AIOU 1339 Basics of Accounting Questions

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Q1. Record the following transactions in the Journal of Mr. "X" 2018
January 1 X Started business by with cash Rs. 50,000/-
January 2 Purchased goods for cash Rs. 5,000/-
January 3 Sold goods to A Rs. 10,000/-
January 4 Bought goods from B Rs. 8,500/-
January 5 Purchased furniture for cash Rs. 5,000/-
January 10 Goods bought from C Rs. 3,700/-
January 13 Received from A cash on account Rs. 5,000/-
January 20 Paid C Rs. 1,000/-
January 25 Sold goods to D Rs. 4,500/-
January 28 Sold goods for cash Rs. 2,500/-


Date Particulars Debit (Rs.) Credit (Rs.)
Jan 1 2018 Cash 50,000
    Capital 50,000
Being business started with cash
Jan 2 2018 Purchases 5,000
    Cash 5,000
Being goods purchased for cash
Jan 3 2018 A 10,000
    Sales 10,000
Being goods sold to A on credit
Jan 4 2018 Purchases 8,500
    B 8,500
Being goods bought from B on credit
Jan 5 2018 Furniture 5,000
    Cash 5,000
Being furniture purchased for cash
Jan 10 2018 Purchases 3,700
    C 3,700
Being goods bought from C on credit
Jan 13 2018 Cash 5,000
    A 5,000
Being cash received from A on account
Jan 20 2018 C 1,000
    Cash 1,000
Being cash paid to C
Jan 25 2018 D 4,500
    Sales 4,500
Being goods sold to D on credit
Jan 28 2018 Cash 2,500
    Sales 2,500
Being goods sold for cash

Q2. On 1st January 2017 Mr. A. Rashid started business with a Capital of Rs. 250,000/- and his transactions during the month were as follows:-
Janurary 2 Purchased furniture for Cash Rs.2,000/-
" 3 Purchased stationery for cash Rs.500/-
" 5 Purchased goods from Tariq for Cash Rs. 150,000/-
" 8 Goods purchased on credit from Tariq Rs.100,000/-
" 15 Sold goods for Cash to Mahmud. Rs.200,000/-
" 20 Sold goods to Mahmud on credit Rs.160,000/-
" 25 Received cash from Mahmud on account Rs.100,000/-
" 28 Paid Cash to Tariq on account Rs. 80,000/-
" 31 Paid Rent of the shop Rs.1,500/-
" 31 Paid Salaries for the month Rs.20,000/-
Record the above transactions in the journal of Mr. A. Rashid.


Date Particulars Debit (Rs.) Credit (Rs.)
Jan 1 2017 Cash 250,000
     Capital 250,000
Being business started with cash
Jan 2 2017 Furniture 2,000
     Cash 2,000
Being furniture purchased for cash
Jan 3 2017 Stationery Expense 500
     Cash 500
Being stationery purchased for cash
Jan 5 2017 Purchases 150,000
     Cash 150,000
Being goods purchased from Tariq for cash
Jan 8 2017 Purchases 100,000
     Tariq 100,000
Being goods purchased on credit from Tariq
Jan 15 2017 Cash 200,000
     Sales 200,000
Being goods sold for cash to Mahmud
Jan 20 2017 Mahmud 160,000
     Sales 160,000
Being goods sold to Mahmud on credit
Jan 25 2017 Cash 100,000
     Mahmud 100,000
Being cash received from Mahmud on account
Jan 28 2017 Tariq 80,000
     Cash 80,000
Being cash paid to Tariq on account
Jan 31 2017 Rent Expense 1,500
     Cash 1,500
Being rent of the shop paid
Jan 31 2017 Salary Expense 20,000
     Cash 20,000
Salaries paid for the month

Q3. Akber Ali informs you that the transactions occurred during May 2024, the first month of business operations.

May 1. Akber Ali transferred Rs. 15000 cash from a personal bank account and equipment with a value of Rs. 4000 to his business.

1. A property was acquired for Rs. 39000, alongside land costing Rs. 20000. An initial payment of Rs. 5000 was made in cash, with a note payable issued for the balance.

