A supplier balance being paid in cheque
c. Wages being paid in cash
d. Non-current assets being purchased on credit
c. Wages being paid in cash
93. Which two of the following are not part of a complete set of the financial
statement?
a. Notes to financial statement
b. Statement of financial position
c. Director report
d. Auditor report
Both c & d
94. Which two of the following would be considered as business transaction?
1. Bank set the limit of overdraft of Rs 10 million
2. Interest charged by bank on overdraft.
a) Both are correct
b) None is correct
c) Only 1
d) Only 2
d) Only 2
95. Which two of the following would be considered as business transaction?

a. Business paid the electricity bill of previous year
b. Owner received the electricity bill of the owner residence
c. Owner paid the electricity bill of the owner residence from personal cash
d. Business received electricity bill of office premises which will be paid in next year
d. Option
96. Income arises from increase in assets or decrease in a liability resulting in:
a. Decrease in equity other than contribution from owner
b. Increase in equity other than contribution from owner
c. Increase in equity including contribution from owner
d. Decrease in equity including contribution from owne
0331 4435703
SC E-Learning
b. Increase in equity other than contribution from owner
97. Which of the following statements is correct regarding trial balance?

a) Every credit balance represents income
b) Return inward has debit balance
c) Opening stock as well as closing stock appear in a trial balance
d) Trial balance is a book of prime entry
b) Return inward has debit balance
98. Which of the following is NOT an asset that falls under the scope of IAS 16
Property, Plant and Equipment?
a) Tangible assets
b) Assets held for the production or supply of goods or services
c) Assets held for sale in the normal course of business
d) Assets expected to be used for more than one period
c) Assets held for sale in the normal course of business
99. Suppose cost of an asset is Rs. 3,600,000 , Residual value is Rs. 500,000 & useful life is 5 years.
Calculate depreciation under reducing balance of year 3rd.
a. 533,149
b. 791,257
c. 2,498,721
d. 359,236
(533,149)
100. Interest charged on drawings of partners:

a) increases the profit available for appropriation to partners
b) decreases the profit available for appropriation to partners
c) increases expenses of the partnership business
d) decreases expenses of partnership business
a) increases the profit available for appropriation to partners
101. Which of the following is not an example of business transaction
a. Amount paid for office repair
b. Owner introduced new capital
c. Goods purchased on account
d. Owner obtained personal loan from a bank
D option
102. The matching concepts matches
a) assets and liabilities
b) income with expenses
c) expenses with capital
d) capital with reserves
b) income with expenses
0331 4435703
SC E-Learning
103. Allowance for doubtful debts’ account is:

a) liability account
b) asset account
c) contra asset account
d) expense account
c) contra asset account
104. Depreciation is nill when asset is idle under which method

a. SLM
b. RBM
c. UPM
d. YDM
105. Which of the following does not require journal entry in periodic inventory method?
a) Abnormal loss
b) Goods returned by a supplier
c) Closing inventory
d) Normal loss
d) Normal loss
106. Payables & purchases are recorded on their cost also if they avail cash discount, this concept is
called
a. Accrual
b. Prudence
c. Reliability
d. Consistency
107. Balance of which of the following groups of item would appear on opposite sides of a trial
balance?
a) inventory and drawings
b) sales and returns outwards
c) carriage in and carriage out
d) Trade receivables and returns
outwards
d) Trade receivables and returns
outwards
108. Which of the following statements is correct?

a) Directors of a company are personally liable for any losses of the company
b) A sole trader business is owned by shareholders and operated by the proprietor
c) Partners are liable for losses in a partnership equally regardless of their profit-sharing ratio
d) A company is run by directors on behalf of shareholders
0331 4435703
SC E-Learning
d) A company is run by directors on behalf of shareholders
109. The cost of a wastebasket having an estimated useful life of 5 years is charged off as an expense
upon purchase. This is an example of the application of the:
a) consistency
b) matching principle
c) materiality concept
d) historical cost principle
c) materiality concept
Business paid weekly salary of Rs. 200,000 on Friday for five-day as the week ends on that day.
Books ends on Thursday. Business will pass the entry as
110. Drawing is a concept of:

a) Business entity
b) Matching
c) Prudence
d) Materiality
a) Business entity
111. Outstanding expenses provided has the following effect

