Uttam Kumar Saha ACA, ACS

Versatile Educare Academy

Accounting
Professional Level: Knowledge Level

Introduction to accounting (Chapter-1)

Q1. What is accounting?

Q2. What is the objective of financial statements?
Q3. How many types of business entity
Q4. Who needs financial information?
Q5. What are the elements of financial statements?
Q6. Definition: Balance sheet, Income statement, GAAP, Capital income, Revenue income, Capital
expenditure, Revenue expenditure, True & fair view
Q7. Identify the principles that relate to each qualitative characteristic?
Q8. Identify the different interests of stakeholders?
Q9. What factors to be considered to develop of accounting?
Q10. As per IFRS framework, what are the qualitative characteristics of accounting information?
Q11. Where an entity recorded it’s first transactions?
Q12. Which factors have not influenced financial reporting?
Q13. Identify the following items whether should be classified as “capital” or “revenue” or “income”
a) The purchase of a property
b) Property depreciation
c) Legal fees in connection with the purchase of property
d) The costs of adding extra memory to a computer
e) Computer repair & maintenance costs
f) Profit on the sale of an office building
g) Revenue from sale by credit card
h) The cost of new machinery
i) Customs duty charged on machinery
j) The cost of installing the new machinery
k) The wages of the machine operators
 Uttam Kumar Saha ACA, ACS
Versatile Educare Academy
Accounting
Professional Level: Knowledge Level

The accounting equation (Chapter-2)

Q1. What is the accounting equation?

Q2. Definition: Asset, liability, receivables/debtors, currents asset, current liability,
payables/creditors, capital, historical cost, profit, loss, drawings, gross profit, net profit
Q3. “The business as a separate entity” Explain.
Q4. Identify and manipulated the accounting equation?
Q5. What is balance sheet?
Q6. A business buys a car for Tk.10,000/-. It expects to keep the car for three years and then
to sell it for Tk.3,400/-. How much depreciation should be accounted for in each year of
the car’s useful life?
Q7. You are given the following information about ABC Co. Ltd. as on 31.12.2009.

Particulars Amount (Tk.)

Capital (01.01.2009) 2,500
Additional capital introduced 250
Profit for the year 3,620
Stall at cost 1,800
Van at cost 700
Drawings in year 960
Loan 50
Inventories 1,250
Cash in hand 20
Trade payables 675
Cash at bank 1,475
Trade receivables 890

Requirement: Prepare a balance sheet for ABC Co. Ltd. as at 31.12.2009

Q8. A business has sales of Tk.1,00,000/-, cost of sales of Tk.60,000/- and expenses of
Tk.20,000/-. What is the gross profit margin?
 Uttam Kumar Saha ACA, ACS
Versatile Educare Academy
Accounting
Professional Level: Knowledge Level

Recording financial transactions (Chapter-3)

Q1. What are source documents used for recording financial transactions?
Q2. Definition: Invoice, credit notes, debit notes, delivery notes, goods received notes, sales
day book, purchase day book, cash book, Petty cash book, payroll
Q3. What are books of original entry used for?
Q4. What is the cash book used for?
Q5. What is the petty cash book used for?
Q6. What is the payroll used for?
Q7. What is the journal used for?
Q8. Petty cash is controlled under an imprest system. The imprest amount is Tk.100/-.
During a period, payments totaling Tk.53/- have been made. How much needs to be
reimbursed at the end of the period to restore petty cash to the imprest account?
 Uttam Kumar Saha ACA, ACS
Versatile Educare Academy
Accounting
Professional Level: Knowledge Level
Ledger accounting and double entry (Chapter-4)
Q1. Why do we need ledger accounts?
Q2. What is the nominal ledger used for?
Q3. Definition: Nominal ledger, double entry bookkeeping, trade discount, cash discount,
VAT
Q4. Identify the debit and credit entries in the following transactions:
a) Bought a machine of Tk.10,000/- on credit
b) Bought goods of Tk.500/- on credit
c) Sold goods of Tk.1,200/- on credit
d) Paid D (a credit supplier) of Tk.3,000/-
e) Collected Tk.1,800/- from E, a credit customer
f) Rent paid Tk.5,000/-
g) Paid insurance premium of Tk.2,500/-
Q5. What are journals entries used for?
Q6. XYZ operates an imprest petty cash system. The imprest amount is Tk.150/-. At the end
of the period the totals of the four analysis columns in the petty cash book were as
follows:
Column 01 Tk.23/-
Column 02 Tk.7/-
Column 03 Tk.13/-
Column 04 Tk.28/-
How much cash is required to restore the imprest amount?
Q7. Please explain about accounting for trade discount and cash discount?
Q8. What is accounting for VAT?
Q9. A Ltd. purchase raw materials at a cost of Tk.1,000/- plus VAT @15%. From the raw
material A Ltd. makes finished products which it sells to a retail outlet, B Ltd. for
Tk.1,600/- plus VAT at 15%. B Ltd. sells the products to customers at a total price of
Tk.2,000/- plus VAT at 15%uch VAT is paid at each stage in the chain?
Q10. Individual customer accounts are kept in which ledger?
Q11. When a credit customer pays an invoice for Tk.230/- including VAT at 15%, what will
be credit entry in the VAT ledger account?
Q12. What may be happened when a debit entry occurred in a T account?
 Versatile Educare Academy
Accounting
Professional Level: Knowledge Level

