1. (i) journal

Con Ch-01, Basic concept of accounting.
• Q. Definition/ what is Accounting/ importance (why needed)/ objectives/ features or characteristics/

functions/some basic terms /
• The word ‘Accounting’ comes from the Latin word ‘Calculi’ which means to count, but
academically, accounting is originated from the work of Luca Pacioli, an Italian Renaissance
mathematicians.
• Accounting is an information science used to collect, classifies, and manipulates
financial data for organizations and individuals.
• According to FASB, ‘Accounting is the service activity of financial recording and reporting.
• According to AICPA, ‘ Accounting is the art of recording, classifying and summarizing, in a
significant manner and in terms of money, transactions and events which are, in part at least,
of a financial character, and interpreting the results thereof.
• According to AAA, ‘Accounting is the process of identifying, measuring, and communicating
economic information to permit informed judgments and decisions by user of the information,
the documentation.
Con Q. What is Accounting? Write features of Accounting.(define A/C)/ how
accounting is an information system / explain accounting is an information system
or “Accounting is an information system”– justify your answer, or how or show
your argument or explain the statement with example.
Accounting: The process of maintaining accounts (lists). How lists have been
prepared ? What are we doing right now? The study of accounting is
Accountancy.
Accounting is an information system that measure, process & communicates financial
information about an identifiable economic entity to permit users of the system to
make informed judgments & decisions.
• The process of identifying, measuring, recording and communicating economic
events in order to provide information for decision-making purposes.
• In 1970, the AICPA (American Institute of Certified Public Accountants) stated that
the function of accounting is “To provide quantitative information, primarily
financial in nature, about economic that is intended to be useful in making
economic decisions.
Con Q What r the Functions of accounting ?
.
• i. To manage the recourse held by specific entities.

• ii. To reflect the claims against and the interest in those entities.
• iii. To measure the changes in those resources, claims and interest.
• iv. To assign the changes to specifiable periods of time.
Q. What r the Objectives of Accounting ? Explain the objectives of Acc

i. Change in financial position resulting from the income producing efforts of an
enterprise.
ii. Earning of an enterprise, presented in a manner that emphasizes sources and trend
of earnings.
iii. Economic resources and obligations of an enterprise.
iv. Change in net financial resources which result from the financial and investment
activities of an enterprise.
Con
Q. Basic terms of accounting: Define/what is/short notes on Assets, Liabilities, Owners’ equity,
Expenses, Business transactions, A/P (account payables), A/R (account receivables), Book keeping,
Double entry system, cash & accrual basis, calendar, fiscal & interim year, journal, ledger, trial balance,
financial statements, ratios, capital, capital budgeting,
Business (We): Motive to earn profit.

Transactions: Economic events that affect the finance/ financial position of the business entity.
Goods: What we deal into. Purchase/ sales & stocks are related with goods.
Capital: Cash/ personal property (what we invest to start the business). Capital is the money the owner
invests in the business when it sets the company up.
Drawing: (Taken out by the owners from business for personal use). Drawing are funds/money the owner
takes out of the business for personal use. Drawing will never be an expense of the business.
Depreciation: The allocation of the cost of an asset to expense over its useful life in a rational &
systematic manner.
Revenue Recognition Principle: The principle that companies recognize revenue in the accounting period
in which it is earned.
Prepaid expenses: Expenses paid in cash that benefit more than one accounting period & that are
recorded as assets.
A/R (Account Receivables) or Debtors or Trade Receivables.: Trade receivable/accounts receivable (A/R) is a
balance sheet asset that represents amount of money the company is legally entitled to receive.
Accounts payable (A/P) or Creditors: A/P represents the amount that a company owes to its creditors and
suppliers (also referred to as a current liability account).
Con
• Assets (what it owns) /has future economic value. Assets ---are a company’s resources-
things the company owns. Examples of assets include cash, accounts receivable, inventory,
prepaid insurance, investments, land, buildings, equipment and goodwill. From the accounting
equation, we see that the amounts of assets must equal the combined amount of liabilities plus
owners (or stockholders) equity. (B/S items).
Liabilities (what it owes to other)the claims of third parties

• Liabilities-- of a company’s obligations-amounts the company owes. Examples of liabilities
include notes or loans payable, accounts payable, salaries and wages payable, interest payable
and income taxes payable (if the company is a regular corporation). (B/S items).
Owners’ Equity (the difference between assets and liabilities)/owner’s claims.
Owner’s equity or stockholder equity is the amount left over after liabilities are deducted from
assets (B/S items) . Assets – Liabilities = Owners (or Stockholders’) Equity
Owner’s investment/capital & income/revenue/profit increase the OE, and owner’s
withdraw/expenses/loss decrease OE.
Con
Equity: The residual interest in the assets of an entity that remains after deducting its liabilities.
E=A-L. Equity is anything that is invested in the company by its owner .
Retained Earnings – It is the portion of the income that is retained in the company to invest in the
business.
• Cash basis and accrual basis of accounting
There are two bases of accounting treatment : cash basis & accrual basis of accounting.
The cash basis of accounting recognizes revenues, when cash is received and recognizes expenses,
when cash is paid out.
On the contrary , accrual basis of accounting recognizes revenue when sales are made or services
are performed regardless of when cash is receiver. Cash is realizable (receivable). The accrual
basis of accounting also recognizes expenses when they incur regardless of when cash to paid.
Cash is payable at any future date.
• Fiscal year.
An accounting time periods that is one year in length is a fiscal year. A fiscal year usually begins
with the first day of a month and ends twelve months.
• Calendar year
Start from January to December it is called Calendar year.
• Interim periods.
Accounting time periods are generally a month, a quarter, or a year. Monthly and quarterly time
periods are called interim periods.
•
Con Q. Characteristics of Accounting
The above definitions bring out the following attributes or characteristics of accounting
• Characteristics of Accounting: ) Economic 2) 2)Identifying (3)Recording
(4) Classifying (5)Summarizing 6) Measuring (7) Analyzing and interpreting
(8)Communicating.
Q. What is an accounting transaction?
An accounting transaction is a business event having a monetary impact on the financial statements
of a business. It is recorded in the accounting records of the business.
A business transaction has the following features:
• 1. It is measurable in terms of money.
• 2. It changes the financial position of the business.
• 3. It has dual aspects.
• 4. It must be an event visible or invisible.
• 5. It should be separate, independent and complete.
• 6. It may be historical or future natured.
• 7. It has documentary evidence.
• 8. It may be cash basis or accrual basis.
Con Q . Describe conceptual framework/ different phases / …. State the CFA or 1st phase or 3rd phase or qualitative
characteristics of accounting information according to 2 nd phase or objectives of accounting information according to 3 rd
stage of CFA etc..
• Conceptual framework : A coherent system of interrelated objectives and fundamentals that can lead to
consistent rules and that prescribes the nature, function and limits of financial accounting and financial
elements.
Assumptions Principles Third level how
1. Economic entity 1. Historical cost Constraints implementation (related

2. Revenue recognition 1. Cost benefit with accounting theories and
2. Going concern
2. Materiality
3. Monetary unit 3. Matching
3. Industry practice
practices) [ GAAP
4. Periodicity 4. Full disclosure
4. Conservatism
2nd level bridge between

level 1 & 3. [ Quality &
Elements]
1st level The why goals &

purpose of accounting
[ Objectives of Acc Information]
Con Describe the conceptual framework: Definition of Conceptual Framework of Accounting (CFA):
According to FASB (Financial Accounting standard board), A conceptual framework is a coherent system of interrelated
objectives & fundamentals that can lead consistent standard & prescribes the nature, function & limit of financial standard.
Third level how

implementation
(related with
accounting
theories and
practices)
2nd level bridge

between level 1 & 3.
accounting
framework of
Conceptual
. Conceptual framework of accounting:
Q
• Q.
Con Q. Q. Describe GAAP with examples. / Explain the GAAP (Generally Accepted
Accounting Principles) / Recognition & Measurement Concepts/ Principles of Accounting/
Assumptions/ Constraints of Accounting
•Assumptions: –Economic Entity, –Going Concern, –Monetary Unit, & –Periodicity
•Principles: –Historical Cost, –Revenue Recognition, –Matching, –Full disclosure.
• •Constraints: –Cost-Benefits, –Materiality, –Industry Practice, –Conservatism
GAAP (Generally Accepted Accounting Principles): The conventions, rules & procedures
necessary to define accepted Accounting practice at a particular time.
1. Money measure: All business transactions are recorded in terms of money. Money is the
only factor common to all business transactions in Bangladesh.
2. Separate Entities: The ideas that a business is separate entity that is distinct from its owner
or owner’s and from every other business.
3. Going concern: It is assume that business has a unlimited life. The assumptions that a business
will continue to operate & that the assets held for use in the business will not be sold.
4. Objective evidence: The Accounting rule that whatever possible the amounts used in
recording transactions be based on verifiable evidence such as business transactions between
independent parties.
Con 5. Materiality concept: Materiality refers to the relative importance of an item or event. If
the effect on financial statements is unimportant to financial statement recorders it can be ignored.
6. Cost concept: All assets & liabilities should be recorded at cost.
7. Realization Principles : The Accounting rules which states that –
The inflow of assets associated with a revenue does not have to be in the form of cash.
Revenue should be recorded as revenue at the time, but not before it is earned.
The amount of revenue should be measured in terms of the cash plus cash equivalent amount of
other assets received.
8. Full disclosure: The Accounting requirements that financial statements including the
footnotes contain all relevant information about the operations & financial position of the
presented in an understandable manner.
Con Con
Q. Explain Accounting Assumptions:
Economic Entity: The business or economic entity exists separate & distinct from its owners, employees,
suppliers & customers. This assumption defines accounting boundaries, but not legal boundaries.
Going Concern: General purpose accounting reports are constructed under the assumption that the business
enterprise will continue in business for the foreseeable future. The current relevance of the historical cost principle is
based on the going-concern assumption.
Monetary Unit: Economic activity of an entity are measured and reported in the Bangladeshi Taka. This assumes
that the Taka has a reasonably constant value over time in terms of purchasing power. This assumption ignores inflation.
Periodicity: Assumes that the economic life of a business can be divided into discrete time periods and that
financial reports from each period are interpretable.
Historical Cost Principle : Acquisition cost is the most objective and verifiable basis upon which to account for assets
and liabilities. That is, it is reliable.
5 methods to measure assets & liabilities:
–Historical cost
–Current cost
–Current market value
–Net realizable (settlement) value
–Present (discounted) value
Con
Matching Principle : Expenses are matched to the revenue generated in that accounting period
“let the expenses follow the revenues”.
Full Disclosure Principle: All information must be disclosed, in not , there must be foot notes.
Financial statements should include sufficient information to permit the knowledgeable reader to
make an informed judgment about the financial condition of the enterprise.
trade-offs:
-sufficient detail to make a difference
-presented in a condensed form for understandability & to avoid information overload
Constraints:
Cost-Benefit: The cost of providing the information should not exceed the benefits that can
be derived from the information.
• Materiality: An item is material if its inclusion or omission would influence or change the
judgment of a reasonable man. Materiality is based on relative size & importance.
• Industry Practice: The unique nature of some industries and business concerns sometimes
(rarely) requires departure from basic theory.
• Conservatism: Never overstate assets or income.
• Con Q. Who are the users of Accounting information and why?
• The users of accounting information/data
Users of Accounting Information: Users of accounting information are divided into two board groups:
(a) internal users, and (b) external users. There are discussed below:
• (a) Internal Users: Internal users of accounting information/data are managers who plan, organize,
and run a business. For internal users, accounting provides internal reports. Such internal reports are
financial comparisons of operating alternatives, projection of income form new sales campaigns,
forecasts of cash needs for the nest year. The internal users are pointed out below:
• Marketing Managers: Marketing mangers use accounting information to perform marketing
activities of the business concern.
• Production Manager: Production managers use accounting data to supervise production of goods.
• Finance Director: Finance director use accounting data to manage finance for the business concern.
• Company Officers: company officers use accounting information to run the organization.
• (b) External Users: there are several types of external users of accounting information/data.
The internal users are pointed out below:
• Investors: Investors (owners) use accounting information to make decisions to buy, hold, or
sell stock.
• Creditors: Creditors such as suppliers and bankers use accounting information to evaluate
risks of granting credit or lending money.
• Taxing Authorities: Taxing authorities, such as the Internal Revenue service, want to know
whether the company complies with the tax laws.
• Con
• Regulatory Agencies: Regulatory agencies, such as the Securities and Exchange Commission
and the trade commission, want to know whether the company is operating within prescribed
rules.
• Customers: Customers are interested in whether a company will continue to honor product
warranties and supports its product lines.
• Labor Union: Labor unions want to know whether the owners can pay increased wages and
benefits.
• Economic Planners: Economic planners use accounting information to forecast economic
activity.
End Words: To ending up, both internal, and external users use accounting data and information to
make important decisions for next best actions.
The Users of Accounting Information:

