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Lahore College of Business and Sciences

The document contains a practice exam for accounting students with multiple choice and short answer questions. It tests knowledge of key accounting concepts like the accounting equation, bookkeeping, the accounting cycle, financial statements, and more. It also includes several journal entry questions and a question requiring preparation of basic financial statements for a toy business.

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Naseem Akhtar
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74 views3 pages

Lahore College of Business and Sciences

The document contains a practice exam for accounting students with multiple choice and short answer questions. It tests knowledge of key accounting concepts like the accounting equation, bookkeeping, the accounting cycle, financial statements, and more. It also includes several journal entry questions and a question requiring preparation of basic financial statements for a toy business.

Uploaded by

Naseem Akhtar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Lahore College of Business and Sciences

Student Name:……………………………………….. Class: 1st year Subject: Accounting


Time allowed:………minutes Total marks:
Q1: Choose the correct options from the following:
1. Usually in bill of exchange there are ……… parties:
(a) one (b) two (c) three (d) four
2. Good will and copy right are:
(a) current assets (b) fixed assets (c) tangible assets (d) intangible assets
3. Copy of customer account in bank’s ledger is called:
(a) cheque book (b)Pass book (c) bank statement (d) Both b& c
4. Gross profile is known as:
(a) Trading a/c (b) Balance sheet (c)trial balance (d) P&L a/c
5. Recording of business transaction in the books of account is called:
(a) accounting (b) book keeping (c) checking (d) classifying
6. Entry done but wrong is error of:
(a)omission (b) commission (c) principal (d) compensating
7. Most safe cheque for payment is:
(a) bearer cheque (b)cross cheque (c) blank cheque(d) order cheque
8. A small sentence under every entry is called:
(a) remark (b) argument (c) narration (d) comment
9. Bank reconciliation statement is prepared:
(a) monthly (b) yearly (c) when needed (d) all of these
10. Unpaid expense are considered:
(a) Asset (b) liability (c) Capital (d) income
11. An expenditure which incurred frequently is called:
(a) revenue expenditure (b) capital expenditure (c) loss (d) profit
12. If a bill of exchange is not paid on due date by drawee then it is called:
(a) dishonoured (b) discounted (c) unpaid (d) honoured
13. In case of bill of exchange number of grace days in:
(a) one (b)two (c) three (d) four
14. Second step of accounting cycle is:
(a) journal (b) ledger (c)trial balance (d) transaction
15. All credit purchases are recorded in:
(a) cash book (b) purchase boo (c) pass book (d) sale book
16. Reward or bearing business risk is called:
(a) profit (b) loss (c) Commossion (d) isalary
17. journal is also:
(a) day book (b) prime book of entry (c) diary of business (d) all of these
18. loss value of an asset due to use or wear and tear is called:
(a) repair (b) depreciation (c) evaluation (d) maintenance
19. subsidiary books are parts of:
(a) journal (b) ledger (c) Cash book (d) pass book
20. Accounts related to physical properties are called:
Lahore College of Business and Sciences
(a) real a/c (b)nominal a/c (c) personal a/c (d) none of these

Q2: Answer the Five questions only from the following question shortly?
1. What is book keeping?
2. What is accounting period concept?
3. What is capital?
4. What is journalizing?
5. What is balance?
6. What is sale book?
7. What is cheque?
8. What is means by honour of cheque?
Q3: Answer the Six questions only from the following question shortly?
1. What is bill of exchange?
2. What is cash book?
3. What is trading account?
4. What do you mean by direct expense?
5. What is meant by work sheet?
6. What is meant by error of ommission?
7. What suspense account?
8. What is means by capital expenditure?
Section B
Note: Attempt any three questions:
1. Sajid sold goods to Abid for Rs.16000 on 1st January, 2017. He drew a bill on Abid for Rs.16000
payable after 3 months. Abid accepted the bill and returned it to Sajid. On 4 th January, 2017 Sajid
discounted the bill at his bank at 10% per annum. On the due date the bill was honoured by the
acceptor. Show entries in books of Sajid and Abid.

2. On 31st January,2017 the cash book of Naseem Traders showed a bank balance of Rs.10500
which did not agree with the balance as per bank statement. The reasons for disagreement of
both balance are as under:
a) A cheque of Rs.450 issued on 27th January was not yet presented for payment.
b) Cheques of Rs.1300 deposited into bank for collection are not yet collected and credited by
the bank.
c) As per standing instruction bank has paid Rs.50 donation to charitable institute but no entry
has been recorded in the cash book.
d) A credit memo for interest earned on Govt. Securities collected and credited and credited
by bank Rs.25.
e) A Debt memoranda for bank service charges Rs.15.
Required: Prepare bank reconciliation statement as on 31st January 2017.
Lahore College of Business and Sciences
3. State the reasons whether the following are capital or revenue.
1. Purchases of machinery.
2. Bought goods for business.
3. Purchase of patent rights.
4. Legal expenses incurred in raising a loan.
5. Wages paid on erection of machinery.
6. Paid salary to staff.
7. Repair to motor car purchased second hand.
8. Custom duty paid on machinery.
9. Purchased land on lease.
10. Paid premium on lease.

4. Pass journal entries to rectify the following errors.


1. Purchase of furniture for Rs.5000 has been wrongly debited to purchases account.
2. A sale of building for Rs. 200000 has been credited t0 sales account.
3. Paid carriage Rs.2000 for the newly purchased machinery was posted to carriage account.
4. The owner draw Rs.1000 for the personal use was wrongly debited to trade expense account.
5. A purchase foods Rs.7000 from Sajid has been wrongly entered in the sales books.
6. Purchases debit from Abid for Rs.1000 were omitted to be recorded in the books.

5.Prepare Trading and P&L A/c for year ended 30-09-2017 and a balance sheet as at the date of
Toyota corolla.
Dr. Cr. Dr. Cr.
Building 60,500 Capital 2, 00,000
Stationary 2,500 Drawing 62,500
Creditors 32,500 Sales 1, 65,000
Commission 3,750 Stock 37,500
Taxes 2,500 Cash 12,500
Machinery 55,000 Salaries 8,750
Postage & Telegram 2,000 Carriage 7,500
Debtors 26,000 Dock & clearing charges 1,300
Rent 5200 Interest 1500
Adjustment:
Closing stock Rs. 7200
Prepaid rent Rs.800
Accrued interest Rs.500

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