PRC 4 Sir Mohsin Last Assignment September 2022
PRC 4 Sir Mohsin Last Assignment September 2022
PRC 4 Sir Mohsin Last Assignment September 2022
2022 Assignment
Sir Mohsin Final Assignment
PRC-04
a. an interaction between a business and customer, supplier or any other party with
b. whom they do business
c. an event that must not be recorded by the accounting system
d. Business started without investment
e. None of above
A option
2. Accounting is a process of
a. Recording, classifying, summarizing the information of financial nature & interpreting the result
b. Recording financial transaction in the accounting records of an entity
c. Activity involving two things that reciprocally affect each other
d. None of above
A option
(b option)
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10. As at 1/01/2010 salary outstanding was Rs. 128,400. Though during the year ended 31/12/2010
Rs. 598,800 was paid as salary, as at 31/12/2010 salary amounting to 142,900 remained unpaid.
What is the salary expense to be written off in the Statement of Income for the year 31/12/2010?
a. 613,300
b. 598,800
c. 741,700
d. 584,300
11. The matching concept matches
e) assets with liabilities
f) income with expenses
g) capital with reserves
h) expenses with capital
f) income with expenses
12. If the Cheque issued by the entity gets dishonoured for insufficient funds
a. It increase back the liability
b. It decrease the bank balance
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A& c
A option
18. Which of the following errors will create balance in a suspense account?
a) Repairs expense was considered as purchase of asset
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d) Petty cash expenses of Rs. 500 were only credited to bank account
19. When a company writes a check for more than the amount available in the checking amount is
an example of
a. Bank overdraft
b. Amount prepaid
c. Drawings
d. None of above
(Bank overdraft)
Partial omission
A&c
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c. Both of above
d. None of above
25. Sc-e learning purchased an asset. The cost of the asset was Rs. 15000. Sc-e learning depreciates
such assets over useful life of 10 years on SLM basis. After the first year of operating the asset i.e.
in the second year Sc-e learning revised its method for depreciation such type of asset on reducing
balance method. Sc-e learning estimates residual value at Rs. 3000.
You are required to calculate the depreciation for the 3rd year
a. 1721
b. 1690
c. 9754
d. 11.475
Ans (1721)
26. Which of the following cost formula gives the highest balance of closing inventory
a. FIFO
b. AVCO
c. Both of the above
d. None of above
Ans (FIFO)
27. Calculate adjusted balance of cash book as on 31 Dec. 2012 & balances appearing on the gives
date are
-Balance as per cashbook Rs 66,000
-Bank charges amounted to Rs. 15,000 & interest income of Rs. 25,000 is not yet recorded in books
-Payment made against standing order Rs. 35,000 not yet recorded in cashbook
-Direct collection by the bank Rs. 36,000 but not yet recorded in cash book
-Cheques amounting to Rs. 25,000 were issued but recorded in cash book twice
-Cheque of Rs. 50,000 received from debtors but entered twice in cashbook
a. 42,000
b. 74,000
c. 52,000
d. 50,000
Ans (52k)
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a) True
b) False
61. Petty cash book must follow imprest system
a) True
b) False
62. Accrual for Receiver is Prepayment for Payer
a) True
b) False
63. Dishonor cheques are recorded on which side of the Cash book?
a) Receipt side
b) Payment side
c) Both sides
d) None of these
b Option
64. Debit note issued is recorded in which Books of Prime Entry?
a) Purchase return Day book.
a Option
65. Debit note issued is recorded in which Books of Prime Entry?
a) Purchase return Day book.
a Option
66. Credit note issued is recorded in which Books of Prime Entry?
a) Sales return Day book.
a Option
67. Credit sales goes to which of the following books of prime entry?
a) Sales day Book
a Option
68. Seller received which note from buyer?
a) Debit note
b) Credit Note
a Option
69. Statement of Financial Position is prepared for
a) Whole year
b) Last day of accounting year
b Option
70. Statement of Comprehensive income is prepared for
a) Whole year
b) Last day of accounting year
b Option
71. In preparing its financial statement for the current year an entity closing inventory was
understated by RS. 200000. What will be the effect of this error if it remains uncorrected?
a. The current year profit will be overstated and next year profit will be understated
b. The current year profit will be understated and next year profit will be overstated
c. The current year profit will be overstated but there will be no effect on next year
profit.
d. The current year profit will be understated but there will be no effect on next year
profit.
