COLLEGE OF ADMINISTRATION AND FINANCE Student's Name: Student ID NO: Date of exam: _19/05/2014 Branch: Time: Two Hour Max, Marks: 50 FINAL EXAMINATION MAY-2014 PRINCIPLES OF ACCOUNTING (ACCT-101) Marks Details SECTION MARKS YOUR MARKS I II III IV (16x1)=16 (16x1)=16 (2x5)=10 (1x8)=8 TOTAL 50 INSTRUCTOR: SIGNATURE Page 1 of 9
Name of the Student.Date. Student I.D. no Course/Class.. Branch. Examination-May-2014 Principles of Accounting (ACCT-101) Time 2 Hour Max. Marks. 50 (Section-I) True and false type Questions. 16 questions each question carries 1 mark. From the following chose the correct Answer (16 marks) 1. Ratio between current assets and current liabilities is called current ratio. (True) 2. Accounting Equation, Liabilities = Assets + Capital (False) 3. Bonds not consider in long term Liabilities (False) 4. Current Liabilities are recorded in the balance sheet at Assets Side (False) 5. Share cannot be issued at discount. (False) 6. Depreciation is a non cash flow item. (True) 7. Replacement method Related to depreciation (False) 8. Last in First Out (LIFO) method not related to Inventory Costing (False) 9. Fixed Assets have short time life (False) 10. Issued Capital = Number of shares actually issued * par value (True) 11. The asset s value at the end of its benefit period is called Salvage Value (True) 12. Effects of Revenue made changes in liabilities (False) 13. Bad Debts make effect on creditors (False) 14. Carrying Value = Face Value + Premium (True) 15. When contract rate is greater than market rate of the bond, it is called issue of bond at premium. (True) 16. The amount invested by the proprietor / partners/ shareholders in the enterprise is known as Equity. (True) Page 2 of 9
(Section-II) Multiple choice type Questions. 16 questions each question carries 1 mark. From the following chose the correct Answer (16 marks) Q.1 Goods returned by customers are recorded in A) Sales Book B) Purchase Return Book C) Sales Return Book Q.2 Abdul Ltd. 4500 shares of 10 each issue at 10% premium. Find the amount of premium. A) 450 B) 4500 C) 45000 Q.3 Book Value of equipment is: A) Cost + Depreciation B) Cost Depreciation C) Both A and B Q. 4 which one related to depreciation Method A) Net Present Value Method B) Replacement method C) Weighted Average method D) Double decline method Q.5 which one related to Inventory costing Method A) Net Present Value Method B) Replacement method C) Weighted Average method D) Double decline method Q.6 Amount owned by proprietor is called: A) Assets B) Liabilities C) Capital D) None of them Q.7 Accounts Payable is an: A) Liabilities B) Assets C) Capital Page 3 of 9
Q.8 Cash in hand is an example of: A) Current Assets B) Fixed Assets C) Capital D) Liabilities Q.9 Company had sales of 545,000 SR and its cost of goods sold of 228,000 SR. Its gross margin equal to: A) 217,000 SR B) 773,000 SR C) 317,000 SR D) 415,000 SR Q.10 what s mean of NPV? A) Net profit value B) Net Price value C) Net Present value Q.11 Bad Debt is an amount which is A) Not received from Account Receivables B) Not paid to the Account Payables C) Both the above D) None of the above Q.12 Wages paid to workers for the installation of new machinery should be debit to: A) Wages Account B) Machinery Account C) Factory Expenses Account Q.13 Khalid Ltd. 2500 shares of 10 each issue at 10% premium. Find the amount credit to capital. A) 27500 B) 2500 C) 25000 Q.14 Factors that determine depreciation are A) Cost B) Salvage Value C) Useful Life D) All the above Page 4 of 9
Q.15 Important Dates related to the payment of dividend is A) Date of Declaration B) Date of Record C) Date of Payment D) All the above Q.16 Current Liabilities are A) Due within one year B) Due beyond one year C) Both the above D) None of the above (Section-III) Short Easy type Questions. Each Question carries 5 marks (5X2=10) Q.1 Hassam ltd on 1 st Jan 2011 purchased a machine at the cost of $50,000. This Machine is estimated to have 5 year useful life. At the end of the 5th year, the salvage value (residual value) will be $5,000. Calculate the depreciation expenses for 2011, 2012, 2013, 2014, and 2015 using straight line method. Ans. Straight-Line Method Depreciation Expense for Period = Cost - salvage Value/ Useful Life Depreciation Expense for Period = 50000-5000/ 5 Depreciation Expense for Period = 9000 Straight-Line Method Depreciation Accumulated Expense Depreciation Accumulated Book Year (debit) (credit) Depreciation Value $ 50,000 2011 $ 9,000 $ 9,000 $ 9,000 41,000 2012 9,000 9,000 18,000 32,000 2013 9,000 9,000 27,000 23,000 2014 9,000 9,000 36,000 14,000 2015 9,000 9,000 45,000 5,000 $ 45,000 $ 45,000 Salvage Value Page 5 of 9
Q.2 K ltd issue 20000 numbers of Bonds for S.R 10 each pass journal entry, in the books of Company if Bonds Payable issue. 1. At Par 2. At 10% Discount 3. At 10% Premium Ans. Journal entry in the books of Company 1. Bond Issue at par Cash A/c (20000x10) Dr. 200000 To Bonds Payable A/c 200000 (Bonds Payable issued at Par Value) 2. Issue at 10% Discount Cash A/c Dr. 180000 Discount on Bonds Payable A/c Dr. 20000 To Bonds Payable A/c 200000 (Bonds Payable Issue at 10% Discount) 3. Issue at 10% Premium Cash A/c Dr 220000 To 10% Premium on Bond 20000 To Bonds Payable A/c 200000 (Bonds Payable Issue at 10% Premium) Page 6 of 9
(Section-IV) Easy type Questions. Question carries 8 marks (8x1=8) Q.1 From the following Balance of Mohammed ltd. Prepare income statement and Balance Sheet for the year ending 31 March 2014: Balance as on 31 st March 2014 Particulars Amount (S.R) Opening stock (1-4-2013) 16000 Purchase 26750 Wages 17500 Sales 60000 Salaries 2500 Travelling Expenses 750 Carriage Inward 2150 Administration Expenses 550 Trade Expenses 750 Building 17000 Furniture 3000 Debtors 4500 Creditors 4500 Capital 28000 Cash 1050 Closing Stock as on 31 st March 2014 25000 Page 7 of 9
Ans Income Statement as on 31 st March 2014 Mohammed ltd Income Statement For the period ending March 31, 2014 Sales 60,000 (-) Sales Returns 0 (-) Sales Discount 0 (=) Net Sales 60,000 (-) Cost of Goods Sold Openning Stock 16,000 (+) Purchase 26,750 (-) Purchase Returns 0 (-) Purchase Discount 0 (+) Carriage Inward 2,150 (-) Closing Stock -25,000 19,900 (=) Gross Profit 40,100 (-) Operating Expenses Wages 17,500 Salaries 2,500 Travelling Expenses 750 Administrative Expenses 550 Trade Expenses 750 22,050 (=) Net Profit 18,050 Page 8 of 9
Mohammed ltd Balance Sheet March 31, 2014 Assets Cash 1,050 Debtors 4,500 Closing Stock 25,000 Building 17,000 Furniture 3,000 50,550 Liabilities and Equity Liabilities Creditors 4,500 Equity Capital 28,000 Profit 18,050 50,550 Page 9 of 9