ASSIGNMENT ON KNOWLEDGE LEVEL-ACCOUNTING

SECTION-1
Prepared by: Mohammad Shahidul Islam ACA
CHAPTER-1: INTRODUCTION TO ACCOUNTING
1. What is the objective of financial statements?
2. Mention the users of financial statements.
3. Why it is easier to get financial information for internal user and harder for external user?
4. Point out the information needs of following users?
a) Stewardship functioning
b) Management performance analysis
c) Ability to pay debt
d) Assessing tax liability and determine tax policy
e) Efficient allocation of resources
f) Contribution to local economy, using local supplier, environmental effect
5. Mention financial reporting framework in Bangladesh.
6. What qualitative characteristic are appropriate for each of the below cases?
a) undue delay in financial reporting
b) incomplete information or redundant information in the financial statement
c) error free, neutral information presented in the financial statement , prudence and economic
substance used
d) information provided in the financial statements on a consistence basis
7. Give 50 examples of CAPEX and 20 for REVEX?
8. Identifying CAPEX and REVEX
a) purchase of an application software for the company
b) purchase a second hand machine with reduced price
c) wages for operating the newly purchased machine
d) advertisement bill given for 5 years at time
e) gain on sale of fixed assets
9. Mention responsibility of directors/management in preparing f/s
10. Define faithful representation
CHAPTER-2: THE ACCOUNTING EQUATION
11. what are BAS term of following account heads:
a) Fixed assets
b) Stock
c) Debtor
d) Creditor
e) Profit & loss account
12. Suppose, list price in an invoice of sales was tk. 500 (VAT inclusive, at standard rate), trade discount
@10%, cash discount @ 5% (2/10, n/30), customer paid the amount on 21 st day. Determine the
invoice value. Determine GP ratio NP ratio and Administrative cost to sale if COGS was tk. 300 and
Admin cost was tk. 80.
CHAPTER-3: RECORDING FINANCIAL TRANSATIONS
13. Mention the name of all source documents.
14. What are the main books of original entries
15. State system note for credit sales process indicating basic documents required in each stage
16. State system note for credit purchase process indicating basic documents required in each stage
17. State system note for purchase of fixed assets in credit indicating basic documents required in each
stage
18. What are basis inclusion of Goods Received Notes (GRN)
19. What information are needed to draft invoice, credit notes, delivery challan and GRN
20. Mention the names of 6 main books of original entries

21. Draft a sales day book, purchase day book, cash book, petty cash book, payroll book (assignment)
22. Mention the name of 7 source documents
23. Three documents i.e. purchase order, invoice and GRN is necessary for 3 way checking explain
24. Draft a invoice mentioning the amount of VAT
25. fill in the blanks:
Source document

Books of original
entry

Sales invoince
?
Purchase invoice
?
Debit note
?
Credit note
?
Cheque remittance
?
advice
Payslip
?
Petty cash voucher
?
26. Preparing cash book:
As on 1 January 2010, ABC Company had Tk. 900 in the bank as overdraft. During the year 2010 the
company had following receipts and payments. Prepare an analyzed cash book from the above
transactions.
Transactions during 2010:
a. Cash sale: receipt of Tk. 94 (including VAT @ 15%);
b. Payment from credit customer XYZ Tk. 380;
c. Cheque received from as a short term loan from PQR Tk. 1800;
d. Cash sale: receipt of Tk 141 (including VAT @ 15%);
e. Cash received for dale of machine Tk 1200 (no VAT);
f. Payment to supplier Tk 120;
g. Payment of telephone bill Tk. 376 (including VAT Tk. 76);
h. Tk. 100 withdrawn from bank for petty cash;
i. Payment of Tk. 1,500 to Otobi for new furniture (no VAT);
27. State few example for which petty cash book is used
28. Difference between imprest system of petty cash book and normal petty cash book
29. Draft a typical petty cash book in imprest system
30. State which books of original entry the following transactions would be entered into:
a. Payment to a supplier a cheque for Tk. 450
b. Send and invoice to customer for Tk. 650
c. Buy envelops for Tk. 12
d. Receive an invoice from a supplier for Tk. 300
e. Pay Tk 500 to customer through online transfer
f. Customer returns goods for tk. 250
g. Return goods to supplier for tk. 504
h. Customer pays you a cheque for tk. 500
31. Draft a dummy payroll sheet/book of your company
32. ABC Ltd. Has 10 employees who had gross pay of tk. 140,000 per annum among them in 2009. In
that year the company made net pay payments to employees of tk. 129,200 and paid tk. 20,900 to
e\the pension trustees. Its total payroll cost was tk. 170,400. how much did the company pay to
Government treasury in respect of withholding tax?
33. What transactions are recorded via journal as a book of original entry?
34. Gross payroll cost is more than employees gross pay since explain why?
35. Suppose that ABC Ltd. Pay tk. 380 in full settlement of an invoice that had been recorded at tk. 385
in total in the sales day book. How cash book would be written up?
CHAPTER-4: LEDGER ACCOUNTING & DOUBLE ENTRY
36. Distinguish nominal ledger and subsidiary ledger
37. Define duality concept with example
38. State the general rule of double entry bookkeeping.

