Leadership College

Intermediate Part I
Mock Exam
Name:
Subject: Accounting
Time: 2.30 Hours

Roll #
Paper: I
Marks: 80

Q NO 2 :Write short answer to any five (5) questions.

(2*5=10)

(A)
1)
2)
3)
4)
5)
6)
7)
8)

Define the term Commission

Define the term Revenue
Define the term Double entry system
Define Book keeping
Define Balancing
Define Insolvency of person
Define Bill of exchange
Define the Special journal

Q NO 3 :Write short answer to any five (5) questions.

(B)
9) Define Bank draft
10) Define Net profit
11) Define Bank reconciliation statement
12) What is Dishonour of cheque
13) Define Final account
14) Define Direct expenses
15) Define Errors of principle
16) Define the suspense account

(2*5=10)

Attempt any three questions

(3*20=60)

Q NO 4
(A) Pass journal entries
1Jan. Stated business with cash Rs 90000, building Rs 100000 and furniture Rs 30000
3Jan. Sold goods to kashif Rs 3200
5Jan. Kashif returned goods Rs 200
6Jan. Received cash from Kashif Rs 2970 and discount allowed Rs 30
10Jan. Purshased goods from Yousaf to the list price of Rs 2000 subject to 5% trade discount.
(B) Prepare accounting equations
(1). Mr Ali started business with goods Rs 50000 and cash Rs 55000
(2). He purchased goods for cash Rs 20000 costing, Rs 17000 on credit basis
(3). Goods sold on credit Rs 5000, costing Rs 4000
(4). Commission received Rs 150
(5). Cash received from debtors Rs 3000
QNO 5

On 31st December 2008 the bank balance of Mr Bilal appeared at Rs 6850 as per the bank column of
the cash book.
That out of cheques for Rs 2400 issued by him on 25 th December, cheques worth Rs 800 were
presented to the banker before 31st December and those worth Rs 1600 were presented on the 10 th
January 2009.
That a bill receivable for Rs 1400 was realized by the banker on 27 th December but not entered in cash
book.
That out of cheques for Rs 3600 paid, one cheque for Rs 1400 was not yet credited by the bank.
That debit in respect of bank charges amounting to Rs 65.
Bank interest Rs 280 were not passes through the cash book.
You are required to prepare bank reconciliation statement.
Q NO 6
Prepare Trading and Profit and Loss Account and Balance Sheet from the given trial balance of
Mr.Azam as on 31st December 2009:
DR

Rs

CR

RS

Patents
Drawings
Bad debts
Insurance
Purchases
Cash
Salaries
Debtors
Motor vehicle
Taxes
Advertisement
Bill receivable
Wages

25000
7250
1000
25600
109440
28600
24440
81750
53600
13800
2600
3610
46830

Creditors
Bill payable
Capital
Bank loan
Rent received
Sales

43380
15200
100000
10000
1300
253640

423520

423520

Adjustments
Closing stock Rs 53500
Interest on capital 7% per annum
Prepaid insurance Rs 1000
Out standing taxes Rs 9800.
Q NO 7
Give journal entries to rectify the errors:
1. A bill for Rs 1250 for furniture sold to B Brother was credited to sales account.
2. A amount of Rs 890 received on account of interest was credited to commission account.
3. Goods to the value of Rs 1300 were returned by Ali but returned was not recorded in the books.
4. Wages paid Rs 1000 posted to wages account twice.
5. An item of Rs 1500 paid for the purchase of furniture debited to purchases account.
6. Bad debts of Rs 500 recovered but credited to the debtors personal account.
7. A purchase of Rs 10000 from Aliwas wrongly passed through the sales Book.

8. The purchase return book was under cast by Rs 200

Q NO 8
State with reasons whether the following are capital or revenue
1. Repair and renewal of machinery
2. Legal expenses incurred on income tax appeal.
3. Custom duty paid on machinery
4. Discount on issue of debentures
5. Cost of air conditioning
6. Heavy expenses on introduction of new product
7. Purchase of second hand truck for business
8. A machinery standing in the books at Rs 300000, were sold for Rs 240000
Q NO 9
Nazir received a bill of exchange from Saeed for Rs 100 and discounted with his banker for Rs 95. On
the bill becoming due Saeed requests Nazir to renew it which Nazir does, adding Rs 2 to the new bill of
interest. On due date bill is honored.
Record the above transactions in Nazir and Saeed books

Leadership College
Intermediate Part I
Mock Exam
Name:
Subject: Accounting
Time: 30 Minutes

Roll #
Paper: I
Marks: 20

Four possible answers A, B, C, and D to each question are given:

20
The choice which you think is correct, fill the circle in front of that question with Marker or Pen ink.

Cutting or filling two or more circle will result in zero mark in that question.

1). The errors which cancel themselves out are called:

(a)
Error of omission
(b) Error of commission
(c )
Compensating errors
(d) None of these
2). Trial balance is prepared to deduct:
(a)
Error of omission
(b) Error of commission
(c )
Compensating errors
(d) Errors of principles
3). Payment for freight on raw material purchased is called:
(a)
Capital payment
(b) Revenue payment
(c )
Deferred revenue payment (d) None of these
4). Which of these is a fixed asset:
(a)
Cash
(b) Stock
(c )
Plant
(d) Prepaid expenses
5). Bad debts are shown in the:
(a)
Trading A/c
(c )
None of these

(b) Profit&Loss A/c

(d) Both first

6). Unearned income is shown as:

(a)
Assets
(b) Liabilities
(c )
Expenses
(d) Income
7). To any business bad debts is:
(a)
An asset
(b) A loss
(c )
An income
(d) A liability
8). An order drawn by a bank on one of its branches to pay a
specific sum of money to the person named in is called:
(a)
Cheque
(b) Money order
(c )
Hundi
(d) Bank draft
9). Pass book is prepared in the book of:
(a)
Bank
(b) Customer
(c )
Guarantor
(d) None of these
10). The paper containing evidence of payment is called:
(a)
Debit voucher
(b) Debit note
(c )
Credit note
(d) Credit voucher
11). Credit sales are recorded in:
(a)
Cash book
(c )
Purchase book

(b) Sales book

(d) Pass book

12). A bill of exchange is accepted by:

(a)
Debtor
(b) creditor
(c )
Holder
(d) Seller
13). The period after which a bill of exchange becomes payable is called:

(a)
(c )

Period of payment
Allowed period

14). Trial balance shows:

(a)
Complete accuracy
(c )
Arithmetical accuracy

(b) Tenor
(d) Loan period
(b) Whole accuracy
(d) Full accuracy

15). Goods returned by a customer should be debited to:

(a)
Sales A/c
(b) Purchase A/c
(c )
Customers A/c
(d) Sales return A/c
16). Compound entry affected at least:
(a)
Two account
(b) Three account
(c )
One account
(d) Four account
17). The modern system of book keeping is based on:
(a)
Double account system
(b) Single entry system
(c )
Single account system
(d) Double entry system
18). The party most interested in accounting information is:
(a)
Owners
(b) Managers
(c )
Investors
(d) Creditors
19). The concept of recording dual aspect of business transaction is called:
(a)
Double entry system concept (b) Dual recording concept
(c )
Dual aspect concept
(d) None of these
20). The deduction allowed by creditor to the debtor for payment before due date is called:
(a)
Trade discount
(b) Purchase discount
(c )
Payment discount
(d) Cash discount