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b Option
72. Bilal has started a trading business. He deals in goods where price is usually rising over the time.
Which of the following statement is correct regarding selection of FIFO and average method in this
case?
a. FIFO will result in lower reported profit
b. Average method will give more accurate profit
c. Avg. method will lead will higher cost of ending stock
d. Profit will be unaffected by the selection of inventory method
b Option
73. Which two of the following is included in cost of inventory?
a. Recoverable taxes paid on purchases
b. Normal wastages of material
c. Selling cost
d. Fixed manufacturing overheads
Both b & d
74. If a PPE remains idle for whole year the depreciation expense for the year will be NIL under:
a. Straight line method
b. Units of production method
c. Reducing balance method
d. All of the above
b. Units of production method
75. Which of the following is not an asset that falls under the scope of IAS 16 PPE?
a. Assets held for the production or supply of goods or service
b. Tangible assets
c. Assets held for sale in the normal course of business
d. Assets expected to be used for more than one period
c option
76. The purpose of depreciation is to;
a. Recognize that asset lose value overtime
b. Write the asset down to its realizable value at the end of each period
c. Allocate the depreciable cost on a systematic basis over the asset’s useful life
d. Accumulate a fund for asset replacement
c Option
77. Which two of the following items would be appearing in analysis of expenses by nature?
a. Salaries exp
b. Admin exp
c. Distribution exp
d. Finance cost
Both a & d
78. Which of the following statement is correct?
a. Credit balance as per bank statement means a bank overdraft
b. Debit balance as per bank statement means a bank overdraft
c. Debit balance as per cash book means bank overdraft
d. credit balance as per cash book means an asset
b Option
79. For reconciling bank balances unpresented cheques should be:
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84. A transection not recorded in any other books of original entry is recorded in:
a. Sales day book
b. Purchase day book
c. Cash book
d. General journal
d. General journal
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91. Income arises from increase in assets or decrease in a liability resulting in:
a. Decrease in equity other than contribution from owner
b. Increase in equity other than contribution from owner
c. Increase in equity including contribution from owner
d. Decrease in equity including contribution from owne
b. Increase in equity other than contribution from owner
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93. Which of the following is NOT an asset that falls under the scope of IAS 16
Property, Plant and Equipment?
a) Tangible assets
b) Assets held for the production or supply of goods or services
c) Assets held for sale in the normal course of business
d) Assets expected to be used for more than one period
c) Assets held for sale in the normal course of business
94. Suppose cost of an asset is Rs. 3,600,000 , Residual value is Rs. 500,000 & useful life is 5 years.
Calculate depreciation under reducing balance of year 3rd.
a. 533,149
b. 791,257
c. 2,498,721
d. 359,236
(533,149)
D option
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a. SLM
b. RBM
c. UPM
d. YDM
99. Which of the following does not require journal entry in periodic inventory method?
a) Abnormal loss
b) Goods returned by a supplier
c) Closing inventory
d) Normal loss
d) Normal loss
100. Payables & purchases are recorded on their cost also if they avail cash discount, this concept is
called
a. Accrual
b. Prudence
c. Reliability
d. Consistency
101. Which of the following statements is correct?
a) Directors of a company are personally liable for any losses of the company
b) A sole trader business is owned by shareholders and operated by the proprietor
c) Partners are liable for losses in a partnership equally regardless of their profit-sharing ratio
d) A company is run by directors on behalf of shareholders
102. The cost of a wastebasket having an estimated useful life of 5 years is charged off as an expense
upon purchase. This is an example of the application of the:
a) consistency
b) matching principle
c) materiality concept
d) historical cost principle
c) materiality concept
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Business paid weekly salary of Rs. 200,000 on Friday for five-day as the week ends on that day.
Books ends on Thursday. Business will pass the entry as
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c. Liability A/c
d. None of above
B option
None of above
108. Which of the following is the correct formula for the Accounting Equation?
(B) Option
109. Which of the following statements is true about the accounting equation?
a. The accounting equation represents that the sources in a business are not equal to the resources of
that business
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b. The accounting equation represents that the sources in a business are equal to the resources of
that business
c. The accounting equation represents that the resources are allocated to the business at cost price
d. None of the above
(B) Option
110. SC E-Learning LTD has received Rs. 5million compensation from Municipal Corporation on
acquisition of an agricultural land for construction of roads
a. It is a capital receipt
b. It is a revenue receipt
c. It is a deferred revenue receipt
d. It is not a receipt
A option
Assets Liabilities
Capital
(B) Option
a. Material cost
b. Direct labour cost
c. Indirect overhead cost
d. None of above
Material cost
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113. A summary of transactions that have taken place in the company’s bank account is called
a. Adjusted cashbook
b. BRS
c. Deposit-in-transit
d. None of above
None of above
A Option
115. If a fixed asset is purchased for Rs.10,000 & it has estimated useful life of 4 years with residual
value of Rs.3,000. calculate dep. Under SLM & RBM of 4 years?