Preparing basic financial statements (Chapter-5)

Q1. What methodically steps you need to follow for preparing income statement and
balance sheet?

Q2. Definition: Trial balance, ledger account

Q3. When the trial balance fails to balance? Even if the trial balance balances are equal, what
types of error may happen?
Q4. What is extended trial balance?
Q5. From the following information prepare ledger accounts, an income statement and a
Balance sheet:
A business is started with capital of Tk.2,000/- paid by the proprietor into a business
bank account, which has an overdraft facility. During the year the following transactions
occurred:
Particulars Amount in Tk.
Purchase of goods, on credit 4,300
Payments to suppliers 3,600
Sales, all on credit 5,800
Payments from customers 3,200
Non-current assets purchased for cash 1,500
Other expenses, all paid in cash 900
Q6. Prepare an extended trial balance from the following information:
Date Particulars
01.01.2009 Opened a Bank account with Tk.400/-. Took Bank loan for Tk.5,000/- and agreed
an overdraft limit of the same amount.
01.01.2009 Bought a car for Tk.2,500/- cash. Insured it for Tk.300/- cash. Bought other
equipment for Tk.1,500/- and consumable items for Tk.500/-, both on credit
05.04.2009 Charged customers Tk.15,945/-, all on credit
12.06.2009 Purchased further consumables for Tk.3,690/- on credit, and diesel for car
Tk.650/- in cash.
18.09.2009 Took Tk.1,250/- in cash from ATM for herself
22.12.2009 Received Tk.12,935/- from customers and paid Tk.3,250/- to suppliers.
 Uttam Kumar Saha ACA, ACS

Versatile Educare Academy

Accounting
Professional Level: Knowledge Level

Control accounts, errors and omissions (Chapter-6)

Q1. What are control accounts?

Q2. The purpose of control accounts?
Q3. Types of error in accounting?
Q4. How errors are corrected?
Q5. What is suspense account?
Q6. What is Bank reconciliation?
Q7. As on 31.12.2009 the balance in ABC C. Ltd. cash book was Tk.805.15 debit. A bank
statement on 31.12.2009 showed a credit at the bank by Tk.1,112.30
The following differences were established:
a) The cash book had been undercast by Tk.90.00 on the debit side
b) Cheques deposited but not yet credited by the bank were Tk.208.20
c) Cheques issued but not yet presented to the bank were Tk.425.35
Prepare a statement of reconciliation.
Q8. On the receivable control account A Co. has sales of Tk.1,25,000/- cash received
Tk.50,000/-, discount allowed Tk.2,000/-. The balance carried down is Tk.95,000/-.
What was the opening balance?
Q9. A payable control account contains the following entries:
Bank Tk.79,500/-
Credit purchase Tk.83,200/-
Discount received Tk.3,750/-
Contra with receivables control account Tk.4,000/-
Balance C/d at the closing Tk.12,920/-
What was the opening balance at the beginning?
 Uttam Kumar Saha ACA, ACS