2. Premium for property insurance was paid in the amount of Rs. 1500 for May.

3. Supplies costing Rs. 500 and equipment costing Rs. 6000 were purchased on account.

15. Cash received for professional services performed, Rs. 5600; other clients were billed for services in the amount of Rs. 2430.

16. Paid cash to creditors on account, Rs. 1800.

20. Returned portion of the supplies costing Rs. 240 since they were not of the proper grade.

22. Received Rs. 1880 cash from clients on account.

31. Paid utility bill, Rs. 500.

31. Paid monthly salaries, Rs. 3000.

31. Recorded additional amount owed by clients for services performed in May, Rs. 4900; payment is due within 30 days.

You are required to:
a) Prepare the General Journal
b) Ledger Accounts
c) Trial Balance d) Trial Balance

a) Prepare the General Journal

Date Particulars Debit Credit
May 1 Cash 15,000
Equipment 4,000
     Capital 19,000
Owner invested cash and equipment into business
May 1 Property 39,000
Land 20,000
     Cash 5,000
     Notes Payable 54,000
Purchase property and building.
May 2 Prepaid Insurance 1,500
     Cash 1,500
Paid insurance premium.
May 3 Supplies 500
Equipment 6,000
     Accounts Payable 6,500
Purchased supplies and equipment.
May 15 Cash 5,600
Accounts Receivable 2,430
     Service Revenue 8,030
Cash received and billed clients for services.
May 16 Accounts Payable 1,800
     Cash 1,800
Paid creditors on account
May 20 Accounts Payable 240
     Supplies 240
Returned part of the supplies purchased earlier.
May 22 Cash 1,880
     Accounts Receivable 1,880
(Received cash from clients previously billed)
May 31 Utilities Expense 500
     Cash 500
Paid utility bill.
May 31 Salaries Expense 3,000
     Cash 3,000
Paid monthly salaries.
May 31 Accounts Receivable 4,900
     Service Revenue 4,900
Recorded additional services performed on account.

b) Ledger Accounts

Cash
Date Particulars Debit (Rs.) Credit (Rs.) Balance
May 1Capital1500015000 Dr
May 1Property and Land500010000 Dr
May 2Prepaid Insurance15008500 Dr
May 15Service Revenue560014100 Dr
May 16Accounts Payable180012300 Dr
May 22Accounts Receivable188014180 Dr
May 31Utilities Expense50013680 Dr
May 31Salaries Expense300010680 Dr
Capital
Date Particulars Debit (Rs.) Credit (Rs.) Balance
May 1Cash, Equipment1900019000 Cr
Equipment
Date Particulars Debit (Rs.) Credit (Rs.) Balance
May 1Capital40004000 Dr
May 3Accounts Payable600010000 Dr
Property
Date Particulars Debit (Rs.) Credit (Rs.) Balance
May 1Cash and Note3900039000 Dr
Land
Date Particulars Debit (Rs.) Credit (Rs.) Balance
May 1Cash and Note2000020000 Dr
Notes Payable
Date Particulars Debit (Rs.) Credit (Rs.) Balance
May 1Property/Land5400054000 Cr
Prepaid Insurance
Date Particulars Debit (Rs.) Credit (Rs.) Balance
May 2Cash15001500 Dr
Supplies
Date Particulars Debit (Rs.) Credit (Rs.) Balance
May 3Accounts Payable500500 Dr
May 20Return240260 Dr
Accounts Payable
Date Particulars Debit (Rs.) Credit (Rs.) Balance
May 3Supplies and Equipment65006500 Cr
May 16Cash18004700 Cr
May 20Supplies Return2404460 Cr
Service Revenue
Date Particulars Debit (Rs.) Credit (Rs.) Balance
May 15Cash and A/R80308030 Cr
May 31Accounts Receivable490012930 Cr
Accounts Receivable
Date Particulars Debit (Rs.) Credit (Rs.) Balance
May 15Service Revenue24302430 Dr
May 22Cash1880550 Dr
May 31Service Revenue49005450 Dr
Utilities Expense
Date Particulars Debit (Rs.) Credit (Rs.) Balance
May 31Cash500500 Dr
Salaries Expense
Date Particulars Debit (Rs.) Credit (Rs.) Balance
May 31Cash30003000 Dr