116. What is the journal entry of settlement discount?
117. Journal entries of prepaid insurance, prepaid salaries, unearned revenue & accrued revenue?
Lectures
•Revision Lectures
•PRC notes
•Teachers Practice books
•Past Papers
•Mid Term test
Mocks test
•Chapters Wise notes
•ICAP Books
PRC-1 Business Writing and Comprehension Skills
https://sce-learning.com/prc-1-business-writing-and-comprehension-skills/
PRC-2 Quantitative Methods https://sce-learning.com/prc-2-quantitative-methods/
PRC-3 Principles of Economics https://sce-learning.com/prc-3-principles-of-economics/
PRC-4 Introduction to Accounting https://sce-learning.com/prc-04-introduction-to-accounting/
PRC 5 introduction to Business https://sce-learning.com/prc-5-introduction-to-business/
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Financial Statement
121. Following is the summarised trial balance of
Qambar Enterprises (QE) for the year ended 31
December 2018:
Rs. in '000
Debit redit
niture - cost 2,535 cumulated dep. at 8:
hicles - cost at 1 Jan 2018 )Q_ -Furniture -
975
entories at 1 Jan 2018 0 - Vehicles 1,450
de receivables 2,970 pital at 1 Jan 2018 5,223
ce and sales suoolies 210 % Bank loan 1,500
h and bank balances 746 btained on 1 April 2018)
chases 12,364 de _,1yables 3,943
urns 826 es 18,184
aries and commission 1,295 her income 275
nt and insurance 545 . .......
ities and repairs 420
ods withdrawn 644
vision for doubtful receivables 45
31,550 31,550
Additional information:
• Inventories as at 31 December 2018 were valued at Rs. 3,860,000. Office and sales
supplies costing Rs. 90,000 are still unused. However, 30% of these supplies are not
usable due to deterioration in quality.
• Rent and insurance includes Rs. 75,000 paid for a photocopying machine. The machine
was obtained on 1 November 2018 at a fixed rent of Rs. 75,000 per quarter and an
additional Re. 0.40 for each copy. 40,000 copies have been made by QE up to 31 December
2018.
• QE received 5% discount on list price of goods purchased for cash which was credited to
other income. List price of such purchases was Rs. 2,500,000.
• Cost of office repairs amounting to Rs. 85,000 was paid by the owner from personal
cash.
• On 1 September 2018, a vehicle was invested into the business by the owner. The
vehicle was purchased by the owner on 1 July 2015 for Rs. 1,050,000 and had a fair value
of Rs. 960,000 on 1 September 2018.
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• QE depreciates vehicles at 10% using straight line method while furniture is depreciated
at 15% using reducing balance method. Cost of furniture includes an item of furniture
purchased for Rs. 400,000 on 1 May 2018.
• Sales include Rs. 335,000 received from a customer though the related goods were
dispatched on 5 January 2019.
• Trade receivables include Salman's balance of Rs. 370,000. It has been decided to set-
off Rs. 100,000 payable by QE to Salman and make a specific provision of 30% against
the remaining balance.
Required:
• Prepare statement of profit or loss for the year ended 31 December 2018.
• Prepare statement of financial position as at 31 December 2018.
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63
500
Current liabilities
135
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122. Following is the summarised trial balance of Sofia Trade (ST) for the year ended 30 June
2018
Additional information
• Cost of closing physical inventory was Rs. 7,400,000. Inventory included goods costing Rs.
240,000 which were damaged in the warehouse. These goods can be sold for Rs. 250,000
after incurring a cost of Rs. 16,000.
• Rent includes payment of annual rent of Rs. 240,000 expiring on 30 November 2018 for
owner's residence.
• Prepaid insurance represents premium which expired on 31 January 2018 while insurance
represents annual premium which is expiring on 31 January 2019.
• Suspense account represents goods returned by ST which were debited to supplier's
account.
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• On 29 June 2018, dishonoured cheque of Rs. 285,000 was returned by a bank. No entry
has been made in the books for this return. This cheque was received from a customer net
of 5% settlement discount.
• ST maintains a 4% provision against trade receivables.
• ST paid Rs. 388,000 (net of 3% settlement discount) which was debited to supplier's account
with the same amount.
• On 1 March 2018, an equipment was sold for Rs. 400,000 and its sale proceeds were credited
to the equipment account. This equipment had been purchased at a cost of Rs. 500,000 and
on 1 July 2017 its book value was Rs. 360,000.
• Advance represents 40% payment made for purchase of vehicle. Remaining balance would
be paid in September 2018. No entry was passed when the vehicle was delivered on 1 June
2018.
• ST depreciates equipment and vehicles at 15% and 25% respectively using reducing balance
method.
Required:
• Prepare statement of profit or loss for the year ended 30 june 2018.
• Prepare statement of financial position as at 30 June 2018.
Answer
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123.
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Answer
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124.
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Answer
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125.
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Answer
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126.
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Required:
• Prepare statement of profit or loss for the year ended 31 December 2015.
Prepare statement of financial position as at 31 December 2015
Answer
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127.
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Answer
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Lectures
•Revision Lectures
•PRC notes
•Teachers Practice books
•Past Papers
•Mid Term test
Mocks test
•Chapters Wise notes
•ICAP Books
PRC-1 Business Writing and Comprehension Skills
https://sce-learning.com/prc-1-business-writing-and-comprehension-skills/
PRC-2 Quantitative Methods https://sce-learning.com/prc-2-quantitative-methods/
PRC-3 Principles of Economics https://sce-learning.com/prc-3-principles-of-economics/
PRC-4 Introduction to Accounting https://sce-learning.com/prc-04-introduction-to-accounting/
PRC 5 introduction to Business https://sce-learning.com/prc-5-introduction-to-business/
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