Question No.1, Short Questions Answers
All the expenditures which are incurred on dally basis activities of the business withing the same accounting period are called as revenue expenditure.
Debit sales account by 198 and suspense account by 270, while crediting Jamal Account by 468, Being sales and Arshad A/C's overstated , now rectified.
Profit Percentage on sales price.
When Recording as Income
Commission account is debited while credited unearned commission account, being the recording of unearned commission.
When Recording as liability:
Debit unearned commission account, credit commission account, being the recording of unearned commission expired.
The purpose of preparing realization account is to ascertain the amount of profit or loss to be transferred to the partners' capital account on the settlement of liabilities and assets of the firm.
Cash System of Accounting:
Transactions are recorded in the books of accounts at he time of cash received or payment made.
Question No.2 Bilal Bills of Exchange
One of the toughest question in financial accounting paper, requires clear understanding of Bills of Exchange.
Question No.3 Bank Reconciliation Statement Using Revised Cash Book
Prepare revised cash book (bank column) as on 31st march 2006
Adjust cash book by debiting customer Direct Payments, Discount received (correct)
Credit Bill Dishonored and Interest on overdraft.
Question No.6 Rectification Entries, Suspense A/c
This question also requires Correct net profit after rectification
Net Profit before rectification of errors
Add : Sales a/c increased
Less : Commission expense A/c increased,Sales a/c decreased, Purchased A/c Increased
Question No.7 Partnership Accounts
Journal entries for Goodwill and revaluation of Assets.
Question No.8 Trading and Profit and Loss Account
After providing adjustments for stock overcast, interest on capital and transfer to reserve account.
Question No.9 Metro Recreational Club, Income and Expenditure Account
Make adjustments for Outstanding Salaries, Prepaid Insurance, Rent received in advance