c) Trial Balance

Trial Balance of Akber Ali as at May 31, 2024
Account Title Debit (Rs.) Credit (Rs.)
Cash10,680
Accounts Receivable5,450
Supplies260
Prepaid Insurance1,500
Equipment10,000
Property39,000
Land20,000
Accounts Payable4,460
Notes Payable54,000
Capital19,000
Service Revenue12,930
Utilities Expense500
Salaries Expense3,000
Total 90,390 90,390

d) Balance sheet

Akber Ali
Balance Sheet
As at May 31, 2024

Assets

Current Assets
  • Cash: Rs. 10,680
  • Accounts Receivable: Rs. 5,450
  • Supplies: Rs. 260
  • Prepaid Insurance: Rs. 1,500

Total Current Assets: Rs. 17,890

Non-Current Assets
  • Equipment: Rs. 10,000
  • Property: Rs. 39,000
  • Land: Rs. 20,000

Total Non-Current Assets: Rs. 69,000

Total Assets: Rs. 86,890

Liabilities

Current Liabilities

  • Accounts Payable: Rs. 4,460
Non-Current Liabilities
  • Notes Payable: Rs. 54,000

Total Liabilities: Rs. 58,460

Owner’s Equity

  • Capital – Akber Ali: Rs. 19,000
  • Add: Net Income
    • Revenue: Rs. 12,930
    • Less: Expenses
      • Utilities Expense: Rs. 500
      • Salaries Expense: Rs. 3,000
      • Insurance Expense: Rs. 1,500
    • Total Expenses: Rs. 5,000
    • Net Income: Rs. 7,930

Total Owner’s Equity: Rs. 26,930

Total Liabilities and Owner’s Equity: Rs. 86,890

Q4. Mr. Hamza started his own business. He executed the following transaction in the first month of his business. April 2024
01: Mr. Naeem started business with cash Rs.250, 000, Furniture. Rs.200, 000 and building Rs.800,000.
02: Opened a bank account with cash of Rs.80, 000.
03: Paid Rs.1, 000 for office expenses.
05: Purchased stationary for office use Rs.50.
07: Bought goods from Mr Zahid for Rs.15, 000, paying cash Rs.5, 000 and balance after one month.
10: Withdraw cash from the bank for office use Rs.8000.
13: Sold goods to Tanveer and Co for Rs.15, 000 and paid carriage Rs 200 for delivery.
21: Cash received from Tanveer and Co Rs.2, 000.
24: Issued a cheque of Rs.1, 000 for advertisement
28: Withdraw from bank Rs.8, 000 for personal use.
31: Goods amounting to Rs.500 were given as charity.
Required: You are required to prepare an Accounting Equation for the month.

Assets = Liabilities + Capital
Date Particulars Assets Liabilities Capital
01-April-2024 Started Business (Cash) 250,000 - 250,000
Started Business (Furniture) 200,000 - 200,000
Started Business (Building) 800,000 - 800,000
02-April-2024 Open a bank account (cash) -80,000 - -
Open a bank account (bank) 80,000 - -
03-April-2024 Paid Office Expenses (Cash) -1,000 - -1,000
05-April-2024 Purchased stationary (Cash) -50 - -50
07-April-2024 Bought goods from Mr. Zahid (Cash) -5,000 - -
Bought goods from Mr. Zahid (Creditors) - 10,000 -
Goods Purchased (Stock) 15,000 - -
10-April-2024 Withdraw cash from bank (Bank) -8,000 - -
Withdraw cash from bank (Cash) 8,000 - -
13-April-2024 Sold goods to Tanveer and Co (Debtors) 15,000 - -
Sold goods to Tanveer and Co (Sales) - - 15,000
Paid carriage for delivery (Cash) -200 - -200
21-April-2024 Cash received from Tanveer and Co (Cash) 2,000 - -
Cash received from Tanveer and Co (Debtors) -2,000 - -
24-April-2024 Issued cheque for advertisement (Bank) -1,000 - -1,000
28-April-2024 Withdraw from bank for personal use (Bank) -8,000 - -8,000
31-April-2024 Goods given as charity (Stock) -500 - -500
Total Final Balance 1,264,250 10,000 1,254,250
Total 1,264,250 1,264,250

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