The users of accounting information can be divided into three major groups:
1. Those who manages a business.(Management/Managers)/(Internal Group)
2. Those outside a business enterprise who have a direct financial interest (External Group) in the business such as:
i. # Present and Potential investors.
ii. # Present and potential creditors.
3. Those persons, groups or agencies, that have an indirect financial interest (Public Group) in the business such as:
i. # Tax authorities.
ii. # Regulatory agencies.
iii. # Economic planners.
iv. # Customers.
v. # Other groups.
Con Users of Accounting Information
Public Groups
⫸ Regulatory agencies.
• Internal External
• .Managing .Financing groups. ⫸ Tax authorities.
groups .Investors. ⫸ Labor Union.
• .Board of .Potential Investors.
directors .Creditors. ⫸ Economic Planners
• .Partners .Potential Creditors.
⫸ Employees
• .Supervisors
etc. ⫸ Customers.
•
⫸ Retirees.
Q. Why Financial information is needed/ objectives of financial reporting/
why accounting information is needed….
The objective of general purpose financial reporting:

To provide financial information about the reporting entity that is useful to
existing and potential investors, lenders and other creditors in making
decisions about providing resources to the entity. Those decisions involve
buying, selling or holding equity and debt instruments and providing or
settling loans and other forms of credit.
This objective of general purpose financial reporting forms the foundation
of the Conceptual Framework.
Objectives of Financial Reporting by Business Enterprises: User
Perspective:
Financial reporting should provide:(1) information useful in investment &
credit decisions (2) information useful in assessing cash flow prospect
(amount, timing & uncertainty), &(3) information about enterprise
resources, claims to those resources, & changes there in.*** ... individuals
who have a reasonable understanding of business & economic activities &
are willing to study the information with reasonable diligence.
. Q. Explain the elements of Accounting/ 2nd phase of conceptual framework ( only
elements not quality of accounting information)
Elements of the financial statements (Financial position)

• Asset: (What we have controlled over / own). Assets are things that are owned by
the business. Such cash, account receivables, inventory, bank, furniture,
equipment etc. They provide future services or economic benefits which results in
cash inflows.
Asset is a resource controlled by the entity as a result of past events and from which
future economic benefits are expected to flow to the entity. Which has probable future
economic benefits. Short term and long term assets.
 Liability:(What we owe / claim of others). Liability is anything that is owed from
the business to someone else. Ex- loan, payable, dues, account payable, note payable
etc. short term and long term liabilities. Liabilities are claims against assets, i,e,
existing debt and obligations. These claims must be paid before ownership claims.
Liability is a present obligation of the entity arising from past events, the settlement of
which is expected to result in an outflow from the entity of resources embodying
economic benefits
• Equity: Interest of owner’s in the business. Equity is the residual interest in the
assets of the entity after deducting all its liabilities.
Q write some features of income & expenses/ distinctions etc.
• Income: The money coming into the business from the product/ service the
business is selling. Owner investing money into the business is not income.
Income is increased in economic benefits during the accounting period in the form
of inflows or enhancements of assets or decreases of liabilities that result in increases
in equity, other than those relating to contributions from equity participants.
• Expenses :Expenses are the day-to-day running / operating cost of the business. Ex-
cost of sales, rental expenses, salaries, light & heat etc. Expenses don’t create assets.
Expenditure creates assets.
Expenses are decreases in economic benefits during the accounting period in the form of
outflows or depletions of assets or incurrences of liabilities that result in decreases in
equity, other than those relating to distributions to equity participants.
Income statement equality:
a) If there is a profit:
Income = Cost + Profit or
b) If there is a loss: Cost = Income +-- Loss
For product sales
• Cost of sales: Beginning of period goods inventory+ Current period amount of goods
purchased − End of period goods inventory
Con For manufacturing
Manufacturing cost:
Current period material cost + Current period labor cost + Current period expenses
Product manufacturing cost:
• Beginning of period work in progress inventory+ Current period manufacturing cost− End of period work in
progress inventory
Cost of sales:
• Beginning of period product inventory+ Current period product manufacturing cost − End of period product
inventory
Revenue: Actual sale proceed.

Debtors: They have to pay us(business). Sold goods on credit to them (customers).
Creditors: Purchased (goods) from them (suppliers).
Q. Q. What is Accounting Theory?
Accounting theory is a set of frameworks, assumptions, and methods that are used in the
application and study of financial reporting principles. The accounting theory study comprises a
review of essential practicalities of accounting practices. These practices are altered and added to
the supervisory framework that regulates financial reporting and statements.
All accounting theories are assured by the theoretical framework of accounting, which is provided
by a specific entity to outline and establish primary objectives of financial reporting by both public
and private businesses. Furthermore, accounting theory can also be regarded as the logical
reasoning that helps to assess and guiding practices of accounting.
Not just that, but it also helps develop new methods and procedures. One essential aspect of
this theory is its usefulness. In the corporate world, all financial statement should have
crucial information that readers can use to make informed and cautious decisions for
businesses. Objectives of Accounting Theory:
Different objectives fulfilled by the theory of accounting are-
• Evaluation and Explanation of Accounting Principles
• Simplifying Complex Phenomena
• Solving Problems Created by Different Scenarios
• Calculating the Effect of an Event on the Future Beforehand
• Predicting Future Events
• Helping the Investigation, Explanation, and Conclusion of an Event
Q. Qualitative Characteristics of Accounting Information :
Q. Explain the qualities/ qualitative Characteristics of accounting information:
• Understandability: # Decision makers must be able to interpret Accounting information.
• Usefulness: # Accountants must provide information that is used in making decisions.
• General purpose: # External Financial Statements # Comparability & consistency : #
Materiality, # Conservatism, # Full disclosure # Cost- benefit
Relevance: # Predictive value, # Feedback value, # Timeliness
Reliability: # Representational faithfulness, # Verifiability, # Neutrality.
• Primary Qualities: (1) Relevance,
(a) Predictive value, (b) Feedback value & (c) Timeliness.
(2) Reliability : (a) Verifiability, (b) Representational Faithfulness (c) Neutrality.
• Secondary Qualities: (1) Comparability (across firms) (2) Consistency (over time)
Q . What are the objectives/importance of financial information ?
Objectives of financial information
1. To furnish information useful in making investment & credit decisions:

i. Offer information
ii. Information useful to present & potential investors, creditors & others.
iii. Making rational investment & credit decisions
2. To provide information useful in assessing cash flow prospects:

i. Judge the amount
ii. Timing
iii. Risk of expected cash receipt from dividends or interest
3. To provide information about business resources, claims to those resources & changes
in them:
i. Information about the asset of a company
ii. Information about the liabilities of a company
iii. Information about the owner’s equity of a company
iv. Information about the effect of transactions that change its assets, liabilities & owner’s
equity.
Q. What do you mean by “ Revenue Recognition Principle” / or
• Recognize Revenue when:
(a) realized or realizable &
(b) earned.........................on the date of sale
exceptions:
(a) during production ... if the production process is long
... Ex: long-term construction contract
(b) end of production ... if selling price & amount is certain
...ex: mining of certain minerals
• (c) receipt of cash ... if the amount to be collected is uncertain.
Recognition
• Revenue............when realized or realizable & earned
• Gains ...............when realized or realizable
• Expenses .......... when economic benefits are consumed in revenue
-earning activities or when future economic benefits are reduced
or eliminated
• Losses ..............when future economic benefits are reduced or eliminated

Q. Explain Accounting Equation (AE) with example or The elements of
Basic Accounting
Accounting Equation: Also called the balance sheet equation, Represents the relationship
between assets, liabilities & owner’s equity, Total assets equal total liabilities plus owner’s
equity,
Foundation for double-entry book-keeping system
Affected by every business transactions.
Assets(A) = Liabilities(L) + Owners’ equity(OE)

Accounting Equation represents the relationship between the assets, liabilities, and
owner's equity of a person or business. Accounting equation describes that the total
value of assets of a business is always equal to its liabilities plus owner's equity.
Thus the statement which shows
Assets = Liabilities + Owners’ equity
is called AE.
1. Assets (what it owns) /has future economic value.
2. Liabilities (what it owes to other)the claims of third parties
3. Owners’ Equity (the difference between assets and liabilities)/owner’s claims
• Assets ---are a company’s resources-things the company owns. Examples of assets

include cash, accounts receivable, inventory, prepaid insurance, investments, land,
buildings, equipment and goodwill. From the accounting equation, we see that the
amounts of assets must equal the combined amount of liabilities plus owners (or
stockholders) equity. (B/S items)
• Liabilities-- of a company’s obligations-amounts the company owes. Examples of
liabilities include notes or loans payable, accounts payable, salaries and wages
payable, interest payable and income taxes payable (if the company is a regular
corporation). (B/S items).
• Owner’s equity or stockholder equity is the amount left over after liabilities are
deducted from assets (B/S items)
Assets – Liabilities = Owners (or Stockholders’) Equity
Owner’s investment/capita & income/revenue/profit increase the OE, and owner’s

withdraw/expenses/loss decrease OE.
Q. What is Accounts/types of account /write golden rules of accounting / how
debit & credit can be determined
The basic storage units for data in accounting systems there is a separate
accounts for each asset, liability, component of owners equity, revenue &
expense.
• Accounts:
# Personal accounts (x,y etc). Receiver of benefits A/C Debit & Giver of
benefits A/C Credit
#Property or real accounts (machine, furniture etc) Whats Come – in A/C Dr &
What Goes-out A/C Cr
#Nominal accounts (wages, salaries, discount etc) All Expenses A/C Dr & All
Income A/C Cr.
Double Entry: Dual effect on the ledgers. Debit & Credit. Two word DEAD
(Debit –-Expenses, Assets , Drawing)
& CLIC (Credit– Liabilities, Income, Capita).
Q. What r the Rules for determination of debit &
credit (/Golden rules of accounting):
• Debit:
• -Receiver of benefits
• -What comes in?
• -Expenses & losses
• Credit:
• -Giver of benefits
• -What goes out?
• -Gains & incomes
• Debit indicates: Credit indicates:
• Assets increases -Assets decreases
• Liabilities decreases Liabilities increases
• Proprietorship / OE decreases Proprietorship /OE increases
• -Income decreases Income increases
• Expenses increases -Expenses decreases
• Purchase increases -Purchase decreases
• Drawing increases -Drawing decreases
• Losses increases -Losses decreases
• Sales decreases Sales increases
• Capital decreases Capital increases
• Profit decreases Profit increases
Q. Explain accounting cycle / Process / steps of accounting
Accounting Cycle: The order or sequence in which Accounting procedures are performed is known as Accounting
cycle.
• Recording (in journal)/1st step.
• Classifying (in ledger)/2nd step
• Summarizing (in trial balance)/3rd Step
• Preparing financial statements/4th step
• Interpretation & Analysis (through accounting ratios)/5th step
• Journal: Chronological listing of a business/firm’s transactions

• Shows debit and credit effects on each specific accounts
• Process of entering data in the journal-journalizing
• A complete entry consists:
• -- date
• --accounts & amount to be debited and credited
• --a brief explanation.
• Objects and advantages of journal
• (1) Detail descriptions of transactions are available in journal.
• (2) It is the primary and basic book for recording transactions.
• (3) It is the daily book of transactions.
• (4) From various subsidiary journals necessary information can be known easily.
• (5) Increases efficiency in accounting tasks.
• (7) It is used as future reference.
• (8) Ledger can be kept briefly and in a neat and clean manner.
• (9) It helps rectification of errors.
Recording: Recording the transactions in the journals or books of original entry
Si. Date Particulars Ledger Debit Credit
No. folio(LF) (Tk.) (Tk.)
01 1.1.20 Cash A/C Dr 500000

Mr. Z’s Capital A/C Cr 500000
(As started business)
• Classifying: Transferring the entries from the journals to the ledger or “T” account.
• Ledger is the book wherein various entries of journal are posted in brief permanently
according to debit and credit under separate heads of accounts is called ledger.
• Willium Pickles says, "Ledger is the destination of all entries made in the subsidiary book
or journals.“ Example , sampl of ledger as T format
• Cash Account (ledger)
Dr Cr
Date Description J.F Amount Date Description J. Amount
F
1. 12. 2023 TK. 1.12.23 By TK.
To 1.Jerry Dow capital 9000 2.Library books 2500
20.12.23 To Sales 2200 17.12.23 5.Office equipment 5600
11,200
===== 31,12.23 3100
balance c/d ( balancing figure)
To Balance b/d 11,200
1.1.24 3,100 =====
Con The visual appearance of the ledger - journal of individual accounts resembles a T-shape, hence why a
ledger account is also called a T-account and depicts credit balances graphically on the right side of the account
and debit balances on the left side of the account. So Another name for a T account is a ledger
account. For asset accounts, the debit (left) side always indicates an increase to the
account and the credit (right) side indicates a decrease to the account. It has another
shape :
• Summarizing: Preparing a trial balance from the debit & credit balances
of ledger accounts.
Trial balance
• For 31st, December2019
Sl. No. Particulars Debit (TK) Credit (TK)
1 Cash 5400
2 Accounts payable 3000
• Trial Balance and it’s purpose