Versatile
Professional stage: Knowledge Level
Subject: Accounting

Accounting concepts and conventions (Chapter-7)

Q1. The importance of accounting concepts and conventions

Q2. Specify how to ensure fair presentation in financial statements?
Q3. What are the underlying assumptions?
Q4. What are the purposes for preparing of financial statements?
Q5. When may departure from BASs at the time of preparing financial statements?
Q6. What is an accounting policy?
Q7. What is going concern?
Q8. A retailer commences business on January 01 and buys 20 washing machines, each
costing Tk.100/-. During the year he sells 17 machines at Tk.150/- each. How should the
remaining machines be valued at December 31, in the following circumstances?
a) He is forced to close down his business at the end of the year and the remaining
machines will realize only Tk.60/- each in a forced sale.
b) He intends to continue his business into the next year.
Q9. If the going concern assumption is not followed, what factors must be disclosed?
Q10. Definition: Prudence, substance over form, neutrality and completeness, materiality,
consistency, historical cost, money measurement concept
 Uttam Kumar Saha ACA, ACS

Versatile
Professional stage: Knowledge Level
Subject: Accounting
Cost of sales, accruals and prepayments (Chapter-8)

Q1. How comprises the cost of sales?

Q2. On January 2009 ABC food store had goods in inventory amount Tk.6,000/-. During
2006 its proprietor purchased goods Tk.50,000/-. Sales for the year amounted to
Tk.80,000/-. The cost of goods in inventory at December 31, 2009 was Tk.2,500/-
Calculate the gross profit for the year.
Q3. Explain about cost of carriage inwards and cost of carriage outwards.
Q4. When inventory to be written off?
Q5. Discuss about the principle behind accruals and prepayments.
Q6. XYZ’s business financial year ended on 28 February each year. His telephone was
installed on April 01, 2008 and he receives his telephone bill quarterly at the end of each
quarter. You need to calculate the telephone expenses to be charged to the income
statement for the year ended February 28, 2009.
Telephone expense for the three months ended:
30.06.2008 Tk.23.50
30.09.2008 Tk.27.20
31.12.2008 Tk.33.40
31.03.2009 Tk.36.00
Q7. A business opens on January 01, 2009 in a shop where the rent is Tk.20,000/- per year,
payable quarterly in advance at the beginning of each three month period. Payments
were made as follows:
January 01, 2009 Tk.5,000
March 31, 2009 Tk.5,000
June 30, 2009 Tk.5,000
September 30, 2009 Tk.5,000
December 31, 2009 Tk.5,000
What will the rental charge be for the year ended December 31, 2009?
Q8. Definition: Cost of sales, accruals, prepayments, carriage inwards, carriage outwards
Uttam Kumar Saha ACA, ACS

Versatile
Professional stage: Knowledge Level
Subject: Accounting
(Chapter-9)

Q1. How irrecoverable debts write off and its presentation?

Q2. What is accounting treatment for irrecoverable debts written off and subsequently paid?
Q3. When a customer’s cheque is dishonored do you treat it as irrecoverable debts?
Q4. We have the following information on ABC for the year ended December 31, 2009.

Particulars Amount (Tk.)

Inventory, January 01, 2009 6,000
Purchases 1,22,000
Inventory, December 31, 2009 8,000
Cash sales 1,00,000
Credit sales 70,000
Discount allowed 1,200
Discount received 5,000
Irrecoverable debts expenses 9,000
Debts paid in 2009 which were previously written off as irrevocable in 2008 2,000
Other expenses 31,800

Prepare income statement from the above information.

Q5. If a receivable allowance is increased, what is the effect on the income statement?
Q6. At July 01, 2009 a business had total outstanding debts of Tk.8,600/-. During the year to
December 31, 2009 the following transactions took palace.
a) Credit sales of Tk.44,000/-
b) Payments from customers of Tk.49,000/-
c) Two debts for Tk.180 and Tk.420, were declared irrecoverable and the customers are
no longer purchasing goods from the company. These are to be written off.
Prepare the trade receivables account and the irrecoverable debts account for the year.
Q7. Definition: Irrecoverable debt, writing off, allowance for receivables
Uttam Kumar Saha ACA, ACS

Versatile
Professional stage: Knowledge Level
Subject: Accounting
Inventories (Chapter-10)

Q1. What do you mean about counting inventories?

