Accounting for Financial Written Question Bank & Solution - Job

Two students are discussing the use of a trial balance. They wonder whether the following errors, each considered separately, would prevent the trial balance from balancing :

(i) The accountant debited cash for Tk. 6,000 and credited salaries and wages expenses for Tk. 6,000 for the payment of wages.
(ii) Cash collected on account was debited to cash Tk. 8,000 and service revenue was credited for Tk. 80,000.

What would you suggest them ?

Indicate whether the following statements are true or false. If false indicate how to correct the statement.

(1) The historical cost principle dictates that companies record assets at their cost. In the later periods, however, the fair value of the assets must be used, if fair value is higher than its' cost.
(2) Relevance means that financial information matches what happened; the information is factual.
(3) The revenue recognition principle states that expenses should be matched with revenues.
(4) Cash flows from operating activities is always less than or equal to the net income of an organization.
(5) In horizontal analysis, each item is expressed as a percentage of the base year's amount.

Income statement of XYZ Company is given below :

Required to calculate :

(i) Current ratio
(ii) Quick ratio
(iii) Inventory turnover ratio
(iv) Net profit margin
(v) Interest coverage ratio.

Abdullah Electronics Ltd.
Comparative Statement of Financial Position
31 December, 2023

Equity and Liabilities :

Abdullah Electronics Ltd.
Income Statement
For the year ended on December 31, 2023

Additional Information

1. Depreciation expenses is TK. 13,300.
2. Dividend declared and paid were Tk. 20,000.
3. During the year equipment was sold for Tk. 9,700 on cash. This equipment cost Tk. 18,000 originally and had accumulated depreciation of Tk. 8,300 at the time of sale.

Instructions :

Delta Pvt. Ltd.
Trial Balance
June 30, 2024

Each of the listed accounts has a normal balance as per general ledger. An examination of the ledger and journal reveals the following errors :

(i) Cash received from a customer in payment of its account was debited for Tk. 5,800 and accounts receivable was credited for the same amount.
(ii) The purchase of a computer on account for Tk. 7,100 was recorded as a debit to supplier for Tk. 7,100 and a credit to accounts payable for Tk. 7,100.
(iii) Services were performed on account for a client for Tk. 9,800. Accounts receivable was debited for Tk. 9,800 and service revenue was credited for Tk. 980.
(iv) A debit posting to salaries and wages expenses of Tk. 7,000 was omitted.
(v) A payment of a balance due for Tk. 3,060 was credited to cash for Tk. 3,060 and credited to accounts payable for Tk. 3,600.
(vi) The cash withdrawal of Tk. 6,000 for owner's personal use was debited to salaries and wage expenses for Tk. 6,000 and credit to cash for Tk. 6,000.

Instructions : Prepare a Correct Trial Balance.

What is worksheet? Is worksheet a mandatory step of accounting cycle? Explain briefly.

The unadjusted trial balance of PQR Company is given below :

PQR Company
Trial Balance
As of 31 December, 2023

Additional information for adjusting entries :
(i) Expired insurance during 2023 was Tk. 150.
(ii) Interest on investment (dated September 01, 2023) is collected annually each August 30.
(iii) Depreciation on delivery equipment during the year Tk. 10,000.

Requirement : Prepare a Work Sheet.