Assignment No. 1
Note: You are required to attempt all questions if you are unable to understand any question of
assignment, do seek help from your concerned tutor. But keep in mind that tutors are not
supposed to solve the assignment questions for you.
Q. 1 a) Define accounting and discuss its functions.
b) Describe the users of accounting information. Why do they need information? (20)
Q. 2 Journalize the following transactions in the books of Mr. Maqsood & Sons, post them to the
ledgers, and prepare trial balance. Mr. Maqsood started a soleproprietorship business named Mr.
Maqsood & Sons, with cash Rs. 450,000 and furniture Rs. 30,000. The transactions, completed
during June 2011, the first month of operations, are as under: (20)
a) Opened a bank account in the name of business with Rs. 150,000.
b) Acquired a shop on monthly rent for Rs. 3,000 after paying cash Rs. 36,000 as advance rent.
c) Purchased showcases and counters for Rs. 18,000, payment was made by cheque.
d) Purchased goods costing Rs. 50,000.
e) Bought gods from Mr. Abrar on account of Rs. 26,000.
f) Cash sale Rs. 32,000.
g) Sold goods on credit to Rahim Rs. 6,000.
h) Returned defective goods to Rauf and Co. costing Rs. 7,000.
i) A regular customer complained about the quality of goods has been granted an allowance of
Rs. 1,000.
j) Received a cheque from Rahim amounting Rs. 5,000, the same day it was deposited into the
Bank.
Q. 3 The following trial balance was extracted from the books of Ahmad, a sole trader, for the year
ending December 31, 2008: (20)
Purchases and Sales 22,860 41,970
Opening Stock 5,160
Capital 7,200
Bank Overdraft 4,350
Cash 90
Discount 1,440 930
Returns Inwards 810
Returns outwards 570
Carriage outwards 2,160
Rent and Insurance 1,740
Provision for Bad & Doubtful debts 660
Fixtures and Fittings 1,200
Delivery Van 2,100
Debtors and Creditors 11,910 6,060
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