Q2. What is included in the total cost of an item?
Q3. ABC Co. Ltd. had a balance on its inventory account at July 01, 2008 of Tk.23,490/-. At
June 30, 2009 it had inventory of Tk.40, 285/-?
Prepare a journal to record the situation as at the year ended June 30, 2009.
Q4. Why it is necessary for inventory counting?
Q5. What arte the basic rule for valuation of inventories?
Q6. How determine the cost of inventory?
Q7. There is any need to entry for writing off inventories?
Q8. How mark-up/margin percentage uses to establish cost?
Q9. What would be the effect on a business’s profit of discovering that inventory with a cost
of Tk.1,250/- and a net releasable value of Tk.1,000/- had been omitted from the year
end inventory count?
Q10. A business has valued inventory at Tk.1,000/-, being the selling price of the items.
Requirement:
What is the cost of closing inventory at cost assuming the business operates?
a) On a margin of 25%?
b) On a mark-up 25%?
Q11. Definition: Conversion cost, cost of inventory, cost of purchase, LIFO, FIFO, AVCO
 Uttam Kumar Saha ACA, ACS

Versatile
Professional stage: Knowledge Level
Subject: Accounting
Non-current assets and depreciation (Chapter-11)

Q1. What items include for calculating the cost of non-current assets? (Page-274-section
overview)
Q2. What do you mean about Part exchange value of asset? (P-274, S-1.2)
Q3. What is depreciation? (P-275, s-1.4)
Q4. What factors are relevant to calculate the depreciation? (P-275, S-1.4)
Q5. ABC enterprises purchased a new car for office use. The invoice received contained the
following information:

Particulars Amount (Tk.)

Price of the car 18,720
Part-exchange allowance of old car (6,200)
Amount due 12,520
It is estimated that the new car have useful life three years and a residual of Tk.6,360/-.
Calculate the total amount of depreciation for new car.
Q6. When depreciation is charged, what things must be accounted for? (P-277, S-3)
Q7. A business has an accounting year from January to December and purchases a non-
current asset on April 01, 2008 at a cost of Tk.24,000/-. The expected life of the asset is
four years, and its residual value is nil. What is the depreciation charge for the year to
December 31, 2008?
Q8. What is accounting for depreciation? (P-284, S-4)
Q9. What do you mean revaluation of non-current assets and journal entries for revaluation?
(P-288, S-5 &5.1)
Q11. What are principles behind calculating the net profit or loss on disposal? (P-290, S-6.1)
Q12. What data kept in an asset register? (P-297, S-7.1)
Q13. Definition: Useful life, depreciation, reducing balance depreciation, accumulated
depreciation, carrying amount, asset register, purchased goodwill
 Uttam Kumar Saha ACA, ACS

Versatile
Professional stage: Knowledge Level
Subject: Accounting
Part-1
Company financial statements (Chapter-12)

Q1. What are character tics of a limited company? (P-314, S-1)

Q2. Distinguish between share capital and shareholders. (P-314, S-1.1)
Q3. What are the differences between private and public companies? (P-315, S-1.2)
Q4. What are basic types of share capital? (P-315, S-2)
Q5. What are relation among irredeemable, redeemable and dividend? (P-317, S-2.3)
Q6. A company may have a number of different reserve, Please mention such type of
reserve. (P-319, S-3)
Q7. How cash involvements reflect for issue of bonus share?
Q8. How comprises the company’s debt capital? (P-324, S-4)
Q9. What is accounting for debt capital? (P-325, S-4.1)
Q10. What is accounting for tax provision? (P-326, S-6.1)
Q11. What are main sources of accounting regulations for companies? (P-327, S-7)
Q12. What are consists in BAS 8? (P-336, S-11)
Q13. On January 2008 a company issues 5% redeemable preference shares of Tk.1,00,000/-. In
the year 2008 the dividend declared on preference shares but unpaid. What will be effect
in Balance sheet and income statement?
Q14. A company issues ordinary shares of 50,000 at a price of Tk.15 per share each which face
value Tk.10 per share. What is the accounting treatment?
Q15. Definition: Right issue (P-320), Retained earnings (P-321), Bonus issue (P-323), change in
account ting policy (P-338), prior period error (P-339)
 Versatile
Professional stage: Knowledge Level
Subject: Accounting
Part-2
Company financial statements (Chapter-12)

