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Accountancy and Auditing Papers 2004
[CENTER][CENTER][B]FEDERAL PUBLIC SERVICE COMMISSION<o:p></o:p>[/B][/CENTER]
[/CENTER] [CENTER][CENTER][B]COMPETITIVE EXAMINATION FOR RECRUITMENT TO POSTS<o:p></o:p>[/B][/CENTER] [/CENTER] [CENTER][CENTER][B]IN BPS 17 UNDER THE FEDERAL GOVERNMENT, 2004. <o:p></o:p>[/B][/CENTER] [/CENTER] [CENTER][CENTER][B]<o:p> </o:p>[/B][/CENTER] [/CENTER] [CENTER][CENTER][B][U]ACCOUNTANCY AND AUDITING <o:p></o:p>[/U][/B][/CENTER] [/CENTER] [CENTER][CENTER][B][U]<o:p> </o:p>[/U][/B][/CENTER] [/CENTER] [CENTER][CENTER][B][U]PAPER - I <o:p></o:p>[/U][/B][/CENTER] [/CENTER] [CENTER][CENTER][B][U]<o:p> </o:p>[/U][/B][/CENTER] [/CENTER] [CENTER][CENTER][B][U]TIME ALLOWED: THREE HOURS MAXIMUM MARKS:100 <o:p></o:p>[/U][/B][/CENTER] [/CENTER] [CENTER][CENTER][B][U]<o:p> </o:p>[/U][/B][/CENTER] [/CENTER] [B]NOTE: (i) Attempt FIVE questions in all. Including question No. 5 & 6 which are compulsory. Qs 5 carrries 40 marks. All other questions carry EQUAL marks i.e. 20 marks each.<o:p></o:p>[/B] [B](ii) Give workings to solution of questions, wherever relevant.<o:p></o:p>[/B] [B]<o:p> </o:p>[/B] [B]<o:p> </o:p>[/B] [B] 1. [/B]What is a Trial Balance? Why is it prepared? What are the two methods of preparing it and which of them is a better one and why? <o:p> </o:p> [B] 2.[/B] Answer the following short questions briefly. Each question carries two marks. <o:p> </o:p> (a) Define ledger (b) List three disadvantages of not preparing the Trial Balance (c) Give Two examples of errors of principle. (d) State two methods of charging depreciation on fixed assets (e) What is reserve for doubtful debts? (f) Why is revaluation account prepaid? (g) Enumerate at least four reasons for which a cheque is dishonoured. (h) What are capital receipts? (i) Name two methods of preparing final accounts final accounts from incomplete records. (j)What do you understand by closing entries? <o:p> </o:p>[B] 3.[/B] Given below is the Receipts and payments account of the Eagle Club for the year ending 31<sup>st</sup> December 2003. <o:p> </o:p> Balance b/d .. .. 10,250 Subscriptions 2002 .. .. .. . 400 2003 .. .. .. . 20,500 2004 .. .. .. . 600 Donations .. .. ... 5,400 Proceeds of drama tickets .. 9,500 Sales of waste paper .. .. 450 [B]TOTAL .. .. ... 47,100<o:p></o:p>[/B] <o:p> </o:p> Salaries .. .. .. .. 6,000 General expenses .. .. .. 750 Drama expenses . 4,500 Newspaper etc. . 1,500 Municipal taxes .. .. 400 Charity .. .. .. . . 3,500 Investments .. .. . .. . 20,000 Electricity Charges .. . . 1,450 Balance c/d .. .. . .. .. 9,000 [B]TOTAL .. . .. . 47,100<o:p></o:p>[/B] <o:p> </o:p> [B] Required: [/B]Prepare the Clubs Income and Expenditure Account for the year ended 31<sup>st</sup> December 2003 and its Balance sheet as on that date, after taking the following information into account.<o:p></o:p>[LIST=1][*] There are 500 members, each paying on annual subscription of Rs. 50, Rs, 600 being in arrears for 2002.[*] Municipal taxes amounting to Rs. 400 per annum have been paid up to 31<sup>st </sup> March 2004 and Rs. 500 for salaries in outstanding.[*] Building stood in the books at the Rs. 60,000 and it is required to write off depreciation at 5 percent.[*] Four percent interest has accrued on investments for five months.[/LIST]<o:p> </o:p>[B] 4.[/B] A and B were in partnership sharing profit and losses in the proportion of three fourth and one fourth respectively. Their balance Sheet stood as follows on 31<sup>st</sup> December 2003. <o:p> </o:p> [B]LIABILITIES . . . Rs.<o:p></o:p>[/B] Creditors ....... 37,500 Capital Account A ...... 40,000 B ...... . 10,000 [B]TOTAL . 