Accounting paper from BUTEX affiliated colleges' 2015 Level-3 Term-II finals, worth 105 marks. Questions cover double entry system benefits, GAAP assumptions, journalizing a laundromat's first month, and accounting equation analysis for multi-year asset data.
Level-3 Term-II, Final Exám-2015
Subject:
Time: 3.0 Hrs. Full Marks: 105
(Use separate answer script for Part: A and Part: B)
(All parts of a question must be answered consecutively)
Part: A
(Answer any three questions)
1. (a) State the objectives and necessaries of Accounting.
(b) Why is meant by Double entry system? Explain the benefits of double entry system.
(c) Discuss the four basic assumptions of GAAP.
[6+5.5+6=17.5]
2. (a) What is an account?
(b) Define Journal and discuss the process and techniques of Journalizing.
(c) Colombia washing opened the Campus Laundromat on September 1, 2015. During the first month of operations the following transactions
Sept. 1 Invested $20,000 cash in the business.
,, 2 Paid $1,000 cash for store rent for the month of September.
,, 3 Purchased washers and dryers for $25,000, paying $10,000 in cash and signing a $15,000, 6-month, 12% note payable.
,, 4 Paid $1,200 for one-year accident insurance policy.
,, 10 Received bi;; from the Daily News for advertising the opening of the laundromat $200.
,, 20 Withdrew $700 cash for personal use.
,, 30 Determined that cash receipts for laundry services for the month were $6,200.
i. Journalize the September transactions
ii. Open ledger accounts and post the September transactions
[2.5+3+(6+6)=17.5]
3. (a) What is basic accounting equation? State and explain the different components of accounting equation.
(b) Lily Company had the following assets and liabilities on the dates indicated.
December 31 | Total Assets | Total Liabilities |
2011 | Tk. 400000 | Tk. 250000 |
2012 | Tk. 460000 | Tk. 300000 |
2013 | Tk. 590000 | Tk. 400000 |
Lily began business on January 1, 2011, with an investment of Tk. 100000.
Instructions
From an analysis of the change in owner’s equity during the year, compute the net income (or loss) for:
i) 2011, assuming Lily’s drawings were Tk. 15000 for the year.
ii) 2012, assuming Lily made an additional investment of Tk. 45000 and had no drawings in 2012.
iii) 2013, assuming Lily made an additional investment of Tk. 15000 and had drawings of Tk. 25000 in 2013.
[7.5+10=17.5]
4. (a) Joan Robinson opens her own law office on July, 1, 2005. During the first month of operations, the following transactions occurred.
1. Invested $10,000 in cash in the law practice.