BBA
First year First semester examination, 2010
PRINCIPLES
OF ACCOUNTING
Subject
code: 1102
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 Four questions from part B]
Part
– A - Short Question
Marks-
6*5=30
1.
(a) What is accounting? What is the
importance of accounting in business?
(b)
What is the basic accounting equation? Discuss the elements of the basic
accounting equation.
2. (a) Explain in short the accounting
cycle.
(b) What is a closing entry? Discuss in
brief the closing process of temporary accounts.
3. (a) What are the different types of
adjusting entries? Explain with examples.
(b) What is a classified balance sheet?
Discuss the different categories of assets according to classified balance
sheet.
4. (a) Describe the different systems to
account for merchandise inventory.
(b) Define the
following concepts:-
(1) FOB destination; (2) FOB shipping
point; (3) Contra revenue accounts.
5. (a) Discuss the principles of internal
control used generally by business organization.
(b) What is reconciliation of bank
accounts? Why reconciliation is required?
6. (a) Briefly describe four assumptions that
underlie financial accounting structure.
7. (a) What is Accounting Information System?
(b)Discuss the nature and advantages of
subsidiary ledger.
PART
– B
MARKS
10*4=40
8. M/S Harun Traders
started its delivery business on August 2010. In the month, the following
transactions occurred:-
August 1. Mr.Harun, the owner, invested tk. 150000 in the business.
2.
Purchased a delivery van for tk 50000 paying tk. 20000 in cash and signing a tk. 30000 note. Occupied an office and paid tk. 5000 in cash as rent.
10.
Purchase supplies of Tk. 3500 in
cash.
15.
performed delivery service of Tk. 9000
on account.
18.
Received cash payment of Tk. 5000
for August 15 transaction.
23.
Performed delivery services for cash Tk. 6000.
27.
Paid Tk. 1500 cash for trade license
fees.
31.
Paid utilities expense, Tk. 2000 and
salaries expenses Tk.5000 in cash.
Required:
(a)
Journalize the above transactions with
proper explanations.
(b)
Post the journals entries in the respective
ledger accounts.
9.
The trial balance of Razib Repairing Service on October 31, 2010 is as the
following:-
Razib
Repairing Services
Trial
Balance
October
31, 2010
|
|
Dr.
Taka
|
Cr.
Taka
|
|
Cash
|
48,800
|
|
|
Accounts
receivable
|
35,200
|
|
|
Office
supplies
|
20,000
|
|
|
Repair
equipment
|
1,50,000
|
|
|
Prepaid
|
18,000
|
|
|
Account
payable
|
|
34,000
|
|
Unearned
service revenue
|
|
14,000
|
|
Salaries
payable
|
|
5,000
|
|
Owner’s
capital
|
|
1,86,00
|
|
Repair
service revenue
|
|
75,000
|
|
Salaries
expense
|
31,000
|
|
|
Rent
expense
|
5,000
|
|
|
Utilities
expense
|
6,000
|
|
|
Total
|
3,14,000
|
3,14,000
|
By examine the books of
original entry, it was reveled that:
(a)
The insurance is for one year starting
from March 1.
(b)
Account of supplies show Tk. 6000 of
unused supplies.
(c)
The store equipment has a salvage value
of Tk. 10,000 and an estimated life of 10 years.
(d)
The unearned revenue of Tk. 9000 has
been earned by October 31.
(e)
Salaries of Tk. 3000 are accrued and
unpaid on October 31.
Required:
(a) Journalize
the adjusting entries with proper explanations.
(b) Post
the journals entries into the respective T-accounts.
(c) Prepare
an adjusted trial balance.
10.
After the first month of operation, the adjusted trial balance of Marine
Enterprise was the following: -
Marine
Enterprise
Adjusted
Trial Balance
September
30, 2010
|
|
Dr.
|
Cr.
|
|
Cash
|
54,000
|
|
|
Accounts
receivable
|
28,000
|
|
|
Supplies
|
10,000
|
|
|
Prepaid
insurance
|
22,000
|
|
|
Equipment
|
6,00,000
|
|
|
Accumulated
depreciation-Equipment
|
|
9000
|
|
Notes
payable
|
|
4,00,000
|
|
Accounts
payable
|
|
24000
|
|
Interest
payable
|
|
5,000
|
|
Owner’s
capital
|
|
3,00,000
|
|
Owner’s
drawings
|
10,000
|
|
|
Service
revenue
|
|
49,000
|
|
Salaries
expense
|
32,000
|
|
|
Utilities
expense
|
8000
|
|
|
Advertising
expense
|
4000
|
|
|
Insurance
expense
|
2000
|
`
|
|
Supplies
expense
|
3000
|
|
|
Depreciation
expense
|
9000
|
|
|
Interest
expense
|
5000
|
|
|
Total
|
7,87,000
|
7,87,000
|
Required:
(a)
Prepare a classified balance sheet
assuming that Tk. 3, 50,000 of notes payable is long –term.
(b)
Prepare an income statement of Marine
Enterprise for September 2010.