• A trail balance is a statement which is, prepared at a particular date with
the ledger account balances to test the arithmetical accuracy of the
ledger accounts and also to facilitate preparation of financial statements
is called a trial balance. A trial balance contains the columns - serial
number of ledger accounts, Account tittles, Ledger folio, debit balance
and credit balance.
Con Preparing Financial Statements: Preparing the trading account, profit & loss account, the balance sheet also taking
into account all adjustments affecting the period concerned..
• The balance sheet is also known as the statement of financial position and it reflects the accounting equation. The balance
sheet reports a company’s assets, liabilities, and owner’s (or stockholders’) equity at a specific point in time. Like the
accounting equation, it shows that a company’s total amount of assets equals the total amount of liabilities plus owner’s (or
stockholders’) equity.
• The income statement is the financial statement that reports a company’s revenues and expenses and the resulting net
income. While the balance sheet is concerned with one point in time, the income statement covers a time interval or period
of time. The income statement will explain part of the change in the owner’s or stockholders’ equity during the time interval
between two balance sheets.
• Interpreting & Analysis those Statements: Giving requisite information to the interested groups by calculating accounting
ratios & by interpreting the performance of the company concerned.
• Con Q. Mr. Firoj is a licensed architect. During the first month of the operation of his business, the
following events and transactions occurred.-
• June 1 invested Tk. 50.000 cash.
• 1 Hired a secretary-receptionist at a salary of Tk.5,000 per month.
• 2 Paid office rent for the month Tk. 2.000.
• 3 Purchased architectural supplies on account from Dhaka Company Tk.2,000.
• 10 Completed blueprints on a carport and billed client Tk. 3,000 for services.
• 20 Received Tk.5,000 cash for services completed and delivered to salma and co.
• 30 Paid secretary reception for the month Tk.5000.
• 30 Paid Tk. 1,000 to Dhaka Company for accounts payable due.
• ) Journalize the transactions.
• b) Post to the ledger accounts.
• c) Prepare a trial balance on June 30, 2008.
• Con Ans: Mr. Firoj
• Req: (a) Journal entries
Debit Credit
Date Explanation Ref.
(Tk.) (Tk.)
June 1 Cash 50,000
”1
Firoj’s Capital [Cash received by owner] 2,000 50,000
”2 No entry
Office rent exp. 2,000
”3
Cash [[Paid office rent] 3,000
” 10 Architectural supplies
5,000 2,000
” 20 Accounts payable [[Purchase supplies on account]
5,000 2,000
Accounts Receivable
” 30
1,000 3,000
Service Revenue [[Service performed on account]
” 30
Cash
Service Revenue [Service performed in cash] 5,000

Salaries exp.
Cash [[Paid salaries secretary receptionist]

Accounts payable 5,000
Cash [[Paid to Dhaka company]
Cash 1,000
Service Revenue [Service performed in cash]
Salaries exp.
Cash [[Paid salaries secretary receptionist]
Accounts payable
Cash [[Paid to Dhaka company]
Con
• Req: (b) Ledger
• Firoj’s Capital
Date Explanation Ref Debit Credit Balance

June 1 50,000 50,000
• Office rent exp.

Date Ref Debit Credit Balance
June 2 2,000 2,000
• Architectural supplies
June 3 2,000 2,000
• Accounts payable

June 3 2,000 2,000
30 1,000 1,000
Con Accounts Receivable
June 10 3,000 3,000
Service Revenue

June 10 3,000 3,000
20 5,000 8,000
Cash
June 1 capital 50,000 50,000
2 Office exp 2,000 48,000
20 Salary exp 5,000 53,000
30 service revenue 5,000 48,000
30 1,000 47,000
• Con Salaries expense
Date Explanation Re Debit Credi Balance

f t
June 30 5,000 5,000
(c) Mr. Fira Trial Balance June 30, 2008
Account. Accounts Title Ref Debit Credit

1 Cash 47,000
2 Foroj’s Capital 50,000
3 Office Rent exp. 2,000
4 Architectural supplies 2,000
5 Accounts payable 1,000
6 Accounts Receivable 3,000
7 Service Revenue 8,000
8 Salaries exp. 5,000 59.000
59,000 =====
======
• Con Q. 2. Sohana started her own consulting firm, named consult Sohana, on January 1.
2008. During the first month of operation the following transactions occurred.
• January
• 1 Sohana invested Tk. 10000 in cash in the business.
• 10 Paid Tk. 800 for the monthly rent.
• 15 Purchased office equipment of account Tk. 3000
• 19 Rendered consulting services to the clients for cash Tk. 1500.
• 22 Borrowed Tk. 700 cash on a not payable.
• 25 Rendered consulting services to the clients on credit Tk. 2000.
• 28 Paid monthly salary Tk. 500.
• 29 Paid monthly utilities Tk. 400.
• 30 Paid Tk. 1000 for equipment purchased on January 15.
• 31 Cash received Tk. 1000 for services rendered on January 25.
• 31 Sohana withdrew Tk. 200 from business for personal use.
• Required:
• Prepare Journal for the above transaction in the books of Consult Sohana.
• Prepare ledgers in the books of Consult Sohana from the Journal.
• Prepare Trial Balance in the books of Consult Sohana as January 31. 2008
• Con Ans: In the Books of Consult Sohana
• Journal entries
Jan 01. Cash 10,000
• Shohana’s Capital 10,000
• [Cash invested by owner in his business]
Jan 10.
• Rent exp. 800
• Cash 800
• [Paid to rent]
• Jan 15. Office equipment 3.000
• Accounts payable 3,000
• [Purchase office equipment on account]
• Jan 19. Cash 1500
• Service Revenue 1500
• [Service 4revenue to customer in cash]
• Jan 22. Cash 700
• Notes Payable 700
• [Money borrowed on a notes payable]
• Jan 25. Accounts Receivable 2,000
• Consulting Revenue 2,000
• [Service rendered to customer on account]
• Con Jan 28. Salaries exp. 500
• Cash 500
• [Paid to salaries]
• Jan 29. Utilities exp. 400
• Cash 400
• [Paid to the utilities exp.]
• Jan 30. Accounts Payable 1,000
• Cash 1,000
• [Paid to accounts payable]
• Jan 31. Cash 1,000
• Accounts Receivable 1000
• [Cash received from a/c receivable]
• Jan 31. Sohana’s withdraw 200
• Cash 200
• [Withdraw by sohana in his personal use]
• Con
• Req: (ii) In the Books of consult Sohana
Ledger
Cash account
2008
January 1 10,000 10,000
10 800 9,200
19 1,500 10,700
22 700 11,400
28 500 10,900
29 400 9,500
30 1,000 9,500
31 1,000 10,500
31 200 10,300
Con Sohan’s Capital
January 1 10,000 10,000
Rent exp.
January 10 800 800
Office equipment
January15 3,000 3,000
Accounts payable
January 15 3,000 3,000
30 1,000 2,000
Con Service revenue
January 19 1,500 1,500
Notes payable
January 22 700 700
Accounts receivable
January 25 2,000 2,000
31 1,000 1,000
Consulting revenue

January 25 2,000 2,000
• Salaries exp.

January 28 500 500
• Con Sohan’s withdraw
January 31 200 200
• Utilities Expenses
January 29 400 400
• Req: (iii) In the Books of consult Sohan

• Trial Balance
• January 31, 2008
•
AccountNo. Accounts Title Ref Debit Credit
1 Cash 10,300
2 Sohan’s Capital 10,000
3 Rent exp. 800
4 Office equipment 3,000
6 Service Revenue 1,500
7 Notes Payable 700
8 Accounts Receivable 1,000
9 Consulting Revenue 2,000
10 Salaries exp. 500
11 Sohan’s withdraw 200
12 Utilities expenses 400 16,200
16200 ====
=====
• Con Q. 3 . Auhon opened a business on September 2009. During the first month of operation the
following transactions occurred:—
• September
• 1 Invested Tk. 20,000 cash in the business;
• 2 Paid Tk.1,000 cash for store rent for the month September;
• 3 Purchased washer and dryer for 25,000 paying Tk. 10,000 in cash and signing a 15,000 six month 125
notes payable;
• 4 Paid Tk. 1200 for one year accident policy;
• 10 Received bill from the daily news for advertising the opening of the business Tk. 200;
• 20 Withdrew Tk., 700 cash for personal use;
• 30 Determine that cash receipts for laundry services for the month were Tk. 6,200.
• Instructions:
• Journalize the September transactions;
• Open ledger accounts and post the September transactions; Prepare a trial balance at September 30,
2009.
• Con
• Ans: Req: (a) Auhon
Date
Journal entries
Explanation Ref
Dr
Cr (Tk.)
(Tk.)
2009 Cash 20,000
Sep.1
A uhon’s Capital 20,000
[Cash invested by owner in his business]
Rent exp. 1,000

2
Cash 1,000
[Paid to rent]
Washer and dryer 25,000

3
Cash 10,000
N otes payable 15,000
[Purchase Washer and dryer in cash and on

notes payable]
4 Prepaid insurance
1,200
Cash
1,200
[Paid one year account policy]
A dvertising exp.
200
10 A ccounts Payable 200
[Receive advertising bill from daily news]

700
withdraw
20 Cash 700
[Withdraw by owner for his personal use]

6,200
Cash
30 Laundry Service Revenue 6,200

• Con Req: (b) Ledger
Cash
2009
Sep. 1
20,000 20,000
2
1,000 19,000
3
10,000 9,000
4
1,200 7,800
20
700 7,100
30
6200 13,300
Req: 1 Auhon Trial Balance

For the month of Sep.30, 2009
Acc. No. Accounts Title Ref Debit Credit
1 Cash 13,300
2 Rent exp. 1,000
3 Washer and dryer 25,000
4 Notes payable 15,000
5 Authon Capital 20,000
6 Prepaid insurance 1,200
7 Advertising exp. 200
8 Accounts Payable 200
9 Withdraw 700
10 Laundry Service Revenue 41,400 6,200
===== 41,400
====
Con
Q,. 4. M/s Harun Traders started its delivery business on August 2010. In the month, the following
transactions occurred:-
August 1 Mr. Harun, the owner, invested Tk. 1,50,000 in the business.
• 2 Purchased a delivery van for Tk. 50,000 paying Tk. 20,000 in cash and singing a Tk.
30,000 note. Occupied an office and Tk. 5,000 cash as rent.
• 10 Purchase supplies of Tk. 3,500 in cash.
• 15 Performed delivery service of Tk. 9,000 on account.
• 18 Received cash payment of Tk. 5,000 for August 15 transaction.
• 23 Performed delivery services for cash, Tk,. 6,000
• 27 Paid Tk. 1,500 cash for trade license fees.
• 31. Paid utilities expense, Tk.2,000 and salaries expenses, Tk. 5,000 in cash.
• Required:-
• (a)Journalize the above transaction with proper explanation.
• (b)Post the journal entries in the respective ledger accounts
• Ans: Req: (a) M/S Harun Traders
• Journal entries
• Con
• Aug 01. Cash 1,50,000
• Mr. Harun’s Capital
• [Cash invested by owner in his business]
• Aug 02. Delivery Van 50,000
• Cash 20,000
• Notes payable 30,000
• [Purchased delivery van by cash and signing a note]
• 02,. Rent Expense 5000
• Cash
Aug 10. Supplies 3,500
• Cash
• [Purchase supplies in cash]
Aug 15. Accounts Receivable 9,000
• Service Revenue
• [Service provided on account]
• Aug 18. Cash 5,000
• Accounts Receivable
• [Cash received from accounts receivable]
• Con
Aug 23. Cash 6,000
Service Revenue
[Service provided in cash]
• 27. Trade license fees 1,500
• Cash
• [Paid license fees in cash]
• 31. Utilities exp. 2,000
• Salaries exp. 5,000
• Cash 7,000
• [Paid utilities and salaries exp. in cash]
Con Princ of Acc page 47. prob 9 Summary of Trans
Q. Mr. Ali started his own consulting firm “ Ali Consulting” on July-01, 2023. The following transactions occurred during the
month of July , 2023.
(i) July-01: He invested TK. 50,000 cash and TK. 10,000 books on engineering.
(ii) July-03: Paid office rent for 3 months in advance @ TK. 3,000 per month.
(iii) July-04: Purchased office supplies on credit TK. 2,000.
(iv) July-10: Received cash for service provided TK. 25,000.
(v) July-11: Withdraw TK. 1,500 cash from business for personal use.
(vi) July-15: Performed services to the clients on account TK. 25,000.
(vii) July-16: Paid utility bill for the month of July TK. 1,500.
(viii) July-17: Received cash TK. 2,300 for service provided on account on July 15.
(ix) July-31: One month’s office rent had become expired and treated as expense.
Explanation Assets == Lia + Owner’s equity
(x) July-31: Paid cash for insurance premium for 3 months in advance including current month TK. 1,500.
Requirement:You are required
cash toPrepaid
prepare aPrepai
Summary
A/R of transactions
Books using appropriate
Office = A/P accounting
Cap titls and arrange
Revenu (Exp) them in the format
(Draw)
of accounting equation. rent d insur supply e
Ans:July
pae 47
1, Invested 50,000 10,000 60,000
3, Prepaid rent (9,000) 9,000
4, Credit off supp 2,000 2,000
10, Revenue 25,000 25,000
11, personal withd (1,500) (1500)
15, on account 25,000 25,000