87,500<o:p></o:p>[/B] [B]<o:p> </o:p>[/B] [B]ASSETS [/B] . .. [B]Rs.<o:p></o:p>[/B] Cash at bank ... 22,500 Bill receivable .. . 3,000 Book debts .. 16,000 Stock .. .. 20,000 Furniture .. .. 1,000 Building .. .... 25,000 [B]TOTAL ... 87,500<o:p></o:p>[/B] [B]<o:p> </o:p>[/B] They admitted C into partnership 1<sup>st</sup> January 2004 on the following terms:<o:p></o:p>[LIST=1][*] The C pays Rs. 10,000 as his capital for 1/5 share in the future profits.[*] That goodwill for Rs. 20,000 is raised in the books of the new firm.[*] That stock and furniture are reduced by 10% and that a 5% provision is made for likely bad debts.[*] That the capital Accounts of A and B are readjusted on the basis of their profit sharing ratios.[/LIST]<o:p> </o:p>[B]Required:[/B] Pass the necessary journal entries and give the ledger Accounts and opening Balance Sheet of the new firm. <o:p> </o:p> [CENTER][CENTER][B][U]COMPULSORY QUESTION <o:p></o:p>[/U][/B][/CENTER] [/CENTER] [B] 5.[/B] The following balances appeared in the books of a merchant on 31<sup>st</sup> December, 2003. <o:p> </o:p> Building . . .70,000 Motor trucks . . .12,000 Furniture . . . ...1,640 Sundry debtors . .15,600 Sundry creditors . . .18,852 Stock . . . .15,040 Cash in hand . .. .. .988 Cash at bank . . .14,534 Bills receivable . .. .5,844 Bills payable . . .6,930 Purchases . . .. .85,522 Sales . . . ... .1,21,850 Capital . . .. .92,000 Carriage on purchase .. .1,291 Carriage on sales .. .. 800 Reserve for bad debts . .1,320 Establishment . . ....2,135 Taxes & Insurance . .. .783 Interest (Cr.) . . .. .340 Bad Debts . . . .613 Audit fee . . .. .400 General charges . .... 3,950 Travelling expenses . .325 Discount (Dr.) . . . .620 Investments . ..8,922 Sales returns .. ... .285 <o:p> </o:p> [B] Required: [/B] Prepare Trading and Profit and Loss account for the year ended 31<sup>st</sup> December 2003 and Balance Sheet as on that date. In doing so take the following matters into consideration.<o:p></o:p>[LIST=1][*] Stock on 31<sup>st</sup> December, 2003 amounted to Rs. 15,500.[*] Depreciate Motor Trucks at 20 per cent and Furniture at 10 percent.[*] Increase Bad Debts Reserve by Rs. 1000[*] Salaries Rs. 500 and Taxes Rs. 150 are outstanding[*] Unexpired Insurance Rs. 50[*] Interest accrued on Investments Rs. 210[*] Rent due for a portion of the Building let Rs. 150[*] A bill receivable for Rs. 500 was discounted in December 2003 but was not due till January next.[/LIST]<o:p> </o:p> [B] 6. [/B]Deliver the correct answer in the Answer Book. Over writing is not allowed. <o:p> </o:p> (1) The need for keeping a record of income and expenditure is a clear and systematic manner has given rise to the subject of: (a) Book keeping (b) Accounting cycle (c) Manufacturing (d) None of these <o:p> </o:p> (2) If proper books of accounts are not kept in a business the amount of profit: (a) Can be ascertained (b) Cannot be ascertained (c) Easily ascertained (d) None of these <o:p> </o:p> (3) The stage under which transactions are recorded chronologically in the books of accounts is called: (a) Summarizing (b) Classifying (c) Recording (d) None of these <o:p> </o:p> (4) Book-keeping is mainly concerned with: (a) Recording of a financial data relating to business transactions (b) Designing the systems in recording, classifying, summarizing the recorded data (c) Interpreting the data for internal and external users (d) None of these <o:p> </o:p> (5) The term expenses and expenditure are: (a) Same in nature (b) Different in nature (c) Opposite in nature (d) None of these <o:p> </o:p> (6) When goods are given away as charity or free samples, the purchases account should be: (a) Debited (b) Credited (c) Recorded in balance sheet (d) None of these <o:p> </o:p> (7) The sake of a business asset on credit is recorded in: (a) Sales journal (b) General journal (c) Cash receipt journal (d) None of these <o:p> </o:p> (8) The discount account is a: (a) Personal account (b) Real account (c) Nominal account (d) Asset account (e) None of these <o:p> </o:p> (9) The payment side of the cash book is under cost by Rs. 200 when overdraft as per bank statement is the starting point: (a) Rs 200 will be deducted (b) Rs 200 will be added (c) Rs 400 will be added (d) Rs 400 will be deducted <o:p> </o:p> (10) All the direct expenses are charged to: (a) Balance sheet (b) Profit and Loss account (c) Trading account (d) None of these <o:p> </o:p> (11) Those liabilities which arise only on the happening of some event, are called: (a) Current liabilities (b) Contingent liabilities (c) Outstanding liabilities (d) Fixed liabilities <o:p> </o:p> (12) Marshalling of balance sheet means: (a) The ordering of its assets and liabilities (b) The totaling of its assets and liabilities (c) Excess of assets over liabilities (d) None of these <o:p> </o:p> (13) Commission received in advance is to be considered as: (a) Outstanding expense (b) Accrued income (c) Prepaid expense (d) Unearned income <o:p> </o:p> (14) The provision for discount on creditors is often not provided in keeping with the principle of: (a) Materiality (b) Consistency (c) Conservatism (d) Realization <o:p> </o:p> (15) Which one of the following is not considered the permanent part of the accounting record: (a) Journal (b) Trial Balance (c) Balance sheet (d) Final accounts <o:p> </o:p> (16) A working paper which is prepared by the accountant for his own convenience is called: (a) Work sheet (b) Cash flows statement (c) Balance sheet (d) Final accounts <o:p> </o:p> (17) Any expenditure incurred to increase the profit earning capacity of the concern is a: (a) Revenue expenditure (b) Capital expenditure (c) Deferred revenue expenditure (d) Capital expenditure <o:p> </o:p> (18) Depreciation on fixed assets is an example of: (a) Revenue expenditure (b) Capital expenditure (c) Deferred revenue expenditure (d) None of these <o:p> </o:p> (19) The capital receipts are shown in the balance sheet on the: (a) Liability (b) Asset side (c) Debit side (d) None of these <o:p> </o:p> (20) Error due to wrong allocation as expenditure between capital and revenue is regarded as: (a) Error of omission (b) Error of principle (c) Compensation errors (d) Error of commission |
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<o:p> </o:p> [CENTER][CENTER][B]FEDERAL PUBLIC SERVICE COMMISSION<o:p></o:p>[/B][/CENTER] [/CENTER] [CENTER][CENTER][B]COMPETITIVE EXAMINATION FOR RECRUITMENT TO POSTS<o:p></o:p>[/B][/CENTER] [/CENTER] [CENTER][CENTER][B]IN BPS 17 UNDER THE FEDERAL GOVERNMENT, 2004. <o:p></o:p>[/B][/CENTER] [/CENTER] [CENTER][CENTER][B]<o:p> </o:p>[/B][/CENTER] [/CENTER] [CENTER][CENTER][B][U]ACCOUNTANCY AND AUDITING <o:p></o:p>[/U][/B][/CENTER] [/CENTER] [CENTER][CENTER][B][U]<o:p> </o:p>[/U][/B][/CENTER] [/CENTER] [CENTER][CENTER][B][U]PAPER - II <o:p></o:p>[/U][/B][/CENTER] [/CENTER] [CENTER][CENTER][B][U]<o:p> </o:p>[/U][/B][/CENTER] [/CENTER] [CENTER][CENTER][B][U]TIME ALLOWED: THREE HOURS MAXIMUM MARKS:100 <o:p></o:p>[/U][/B][/CENTER] [/CENTER] [CENTER][CENTER][B][U]<o:p> </o:p>[/U][/B][/CENTER] [/CENTER] [B]NOTE: (i) Attempt FIVE questions in all. Including question No. 9 which is compulsory. <o:p></o:p>[/B] [B](II) Select at least ONE QUESTION from each of the PART A,B,C and D. All questions carry equal marks.