39. Identify the debit and credit entries in the following transactions (ignore VAT)
a) bought a machine on credit from A, cost tk. 8,000
b) bought goods on credit from B, cost tk. 500
c) sale goods on credit to C, valu tk. 1,200
d) paid D (a credit supplier) tk. 300
e) collected tk. 180 from E, a credit customer
f) paid net pay tk. 4,000
g) received rent bill of tk. 700 from landlord G
h) paid rent insurance premium tk. 90
40. Summit Power operates an imprest petty cash system. The imprest amount is Tk. 5000. at the end
of the period the totals of the four analysis columns in the petty cash book were as follows:
Column -1
tk. 23.12
Column -2
tk. 6.74
Column -3
tk. 12.90
Column -4
tk. 28.50
How much cash is required to restore the imprest amount?
41. Give two example of subsidiary ledger.
42. Soft Supplies Co. recently purchase from Hard Imports Co. 10 printers originally priced at tk. 200
each. A 10% trade discount was negotiated together with a 5% cash discount if payment was made
within 14 days. Calculate the following.
a) The total of the trade discount
b) The total of the cash discount
43. Define trade discount and cash discount with two examples
44. Define the term 2/10, n/30
45. Prepare an income statement from the following items:
Taka
a) purchase at gross cost
120,000
b) trade discount allowed
4,000
c) cash discount received
1,500
d) cash sales
34,000
e) credit sale at invoice price 150,000
f) cash discount allowed
8,000
g) distributaries cost
32,000
h) administrative cost
40,000
i) drawings by proprietor
22,000
46. Explain why VAT is called expenditure tax?
47. Explain how VAT is collected?
48. Explain implication of VAT for registered and non-registered persons
49. A manufacturing company purchase raw materials at a cost of tk. 1,000 plus VAT at standard rate of
15%. From the raw materials the company makes finished products which it sales to a retail outlet,
B ltd. For tk. 1,600 plus VAT a\@ 15%. B Ltd. Sales the products to customers at a total price of tk.
2,000 plus VAT @15%. How much VAT is paid at each stage in the chain?
50. Define the term irrecoverable VAT with two examples
51. ABC Company usually sell goods at tk. 130 each, it gives XYZ Trade discount of tk. 10 so he sells
goods to XYZ for tk. 120. ABC is registered for VAT. How much output VAT should ABC company
include on XYZs invoice?
52. If you are told that an amount includes VAT @ 15% (gross amount), calculate the VAT amount?
53. ABC is preparing financial statements for the year ended 31 December 2009. Included in its balance
sheet as at 31 December 2008 was a balance for VAT due from government of tk. 15,000. ABCs
summary income statement for the year 31 December 2009 was as follows:
Taka
Revenue (net) (all standard rated)
500,000
Purchase (net) (all standard rated)
(120,000)
Gross profit
380,000

Expenses:
Wages & salaries (VAT exempted)
(163,000)
Entertainment (Tk. 40 plus irrecoverable VAT Tk. 6)
(46,000)
Other (net, all standard rated)
(71,000)
Net profit
100,000
Payments of tk. 5,000, 15,000 and 20,000 have been made in the year to government and a
repayment of tk. 12,000 was received.
a) What is the balance for VAT in the balance sheet as at 31 December 2009 (assume VAT @ 15%)
54. When a credit customer pays an invoice for tk. 115 including VAT @ 15%. What will the credit entry
in the VAT ledger account?
55. Define input VAT and output VAT with example.
CHAPTER 5: PREPARING BASIC FINANCIAL STATEMENTS
56. What are the components of a complete set of financial statements
57. What are the basis elements of a financial statements
58. What are the errors do not make a trial balance imbalance?
59. Distinguish between errors that cause trial balance imbalance and those that do not.
CHAPTER 6: CONTROL ACCOUNT, ERRORS AND OMISSION
60. The total of the balance in a companys receivables ledger is tk. 800 more than the debit balance
on its receivables control account. Which one of the following errors could by itself account for the
discrepancy?
a) The sales day book total column has been under cast by tk.800
b) Cash discounts totallling tk. 800 have been omitted form the nominal ledger
c) One receivables ledger account with a credit balance of tk. 800 has been treated as a debit
balance in the list of balances
d) The cash receipts book has been under cast by tk. 800
61. For Export Co. on 1 October 2008 the receivables ledger balance were tk. 8,024 debit and tk. 57
credit, and the payables ledger balance on the same date were tk. 6.135 credit and tk. 105 debit.
There balance have been checked and are correct.
For the year ended 30 September 2009 the following particulars are available (in taka):
Sales
62.514
Purchase
39,439
Cash from credit customers
55,212
Cash to credit suppliers
37,307
Discount received
1,475
Discount allowed
2,328
Irrecoverable debts written off
326
Refund from suppliers
105
Amount due from customers as shown by receivables ledger, offset against amount due to the
same firm as shown by payable ledger (settlement by contra).
434
What are the balances as at 30 September 2009 on:
a) receivables control account
b) payable control account
62. Bank statement is the mirror image of the cash book-explain
63. Mention the 5 common explanations for differences between cash book and bank statement
64. Explain, in brief, the adjusted cash book
65. ABCs bank statement shows tk. 715 direct debits and tk. 353 investment income not recorded in
the cash book. The bank statement does not show a customers cheque for tk. 875 entered in the
cash book on the last day of the accounting period. The cash book has a credit balance of tk. 610.
What balance appear in the bank statement?
66. What are the 5 broad types of error in accounting