serve
16, utility exp (1500) (1500)
17, cash rcv 23,000 (23,000

31, Rent expire -- 3000) ) 3000)
31, Insur expire (1500) 1500
---------- --------- ------- ---------- --------- --------- --------- --------- ------- -------- -------
Assets 106,000 84,500 6,000 1500 2,000 10,000 2,000 2,000 60,000 50,000 (4,500 (1500)
L+ OE = 1,06,000
Con page 48, prob 10, Ans page 49
•On April 01 Holly Palmar established Matrix Travel Agency. The following
transactions were completed during the month.
1. He invested TK. 10,000 cash to start the agency.
2. Paid TK. 400 cash for April office rent.
3. Purchased office equipment for TK. 2,500 cash.
4. Incurred TK. 300 of advertising costing the Chicago Tribune on account.
5. Paid TK. 600 cash for supplies.
6. Earned TK. 7,500 for service rendered: TK. 1,000 cash is received from
customers and the balance of TK. 6,500 is billed to the customers on
account.
7. Withdrew TK. 2000 cash for personal use.
8. Paid Chicago Tribune amount due in transaction [4].
9. Paid employees salary TK. 2,200.
10.Received TK. 5,000 in cash from customer who have previously been
billed in transaction [6].
•
•You are required to prepare a Summary of Transactions applying
Accounting Equation
Con Ans:
Date Explanation Assets = Liabilities + Owner’s equity

Cash A/R Supplie Off, Equp A/P Capital Revenue (Exp) (Drawing)
s
April-1, Investment 10,000 10,000
April-2, Rent paid (400) (400)

3, off, equipment at cash (2,500) 2,500
4, adv exp on account (600) 600 300 (300)

5,supplies
5, revenue cash & credit 1,000 6,500 7,500
7, personal withdraw (200) (200)

8,Paid transaction [4] (300) -- --- (300) -- --- -- --
9, Paid salary (2200) -- --- --- ---- (2200) ----
10,Received for transaction 5,000 (5,000) --- --- -- --- ---------- -------------
[6] -------- ------- ----- ---------- --------- -------- --------- (200)
9,800 1500 600 2500 00 10,000 7,500 (2,900)
Total = 14,400
Con
•PPP opened a veterinary business in Gazipur on July – 01, 2022. On August—
31, the balance sheet shows, Cash Tk. 9,000; Account Receivable Tk. 1,700;
Supplies Tk. 600; Office Equipment Tk. 6,000; Account Payable Tk. 3,600;
PPP Capital Tk. 13,700. During September the following transactions occurred:
i. Paid Tk. 2,900 cash on account payable.
ii. Collected Tk. 1,300 on account receivable.
iii. Purchased additional office equipment for Tk. 2,100, paying Tk. 800 in cash
& the balance on account.
iv. Earned revenue of Tk. 6,300 of which Tk. 2,500 is paid in cash & the
balance is due in October.
v. Withdraw Tk. 600 cash for personal use.
vi. Paid salaries Tk. 1,700, rent for Tk. 900 & advertising expense Tk. 300.
vii. Incurred utility expenses for month on account Tk. 170.
viii.Received Tk. 10,000 from Agrani Bank – money borrowed on a note
payable.
• You are required to prepare a Summary of Transactions applying
Accounting Equation
Con
•Mr. Rahim has started restaurant business named Beauty Park and Restaurant on April 01, 2023.
The following selected events and transactions occurred in the month of April were as follows:
•Apri-01: Mr. Rahim invested TK 60,00,000 cash in the business.
•03: Purchased land costing TK. 20,00,000 for cash.
•05: Incurred advertising expenses of TK. 12,000 on account.
•09: Paid salaries to the employees TK. 45,000.
•14: Paid TK. 150,000 cash for one-year insurance policy.
•17: Withdrew TK. 10,000 cash for personal use.
•21: Received TK. 48,000 in cash for admission fees.
•29: Sold 100 coupon books for TK. 20 each.
•30: Paid the telephone bill TK. 10,000.
•30: Paid advertising incurred on April-05.
•
•Requirement:
•You are required to
i. Prepare the journal entries and
• Post them to the ledger (CLO1)
• Con Q. 5. Mr. Mahabub started Wonderland Park on 1 st July 2008. he following events and
transactions were occurred during the July .
• July
• 1 Invested cash Tk.6,00,000 in the business.
• 5 Purchase Land costing Tk.60,000 cash .
• 11 Incurred advertising expense of TK. 4,000 on account.
• 13 Hired park manager at a salary of Tk. 5,000 per month effective from 1 st August
• 15 Borrowed TK. 30,000 from Islami Bank on a notes payable.
• 17 Paid TK. 6,700 in cash for one year Insurance policy .
• 24 Sold 200 coupon books for TK. 25 each . Each book contains 10 coupons that entitle
• the holder to one admission to the park.
• 28 Paid 50% of the advertising bill that incurred on July 11.
• Required : (a) Journalize the July transactions ;
• (b) Post to the ledger account ; and
• (c) Prepare a Trial Balance.
• Con Ans: Wonderland Park
• Req.: (a) Journal entries
July 01. Cash 6,00,000

• Mahabub’s capital
• [ Cash invested by the owner]
• Jul 05. Land 60,000
• Cash
• [ Purchase land in cash]
• 11. Advertising expense 4,000
• Accounts Payable
• [Incurred advertising exp. on account]
Jul 13. No entry
• Jul 15. Cash 30,000

• Notes Payable
• [ Borrowed from Islami Bank on a N/P]
• 17, Pre paid insurance 6,700
• Cash
• [Paid to one year insurance policy]
• Con Jul 24. Cash 5,000
• Unearned Revenue
• [Sold coupon book in advance.]
• 28. Accounts Payable 2,000
• Cash
• [Paid to accounts payable]
• Wonderland Park Trial Balance
• Req.: (c) For the month of July,2008
S.N Accounts titles Ref. Dr. (Tk.) Cr. (Tk.)

1 Cash 5,66,300
2 Capital 6,00,000
3 Land 60,000
4 Advertising exp. 4,000
6 Notes payable 30,000
7 Prepaid Insurance 6,700
8 Unearned Revenue -------------- 5,000
6,37,000 ----------
6,37,000
• Con
• Q. On April 01, ABC co, started their business as a travel agency . The
following transactions were occurred during the month:
1. Invested TK. 10,000 to start the agency.
2. Paid TK. 400 for April office rent.
3. Purchased office equipment TK. 2500 cash.
4. Incurred TK. 300 of advertising costing on ABC co. on account.
5. Paid TK. 600 cash for office supplies.
6. Earned TK. 7,500 for service rendered . TK. 1,000 is received from
customers & the balance of TK. 6,500 is billed to customers on account.
7. Withdrew TK. 200 for personal use.
8. Paid ABC co. on transaction no. 4.
9. Paid employee salaries TK. 2,200.
10. Received TK. 5,000 from customers to whom was billed in transaction
no. 6.
Requirement : Prepare summary of transaction , income statement & B/S.
• Con
Ans: Summary of transaction/ equation/ tabular analysis:
Explanation Assets Liabilities Owner’s Equity
Cash A/R Supplies Office EQUP Account payable Capital Revenue (Expenses) (Drawing)
1. Invested 10,000 10,000
2.Paid off rent (400) ----- --- (400)
3.Off EQUP (2,500) --- ---- 2,500
4. Exp due 300 --- ---- (300)
5.Paid off suplies (6,00) --- 600
6.Serv Rev C & Cr 1,000 6,500 -- 7,500 -----
7. Draw for own (200)---- ----- ----- --- ---- ----- (200)
8.Paid due (300)---- ------ (300)
9. Paid salary exp (2,200) ------- ----- ------ --- ----- (2,200)------------------
--------------
10.Recev from AR 5,000 (5,000) ---- ----- 000 10,000 7,500 (2900) (200)
Balance 9,800 1,500 600 2500
Total === 14,400 ====== 14,400
======== ========
• Con
1. Mr. Rahman opened a law office. Mr. Rahman, Attorney at law on July 31, the balance sheet showed cash
Tk. 8,000, Accounts Receivable Tk.3, 000, Supplies Tk. 1,000, Office Equipment Tk. 10,000, Accounts Payable
Tk. 8,400 and Mr. Rahman, Capital Tk. 13,600. During August the following transactions occurred:-
• (i) Collected Tk.2, 800 of accounts receivable.
• (ii)Paid Tk.5, 400 cash on accounts payable.
• (iii) Earned revenues of Tk.15, 000 of which Tk.6, 000 is collected in cash and the balance is due in
September.
• (iv) Purchase additional office equipment for Tk.2, 000; paying Tk.800 in cash and the balance on account.
• (v) Paid salaries Tk. 6,000; rent Tk. 1,800 and advertising expenses Tk.700’
• (vi) Withdrew Tk. 1,100 in cash for personal use.
• (vii) Received Tk. 4,000 from Standard bank-money borrowed on notes payable.
• (Viii) Incurred utility expenses for month on account Tk.500.
• Prepare a tabular analysis of the August transactions beginning with July 31 balances. The column heading
should be as follows: Cash Accounts Receivable Supplies Office Equipment Accounts Payable Notes
Payable Mr. Rahman, Capital.
27,200
• Con Mr. Rahman (Tabular Analysis)

• For the month of August 30, 2005
A = L + O.E
Notes Remarks
Date Supplie A/P Capital Revenue (Exp) (Drawing)
payable
Cash A/R Office Equ
s
8,400 13,600 Investment
August 8,000 3,000 10,000
01 1,000
(i) 2,800 (2,800)

(ii) (5400) (5,400)
(iii) +6,000 +9,000 +15,000 Earned. Rev
(iv) (800) +2,000 +1,200

(v) (8500) (8,500) Salaries, Rent,
Advt.exp
(vi) (1,100)
(1100) Withdrawn
(vii) +4,000 +4,000
Utilities exp on
(viii) +500 (500)
account
5,000 9,200 1,000 12,000 4,000 4,700 18,500
27,200 27,200
• Con 2. Mr. Salman started his own consulting firm, Salman Consulting on January 1, 2008. The following
transactions occurred during the month of January.
• January 1 Salman invested Tk. 20,000 cash in the business.
• 2 Purchased office equipment for Tk. 15,000. Salam paid Tk. 5,000 cash and signed a note
payable for the remaining balance.
• 3 Paid Tk. 1000 for office rent for the month.
• 5 Performed Tk. 10,000 of services on account.
• 10 Withdraw Tk. 500 cash for personal use.
• 12 Purchased supplies for Tk. 300 on account.
• 14 Received a cash payment of Tk. 7,000 for services provided on January 5.
• 18 Incurred Tk.500 of advertising cost in the Bangladesh Observer on account.
• 21 Received a cash payment of Tk. 5,000 for service provided.
• 23 Made cash payment of Tk. 3,000 on the note payable.
• 25 Paid Tk. for utilities. Tk. 200
• 30 Paid Bangladesh Observer amount due on January 18.
• 31 Paid Tk. 2,000 for employee salaries.
• .
• Con (i) Show the effects of the previous transactions on the accounting equation using the suitable format.
• (ii)Prepare an income statement for the month of January.
• (iii)Prepare a balance sheet at January 31, 2008.
• Ans: (i) Mr. Salman Consulting
Tabular Analysis
For the month of January, 2008
Date A = L + O.E Remarks
A/c
Cash A/c Rec. Equipment Supplies payable
Notes payable capital
July 1 +20,000 +20,000

Investment
2 (5,000) +15,000 +10,000
3 (1,000) (1,000) Rent exp.
5 +10,000 +10,000 Service Rev.

