Module-01

Q-01:

Briefly explain the “Separate Entity Concept” with the help of example.

Q-02:

Differentiate between “Transaction”, “Event” and “Condition”.

Q-03:

Write the relevant source of financial information in second column against all information
given in first column from the following list:
• Transaction
• Event
• Condition

First Column Second Column

Information Source of information
Payment of commission expense ?
Loss by fire ?
Depreciation expense of Plant & ?
Machinery
Note: You must follow the above tabular format to fill the missing particulars
of second column.

Answer:

First Column Second Column

Information Source of information
Payment of commission expense Transaction
Loss by fire Event
Depreciation expense of Plant & Condition
Machinery
Q-04:

Write the relevant main head of financial information in second column against each
accounting head given in first column from the following list.

• Asset
• Liability
• Expense

First Column Second Column

Accounting heads Main head of financial information
Accounts Receivables ?
Cash in hand ?
Accounts Payables ?
Loan taken from House Building
?
Finance Corporation
Repair of machinery ?
Note: You must follow the above tabular format to fill the missing particulars
of second column.

Answer:

First Column Second Column

Accounting heads Main head of financial information
Accounts Receivables Asset
Cash in hand Asset
Accounts Payables Liability
Loan taken from House Building
Liability
Finance Corporation
Repair of machinery Expense
 Module-02

Q-05:

What do you know about credit transaction and cash transaction?

Q-06:
Differentiate between “Debtors” and “Creditors”.

Q-07:

Following are the transactions of ABC Brothers for the month of December 2023.

FIRST COLUMN SECOND COLUMN

Transactions Type of Transaction
Credit Transaction OR Cash Transaction

Rent of vehicle Rs. 45,000 for the month of

?
December 2023 paid in January 2024.

Goods costing Rs. 133,000 sold on account to

?
PLY Brothers

Amount of Rs. 25,000 received from a customer

?
Mr. Ali during the month.

Required:
Being an accountant, identify the type of transactions and write “Credit
Transaction” or “Cash Transaction” in second column against each transaction of
first column for the month of December 2023.

Answer:

FIRST COLUMN SECOND COLUMN

Transactions Type of Transaction
Credit Transaction OR Cash Transaction

Rent of vehicle Rs. 45,000 for the month of

Credit Transaction
December 2023 paid in January 2024.
Goods costing Rs. 133,000 sold on account to
Credit Transaction
PLY Brothers

Amount of Rs. 25,000 received from a customer

Cash Transaction
Mr. Ali during the month.

Q-08:

Transaction: Vehicle of Rs. 11,30,000 purchased on credit basis from Rahim Brothers.

FIRST COLUMN SECOND COLUMN

Accounts Effect
Increase, Decrease or No effect

Asset account ?

Liability account ?

Expense account ?

Required:
Write the effect of given transaction i.e., “Increase” or “Decrease” or “No effect”
in second column against each account mentioned in first column.

Answer:

FIRST COLUMN SECOND COLUMN

Accounts Effect
Increase, Decrease or No effect

Asset account Increase

Liability account Increase

Expense account No effect
 Q-09:

Books of ABC Furniture Showroom showed balances of Cash Rs.100,000, Creditors Rs.
145,000 and Debtors Rs. 140,000 as on 20th June 2020. Some transactions of ABC Furniture
Showroom after 20th June 2023 are given below.

Date Transactions

24th June Sold merchandise to a customer for Rs. 10,000 on

credit basis.
28th June Cash collected from customer Rs. 5,000.

29th June Purchased goods from a supplier for Rs. 15,000 on

credit basis
30th June Cash paid to supplier Rs. 3,000

Required:
Based on the above transactions, calculate the amount/balance of the following
accounts at the end of June 2023.
1- Cash
2- Debtors
3- Creditors

Assets = Owner’s Equity Liabilities

Date Cash Debtor Other assets = Capital Bills payable Creditors

Balance 100,000 140,000 145,000

24th June +10,000
28th June +5,000 -5,000
29th June +15,000
30th June -3,000
-3,000
102,000 145,000 - 157,000
 Module-03

Q-10:

Differentiate between Real account, Personal account, and Personal account with the help of
examples.

Q-11:

FIRST COLUMN SECOND COLUMN

Particulars Debit or Credit

Decrease in liabilities ?