a. Increase in liability & decrease in equity
b. Decrease in asset & decrease in expenses
c. Decrease in liability & in crease in equity
d. Increase in asset & decrease in another asset
Increase in liability & decrease in equity
112. Which of the following is not an asset as per PPE

a. Assets held for production
b. Assets used for more than 12 months
c. Assets held for sale in ordinary course of business
d. None of above
Ans (None of above option)
21 .Allowance for doubtful debt A/c is

a. Expense A/c
0331 4435703
SC E-Learning
b. Asset A/c
c. Liability A/c
d. None of above
Ans (None of above option(contra))
113. What is the correct entry of interest payable

a. interest expense (dr) to interest payable (cr)
b. Interest paid (dr) to interest expense(cr)
c. Interest accrued payable (dr) to bank (cr)
d. None of above
interest expense (dr) to interest payable (cr)
114. Matching concept match

a. Assets with liabilities
b. Income with expenses
c. Capital with reserve
d. Expense with capital
B option
115. which of the following transactions is correct in relation to increase in liability?

a. Drawings by proprietor
b. Telephones Bills paid by proprietor
c. New investment made in business by proprietor
d. None of above
None of above
116. Which of the following is the correct formula for the Accounting Equation?
a. Assets = Liabilities – Shareholder’s Equity

b. Assets = Liabilities + Shareholder’s Equity
c. Liabilities = Assets + Shareholder’s Equity
d. Shareholder’s Equity = Assets + Liabilities
(B) Option
117. Which of the following statements is true about the accounting equation?
0331 4435703
SC E-Learning
a. The accounting equation represents that the sources in a business are not equal to the resources of
that business
b. The accounting equation represents that the sources in a business are equal to the resources of
that business
c. The accounting equation represents that the resources are allocated to the business at cost price
d. None of the above
(B) Option
118. SC E-Learning LTD has received Rs. 5million compensation from Municipal Corporation on
acquisition of an agricultural land for construction of roads
a. It is a capital receipt
b. It is a revenue receipt
c. It is a deferred revenue receipt
d. It is not a receipt
A option
119. Which of the following is correct
Assets Liabilities Capital
12,500 1,800 10,070
28,000 4,900 23,100
119,500 15,400 100,100
88,989 56,587 32,400
(B) Option
120. Cost of cotton cloth for hosiery factory is an example of
a. Material cost
b. Direct labour cost
c. Indirect overhead cost
d. None of above
0331 4435703
SC E-Learning
Material cost
121. A summary of transactions that have taken place in the company’s bank account is called
a. Adjusted cashbook
b. BRS
c. Deposit-in-transit
d. None of above
None of above
122. According to straight line method of providing depreciation, the depreciation

a. Remains constant
b. Increase each year
c. Decrease each year
d. None of them
A Option
123. Which TWO of the following are not part of a complete set of component of financial
statement?
A) Statement of Cash flows