10 (500) (500) Withdraw
12 +300 +300
14 +7,000 (7,000)
18 +500 (500) Adv. exp.
21 +5,000 +5,000 Service Rev.
23 (3,000) (3,000)
25 (200) (200) Utilities exp.
30 (500) (500)
31 (2,000) (2,000) Salaries exp.
19,800 3,000 15,000 300 300 7,000 30,800

• Con (ii) Mr. Salman Consulting
Income Statement
For the year ended January 31, 2008
Explanations
11,300 Tk. Tk.
Service Revenue 15,000
Less. Expenses:
Rent exp. 1,000
Advertising exp. 500
Utilities exp. 200
Salaries exp. 2,000 3,700
Net income
• Con Mr. Salman Consulting
Balance Sheet
As at Janury 31, 2008
Explanations Tk. Tk.

Assets:
Cash 19,800
Accounts Receivable 3,000
Equipment 15,000
Supplies 300 38,100
======
Liabilities and O.E: 300

Notes payable
O.E:
Capital
20,000
Add. Net income 30,800
11,300
38,100
Less. Withdraw =====
• From book (pictures):
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Con Q. At the end of Accounting period a Trial Balance & another data are taken from RRR Corporation on December-
2022. The related information are as follows:
• RRR Corporation
• Trial Balance
SN Particulars Debit Credit

(Tk.) (Tk.)
1. Cash 4,850
2. Office Supplies 1,100
3. Prepaid Insurance 2,120
4. Office Equipment 27,860
5. Accumulated Dep- Office 11,630
Equipment
6. Account payable 890
7. Capital 26,380
8. Drawing 22,500
9. Fees Revenue 46,400
10. Wages Expenses 18,220
11. Rent Expenses 7,500
12. Utility Expenses 1,150
Totals 85,300 85,300
Con
•Additional Information:
i. Expired insurance Tk. 1,410.
ii. An office supply inventory showed Tk. 460 of
supplies on hand.
iii.Estimate depreciation of equipment Tk. 2,800.
iv.Wages unpaid Tk. 220.
v. Rent expenses paid in advance Tk. 300.
vi.Fees earned but not received Tk. 5,000.
• You are required to complete the Final Account
applying the rules of Financial Statements
• Q. Explain types of journal / recording process
• Most Common Types of Journals

• Businesses vary in size, service, and ownership. These businesses use different types of
journals based on their operations. However, journals are broadly classified into general and
special.
• While the small businesses and startups use the general journal, the big ones go for special
journals. Trading, manufacturing, and other industries record their transactions in special
journals as they are recurring in nature. ‘
• The following is the list of most frequent types of special journals used by big companies:
– Sales – the income earned from sales
– Sales Return – the loss of income from sales refunded
– Accounts Receivable – cash owed to the company
– Accounts Payable – cash owed by the company
– Cash Receipts – cash the business has gained
– Purchases – payments by the business
– Equity – owner’s investment
– Payroll – payroll transactions like gross wages, taxes, etc.
• Q. Cash book/ types/ important
• It is both a subsidiary book (book of original entry) and principal book. When a cash
book is maintained, transactions of cash are not recorded in the journal. As all the
cash transactions are recorded for the first time in the cash book, it is, therefore, a
book of original entry.
• Cash book is a special type of book that is only concerned with the recording of cash
transactions of an organization. It performs the dual role of both journal and a ledger
for all the cash transactions taking place in a business organization,
Cash Book is a type of Subsidiary Book because it is a book of original entry.
However, it is treated as a Principal Book because it is a part of the ledger accounts and
its balances are directly transferred to the General Ledger. Cash book is both journal and
ledger as it contains all journal and ledger features and serves purposes of both. A
number of subsidiary books are opened to record all business transactions. Whereas Cash
book is a type of Subsidiary Book in which only payments and receipts which are carried
in Cash are recorded.
• What is the difference between cash book and bank cash book?
A cashbook records the cash and bank transactions of an organization that takes place
within a financial year. A bank book is issued to the account holder by their bank and it
keeps a record of deposits and withdrawals.
• Con
• A cash book in accounting records all cash transactions in detail. This is different from a cash
account, which is an account that appears in a general ledger. A cash account is structured
more like a ledger whereas a cash book is able to operate as both a journal and a ledger.
• Cash Book is maintained by the business or person who owns it and is accessible only to
them, while Passbook is maintained by the bank and is accessible to the account holder.
• In single-entry bookkeeping, the income and expenses for the transactions are recorded in a
cash register, whereas the double-entry system starts with a journal, followed by a ledger, a
trial balance, and finally financial statements.
• The four types of cash books are:

• Single column cash book.
• Double column cash book.
• Triple column cash book.
• Petty cash book.
• What is the difference between cash book and journal?
• Cash book is basically the book of original entry. When cash book is maintained, transactions
of cash are not recorded in the journal and no separate account for cash or bank is required in
the ledger, In this way. It serves the purpose of the journal as well as the ledger.
Q. Petty cash book: It is a book in which we record small expenses such as staff refreshment ,
postages, taxi fare, stationary etc. It is responsible for managing small day-to-day cash
payments.
• Imprest petty cash book. [ mainly it is followed].
• Columnar or Analytical petty cash book.
Three different systems are used to maintain petty cash. These systems are:
• Open systems (or ordinary systems) for petty cash
• Fixed system for petty cash
• Imprest system of petty cash
• Open systems (or ordinary systems) for petty cash: Under this system, the petty cashier is
given a lump sum to meet petty expenses. When the whole amount of petty cash is spent, the
petty cashier submits the account to the chief cashier who again pays a lump sum to the petty
cashier.
• .
• con
• Fixed system for petty cash: Under the fixed system of petty cash, a
fixed amount is given to the petty cashier for a fixed period of time.
• Imprest system of petty cash: This is the most scientific approach to
maintain Petty Cash.
• Under the imprest system, total petty expenses for a specific period
are estimated and the amount is advanced to the petty cashier. This
amount is known as imprest cash.
• The petty cashier spends the imprest cash during the period. At the
end of the period, the petty cashier submits the statements covering
petty expenditures to the chief cashier.
• The amount spent by the petty cashier is reimbursed, thus making
up the balance to the original amount.
• In this way, the petty cashier will begin every period with an amount
equal to imprest cash, and the amount held by the petty cashier will
never exceed this
• Con Simple Petty Cash Book
• A simple petty cash book is just like the main cash book. Cash received by the petty cashier is recorded on the
debit side, and all payments for petty expenses are recorded on the credit side in one column.
• Example of a Simple Petty Cash Book
• Record the following transactions in a simple petty cash book for the month of January 2019.
• Solution
• Con Analytical Petty Cash Book
• An analytical petty cash book is the most effective way to record petty cash payments.
• A separate column is assigned for each petty expense on the credit side. Whenever a petty expense is recorded in the
total payment column, the same amount is recorded in the relevant petty expense column.
• Example of an Analytical Petty Cash Book
• Record the following transactions in an analytical petty cash book for the month of January 2019.
• Solution
• Assets:
a) Current assets
1. Cash in hand, 2. Cash at Bank, 3. Accounts Receivables, 4.
Note Receivables, 5. Closing Inventories, 6.Supplies in hand,
7. Investment (short term), 8. Stationary at hand, 9.
Prepaid expenses, 10. Outstanding/accrued/earned
revenue/ incomes.
b) Fixed Assets
1. Land & Building, 2. Plant & Machinery 3. Furniture’s &
Fixtures, 4. Office Equipment, 5. Motor Vehicles, 6. Leaseholds etc.
• Liabilities:
a) Current liabilities
1. Accounts payables, 2. Note payables, 3. Loans, 4. Mortgages, 5.
Bank overdraft,
6. Outstanding/unearned revenue expenses.
b) Fixed / Long Term Liabilities
1. Long term loans, 2. Debentures or bonds.
• Owner’s Equity:
1. Capital / Common Stocks, 2. Net profit, 3. Retained Earnings, 4.
Reserves, 5. Any Specific Funds, 6. Drawings.
• Expenses– (I/S items) the money spent, or costs incurred, by a business in
their effort to generate revenues. Expenses represent the cost of doing
business; they are the sum of all the activities that result in (hopefully) a
profit.
a) Office & Administrative
1. Office Staff Salary, 2. Directors Fees, 3, Legal Charges, 4. Printing &
stationary, 5. Postage & Telegram, 6. Accounting Charges, 7. Computer Hire
Expenses, 8. Car Expenses- Office, 9. Office manager salary, 10. Auditor Fees,
11. Professional Fees, 12. Office rents & rates, 13. Depreciation-Office Assets,
14. Office Supplies & Expenses, 15. Donation- Office, 16. Postage, telex &
Telegram.
b) Selling & Distribution Expenses
1. Sales Manager Salary, 2. Marketing Director Fees, 3. Travelling
Expenses – Sales Manager, 4. Delivery Expenses, 5. Packing Expenses , 6.
Cost of sample, 7. Depreciation- Delivery Van, 8. Entertainment Expenses, 9.
Salaries – Salesman, 10.Commission-Salesman, 11. Advertising, 12. Bad debts,
13. Fair Expenses.
• c) Financial Expenses
1. Interest on Loan, 2. Interest on overdraft, 3. Interest on capital.
• Incomes: (I/S items) money received, especially on a regular basis, for work or
through investments. Accounting ---income is the profit a company retains after
paying off all relevant expenses from sales revenue earned. It is synonymous
with net income.
• Operating income = Total Revenue – Direct Costs – Indirect Costs
or
• Operating income = Gross Profit – Operating Expenses – Depreciation
or
• Operating income = Net Earnings + Interest Expense + Taxes
Revenue is the money that a company receives from selling goods or services
throughout the course of business. ... Net income equals the total company revenues
minus total company expenses.
• Non Operative Income-
1. Commission received,
2. Other service revenues,
3. Discount received
• Q. Why engineering students need accounting ?
Accounting for Engineers --As an engineer may apply a combination of maths and
science to solve technical problems. As accountants, may solve financial, tax and
business planning problems. ... However, an accountant may have to manage cash
flow, prepare budgets, obtain finance and do some financial modeling.
There are new inventions coming every year and engineer need to update with all
the information floating around. Now, engineering is a very broad term.
To stay competitive in the job market, engineers and those who want to advance
need a strong, diverse set of skills.
Some of the top skills for engineers include:
• Technology skills, including understanding various analytical and scientific
software
• Mathematics and scientific problem-solving
• Critical thinking
• Effective communication
• Management
• Negotiation
• Decision-making
As senior engineers acquire responsibilities like managing teams,
projects, and budgets. To reach those positions and perform their duties
effectively, they need to have a strong set of business skills.
“Senior engineers and division and department heads all use more
business skills in day-to-day work than engineering skills,” engineers
needed to understand accounting tools, financial reports, and markets to
compete.”
From understanding financial basics to engaging in creative problem-
solving, there are business skills that every engineer needs.
• 1. Effective Communication
Because their work is so technical, it can sometimes be harder for

others in the organization to understand engineers’ true impact. Knowing
how to translate technical topics into more simplified terms and properly
articulate and support their ideas across the organization is critical to
success.
2. Management Essentials
Understanding what motivates colleagues and knowing
how to exercise influence, effectively implement strategies, and develop learning
initiatives that can help the organization innovate are skills that can take an
engineer’s career to the next level.
3. Creativity
An engineer’s day-to-day solving complex problems. Understanding the
social/global needs & wants they try to innovate new and new customized
products/services.
4. Financial Accounting
Accounting knowledge can help engineers measure the impact of their work in
terms of revenue, but also control the cost of particular projects and better
understand the organization’s overall budget.
5.The Ability to Spot Opportunities and Validate Ideas
As technology is continuously disrupting industries so in today’s
increasingly complex global business environment engineers will have to play a
pivotal role in problem solving through taking/facing new challenges.
6. Negotiation
Engineers very often need to work in a team to achieve business goals.
Understanding and negotiating with each other helps to realize the common
goals of stakeholders ,build trust among decision makers and successfully
motivate others to secure maximum value for the organization.
7. Ethics
Engineers have to build products and services that can have a direct impact on
society. It’s important to approach each problem with integrity and, ultimately,
do what’s right for the business.
By acquiring essential business skills, engineers can better equip

themselves to meet changing workforce demands and gain a competitive
edge.
In case of engineering, there are mainly six functions which are of prime
importance.
• Research: This is one of the primary things you need to do for you to invent
something new. Using different experimentation techniques, applying inductive
reasoning and employing mathematical concepts into your research would yield you
greater benefits.
• Development: Once the engineer researches and gathers information that can
be useful, it’s time to apply those ideas in development of a product or a new idea that
can help the company/society/as well as country.
• Design: In designing a product or any structure like building or bridge, the
engineer designs each and every part of the structure or the product. It is first done on
paper and then a prototype /image/paradigm is being built.
• Construction: An engineer constructs the building or the structure by following
the design crafted by him or by his colleague.
• Operation: Engineers who handle machines, equipment, take care of the overall
operation of these machines. He takes care of the procedures and supervises the
personnel to see whether every part of the machine or equipment is working properly.
• Management functions: Along with taking care of the above functions, an
engineer needs to take care of planning, organizing, controlling and leading. But they
are not given to perform any management functions before they get some experience.
• Q. What is double entry system? Double-entry book keeping
Double-entry bookkeeping, in accounting, is a system of book keeping where every entry to an

account requires a corresponding and opposite entry to a different account. The double-entry has
two equal and corresponding sides known as debit and credit. The left-hand side is debit and right-
hand side is credit.
• Q. Distinguish between double entry and single entry system.
S.N./Points Single entry Double entry
Duality Not based on duality Based on duality