Decrease in revenue ?

Increase in capital/equity ?

Required:
Being an accountant, write “Debit” or “Credit” in second column against each
particular mentioned in first column of table given above.

Answer:

FIRST COLUMN SECOND COLUMN

Particulars Debit or Credit

Decrease in liabilities Debit

Decrease in revenue Debit

Increase in capital/equity Credit

 Q-12:

Debited accounting heads are mentioned in second column against each transaction given in
the first column. You are required to write the appropriate cause of debited accounting head in
third column from the following list against each given transaction of debited accounting head.
• Increase in asset
• Decrease in asset
• Increase in expense
• Decrease in expense
• Increase in equity
• Decrease in equity

First Column Second Column Third Column

Transactions Debited Cause of debited accounting

accounting head head

Investment of Rs. 11,50,000 made in Cash account ?

business by owner in the business

Purchase furniture of Rs. 200,000 on Furniture account ?

cash from Rahim Furniture House.

Purchase merchandises for cash Rs. Purchase account ?

20,000

Rent of building Rs. 90,000 paid in Rent account ?

cash

Salaries paid through cheque Salaries account ?

amounting to Rs. 500,000

*Note: You must follow the above format to fill the missing particulars.

Answer:

First Column Second Column Third Column

Transactions Debited Cause of debited accounting

accounting head head

Investment of Rs. 11,50,000 made in Cash account Increase in asset

business by owner in the business

Purchase furniture of Rs. 200,000 on Furniture account Increase in asset

cash from Rahim Furniture House.

Purchase merchandises for cash Rs. Purchase account Increase in expense

20,000
Rent of building Rs. 90,000 paid in Rent account Increase in expense
cash

Salaries paid through cheque Salaries account Increase in expense

amounting to Rs. 500,000
 Module-04

Q-13:

You are required to write the appropriate accounting heads to be debited in second column
against each transaction given in first column, from the following list of accounts.
• Cash account
• Capital account
• Furniture account
• Purchase account

First Column Second Column

Transactions Accounting head
to be debited

Investment of Rs. 10,00,0000 made in ?

the business by the owner

Purchased furniture amounting to Rs. ?

500,000

Purchased merchandise for Rs. 50,000 ?

*Note: You must follow the above format to fill the missing particulars of second
column.

Answer:
First Column Second Column

Transactions Accounting head

to be debited

Investment of Rs. 10,00,0000 made in Cash account

the business by the owner

Purchased furniture amounting to Rs. Furniture account

500,000

Purchased merchandise for Rs. 50,000 Purchase account

Q-14:

Particular heads of account in second column have been mentioned against each transaction
given in the first column. You are required to fill the treatment with “Debit” or “Credit” in third
column based on given head of account of each transaction.

FIRST COLUMN SECOND COLUMN THIRD COLUMN

Transactions Head of Account Treatment

Debit or Credit
Investment of Rs. 11,50,000 made in Capital account ?
business by owner in the business

Purchase furniture of Rs. 200,000 on Furniture account ?

cash from Rahim Furniture House.

Purchase merchandises for cash Rs. Purchase account ?

20,000

Rent of building Rs. 90,000 paid in Cash account ?

cash

Salaries paid through cheque Bank account ?

amounting to Rs. 500,000

* You must follow the above tabular format to fill the missing treatment in third
column.

Answer:

FIRST COLUMN SECOND COLUMN THIRD COLUMN

Transactions Head of Account Treatment

Debit or Credit
Investment of Rs. 11,50,000 made in Capital account Credit
business by owner in the business

Purchase furniture of Rs. 200,000 on Furniture account Debit

cash from Rahim Furniture House.

Purchase merchandises for cash Rs. Purchase account Debit

20,000

Rent of building Rs. 90,000 paid in Cash account Credit

cash

Salaries paid through cheque Bank account Credit

amounting to Rs. 500,000
 Module-05

Q-14:

Some normal balances of accounts for the books of ABC & Sons have been given below.
1. Bank account Rs. 175,000
2. Cash account Rs. 160,000
3. Commission income account Rs. 335,000
Required:
Prepare the Trial Balance based on the information given above by following the
format given below. (Note: List of given balances of accounts is incomplete so there
is no need to verify the total of debit and credit column and other aspects in Trial
Balance)
Trial Balance

S.No Accounting Head Debit Credit

Rs. Rs.
1

*Note: You must follow the above format to prepare the Trial Balance

Answer:

Trial Balance

S.No Accounting Head Debit Credit

Rs. Rs.
1 Bank account 175,000

2 Cash account 160,000

3 Commission income account 335,000

Q-15:

Some journal entries from the books of Rahim Brother are given below.

