ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD

(Department of Commerce)

BASICS OF ACCOUNTING (1339)

CHECKLIST

SEMESTER: AUTUMN, 2024

This packet comprises the following material:

1. Textbook (One)
2. Assignment No. 1& 2
3. Assignment Forms (2 sets)

In this packet, if you find anything missing out of the above-mentioned material,
please contact at the address given below:

The Mailing Officer,

Mailing Section, Block No. 28,
Allama Iqbal Open University,
H-8, Islamabad.
Phone: 051-9057611-12

ASIA BATOOL
(Course Coordinator)
 ALLAMA IQBAL OPEN UNIVERSITY
(Department of Commerce)
WARNING
1. PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING
THE ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD
OF DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE.
2. SUBMITTING ASSIGNMENT(S) BORROWED OR STOLEN FROM
OTHER(S) AS ONE’S OWN WILL BE PENALIZED AS DEFINED IN
“AIOU PLAGIARISM POLICY”.
SCHEDULE FOR SUBMISSION OF ASSIGNMENTS
06 Credit Hours Due Date 03 Credit Hours Due Date
Assignment-1 10-01-2025
Assignment-1 05-02-2025
Assignment-2 05-02-2025
Assignment-3 05-03-2025
Assignment-2 01-04-2025
Assignment-4 01-04-2025
Note: Tutorial Schedule and Rehnama-e-Tulba are available on AIOU website i.e. aiou.edu.pk

Course: Basics of Accounting (1339) Semester: Autumn, 2024

Level: FA / I Com
Please read the following instructions for writing your assignments. (SSC,
HSSC & BA Programmes)
1. All questions are compulsory and carry equal marks but within a question the marks
are distributed according to its requirements.
2. Read the question carefully and then answer it according to the requirements of the
question.
3. Late submission of assignments will not be accepted.
4. Your own analysis and synthesis will be appreciated.
5. Avoid irrelevant discussion/information and reproducing from books, study guide or
allied material.

ASSIGNMENT No. 1
Total Marks: 100 Unit: (1–4) Pass Marks: 40
Q. 1 Define “Accounting” and describe its cycle. (20)

Q. 2 Differentiate between Accounting Book-Keeping. Also describe their importance.

(20)
Q. 3 Describe in detail the rules, merits, and demerits of Double Entry System of book-
keeping. (20)

Q. 4 Record the following transaction in the journal. (20)

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 1st November 2024 Mr. Muhammad Waqar commenced business with Cash of Rs.
15,000,000/- Machinery Rs.20,500,000/-
3rd Purchased Furniture with cash Rs. 350,000/-
5th Purchased goods from Miss Zara Rs.75, 000/-
13th Sold goods to Mr. Majid Rs. 98,000/-
th
15 Goods returned to Miss Zara a Rs.5, 000/-
20th Machinery Purchased Rs.175, 000/-
22nd Returned goods from Mr. Majid Rs.2, 030/-
25th Paid Utility bills Rs.185, 000/-
26th Paid Rent Rs.80, 000/-
30th Paid salaries Rs. 169,000/-

Q. 5 (A) Fill in the blanks. (10)

i Book-keeping reduces the chances of _____________.

ii. It is not possible for a businessman to ________________all the business
transactions.
iii. Income tax has an important __________________in the modern business
environment.
iv. ______________ means disability to pay the debts of creditors.
v. For any reason if a businessman has to sell business accounting records helps
to determine the ______________ of the business.
(B) Identify the correct and incorrect statements. (10)

i It is a legal requirement to maintain accounting records for all business units.

R/W

ii. There is no difference between accounting and bookkeeping. R/W

iii. When the work of bookkeeper ends the work of accountant starts. R/W

iv. The duty of the accountant is just to record all the business transactions. R/W

v. The basic principle of the double-entry system of bookkeeping is to record

the transactions twice in different books. R/W

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 ASSIGNMENT No. 2
Total Marks: 100 (Units: 5–9) Pass Marks: 40

Q. 1 Prepare Bank Reconciliation of Ahmer traders as on 31 st May, 2024 with single

balance method.
On- 31st May the passbook showed the credit balance of Rs. 30,500/- cheques
amounting to Rs. 25,750/- were deposited in the bank but only cheques of Rs.
11,750/- had not been cleared up to 31 st May. Cheques amounting to Rs.80,500/-
were issued, but cheques for Rs. 15,700/- had not been presented for payment in
the bank up to 31st May. The bank had given the debit of Rs. 1,350/- for sundry
charges and also bank had received directly from customers Rs. 8,000/- and
dividend of Rs. 25,030/- up to 31st May. Find out the balance as per cashbook. (20)

Q. 2 Define bill of exchange and describe parties involved in it. Also explain various
types of bills of exchange with each example. (20)

Q. 3 ABC Corporation Ltd. Purchased machinery for Rs. 680,000/- on 1st January 2014.
It spent on its carriage and installation Rs. 45,000. On 1st January 2016 additional
machinery was purchased for Rs. 620,000 and old machinery was sold for Rs.
225,000 on the same date. The rate of depreciation to be charged is 20% p.a.
Assume that the accounts are closed on 31st December every year.
Prepare machinery account for the first five years under:
(i) Straight-line Method
(ii) Diminishing Balance Method (20)

Q.4 Following is the trial balance of Toor & Co. Prepare the trading and Profit and
Loss A/C & Balance sheet for the year ended at 31, Dec 2019. (20)

Particular Credit Rs. Particular Debit Rs.

Purchases return 9,900 Drawing 60,500
Sales 7,50,000 Debtors 3,30,000
Commission 27,000 Machinery 3,80,500
Capital 8,23,740 Building 4,55,000
Creditors 1,40,000 Cash 6,300
Loan 4,20,000 Wages 54,590
Rent 2,24,000
Sales return 26,250
Purchases 5,00,000
Stock 1,33,500
Total 21,70,640 Total 21,70,640
Adjustments:
i. Closing stock was valued Rs. 250,000.
ii. Outstanding insurances Rs. 9,000.
iii. Depreciation on building @10% p.a.
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Q. 5 Mr. Zubair runs a sole proprietorship business that deals with the manufacturing
and sale of computer accessories. There is high competition in the industry and the
profit margins are declining. However, Mr. Zubair’s business products are
perceived to be of better quality than its competitors. Hence, business is still
running its operations profitably despite high competition.
During the month of August 2018, following transactions were recorded you are
required to enter the transaction in three column cash Book. (20)

August 2018
2: Cash in hand Rs. 300,000/-
2: Cash at Bank Rs. 222,500/-
5: Purchased Machinery Rs. 135,000/-
8: Cash sales Rs. 67,500/-
12: Received a cheque from Mr. Farooq for Rs. 154,000 in full settlement of
his account Rs. 155,000/- and deposited it into the bank.
15: Payment to Mr. Furqan cash Rs. 75,000/- and a cheque for Rs. 78,500 in
Full settlement of his account 150,000/-
17: Cash purchases Rs. 25,500/-
20: Electricity bill paid by Bank Rs. 15,000/-
23: Received interest from Bank Rs. 27,000/-
25: Cash deposited into Bank Rs. 30,000/-
28: Received a cheque from Mr. Asif Rs. 60,000/- but not deposited into the
Bank.
29: Mr. Asif cheque ‘s deposited into bank.
29: Paid to Mr. Kaleem by cheque Rs. 70,000/-
30: Cash drew from Bank for office use Rs. 10,000/-
31: Cash drew from Bank for personal use Rs. 7,500/-