User Sole proprietors &partnership Large corporations
Costs involved Cheap Costly

Accounts maintained Simple personal accounts Personal, property and nominal accounts
Detection of errors Difficult to detect errors Easy to detect errors
Preparation of trial balance Not useful Useful
Profit and loss account Not useful Useful
Single entry, double entry, business entity, then sole proprietorship, partnership and joint
venture concept may come across.
Q. sole proprietorship as–
A business enterprise exclusively owned, managed and controlled by a single person with all
authority, responsibility and risk.
Characteristics of Sole Proprietorship: i. Single Ownership ii. No sharing of Profit and Loss iii.
One-man’s Capital iv. One-man Control v. Unlimited Liability vi. Less legal formalities
i. Single Ownership: A single individual always owns sole proprietorship form of business
organization.. Consequently, he alone bears all the risk of the business.
ii. No sharing of Profit and Loss : If there is any loss it is also to be borne by the sole proprietor
alone. Nobody else shares the profit and loss of the business with the sole proprietor.
iii. One man’s Capital : He provides it either from his personal resources or by borrowing
from friends, relatives, banks or other financial institutions.
iv. One-man Control: The owner or proprietor alone takes all the decisions to run the
business. Of course, he is free to consult any body as per his liking.
v. Unlimited Liability: The liability of the sole proprietor is unlimited. This implies that, in
case of loss the business assets along with the personal properties of the proprietor shall be used
to pay the business liabilities.
vi. Less Legal Formalities: It also does not require to be registered.
Q. Advantages of Sole Proprietorship
i. Easy to Form and Wind up: A sole proprietorship form of business is

very easy to form. With a very small amount of capital you can start the
business.. Just like formation it is also very easy to wind up the business.
It is your sole discretion to form or wind up the business at any time.
ii. ii. Direct Motivation: The profits earned belong to the sole proprietor
alone and he bears the risk of losses as well. Thus, there is a direct link
between effort and reward. This provides strong motivation for the sole
proprietor to work hard.
iii. iii. Quick Decision and Prompt Action: In a sole proprietorship
business the sole proprietor alone is responsible for all decisions.. But he
is free to take any decision on his own..
• iv. Better Control: In sole proprietorship business the proprietor has full
control over each and every activity of the business. He is the planner as
well as the organizer, who co-ordinates every activity in an efficient
manner.
• v. Maintenance of Business Secrets:. It refers for keeping the future
plans, technical competencies, business strategies, etc,. secret from
outsiders or competitors. In the case of sole proprietorship business, the
proprietor is in a very good position to keep his plans to himself since
management and control are in his hands.
• vi. Close Personal Relation: The sole proprietor is always in a position to
maintain good personal contact with the customers and employees. Also,
it helps in maintaining close and friendly relations with the employees
and thus, business runs smoothly.
• vii. Flexibility in Operation: A sole proprietor can expand or curtail his
business according to the requirement.
• viii. Encourages Self-employment: Sole proprietorship form of business
organization leads to creation of employment opportunities for people..
Thus, it helps in reducing poverty and unemployment in the country
Q. Limitations of Sole Proprietorship:
i. Limited Capital: ii. Unlimited Liability iii. Lack of Continuity: iv.

Limited Size v. Lack of Managerial Expertise
Lets sum up
Advantages: • Easy to form and wind up • Direct Motivation • Quick
Decision and Prompt Action • Better Control • Maintenance of Business
Secrets • Close Personal Relation • Flexibility in Operations
Limitations: • Limited Capital • Unlimited Liability • Lack of Continuity •

Limited Size • Lack of Managerial Expertise
Q. Partnership and features of it.
A partnership is a business structure wherein two or more persons (in general business it
does not exceeding 20, but in banking it will not more than 10), coming together as partners,
decide to share profits or losses in an agreed proportion, carrying an unlimited liability.
Features of Partnership:
✓ More Persons having an unlimited liability except for minor.
✓ Profit and loss in an agreed proportion.
✓ Oral or written agreement.
✓ Lawful Business.
✓ Absolute trust and belief in each other.
✓ Restriction on transfer of share without the consent of the other partners.
✓ Responsible for other partner’s deeds.
Q. Advantages of Partnership:
✓ There will be combined capital, talents, skills, opinions.
✓ The ability of funds rising becomes easier.
✓ Borrowing capacity will increase.
✓ All the partners with different skills will work efficiently in their own way. So, this will
result in higher profits and greater sustainability and productivity.
✓ Everyone shares control and management.
✓ The distribution of the risks lead will be lower.
• Q. Disadvantages of Partnership:
• ✓ Since the partnership is not a separate legal entity, liabilities are unlimited for the
• partners except minors.
• ✓ The differences in the opinion and thoughts of one or more partners.
• ✓ If the other partner has committed a mistake, the other partners will also have to face
its
• consequences.
• ✓ In partnership, the ideas, thoughts, secrets, are confidential. So, it will create problems
• when the information is disclosed.
• Q. Rights of Partner in Partnership:

• 1. Right to manage business
• 2. Right to express views and ideas
• 3. Right to inspect books account
• 4. Right to share profit
• 5. Right to be indemnified/compensation
• 6. Right to use property
• 7. Right to join the ownership
• 8. Right to get retirement
• 9. Right to bind other partners
• 10. Right to dissolve the business
Q. Explain features / characteristics of a company/ company is a separate Leal person do you believe it
not explain
Company: A registered association which is an artificial legal person, having an independent legal,
entity with a perpetual succession, a common seal for its signatures, a common capital comprised of
transferable shares and carrying limited liability.
• Features of a Company:
• 1. Separate Legal Identity – A company is a separate legal identity, different from its members
• or shareholders.
• 2. Limited liability of members – The liabilities upon the company’s shareholders is limited only
• to the unpaid amount on the shares bought by them. Thus for a fully paid-up shares, a
• member cannot be asked to contribute more, even if the company goes for liquidation.
• 3. Perpetual Existence – A Company has a perpetual existence, irrespective of its shareholders
• coming and leaving the company till the point of its wound up.
• 4. Common Seal – A company has its common seal which acts as the signature of the company.
• 5. Transferable Shares – Shares of a company are transferable in nature. And the transfer of its
• shares from one person to another does not affect it at all.
• 6. Separate ownership of the property – Since the company has its own separate legal identity,
• it can own and dispose property under its own name. Moreover, the property owned by
• a company cannot be the property of its shareholders.
• 7. Capacity to sue or being sued – Since the company has its own separate legal identity, it can
• enter into contracts and has capacity to sue or being sued.
• Q. Advantages of a company include that:
✓ Liability for shareholders is limited
✓ It's easy to transfer ownership by selling shares to another party
•
✓ Shareholders (often family members) can be employed by the company

•
✓ Taxation rates can be more favorable

•
✓ It has access to a wider capital and skills base.

•
•
✓ Expensive to establish, maintain and wind up

• Disadvantages of a company include that:
✓ The reporting requirements can be complex

•
✓ if directors fail to meet their legal obligations, they may be held personally liable
•
•
for the
• ✓ Profits distributed to shareholders are taxable.

• company's debts
The difference between Private Limited Company and Public Limited

Company:
• Q. The difference between Private Limited Company and Public Limited Company:
S.N. Point of Difference Private Company Public Company
Members Minimum – 02 Minimum – 07

Maximum – 50 Maximum –
Unlimited
Minimum number 02 03
of Directors
Mode of raising Private Arrangement Private Arrangement
capital Public Subscription
Nature of shares Not Transferable, unless Completely
otherwise mentioned in Transferable
Articles
Suffix with the Private Limited Public Limited or
Company’s name Limited
Q. What is Business Transaction?/Characteristics of Business Transactions
/What is an accounting transaction?
An accounting transaction is a business event having a monetary impact on the
financial statements of a business. It is recorded in the accounting records of the
business.
• A business transaction has the following features:
1.It is measurable in terms of money (i.e., of a financial value)
2.It changes the financial position of the business.
• 3. It has dual aspects.
• 4. It must be an event visible or invisible.
• 5. It should be separate, independent and complete.
• 6. It may be historical or future natured.
• 7. It has documentary evidence.
• 8. It may be cash basis or accrual basis.
9. .It must have a two-fold effect in the elements of accounting
10. . It must be supported by a source document (e.g. sales invoice, official receipt,
disbursement voucher, remittance advice, etc.)
Economic events that affect the financial position of the business entity.
• Q. Whatis financial accounting/cost accounting/
management accounting? Compare and contrast among
them, write some features/characteristics of them, ….
• Financial Accounting: Financial information that is disseminated to

external parties such as investors & creditors and based on GAAP.
• Management Accounting: Financial and nonfinancial information that helps
managers make decisions, and is flexible in nature.
Management accounting also called a field of accounting that provides economic
& financial information for managers & other internal users.
• Cost Accounting:
Cost accounting analysis the transactions in an objective manner, for the purpose
of planning, control and decision making.
Cost accounting is the identification, accumulation, assignment and analysis of
production and activity cost data to provide information for external reporting,
internal planning and control of ongoing operations and special decisions
Financial Accounting Serial No. Managerial Accounting
External users: Stockholders, Primary users of Internal Users: Officers, head of the
Creditors, regulators department, managers, supervisors.
reports
statements Issued quarterly & annually Classified financial Types& Internal reports Issued as frequently as
needed
frequency of
reports
General purpose information for all users Purpose of Special purpose information for a particular
user for a specific decision.
reports
Pertains to business as a whole & is highly aggregated. Limited Contents of Pertains to sub-units of the business & may
to double entry accounting system & cost data. be very detailed.
Reporting standard is generally accepted accounting principle. reports May extend beyond double entry accounting
system to any type of relevant data,
Reporting standard is relevance to the
decision to be made.
Annual independent audit by certified public accountant. Verification No independent audits.

Process
Q. Financial Accounting vs. Managerial Accounting
Managerial Accounting
Financial Accounting Managerial Accounting
Points
Purpose of To communicate the To help management make

information company’s financial position better decisions to fulfill the
to external users (i.e. company’s overall strategic
investors, banks, regulators, goals
government)
Primary users External users Internal (management)
Focus and Past oriented Future oriented

emphasis
Time span Annual or quarterly financial Varies from hourly to years
reports depending on of information
company
• Q.
• 1. Cash brought in by proprietor as capital TK. 30000
Journal Entry:
Cash Account Debit 30, 000
Proprietor’s capital Account Credit 30,000
• (As brought capital).
2. Goods purchased on credit from Madan Lal TK. 5,000
Purchase account debit 5000
AP (Madan Lal) account credit 5000
• (As purchased on credit).
3. Furniture purchased for cash TK. 10000
•
Furniture Account Debit 10,000
Cash Account Credit 10,000
• (as furniture on cash).
4. Goods sold on credit to Dev Raj TK. 1600
•
AR (Dev Raj) Account Debit 1600
Sale Account Credit 1600
• (As sold on credit)
5. Goods purchased for cash TK. 4500
Cash account credit 4500
• (As purchased on cash).
• Con
• 6. Goods sold for cash TK. 2100
Cash account debit 2100
Sale account credit 2100
• (As sold on cash).
•
7. Rent paid for shop to landlord TK. 3000
Rent Expense Account Debit 3000
Cash Account Credit 3000
•
8. Commission received in cash TK. 2000
Cash Account Debit 2000
Commission Received/ Service Revenue/ Revenue Account Credit 2000
9. Cash deposited into bank TK. 5000

Bank Account Debit 5000
•
10. Cash withdrawn from bank for office use TK. 2000
Bank Account Credit 2000
11. Cash drawn by proprietor from business (Bank) for personal use TK.. 3000
Drawing Account Debit 3000

Bank/ Cash Account Credit 3000
12. Goods given as charity TK.. 1000

Charity Account Debit 1000
Purchase Account Credit 1000
• 13. Bad Debts written off TK.. 500
Bad Debt Account Debit 500
Debtor Account Credit 500
•
14. Bad debts recovered in cash TK.. 300
Bad Debts Recovered Account Credit 300
•
15. Carriage paid on machinery ( expenses on purchase of asset ) TK.. 1000
Machinery Account Debit 1000
•
16. Depreciation on fixed assets TK.. 500
Depreciation Expense--- property Account Debit 500
Accumulated Depreciation----- Property Account Credit 500
17. Carriage paid on the behalf of buyer TK.. 1000

