Principles of Accounting BBA First Year First Semester Examination,2011

BBA First Year First Semester Examination,2011

Subject Code: 1102

(Principles of Accounting)

Time – 3 hours

Full marks – 70

[N.B. – The Figures in the right margin indicate full marks. Answer any five questions from part A and any four questions from part B]

Part A – Short Questions

(Answer any five questions)

Marks – 6x5=30

1.      (a) Define GAAP, Discuss the various principles of GAAP.

(b) Why accounting is the language of business?

2.      (a) Who are the internal users of accounting information?

(b) Write down the three basic differences of event and transaction.

3.      (a) Define the credit term: -

(I)     2/10 , n/30

(II) 1/10, EOM

           (b) Distinguish between perpetual and periodic inventory method.

4.      (a) Is worksheet a part of accounting cycle? Explain the purpose of worksheet.

(b) What are the entries an organization needs to prepare for closing its books of accounts at the end of the each accounting period?

5.      (a) What is special journal?

(b)Discuss the nature and advantages of subsidiary ledger.

6.      (a) What is Bank Reconciliation Statement?

(b) Describe the three principles of accounting information systems.

7.      (a) What statements are prepared under financial statement?

(b) What is FOB destination?

Part B – Broad Question

(Answer any four Questions)

Marks – 10x4=40

8.      Mr. Hasan invested Tk. 15000 cash in the business on June, 1. Actually he started his own delivery service ‘Ajanta’ on June 1, 2011. The following transactions occurred during the month of June:−

         2 Purchased a used van for deliveries for Tk. 10,000 Rahim paid Tk. 2,000              cash and signed a note payable for the remaining balance.

          3 Paid Tk. 500 for wages.

          4 Borrowed Tk. 700 cash from a bank on a note payable.

          5 Performed Tk. 1000 of services on account.

          9 Rahim withdrew Tk. 200 cash for personal use.

         12 Purchased supplies for Tk 150 on account.

         15 Received a cash payment of Tk.750 for services provided on June 5.

         17 Purchased gasoline for Tk. 100 on account.

         20 Received a cash payment of Tk. 1500 for services provided.

         25 Made a cash payment of Tk.500 on the note payable.

         30 Paid monthly salaries Tk, 500.

Required:   (a) show the effect of the transactions on the accounting equation.

                   (b) Prepare an income statement of the June 2011.

9.      (a) Differentiate between periodic inventory system and perpetual inventory system.

(b) At the beginning of the current season on April 1, the leger of Tri-state Pro Shop showed cash Tk. 2500; merchandise inventory Tk.3500 and Tiger woods capital Tk. 6,000. The following transactions occurred during April 2011:-

April

       5 Purchased golf bags, clubs and balls on account from Bravo Co. 1700.FOB shipping point, terms   2/10 , n/10.

       7 Paid freight on Bravo Co Purchases Tk. 80.

April

       9 Received credit from Brave Co. for merchandise returns Tk. 200.

     10 Sold merchandise on account to members Tk.950, Terms n/10.

     12 Purchased golf shoes, sweaters and other accessories on account from Arrow Sportswear 660, terms 1/10, n/30 .

    14 Paid Brave Co, in full.

     17 Received credit from Arrow Sportswear for merchandise returned Tk, 60.

     20 Make sales on account to member 700. Terms n/30.

     21 Paid Arrow Sportswear in full.

Required: Record the transactions in Journal of the Tri-State Pro Shop using a perpetual inventory system.

10.  Mr. Mahabub started  wonderland park on 1^st July 2008. The following events and transactions were occurred during the July.

July

            1 Invested cash Tk. 6,00,000 in the business.

            5 Purchase Land costing Tk. 60,000 cash.

            11 Incurred advertising expense of Tk. 4,000  on account.

            13 Hired park manager at a salary of Tk.5,000 per month effective form 1^st August .

            15 Borrowed Tk. 30,000 from Islami Bank on a notes payable.

            17 Paid Tk. 6,700 in cash for one year insurance policy.

            24 Sold 200 coupon books for Tk. 25 each. Each book contains 10 coupons that entitle the holder to one admission to the park.