Debit Credit
Particulars
Rs Rs
Cash Account 240,000

Capital Account 240,000

Cash Account 55,000

Commission Account 55,000

Rent Account 45,000

Cash Account 45,000

Required:
Prepare “Cash Account” based on the above journal entries by following the
format given below.

Cash Account
Particulars Rs. Particulars Rs.

*Note: You must follow the above format to prepare the Cash Account.

Answer:

Cash Account
Particulars Rs. Particulars Rs.
Capital Account 240,000 Rent Account 45,000

Commission Account 55,000 Balance c/d 250,000

295,000 295,000
 Module-06

Q-15:

Write the appropriate type of financial statement (Income Statement or Balance Sheet) in
second column for each account mentioned in first column.
First Column Second Column
Financial Statement
Accounts
Income Statement or Balance Sheet
Cash in hand ?

Sales revenue ?

Sundry debtors ?

*Note: You must follow the above format to fill the missing particulars of second
column.

Answer:
First Column Second Column
Financial Statement
Names of accounts used in chart of accounts
Income Statement or Balance Sheet
Cash in hand Balance Sheet

Sales revenue Income Statement

Sundry debtors Balance Sheet

Q-16:

Following information is available for the Books of Rahmi Brothers

• Capital at the start Rs. 200,000

• Net profit for the year Rs. 60,000
• Drawings during the period Rs. 40,000
• Land Rs. 55,000
• Building Rs. 65,000
• Cash in hand Rs. 45,000
• Cash at bank Rs. 150,000

Required:
Calculate the amount of owners’ equity to be shown in balance sheet from the
information given above.

Answer:

Amount
Particulars
Rs.
Capital 200,000
Add: Net profit 60,000
Less: Drawings (40,000)

Amount of owners’ equity shown in balance sheet 220,000

Q-17:

Following information is available for the Books of Rahmi Brothers

• Accounts payables Rs. 50,000

• Bank overdraft Rs. 60,000
• Sales revenue Rs. 50,000
• Long term loan taken from bank Rs. 60,000
• Building Rs. 88,000
• Capital Rs. 99,000
• Expenses Rs. 150,000

Required:
Calculate the amount of Current Liabilities to be shown in balance sheet from the
information given above.

Answer:

Amount
Particulars
Rs.
Creditors 50,000
Bank overdraft 60,000
Amount of Current Liabilities shown in balance 110,000
sheet
Q-18:

Following information is available for the Books of Rahmi Brothers

• Prepaid expenses Rs. 40,000

• Machinery Rs. 50,000
• Accounts payable Rs. 60,000
• Sundry creditors Rs. 70,000
• Cash at bank Rs. 10,000
• Accounts receivable Rs. 20,000
• Closing inventory Rs. 30,000
• Rent expenses Rs. 55,000
• Commission income Rs. 133,000
• Gross profit Rs. 500,000

Required:
Calculate the amount of Current Assets from the information given above.
Note: It is necessary to mention Add or Plus sign (+) / Less or Minus sign (-) in
the working otherwise marks for working will not be awarded.

Answer:
Amount
Particulars
Rs.
Cash at bank 10,000
Accounts receivable 20,000
Closing inventory 30,000
Prepaid expenses 40,000
Current Assets 100,000
 Module-07

Q-19:

Causes of disagreements between cash book (bank column) and bank statement are given in
first column. You are required to mention the effect (either debit, credit or no effect) of each
given cause of disagreement to adjust the cash book (bank column) in second column.