Debtor account Debit 1000
18. Goods given as free samples TK.. 1500

Advertising Account Debit 1500
• con19. Interest allowed on capital TK. 600
Interest on capital Account Debit 600
Capital Account Credit 600
20. Interest charged on drawings TK. 500

Interest on drawing account Credit 500
21. Bank charges or interest charged by bank TK. 200

Bank charge (Expense) Account Debit 200
Bank account Credit 200
•
22. Goods lost by fire TK. 800
Loss by Fire Account Debit 800
•
23. Goods insured and a claim is admitted by insurance company in full or in part.
Insurance company Account Debit XXXX
Loss by Fire Account Credit XXXX
•
24. Loan taken TK. 1,00,000
Cash Account Debit 1, 00,000
Lender’s loan Account Credit 1,00,000
25. Interest paid on loan. TK. 1000

Interest on loan Account Debit 1000
Con 26. Interest on loan due but not paid in cash. TK. 500
Interest on loan Account Debit 500
Loan or/ AP /Creditor / Interest payable Account 500
27. Investment purchased TK. 50,000
Investment Account Debit 50000
28. Cash stolen from office. TK. 6000

Loss by Theft Account Debit 6000
29. Cash paid to a creditor in full settlement ( When cash discount is received) Amount due to Madan Lal TK. 5000 paid him
TK. 4950 in full settlement.
AP (Madan Lal) Account Debit 5000
Discount Received Account Credit 50
30. Cash received from a debtor in full settlement (When cash discount is allowed). Amount receivable from Dev Raj TK. 1600,
received from him TK. 1570.
Discount Allowed Account Debit 30
AR (Dev Raj) Account Credit 1600

Con Ans: Journal entries
S Particulars LF Debit Credit
N TK. TK.
1. Cash brought in by proprietor as capital TK. 30000. 30, 000 30,000
Cash Account Debit
Proprietor’s capital Account Credit
(As brought capital).
2. Goods purchased on credit from Madan Lal TK. 5,000

AP (Madan Lal) account credit
(As purchased on credit). 5000
3. Furniture purchased for cash TK. 10000

Furniture Account Debit
Cash Account Credit 10,000
(As furniture on cash). 10,000
4. Goods sold on credit to Dev Raj TK. 1600

AR (Dev Raj) Account Debit
Sale Account Credit 1600
(As sold on credit) 1600
Con Journal entries
SN Particulars LF Dr. TK. Cr. TK.

5. Goods purchased for cash TK. 4500
Cash account credit 4500
(As purchased on cash).
6. Goods sold for cash TK. 2100
Cash account debit 2100
2100
Sale account credit
(As sold on cash).
7. Rent paid for shop to landlord TK. 3000
Rent Expense Account Debit 3000
8. Commission received in cash TK. 2000 2000

Commission Received / Service Revenue
/ Revenue Account Credit
(As Commission received )
Con
9. Cash deposited into bank TK. 5000

Bank Account Debit 5000
Cash Account Credit
(As deposited into bank ). 5000
Cash withdrawn from bank for office use TK. 2000

10 Cash Account Debit 2000
Bank Account Credit
(As withdrawn for office).
2000
Cash drawn by proprietor from business (Bank) for personal use TK..
11. 3000
3000
Drawing Account Debit
Bank/ Cash Account Credit
(As withdrawn for personal use). 3000
1000
12. Goods given as charity TK.. 1000
Charity Account Debit
Purchase Account Credit
(As goods given as charity). 1000
con
13. Bad Debts written off TK.. 500 500
Bad Debt Account Debit Debtor Account 500
Credit
( As bad debt written off).
14. Bad debts recovered in cash TK.. 300

Bad Debts Recovered Account Credit
( As bad debt received in cash). 300
Carriage paid on machinery ( expenses on

15. purchase of asset ) TK.. 1000
Machinery Account Debit 1000
( As carriage of exp for machine).
16. Depreciation on fixed assets TK.. 500 500
Depreciation Expense--property Account Debit 500
Accumulated Depreciation--Property Account Cr
( As depreciation ).
Con
17. Carriage paid on the behalf of buyer TK.. 1000

Debtor account Debit 1000
( As paid on behalf of buyer)
18. Goods given as free samples TK.. 1500

Advertising Account Debit 1500
(As given as free sample).
19. Interest allowed on capital TK. 600

Interest on capital Account Debit 600
(As interest on capital).
20 Interest charged on drawings TK. 500

Interest on drawing account Credit 500
(As interest on drawing).
21.
Bank charges or interest charged by bank TK. 200 200
Bank charge (Expense) Account Debit 200
Bank account Credit
(As charged by bank).

Loss by Fire Account Debit 800
(As lost by fire)..
Con

Loss by Fire Account Debit
Purchase Account Credit
(As lost by fire)..
Goods insured and a claim is admitted by insurance company in full or in part.

Insurance company Account Debit XXXX 1, 00,000
23. Loss by Fire Account Credit XXXX 1, 00,000
Loan taken TK. 1,00,000

Cash Account Debit
Lender’s loan Account Credit 1000 1000
24. (As loan taken).
Interest paid on loan. TK. 1000

Interest on loan Account Debit
Cash Account Credit
(As interest paid on loan). 500
25 500
Interest on loan due but not paid in cash. TK. 500

Loan or/ AP /Creditor / Interest payable Account Credit
(As due).
26.
Con
26. Interest on loan due but not paid in cash. TK. 500
Loan or/ AP /Creditor / Interest payable Account 5,000
Credit 5,000
(As due).
27.
Investment purchased TK. 50,000
Investment Account Debit
Cash stolen from office. TK.Credit
Cash Account 6000
(As investment purchased).
Loss by Theft Account Debit 6000
Journal
Sept. 1 Hamid invested Tk.20,00,000 cash in the business.
2 The company paid Tk.1,00,000 cash for store rent for September.
3 Purchased washers and dryers for Tk.25,00,000, paying Tk.10,00,000 in cash and
signing a Tk.15,00,000, 6-month, 12% note payable.
4 Paid Tk.1,20,000 for a one-year accident insurance policy.
5. Sep-10 Received a bill from the Daily News for advertising the opening of the Cleaners
Tk.20,000.
6. sep-20 Withdrew Tk.70,000 cash for personal use.
7. sep-30 Determined that cash receipts for laundry services for the month were Tk.6,20,000.
Date Account Titles & Explanation L.F Debit Credit

2017
Sept. 1 Cash Tk. 20,00,000
Hamid, Capital Tk. 20,00,000
(Owner’s investment of cash in business)
2 Rent Expense 100000

Cash
(Paid September rent)
Con
3 Equipment 2500,000
Cash 10,00,000
Notes Payable 1500,000
(Purchased laundry equipment for cash and 6-month, 12% note payable)
4. Prepaid Insurance 120,000
Cash
(Paid one-year insurance policy)
5. Sep- 10 Advertising Expense 20,000

Accounts Payable
(Received bill from Daily News for advertising)
6. Sep- 20 Hamid, Drawings 70,000
Cash
(Withdrew cash for personal use)
7. Sep- 30 Cash 620,000
(Received cash for services provided)
• Con
Q: Mr Robert commenced business on 1st January, 2011 with a capital of $100,000 in cash.
On the same date he opened the bank account in ADCB and deposited $20,000. During the
month of January 2011 the following transactions took place:
Jan 1 Bought goods for cash 70,000

2 Sold goods to Steve Co. (Credit) 38,000
15 Sold goods for cash 9,000
21 Steve Co. paid by cheque 35,000
22 Stationery bill paid by cheque 2,000
22 Telephone bill by cash 500
31 Paid rent by cash 2,000
Paid salaries by cash 3,000
Withdrew cash personal use 5,000
Required:
Record journal entries for the transactions and post them to ledgers.
Ans: 1. Jan 1 Dr Cash on hand 80,000
Dr Bank 20,000
Cr Capital 100,000
(As started business with cash TK. 80,000 on hand and at Bank TK. 20,000 )
Note that in most accounting questions you won't have to account for "Cash on hand" and
"Bank" in separate accounts. in this question they specifically talk about opening the bank
account with $20,000 of the $100,000, which indicates they kept cash on hand in addition to the
bank account, which needs to be accounted for.
Con OR Cash / Bank account Debit 100,000
(As started business)
2. Jan- :. Dr. Purchases/Inventory 70,000
Cr Cash on hand 70,000
(As purchased)
Note that it's "Purchases" for a periodic system of inventory and "Inventory" if
it's the perpetual system
3.. Dr Debtors 38,000
Cr Sales 38,000
(As sold)
4. Jan-15. Dr Cash on hand 9,000
Cr Sales 9,000
(As sold on cash)
5. Jan-21. Dr Bank 35,000
Cr Debtors 35,000
(As )
Con
22. Dr Stationery expense 2,000
Cr Bank 2,000
(As )
22. Dr Telephone expense 500
Cr Cash on hand 500
(As )
31. Dr Rent expense 2,000
(As )
31. Dr Salaries 3,000
(As
31. Dr Drawings 5,000

(As )
• Con
Con
The following are the journal entries recorded earlier for Printing Plus.
1: On January 3, 2019, issues $20,000 shares of common stock for cash.
2.On January 5, 2019, purchases equipment on account for $3,500, payment due within the month.
3: On January 9, 2019, receives $4,000 cash in advance from a customer for services not yet rendered.
3. Continues
4: On January 10, 2019, provides $5,500 in services to a customer who asks to be billed for the services.
5: On January 12, 2019, pays a $300 utility bill with cash.

6. Transaction 6: On January 14, 2019, distributed $100 cash in dividends to stockholders.
7. On January 17, 2019, receives $2,800 cash from a customer for services rendered.
8. On January 18, 2019, paid in full, with cash, for the equipment purchase on January 5.
9. On January 20, 2019, paid $3,600 cash in salaries expense to employees.
10. On January 23, 2019, received cash payment in full from the customer on the January 10 transaction.
11. On January 27, 2019, provides $1,200 in services to a customer who asks to be billed for the services.
12. On January 30, 2019, purchases supplies on account for $500, payment due within three months.
T-Accounts Summary: Once all journal entries have been posted to T-accounts, we can check to make sure the
accounting equation remains balanced.
Journal: You have the following transactions the last few days of April.
Apr. 25 You stop by your uncle’s gas station to refill both gas cans for your company,
Watson’s Landscaping. Your uncle adds the total of $28 to your account.
Apr. 26 You record another week’s revenue for the lawns mowed over the past week. You
earned $1,200. You received cash equal to 75% of your revenue.
Apr. 27 You pay your local newspaper $35 to run an advertisement in this week’s paper.
Ans
Apr. 29 You make a $25 payment on account.
Con 1.
2.
3.
1. Company A was incorporated on January 1, 20X0 with an initial capital of 5,000 shares of
common stock having $20 par value. During the first month of its operations, the company
engaged in the following transactions:
Date Transaction
Jan 2 An amount of $36,000 was paid as advance rent for three months.
Paid $60,000 cash on the purchase of equipment costing $80,000. The remaining amount was recognized as a one
Jan 3
year note payable with an interest rate of 9%.
Jan 4 Purchased office supplies costing $17,600 on account.