            28 Paid 50% of the advertising bill that incurred on July 11.

Required: (a) Journalize the July transactions;

                  (b) Post to the ledger account; and

                 (c) Prepare a Trial Balance.

11. Tanjim Graphics Company was organized on January 1, 2911. At the end of the first 6 months of operations the trial balance contained the following accounts:-

Debits	Taka	Credit	Taka
Cash	9,500	Notes Payable	20,000
Accounts Receivable	14,000	Accounts Payable	9,000
Equipment	45,000	Tanjim capital	22,000
Insurance Expense	1,800	Graphic Revenue	52,100
Salaries expense	30,000	Consulting Revenue	6,000
Supplies expense	3,700
Advertising expense	1,900
Rent expense	1,500
Utilities expense	1,700
	1,09,100		1,09,100

Analysis reveals the following additional data:-

(I)    The Tk. 3,700 balance in supplies expense represents supplies purchased in January. At June 30 Tk.2,300 of supplies was on hand.

(II) The note payable was issued on February 1. It is a 10%, 6 months note.

(III)      The balance in insurance expense is the premium on a one year policy, dated March 1, 2011.

(IV)     Consulting fees are credited to revenue when received. At June 30, consulting fees of Tk. 4,100 are unearned.

(V)Graphic revenue earned but unrecorded at June30, Tk.3,000.

(VI)     Depreciation is Tk. 5,000 per year.

Required: (a) Journalize the adjusting entries at June 30, 2011;

                 (b) Prepare an adjusted trial balance.

12. The unadjusted trial balance of Methi service were as follows for the year ended December 31, 2011:-

T/B

31 December 2011

Accounts Title	Debit	Credit
	Taka	Taka
Cash	43,350
Notes Receivable	51,700
Supplies	2,800
Prepaid Insurance	8,950
Equipment	1,37,050
Accumulated Dep- Equipment		7,400
Buildings	2,69,500
Accumulate Dep-Building		1,72,800
Land	93,500
Accounts payable		73,650
Unearned Service Revenue		44,000
Notes payable		93,500
Methi’s Capital		1,71,450
Drawings	19,000
Service revenue		84,850
Salaries expenses	10,850
Utilities expenses	5,650
Advertising expenses	5,300
	6,47,650	6,47,650

Adjusting entries:

(I)     Unearned service revenue had been earned Tk. 22,000.

(II) Accrued interest revenue Tk. 850.

(III)           Supplies on hand Tk. 2,050.

(IV)          Accrued salary Tk. 3,000.

(V)Insurance expired Tk. 1,950.

(VI)          Accrued interest Tk. 1,100.

(VII)       Accrued advertising expenses Tk. 300.

Required: Prepare a ten column worksheet and show necessary adjusting entries.

13. The trial balance of Navana Ltd. For the year ending Dec. 31, 2011 is shown below: -

Trial Balance of Navana Ltd.

December 31, 2011

Accounts Title	Debit	Credit
	Taka	Taka
Cash	30,000
Accounts receivables	55,200
Merchandise inventory	60,000
Prepaid insurance	3,600
Equipment	70,000
Land	14,000
Accumulated Dep.-Equipment		20,000
Accounts payable		62,400
Sales revenue		4,82,000
Sales return and allowances	9,200
Capital		1,00,600
Sales discount	7,800
Purchase	3,44,000
Freight in	10,000
Purchase returns		2,400
Purchase Discount		4,000
Salaries expenses	41,400
Interest	14,000
Utilities	12,200
Total	6,71,400	6,71,400

Other information:

1)     Merchandise inventory on hand at Dec 31, 2011 is Tk. 80,000.

2)     Prepaid salaries Tk.4,000

3)     Insurances expired Tk. 2,000 during the year.

4)     Provide depreciation @ 10% on equipment.

           Requirements:

a)     Prepare a multiple steps income statement for the year ended on December, 2011.

b)     Prepare a classified balance sheet as at 31^st  December, 2011.