First column Effect in cash book

(bank column)
Causes of disagreements
Debit, Credit or No
effect
Unpresented cheques ?
Direct debits by the bank but no entry made in cash ?
book
Debit entry in bank statement and the same entry ?
has been credited in cash book

Answer:

First column Effect in cash book

(bank column)
Causes of disagreements
Debit, Credit or No
effect
Unpresented cheques Debit
Direct debits by the bank but no entry made in cash Credit
book
Debit entry in bank statement and the same entry No effect
has been credited in cash book
Q-20:

From the following particulars of ABC Brothers, prepare a Bank Reconciliation Statement as
on 31st December 2023.

• Favourable balance as per cash book (bank column) Rs. 40,000

• Cheque amounting to Rs. 10,000 issued during the month but not presented in the bank
till 31st December 2023.

• Cheque amounting to Rs. 30,000 deposited into the bank during the month but not
credited in the bank till 31st December 2023.

Solution:

ABC Brothers

Bank Reconciliation Statement

As on 31st December 2023

Particulars Nature Rs.

Favourable balance as per cash book (bank Debit 40,000

column)

Credit (30,000)
Less: un-credited cheque
10,000

Debit 10,000
Add: un-presented cheque

Balance as per bank statement (Cr.) 20,000

Q-21:

From the following particulars of ABC Brothers, prepare a Bank Reconciliation Statement as
on 31st December 2023.

• Unfavourable balance as per cash book (bank column) Rs. 40,000

• Cheque amounting to Rs. 10,000 issued during the month but not presented in the bank
till 31st December 2023.

• Cheque amounting to Rs. 30,000 deposited into the bank during the month but not
credited in the bank till 31st December 2023.

Solution:

ABC Brothers

Bank Reconciliation Statement

As on 31st December 2023

Particulars Nature Rs.

Favourable balance as per cash book (bank Credit 40,000

column)

Credit 30,000
Add: un-credited cheque
70,000

Debit 10,000
Less: un-presented cheque

Balance as per bank statement (Dr.) 60,000

Q-22:

From the following particulars of ABC Brothers, prepare a Bank Reconciliation Statement as
on 31st December 2023.

• Favourable balance as per bank statement Rs. 40,000

• Cheque amounting to Rs. 10,000 issued during the month but not presented in the bank
till 31st December 2023.

• Cheque amounting to Rs. 30,000 deposited into the bank during the month but not
credited in the bank till 31st December 2023.

Solution:
ABC Brothers

Bank Reconciliation Statement

As on 31st December 2023

Particulars Nature Rs.

Favourable balance as bank statement Credit 40,000

Add: un-credited cheque Credit 30,000

70,000

Less: un-presented cheque Debit 10,000

Balance as per cash book (Dr.) 60,000

Q-23:

From the following particulars of ABC Brothers, prepare a Bank Reconciliation Statement as
on 31st December 2023.

• Unfavourable balance as per bank statement Rs. 40,000

• Cheque amounting to Rs. 10,000 issued during the month but not presented in the bank
till 31st December 2023.

• Cheque amounting to Rs. 30,000 deposited into the bank during the month but not
credited in the bank till 31st December 2023.

ABC Brothers

Bank Reconciliation Statement

As on 31st December 2023

Particulars Nature Rs.

Unfavourable balance as per bank statement Debit 40,000

Less: un-credited cheque Credit (30,000)

10,000

Add: un-presented cheque Debit 10,000

Balance as per cash book (Cr.) 20,000

 Module-08

Q-24:

You are required to calculate the amount of expense to be shown in Income Statement
without preparing any account based on the following information.

Particulars Rs.
Rent paid during the period 150,000
Accrued rent at the end of accounting 25,000
period
Loan taken from bank 3,000
Sales 300,000
Gross loss 145,000
Building 950,000

Answer:

Particulars Rs.
Rent paid during the period. 150,000
Add: Accrued rent at the end of accounting period 25,000
Rent expense for the year to be reported in income statement 175,000
Q-25:

You are required to calculate the amount of expense to be shown in Income Statement
without preparing any account based on the following information.

Particulars Rs.
Rent paid during the period 150,000
Prepaid rent the end of accounting 25,000
period
Loan taken from bank 3,000
Sales 300,000
Gross loss 145,000
Building 950,000

Answer:

Particulars Rs.
Rent paid during the period. 150,000
Less: Prepaid rent 25,000
Rent expense for the year to be reported in income statement 125,000
Q-26:

Following information is available in the books of Rahim Brothers.