B) Financial statement
c) Income Return
d) Auditor's report
c) Income Return
If a fixed asset is purchased for Rs.10,000 & it has estimated useful life of 4 years with
residual value of Rs.3,000. calculate dep. Under SLM & RBM of 4 years?
124. What is the journal entry of settlement discount?
125. Journal entries of prepaid insurance, prepaid salaries, unearned revenue & accrued revenue?
126. What is the formula of prime cost?
0331 4435703
SC E-Learning
127. What is the entry of charity in perpetual accounting system?
Lectures
•Revision Lectures
•PRC notes
•Teachers Practice books
•Past Papers
•Mid Term test
Mocks test
•Chapters Wise notes
•ICAP Books
PRC-1 Business Writing and Comprehension Skills
https://sce-learning.com/prc-1-business-writing-and-comprehension-skills/
PRC-2 Quantitative Methods https://sce-learning.com/prc-2-quantitative-methods/
PRC-3 Principles of Economics https://sce-learning.com/prc-3-principles-of-economics/
PRC-4 Introduction to Accounting https://sce-learning.com/prc-04-introduction-to-accounting/
PRC 5 introduction to Business https://sce-learning.com/prc-5-introduction-to-business/
0331 4435703
SC E-Learning
Lectures
•PRC notes
•Past Papers
•Mid Term test
Mocks test
•ICAP Books
0331 4435703
SC E-Learning
Financial Statement
129. Following is the summarised trial balance of
Qambar Enterprises (QE) for the year ended 31
December 2018:
Rs. in '000
Debit Credit
Furniture - cost 2,535 Accumulated dep. at 1 Jan 2018:
Vehicles - cost at 1 Jan 2018 -
--
- 4,5_()Q_ -Furniture - - -
975
Inventories at 1 Jan 2018 4,450 - Vehicles 1,450
Trade receivables 2,970 Capital at 1 Jan 2018 5,223
Office and sales suoolies 210 12% Bank loan 1,500
Cash and bank balances 746 _(obtained on 1 April 2018)
Purchases 12,364 Trade _,1yables 3,943
Returns 826 Sales 18,184
Salaries and commission 1,295 Other income 275
Rent and insurance 545 . .......
Utilities and repairs 420
Goods withdrawn 644
Provision for doubtful receivables 45
31,550 31,550
Additional information:
 Inventories as at 31 December 2018 were valued at Rs. 3,860,000. Office and sales
supplies costing Rs. 90,000 are still unused. However, 30% of these supplies are not
usable due to deterioration in quality.
 Rent and insurance includes Rs. 75,000 paid for a photocopying machine. The machine
was obtained on 1 November 2018 at a fixed rent of Rs. 75,000 per quarter and an
additional Re. 0.40 for each copy. 40,000 copies have been made by QE up to 31 December
2018.
 QE received 5% discount on list price of goods purchased for cash which was credited to
other income. List price of such purchases was Rs. 2,500,000.
 Cost of office repairs amounting to Rs. 85,000 was paid by the owner from personal
cash.
 On 1 November 2018, a vehicle was completely destroyed in an accident. In December

2018, insurance company agreed to pay Rs. 500,000 in January 2019. The vehicle was
purchased for Rs. 600,000 on 1 January 2016.
 On 1 September 2018, a vehicle was invested into the business by the owner. The
vehicle was purchased by the owner on 1 July 2015 for Rs. 1,050,000 and had a fair value
of Rs. 960,000 on 1 September 2018.
0331 4435703
SC E-Learning
 QE depreciates vehicles at 10% using straight line method while furniture is depreciated
at 15% using reducing balance method. Cost of furniture includes an item of furniture
purchased for Rs. 400,000 on 1 May 2018.
 Sales include Rs. 335,000 received from a customer though the related goods were
dispatched on 5 January 2019.
 Trade receivables include Salman's balance of Rs. 370,000. It has been decided to set-
off Rs. 100,000 payable by QE to Salman and make a specific provision of 30% against
the remaining balance.
 A general provision of 4% of remaining trade receivables is maintained. Trade receivables

amounting to Rs. 131,000 were written off and debited to provision for doubtful
receivables during 2018.
Required:
 Prepare statement of profit or loss for the year ended 31 December 2018.
 Prepare statement of financial position as at 31 December 2018.
0331 4435703
SC E-Learning
0331 4435703
SC E-Learning
0331 4435703
SC E-Learning
63
500
Current liabilities
135
PL
0331 4435703
SC E-Learning
130. Following is the summarised trial balance of Sofia Trade (ST) for the year ended 30 June
2018
Additional information
 Cost of closing physical inventory was Rs. 7,400,000. Inventory included goods costing Rs.
240,000 which were damaged in the warehouse. These goods can be sold for Rs. 250,000
after incurring a cost of Rs. 16,000.
 Rent includes payment of annual rent of Rs. 240,000 expiring on 30 November 2018 for
owner's residence.
 Prepaid insurance represents premium which expired on 31 January 2018 while insurance
represents annual premium which is expiring on 31 January 2019.
 Suspense account represents goods returned by ST which were debited to supplier's
account.
0331 4435703
SC E-Learning
 On 29 June 2018, dishonoured cheque of Rs. 285,000 was returned by a bank. No entry
has been made in the books for this return. This cheque was received from a customer net
of 5% settlement discount.
 ST maintains a 4% provision against trade receivables.
 ST paid Rs. 388,000 (net of 3% settlement discount) which was debited to supplier's account
with the same amount.
 On 1 March 2018, an equipment was sold for Rs. 400,000 and its sale proceeds were credited
to the equipment account. This equipment had been purchased at a cost of Rs. 500,000 and
on 1 July 2017 its book value was Rs. 360,000.
 Advance represents 40% payment made for purchase of vehicle. Remaining balance would
be paid in September 2018. No entry was passed when the vehicle was delivered on 1 June
2018.
 ST depreciates equipment and vehicles at 15% and 25% respectively using reducing balance
method.
Required:
 Prepare statement of profit or loss for the year ended 30 june 2018.
 Prepare statement of financial position as at 30 June 2018.
Answer
0331 4435703
SC E-Learning
0331 4435703
SC E-Learning
0331 4435703
SC E-Learning
0331 4435703
SC E-Learning
131.
0331 4435703
SC E-Learning
0331 4435703
SC E-Learning
Answer
0331 4435703
SC E-Learning
0331 4435703
SC E-Learning
132.
0331 4435703
SC E-Learning
0331 4435703
SC E-Learning
Answer
0331 4435703
SC E-Learning
0331 4435703
SC E-Learning
133.
0331 4435703
SC E-Learning
Answer
0331 4435703
SC E-Learning
0331 4435703
SC E-Learning
0331 4435703
SC E-Learning
134.
0331 4435703
SC E-Learning
Required:
 Prepare statement of profit or loss for the year ended 31 December 2015.
Prepare statement of financial position as at 31 December 2015
Answer
0331 4435703
SC E-Learning
0331 4435703
SC E-Learning
0331 4435703
SC E-Learning
135.
0331 4435703
SC E-Learning
Answer
0331 4435703
SC E-Learning
0331 4435703
SC E-Learning
Lectures
•PRC notes
•Past Papers
•Mid Term test
Mocks test
•ICAP Books
0331 4435703
SC E-Learning
0331 4435703