Q1. Why does BAS 1 include formats? (P-327, S-7.1)

Q2. Explain the structure and content of financial statements? (P-328, S-7.2)
Q3. When accounting policy can be changed? (P-336, S-11)
Q4. When accounting estimate can be changed? (P-336, S-11)
Q5. You are supplied with the following extract of Nitol Ltd’s balance sheet on December 31,
2009 & 2010

Particulars 2010 2009

Ordinary shares of Tk.1 each Tk.1,20,000/- Tk.1,00,000/-
Share Premium Tk.2,60,000/- Tk.2,20,000/-
Notes:
1) On July 01, 2009 there was a 1 for 10 bonus issue
2) On September 2009 there was right issue
3) There are no other reserve balances

What was the total amount received from the issue of shares for the year ended
December 31, 2010? (Tk.60,000/-)

Q6. The following information is available in relation to the tax figures to be included in the
financial statements of Golden Ltd.

Particulars 2007 2006

Tax payable at Balance sheet Tk.2,71,500/- Tk.2,37,600/-
Tax charge in the income statement Tk.2,69,700/- Tk.2,19,800/-

What is the total tax paid during the year ended December 31, 2007? (Tk.2,35,800/-)

Q7. Rodhall Ltd. has a property which cost Tk.1,00,000 on 01.01.2000. It had then an
estimated useful life of 50 years. On 01.01.2005 the property was revalued to
Tk.2,80,000/-. The company has no other non-current assets. How much will be credited
to Rodhall Ltd’s revaluation reserve on 01.01.2005? (Tk.1,90,000/-)

Q8. If tax is under provided in the income statement for 2008 what effect will be incurred in
the following year income statement? (A reduction in profit for the year)

Q9. What requires under BAS-8 a change in accounting estimate prospective application or
retrospective application?
 Uttam Kumar Saha ACA, ACS

Versatile
Professional stage: Knowledge Level
Subject: Accounting
Sole trader and partnership financial statements (Chapter-13)

Q1. What are differences between sole trader & Company financial statement? (P-354,
section overview)
Q2. How calculate the net assets under sole trade financial statements? (P-354)
Q3. In 2005 Waris takes drawings of Tk.40,000/- and ends 2005 with net assets of
Tk.8,50,000/- and opening capital of Tk.7,08,000. He did not introduce any capital in the
year. What was net profit of Waris in 2005?
Q4. How a sole trader convert in to a company? (P-357, section overview)
Q5. Why would a sole trader wish to register as a limited liability company? (P-357, S-2.1)
Q6. Arun, a sole trader, has agreed to sell his business to Wymax Ltd for Tk.1,00,000/-, the
consideration to be paid in Tk.0.50 shares valued at Tk.0.80. The following information is
available about Arun’s business as at the sale date:

Particulars Amount (Tk.)

Fixed assets (net book value) 49,500/-
Stock 4,200/-
Debtors 5,740/-
Cash 1,850/-
Creditors 2,860/-
Wymax Ltd values Arun’s fixed assets at Tk.60,000/- and stock at Tk.3,000/-; Arun is to
retain the cash and pay off the creditors.
a) What is the gain on realization in Arun’s books?
b) With how many shares in Wymax Ltd will Arun be issued?
Q7. What issues are included in the partnership agreement? (P-362, S-4.1)
Q8. How does accounting for partnerships differ from accounting for sole traders? (P-365, S-5.1)

Q9. What are differences between capital and current account? (P-366)
Q10. What is the procedure for conversion or sale of a partnership to a company? (P-374, S-7)
Q11. Definition: Partnership (P-362), appropriation of profit (P-365), current account (365)