<o:p></o:p>[/B] [B]<o:p> </o:p>[/B] [CENTER][CENTER][B]PART A (COST ACCOUNTING)<o:p></o:p>[/B][/CENTER] [/CENTER] [B]<o:p> </o:p>[/B] 1. Define Cost Accounting. Discuss its objectives and distinguish it from financial accounting. <o:p> </o:p> 2. The following data relate to the Shirley Company: <o:p> </o:p> [B]----------------------------------------[U]Inventories<o:p></o:p>[/U][/B] [B]-----------------------------------ENDING[/B] [B] BEGINNING<o:p></o:p>[/B] Finished goods 95,000 .. 10,000 Work in process . . 80,000 .. 70,000 Direct material . 95,000 ... 90,000 <o:p> </o:p> Costs incurred during the period: Costs of goods available for sale . X ........684,000 Total manufacturing costs . ..X ..... ..584,000 Factory overhead . ..X ..... ..167,000 Direct materials used . ..X .......193,000 <o:p> </o:p> [B] Required: [/B]Statement of cost of goods sold, including all beginning and ending inventories. <o:p> </o:p> [CENTER][CENTER][B]PART B (AUDITING)<o:p></o:p>[/B][/CENTER] [/CENTER] <o:p> </o:p> 3. Define Final Audit and explain its merits and demerits. <o:p> </o:p> 4. What is an Audit Program? Explain its advantages and limitations. <o:p> </o:p> [CENTER][CENTER][B]PART C (INCOME TAX)<o:p></o:p>[/B][/CENTER] [/CENTER] <o:p> </o:p> 5. (a) Discuss the residential status of the following Taxpayer: (i) Individual (ii) Company (iii) Association of person <o:p> </o:p> (b) List down the constituents of Income Tax Law in Pakistan. <o:p> </o:p> 6. From the following data, calculate income tax payable by Mr. Fahad for the tax year ending 30<sup>th</sup> June, 2003. <o:p> </o:p>[LIST=1][*] Basic salary . . . . . . . . . . .15,000[*] Bonus . . . . . . . . . . ..10,000[*] Senior post allowance . . . . . . . ..2,000[*] House rent allowance . . . . . . . ..... 1,25,000[*] Medical allowance (Actual Expenditure incurred Rs. 3000) . . .4,000[*] Entertainment allowance (Actual Expenditure incurred Rs. 3000) .6,000[*] Gas and electricity allowance . . . . . . 18,000[*] Leave encashment . . . . . . . . .2,500[*] Special pay . . . . . . . . . . . 2000[*] Orderly allowance . . . . . . . .. .5,000[*] Income as non professional writer . . . . . .. ..4,500[*] Special allowance . . . . . . . .. .8,000[*] Donation to bait-ul-Mal . . . . . . . ..2,000[*] Zakat paid . . . . . . . . . .3,000[/LIST]<o:p> </o:p> [CENTER][CENTER][B]PART D (BUSINES ORGAZIATION AND FINANCE)<o:p></o:p>[/B][/CENTER] [/CENTER] <o:p> </o:p> 7. (a) Describe registration of partnership. What are the consequences of non-registration? (b) Enumerate rights, duties and liabilities of partners. <o:p> </o:p> 8. (a) Define business finance and discuss the advantages and disadvantages of debt financing. (b) What is a capital market? Explain in detail. <o:p> </o:p> [CENTER][CENTER][B][U]COMPULSORY QUESTION <o:p></o:p>[/U][/B][/CENTER] [/CENTER] [CENTER][CENTER][B][U]<o:p> </o:p>[/U][/B][/CENTER] [/CENTER] 9. Write only the correct answer in the Answer Book. Do not reproduce the questions. <o:p> </o:p> (1) The heat treatment department at Noori Pipe is the third department in a sequential process. The work in process account for the department would consist of: (a) Costs transferred in from the prior department (b) Materials costs added in the heal treatment department (c) Conversion costs added in the heat treatment department (d) All of the above (e) None of these <o:p> </o:p> (2) Jingo Products uses the weighted average method in its process costing system. Last month in the milling department the cost per equivalent unit for conversion cost was Rs. 105. A total of 540 equivalent units of conversions cost were used to compute this units cost. The total conversion cost added during the month was Rs. 54,500. What was the amount of conversion cost in the beginning work in process inventory? (a) Rs. 0 (b) Rs. 2200 (c) Rs. 4200 (d) Rs. 3000 (e) None of these <o:p> </o:p> (3) Shahzad Corp. uses the FIFO method in its process costing system. The company had Rs. 6000 of material cost in its beginning work in process inventory and the company added Rs. 75,000 in materials cost during the period. The equivalent units of production for materials were 20,000. The unit cost per equivalent unit for material would be: (a) 3.75 (b) 4.05 (c) 0.30 (d) 3.30 (e) None of these <o:p> </o:p> (4) Costs in the beginning work in process inventory are added to the cost of the current period when making units cost calculations by: (a) The FIFO cost method (b) The weighted average cost method (c) The quantity schedule method (d) LIFO method (e) None of these <o:p> </o:p> (5) A chemical process has normal wastage of 10% of input. In a period, 2500 kgs of material were input and there was an abnormal loss of 75 kgs. What quantity of good production was achieved? (a) 2175 kgs (b) 2250 kgs (c) 2325 kgs (d) 2425 kgs (e) None of these <o:p> </o:p> (6) Premium on issue of shares can be used for: (a) Payment of dividends (b) Writing off preliminary expenses (c) Paying fees to directors (d) Redemption of debentures (e) None of these <o:p> </o:p> (7) ??? <o:p> </o:p> (8) Pre incorporation profit is to be credited to: (a) Capital reserve (b) Profit and loss account above the line (c) Profit and loss account below the line (d) General premium (e) None of these <o:p> </o:p> (9) The excess of purchase price over the net asset is: (a) Goodwill (b) Capital Reserve (c) Preliminary expenses (d) Share premium (e) None of these <o:p> </o:p> (10) Statutory report is necessary in the case of: (a) All Companies (b) Public Limited Companies (c) Foreign Companies (d) Private Limited Companies (e) None of these <o:p> </o:p> (11) Dividends are usually paid on: (a) Called up capital (b) Paid up Capital (c) Paid up capital call in advance (d) Subscribed capital (e) None of these <o:p> </o:p> (12) Provision for taxation of a previous year was Rs. 100,000 and tax assessed for that year Rs. 80,000. This adjustment for this is: (a) A credit of Rs. 100,000 below the line (b) A credit of Rs. 80,000 below the line (c) A credit of Rs. 20,000 above the line (d) A credit of Rs. 20,000 below the line (e) None of these <o:p> </o:p> (13) Amount set apart to meet losses due to bad debt is a: (a) Provision (b) Reserve (c) Liability (d) Contingent liability (e) None of these <o:p> </o:p> (14) Advance Payment of tax is in the nature of: (a) Asset (b) Revenue expense (c) Liability (d) Prepaid expense (e) None of these <o:p> </o:p> (15) Values that express preferred behavior and the means by which one achieves his/her goals are known as: (a) Terminal values (b) Dominant values (c) Instrumental values (d) Affective values (e) None of these <o:p> </o:p> (16) Evaluate positive or negative-concerning people, objects, or events are called: (a) Perceptions (b) Attitudes (c) Beliefs (d) Values (e) None of these <o:p> </o:p> (17) The auditor is required to report that Financial Statement are: (a) True & Correct (b) True & Fair (c) Complete & Correct (d) Covering all required records (e) None of these <o:p> </o:p> (18) The auditors is required to report that Financial Statement are: (a) Creditors (b) Debtors (c) Share holders (d) Directors (e) None of these <o:p> </o:p> (19) Interim audit is conducted for examining the account for: (a) Full one year (b) Next one year (c) Previous one year (d) For a part of current year (e) None of these <o:p> </o:p> (20) Payment should be made preferably through (a) Cross cheque (b) Bank Draft (c) Pay order (d) Cash basis (e) None of these [B][FONT="]<o:p> </o:p>[/FONT][/B] <o:p> </o:p> |
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