(c)
Journalize the closing entries.
11.
Ready-Set-Go suitcases to retail stores and extends credit terms of 1/10, n/30
to all of its customers. At the end of July, R-S-G’s inventory consisted of 40
suitcase purchased at Tk. 30 each. During the month of July the following
merchandising transactions occurred:-
July
1. Purchased 50 suitcases on account
for Tk. 30 each from Trunk Manufactures, FOB destination, terms 2/10, n/30. The
appropriate party also made cash payment of Tk. 100 for freight on this date.
July 3. Sold 40
suitcases on account to Satchel World for Tk.55 each.
July 9. Paid Trunk
Manufactures in full.
July 12. Received
payment in full from Satchel World.
July 17. Sold 30
suitcases on account to the going concern for Tk.55 each.
July 18. Purchased 60
suitcases on account for Tk. 1,700 from Holiday Manufactures, Fob shipping
point, terms 1/10, n/30. The appropriate party also made a cash payment of Tk.100 for freight on this date.
July 20. Received Tk.
300 credit (including freight) for 10 suitcases returned to holiday
Manufacturers.
July 21. Received
payment in full from the Going Concern.
July 22. Sold 45 suitcases
on account to Fly-By-Night for tk.45 each.
July 30. Paid Holiday
Manufacturers in full.
July 31. Granted
Fly-By-Night Tk.220 Credit for 4 suitcases returned costing Tk.120.
Instructions:
Journalize the
transactions for the month of July for Ready-Set-Go using a perpetual inventory
system.
12. The chart of
accounts of Dutch Company includes the following selected accounts:-
112. Accounts receivable
120. Merchandise Inventory
126. Supplies
157. Equipment
201. Accounts Payable
401. Sales
412. Sales return and
allowance
505. Cost of goods sold
610. Advertising expense
In May the following
selected transactions were completed. All purchases and sales were on account expected
as indicated. The cost of all merchandise sold was 65% of the sales price:-
May 2. Purchased
merchandise from Van Houk Company Tk. 9500.
May3. Received freight bill from Ruden freight on
Van Houk purchase Tk. 360.
May5. Sales were made
to Elie Company Tk.1980, Cornelis Bros. Tk.2700 and Jan Company Tk.1500.
May 8. Purchased
merchandise from Tulip Company Tk.8000 and Zeider Company Tk.8700.
May 10. Received credit
on merchandise returned to Zeider Company Tk.500.
May 15. Purchased
Supplies from Sandvoort Supply Tk. 900
May 16. Purchased
merchandise from Van Houk Company Tk. 4500 and Tulip Company Tk. 7200.
May 17. Returned
supplies to Sandvoort Supply, receiving credit Tk.100.
May 18. Received
freight bills on May 16 purchases from Ruden FreightTk.500.
May 20. Returned
merchandise to Van Houk Company receiving credit Tk.300.
May 23. Made sales to
cornelis Bros. Tk. 2,400 and to Jan Company Tk. 3,100.
May 25. Received bill
for advertising from Amster Advertising
Tk. 900.
May 26. Granted
allowance to Jan Company for merchandise damaged in shipment Tk. 200.
May 28. Purchased equipment
from Sandvoort Supply Tk.250.
Instruction:
Journalize the
transactions above in a purchase journal, a sales journal, and a general
journal.
13. On October31, 2009, M/s Khan & Co. hand a
cash balance per books of Tk. 6,78,150.
The bank statement from One bank Ltd. On the same day showed a balance of Tk. 640,460. A comparison of the statement
with the cash account revealed the following facts:-
(a) The statement included a debit memo of Tk. 4,000 for the printing of additional company
checks.
(b) Cash sales of Tk. 83,615 on Octobers 12 were deposited on the bank. The cash receipt
journal entry and the deposit slip was incorrectly made for Tk. 89,615. The bank credited M/s Khan
& Co. for the correct amount.
(c) Outstanding checks at Octobor31totalled Tk. 57,625 and deposits in transit were Tk.
1,91,615.
(d) On October 18, the company issued check no.
C-011817 for Tk.68500 to Mollah
Traders. The check, which was cleared in October by the bank, was incorrectly
journalized and posted by M/s Khan & Co. Tk. 65800.
(e) A Tk.
2,50,000 note receivable was collected by the bank for M/s Khan& Co. on
October 31 plus Tk. 8,000 interest.
The bank charged a collection fee of Tk. 2000.
No interest has been accrued on the note.
(f) Include with the cancelled checks, was a check
issued by Star Enterprise to M/s Karim & Sons, for Tk.80000 that was incorrectly charged to M/s Khan & Co. by the
bank.
(g) On Octobers 31, the bank statement showed an NSF
charge of Tk. 68000 for a check
issued by Sojib Enterprise, a customer, to M/s Khan & Co. On account.
Required:
(1) Prepare
the bank reconciliation statement at October 31, 2009.
(2) Prepare
the necessary adjusting entries for M/s Khan & Co. at October 31, 2009.
0 comments:
Post a Comment