Particulars Rs.
Receivable income opening 500,000
Income received during the period 700,000
Receivable income closing 100,000
Unearned/Advance income opening 200,000
Unearned/Advance income closing 300,000

Required:
Prepare Income Account by considering above mentioned information of Rahim
Brothers. You must follow the format given below for preparing Income Account.

Income Account
Debit Credit
Particulars Rs. Particulars Rs.

Solution:

Income Account
Debit Credit
Particulars Rs. Particulars Rs.

Receivable income opening 500,000 Cash account 700,000

Closing advance income 300,000 Opening advance income 200,000

Profit and loss account

(balancing figure) 200,000 Receivable income closing 100,000

1,000,000 1,000,000
 Module-09

Q-27:

Differentiate between bad debts and doubtful debts.

Q-28:

Briefly explain the concept debtors and provision for doubtful debts.

Q-29:

Following information is available of ABC Brothers.

Opening balance of provision for doubtful debts Rs. 200,000

Increase in provision for doubtful debts Rs. 50,000
Closing balance of provision for doubtful debts 250,000

Required:
Prepare Provision for Doubtful Debts Account from the information given above.
Note: You must follow the format given below to prepare the required account.
Provision for Doubtful Debts Account
Debit Credit
Particulars Rs. Particulars Rs.

Solution:

Provision for Doubtful Debts Account

Debit Credit
Particulars Rs. Particulars Rs.
Opening balance 200,000

Closing balance 250,000 Bad debts 50,000

250,000 250,000
Q-30:

Following information is available of ABC Brothers.

Opening balance of provision for doubtful debts Rs. 300,000

Decrease in provision for doubtful debts Rs. 50,000
Closing balance of provision for doubtful debts 250,000

Required:
Prepare Provision for Doubtful Debts Account from the information given above.
Note: You must follow the format given below to prepare the required account.

Provision for Doubtful Debts Account

Debit Credit
Particulars Rs. Particulars Rs.

Solution:

Provision for Doubtful Debts Account

Debit Credit
Particulars Rs. Particulars Rs.
Opening balance 300,000
Bad debts 50,000

Closing balance 250,000

300,000 300,000
Q-31:

Following information is available of ABC Brothers.

The provision for doubtful debts is decreased by Rs. 20,000

Amount charged to Income Statements is Rs. 180,000
Sundry debtors written off as bad debts is Rs. Rs. 200,000

Required:
Prepare Bad Debts Account from the information given above.
Note: You must follow the format given below to prepare the required account.

Bad Debts Account

Debit Credit
Particulars Rs. Particulars Rs.

Solution:

Bad Debts Account

Debit Credit
Particulars Rs. Particulars Rs.
Debtors 200,000 Provision for doubtful 20,000
debts

Income Statement 180,000

200,000 200,000
Q-32:

Following information is available of ABC Brothers.

The provision for doubtful debts is increased by Rs. 20,000

Amount charged to Income Statements is Rs. 220,000
Sundry debtors written off as bad debts is Rs. Rs. 200,000

Required:
Prepare Bad Debts Account from the information given above.
Note: You must follow the format given below to prepare the required account.

Bad Debts Account

Debit Credit
Particulars Rs. Particulars Rs.

Solution:

Bad Debts Account

Debit Credit
Particulars Rs. Particulars Rs.
Debtors 200,000

Provision for doubtful

debts 20,000 Income Statement 220,000
220,000 220,000
Q-33:

Following information is available of ABC Brothers.

Particulars Rs.
Opening balance of sundry debtors 150,000
Credit sales 75,000
Closing balance of sundry debtors 200,000
Discount allowed 5,000
Trade discount 15,000
Debtors written off as bad debts 20,000
Depreciation of fixed asset 27,500
Residual value of fixed asset 2,500
Fixed asset cost 500,000

Required:
Prepare Debtors Account from the information given above.
Note: You must follow the format given below to prepare the required account.
Debtor’s Account
Debit Credit
Particulars Rs. Particulars Rs.

Solution:
Debtor’s Account
Debit Credit
Particulars Rs. Particulars Rs.
Balance b/d 150,000 Bad debts 20,000

Sales 75,000 Discount allowed 5,000

Balance c/d 200,000

225,000 225,000