PRC 4 Sir Mohsin Last Assignment March 2023

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

PRC 4 Sir Mohsin Last Assignment March 2023

Uploaded by

Copyright:

Available Formats

PRC-4 March 2023

Mohsin [Date] PRC 4

1. Which of the following statement is correct about Business transaction

3. Accrual basis of accounting records revenue when they are

4. Which of the following statement is correct about trail balance

5. Entry to record bad debt for the period is

7. 2) Which of the following should not be shown as an intangible non-current asset?

8. Statement of comprehensive income is prepared for

9. Statement of financial position is prepared for

10. Prime Cost is

15. The purpose of depreciation is to

16. Which elements have same nature

18. Debit always means

19. International Financial Reporting Standards are issued by:

20. Double entry for the reversal of dishonoured cheques is

25. Which items influence the trail balances agreement

26. Trail balance is used to check the accuracy of

Ledger accounts balances

27. Items returned by credit customers are recorded in

28. Dishonoured cheques (received) goes to the

29. Items are returned to credit suppliers on the basis of

c. Debit note received

33. What is an asset?

c) So that profit is not understated

b) Value of asset basis

a. Deducted from balance of bank statement or added to balance of cash book

86. Which two of the following would be appear in trail balance?

90. Which of the following document would require a double entry?

91. Which two of the following would be recorded in General journal?

92. Total assets of a business would be charged as a result of:

95. Which two of the following would be considered as business transaction?

b. Increase in equity other than contribution from owner

97. Which of the following statements is correct regarding trial balance?

100. Interest charged on drawings of partners:

103. Allowance for doubtful debts’ account is:

104. Depreciation is nill when asset is idle under which method

108. Which of the following statements is correct?

d) A company is run by directors on behalf of shareholders

110. Drawing is a concept of:

111. Outstanding expenses provided has the following effect

Increase in liability & decrease in equity

112. Which of the following is not an asset as per PPE

Ans (None of above option)

21 .Allowance for doubtful debt A/c is

Ans (None of above option(contra))

113. What is the correct entry of interest payable

interest expense (dr) to interest payable (cr)

114. Matching concept match

115. which of the following transactions is correct in relation to increase in liability?

a. Assets = Liabilities – Shareholder’s Equity

119. Which of the following is correct

Assets Liabilities Capital

12,500 1,800 10,070

28,000 4,900 23,100

119,500 15,400 100,100

88,989 56,587 32,400

120. Cost of cotton cloth for hosiery factory is an example of

122. According to straight line method of providing depreciation, the depreciation

A) Statement of Cash flows

126. What is the formula of prime cost?

127. What is the entry of charity in perpetual accounting system?

 On 1 November 2018, a vehicle was completely destroyed in an accident. In December

 A general provision of 4% of remaining trade receivables is maintained. Trade receivables