67. Identity types of error from following transactions

Error

Type

A credit sales of tk. 6,843 has been incorrectly debited in the receivable ledger as tk.
6,483
A business receives an invoice from a supplier for tk. 250 and the transaction is missed
from the books
An error is to treat revenue expenditure incorrectly as capital expenditure
Putting a debit entry or a credit entry in the wrong account
Casting error
Admin expenses of tk. 2,822 are entered as tk. 2,282 in the administrative expenses
ledger account. At the same time, income of tk. 8,931 is shown in te sales account as
tk. 8,391.
68. A bank statement shows a balance of tk, 1,200 in credit. An examination of the statement shows a
tk. 500 cheques paid in per the cash book but not yet on the bank statement and a tk. 1,250
cheque paid out nu\\but not yet on the statement. In addition the cash book shows the proprietors
correct calculation of savings interest of tk. 50 which should have been received, but which is not
on the statement. What is the balance per the cash book?
69. ABC Company had a difference on its trial balance. After investigation the following errors were
discovered.
a) A sales invoice for tk. 500 was mis-read by the clerk as tk. 600 ad\nd entered as such into
the ledger accounts
b) Bank charge of tk. 145 had been debited to the cash at bank account tk. 154
How much was the original difference on the trial balance?
70. Give 3 examples for which a suspense account is required for correction of an error.
71. Bank statement of a company showed an overdrawn balance of tk. 5,250 on 31 December 2009.
when this was reconciled to the cash book, the following difference were noted:
o Un-presented cheques
o Un-credited lodgment
o Standing order for insurance premium payable not entered in cash book
o Overdraft interest not recorded in the cash book
o Credited in error to companys account by bank
What is the original balance on companys cash book as on 31 December 2009?
72. Closing inventory balance is not included in the initial trial balance rather included in the
extended trial balance explain
73. As at 31 December 2009 a companys bank statement shows an overdraft of tk. 1,500. The
statement includes bank charges of tk. 30 which have not yet been recorded in the companys cash
book. On 29 December 2009 the company had paid a cheque of tk. 500 to a supplier and banked
tk. 200 received from a trade receivable; neither of these terms appears in the bank statement.
What would be the overdraft of the companys balance sheet at 31 December 2009?
74. The cash book shows a bank balance of tk. 5,675 overdrawn at 31 December 2009. it is
subsequently discovered that a standing order payment for tk. 125 has been entered twice, and
that a dishonored cheque for tk. 450 has been debited in the cash book instead of credited. What
should be correct bank balance?
75. Give 10 examples for which amendments of cash book is required. (Assignment)
76. Give 5 example for which amendments of banks statement is required (assignment)
CHAPTER 7: ACCOUNTING CONCEPT AND CONVENTIONS:
77. identifying concepts and conventions:
Scenario

Concept and
convention

Owner of the business takes goods from inventories for his own personal
use

Application of degree of caution in exercising judgment under conditions of

uncertainty
The directors do not intend to liquidate the entity or to cease trading in the
foreseeable future
The entitys financial position financial performance and cash flow are
presented fairly
When computing profit, income earned must be matched against the
expenditure incurred in earning it
The presentation and classification of items in the financial statements
should stay the same from one period to the next
Financial statements are produced within a time interval that enables users
to make relevant economic decision.
78. State few items for which set-off of is allowed?
79. When break-up value of accounting is attracted?
80. A retailer commences business on 1 January 2009 and buys 20 washing machines, each costing tk.
100. During the year he sells 17 machines at tk. 150 each. How should the remaining machines be
valued at 31 December in the following circumstances?
a) He forced to close down his business at the end of the year and the remaining machines will
realize only tk. 60 each in a forced sale.
b) He intends to continue his business into the next year.