Jan 13 Provided services to its customers and received $28,500 in cash.
Jan 13 Paid the accounts payable on the office supplies purchased on January 4.
Jan 14 Paid wages to its employees for the first two weeks of January, aggregating $19,100.
Jan 18 Provided $54,100 worth of services to its customers. They paid $32,900 and promised to pay the remaining amount.
Jan 23 Received $15,300 from customers for the services provided on January 18.
Jan 25 Received $4,000 as an advance payment from customers.
Jan 26 Purchased office supplies costing $5,200 on account.
Jan 28 Paid wages to its employees for the third and fourth week of January: $19,100.
Jan 31 Paid $5,000 as dividends.
Jan 31 Received an electricity bill of $2,470.
Jan 31 Received a telephone bill of $1,494.
Jan 31 Miscellaneous expenses paid during the month totaled $3,470
Date Account Debit Credit
Ans: Jan 1 Cash

Common Stock
100,000
100,000
Jan 2 Prepaid Rent 36,000
Cash 36,000
Jan 3 Equipment 80,000
Cash 60,000
Notes Payable 20,000
Jan 4 Office Supplies 17,600
Accounts Payable 17,600
Jan 13 Cash 28,500
Jan 13 Accounts Payable 17,600
Cash 17,600
Jan 14 Wages Expense 19,100
Cash 19,100
Jan 18 Cash 32,900
Jan 23 Cash 15,300
Jan 25 Cash 4,000
Unearned Revenue 4,000
Jan 26 Office Supplies 5,200
Jan 28 Wages Expense 19,100
Cash 19,100
Jan 31 Dividends 5,000
Cash 5,000
Jan 31 Electricity Expense 2,470
Utilities Payable 2,470
Jan 31 Telephone Expense 1,494
Utilities Payable 1,494
Jan 31 Miscellaneous Expense 3,470
Cash 3,470
The Journal entry to record outstanding expenses is
Date Particulars Amount (Dr.) Amount (Cr.)
Expense A/c Dr.
To Outstanding Expense A/c
(Being recording the expense for the current year

outstanding)
• The Journal entry to record prepaid expenses is:
Prepaid Expense A/c Dr.
To Expense A/c
(Being prepaid expense recorded)

• The Journal entry to record accrued incomes is:
D
Accrued Income A/c r
.
To Income A/c
(Being recording of accrued incomes)
• The Journal entry to record income received in advance is:
D
Income A/c r
.
To Income Received in Advance A/c
(Being income received in advance recorded)

• Q. Q1. Tabular analysis:
• 1. Eric opened a law office on July 01, year 01. On 31st July, the balance sheet
showed cash Tk. 5300; A/R Tk. 1400; Supplies Tk. 900; Equipment Tk. 5000; A/P Tk.
4500; and owner’s capital Tk. 8100. During Sugust, the following transactions
occurred.
• 1. Collected Tk. 1100 of A/R.
• 2.Paid Tk. 2500 to A/P.
• 3. Recognized revenue of Tk. 7000 of which Tk. 3900 is collected in cash & the
balance is due in September.
• 4. Purchased additional equipment for Tk. 2600 paying Tk. 800 in cash & the
balance on account.
• 5. Paid salaries Tk. 2150; rent for August Tk. 1100 & advertising expenses Tk. 200.
• 6. Withdrew Tk. 1250 in cash for personal use.
• 7. Received Tk. 2500 from Sonali Bank –money borrowed on a note payable.
• 8. Incurred utility expenses for month on accoiunt Tk. 310.
• Requirements: a) Prepare a tabular analysis of the August transactions beginning
with July 31 balances.
• b) Prepare an Income Statement for August, an owner’s equity
statement for August & a balance sheet at August 31.
• Journal entries
• Con Best format for Summary of transactions Ans:
• Ericks (Law Office)
• Income statement
• For the month ended August 31, Year-1
Ericks (Owner Equity Statement)

• For the month August 31, Year-1.
• Con
• Erick
• Balance Sheet
• As on August 31, Year-1
Basis of Financial Accounting Cost Accounting
comparison
1. Objective Determination of profit or loss Mainly, communication of financial
and financial position information to management for
planning, controlling and evaluating
resources.
2.For whom For owners & external users Predominantly for internal users
prepared
3.Limitations Direct regulations Indirect regulations
4.Basis of Historical Cost Any form of monetary and physical
valuation units
5.When Periodically mostly at the end As and when needed by the
Prepared of accounting period. management.
6.Perspective Entire Organization Department, division, unit or any
fraction of the entire organization.
7.Time period Current Both current & future
Examples of Business Transactions
• Investment of cash or other assets by the owners
• Withdrawal of cash or other assets by the owners, and distribution of dividends
• Borrowing of cash from other entities for business use
• Payment of borrowings
• Sale of goods or services (either for cash or on credit/account)
• Collection of receivables from customers and other entities
• Acquisition of assets or services (either for cash or on credit/account)
• Payment of payables to suppliers or other entities
• Consumption or expiration of assets (such as use of office supplies and expiration
of insurance, expiration of rent, depreciation of equipment, etc.)
• Q. Financial Accounting vs Cost Accounting
S. N. Financial Accounting Cost Accounting
Records and summarizes cost information and

Records financial data of the organization. So it records data. This includes information about labour,
1
all relevant monetary data materials and various overheads of the
manufacturing process.
Financial accounting only deals in historical costs (only Cost accounting uses both historical and pre-
2
actual costs and figures) determined costs (standard costs, estimates etc.)
Information provided by cost accounting is only

The users of the information provided by financial
3 meant for people within the firm like
accounting are both internal and external users
management, employees etc.
Financial accounting is mandatory for all firms. Every
Cost accounting is only done by manufacturing
4 organization has to keep some record of its financial
firms. And in most cases, it is not mandatory.
transactions
Other than recording data it also provides a
The emphasis here is on recording the transactions/data
5 system of cost control of labour, material,
and presenting it in the given format.
overhead costs
Financial accounts deal with the business in its entirety.
Costing will enable us to get the profit or loss for
6 So it provides us with profit or loss for the whole
individual products, process, job etc.
concern
7
In financial accounting, there is no aspect of forecasting. In Cost accounting, forecasting is possible using
It is simply a record of the financial position of the firm some of the budgeting techniques
8
Financial accounting is strictly a positive science. There Cost accounting is both a positive and normative
is rigidity in the process due to legal requirements science.
Transactions Assets = Liabilities + Capital
C+E+F+AR AP+NP R+I—Exp--D
1. Cash investment of owner + Cash = N/A + + as Owner's Capital

2. Borrowed cash from bank + Cash = + Payable + N/A
+ Equipment
3. Purchased equipment for cash = N/A + N/A
- Cash
4. Paid business licenses - Cash = N/A + - as Expenses

5. Paid water and electricity used - Cash = N/A + - as Expenses
6. Purchased tables, 50% cash and 50% on + Furniture

= + Payable (50%) + N/A
account - Cash (50%)
7. Received cash for services rendered + Cash = N/A + + as Revenue
8. Rendered services on account + Receivable = N/A + + as Revenue
+ Cash
9. Collected customer accounts = N/A + N/A
- Receivable
10. Owner withdrew cash from the

- Cash = N/A + - as Drawings
business
Following are the accounting transactions relating to Mr. P's business. Use the
accounting equation to show their effect on
Accounting equation:
1. Commenced business with a Capital of 50,000
2 Bought Machinery for cash 10,000
3. Purchased goods for cash 15,000
4. Purchased goods from A on credit 5,000
5. Sold goods for cash 10,000
6. Paid to A 2,000
7. Sold goods to B on credit 3,000
8. Paid into Bank 6,000
9. Paid to A by cheque 1,000
10. Received from B a cheque for 2,000
Con Princ of acc page 123, prob 03.
Q. The ledger of Rental agency on March -31 of the current yearincludes the following selected accounts before adjusting
entries have bee prepared :
Details Debit TK. Credit TK.
i) Prepaid insurance 3,600
ii) Supplies 2,800
iii) Equipment 25,000
iv) Accumulated Depreciation (Equipment) ----- 8,400
v) Notes payable ---------- 20,000
vi) Unearned rent ------ 9,900
vii) Rent Revenue ------ 60,000
viii) Interest Exp 0
ix) Wages Exp 14,000
An analysis of the accounts shows the following :

1. The equipment depreciates TK. 400 per month.
2. One-third of the unearned rent was earned during the quarter.
3. Interest of TK. 500 is accrued on the notes payable.
4. Supplies on hand total TK. 700.
5. Insurance expires at the rate of TK. 200 per month .
Required : Prepare the adjusting entries at March-31, assuming that adjusting entries are made quarterly.
Ans : page 123, prob 03

• Con Q. 1. The unadjusted trial balance of 31st December, 2004 is given below :—
Jaba and Company , Unadjusted Trial Balance, As at 31st December, 2019
Particulars Debit Credit
Taka Taka
Cash 20,000
Prepaid Insurance 3,000
Supplies 4,000
Equipment 25,000
Unearned Revenue 6,500
Jaba's Capital 19,000
Jaba's Drawings 1,500
Commission Revenue 30,000
Utility Expenses 600
Salaries Expenses 6,400
65,500 65,500
• Other Information:—
( a) Supplies on hand at the end of the period Tk. 2800
• (b) Prepaid insurance of Tk. 1,500 expired during the year.
• © Commission revenue earned but not received Tk. 5,000.
• (d) Salaries accrued amounting to Tk.1,600.
• (e ) Depreciation is to be charged on equipment @ 10%.
• Con Required: (i) Prepare adjusting entries for December 31, 2019. (ii) Prepare adjusted Trial Balance.
(iii) Prepare necessary closing entries.
• Req: (i) Jaba and Company Adjusting entries

• Dec 31. Supplies exp. 1200
• Supplies(4,000-2,800)
• [To record supplies exp.]
• Dec 31. Insurance exp. 1,500
• Pre Paid insurance
• [To record insurance exp.]
• Dec 31, Accounts Receivable 5,000
• Commission Revenue
• [To record commission Revenue]
• Dec 31. Salaries exp. 1,600
• Salaries Payable
• [To record unpaid salaries]
• Dec 31. Dep. exp.-Equipment 2,500
• Accumulated dep.-Equipment
• [To record depreciation exp.]
• Con Req: (ii) Jaba and Company . Adjusted Trial Balance , As at Dec.31. 2019
•
74SL.
,600
No Accounts Title Ref. Dr. (Tk.) Cr (Tk.)
1 Cash 20,000
2 Accounts Receivable(5000+5000) 10,000
3 Commission Revenue(30000+5000) 3,5000
4 Pre Paid insurance(3000-1500) 1,500
5 Insurance exp. 1,500
6 Supplies(4000-1200) 2,800
7 Supplies exp. 1,200
8 Equipment 25,000
9 Accounts Payable 10,000
10 Unearned Revenue 6,500
11 Juba’s Capital 19,000
12 Juba’s Drawings 1,500
13 Utilities exp. 600
14 Salaries exp.(6400+1600) 8,000
15 Salaries Payable 1,600
16 Depreciation exp.-Equipment 2,500
17 Accumulated dep.-Equipment ---------- 2,500
74,600 74,600
======== =====
• Con Req (iii) Jaba and Company , Closing entries
Date Explanation R Dr (Tk.) Cr (Tk.)

ef.
Dec.31 Income summary 13,800
Insurance exp. 1,500
Supplies exp. 1,200
Utilities exp. 600
Salaries exp 8,000
Dep. exp.-Equipment 2,500
[To close all exp.]
Dec 31 35,000
35,000
Commission Revenue
Dec 31 Income summary 1,500
[To close commission revenue] 1,500
Dec 31 Juba’s Capital

Juba’s Drawings
[To close Drawings] 21,200
Income summary 21,200
Juba’s capital
[To close net income]
• Con Q.2. The unadjusted Trial Balance of tower Holdings Ltd. At December 31, 2019 was as:-
Tower Holdings Ltd., Trial Balance , December 31, 2019
Accounts items Debit
Taka
Credit
Taka
Cash 25,400
Accounts receivable 37,600
Merchandise inventory 90,000
Prepaid insurance 1,600
Investments 5,000
Land 2,76,000
Preliminary expenses 4,000
Buildings 1,97,000
Accumulated depreciation Buildings 84,000
Equipment 83,500
Accumulated depreciation – equipment 52,400
Notes payable 50,000
Taxes payable 17,000
Bank loan 80,000
Tower holdings Ltd. Capital 2,60,500
Tower holdings Ltd. Drawings 4,600
Sales 9,93,825
Sales discount 4,100
Cost of goods sold 7,09,000
Salaries expense 69,000
Utilities expense 19,000
Repair expense 6,000
Gas and oil expense 7,000
Insurance expense 3,500
Advertisement expense 15,000
Interest expense 4,600
Supplies 7,500
Traveling expense 1,500
Interest on investments 175
15,70,900 15,70,900
• Con Adjustment data:-
• (i) The investment carry and annual interest rate of 7 percent. Interest for the second half of
2019 has not been received.
• (ii) Preliminary expenses are being written off in 5 years. It has already been written off for
last three years. That is, the balance must be written off in 2years.
• (iii) The bank loan was obtained on 1 July 2019. It carries an interest rate of 15 percent. The
interest expense recognized in the trial balance exclusively relates to this loan.
• (iv) Depreciation for the year is Tk.15, 000 on buildings and Tk.12, 000 on equipment.
• (v) Interest of Tk.2, 000 is due and unpaid on notes payable at December 31.
• (vi) Salaries accrued but unpaid Tk.3,000
• (vii) Utilities bill received after pre-paring the trial balance Tk.1, 200 (the amount is still
unpaid).
• (viii) Provision for bad and doubtful debts 3 percent of accounts receivable.
• (ix) Supplies in hand Tk.2, 500.
• Required:-
• a. Pass necessary journal entries to record the above adjustments.
• b. Prepare and Adjusted Trial Balance.
• Con
• Ans: Tower Holdings Ltd. , Adjusting entries
• Dec 31. Interest Receivable 175
• Interest Revenue
• [To record interest revenue]
• Dec 31, Amortization of preliminary exp. 2,000
• Preliminary exp.
• [To record written off preliminary exp.]
• 31. Interest exp. 1400 [ 80,000 x 15% x 6 / 12]
• Interest payable (6,000 – 4,600) To record unpaid interest]
• Dec 31. Dep. exp.- Building 15,000
• Accumulated dep.-Building
• Dep. exp.- Equipment 12,000
• Accumulated dep.- Equipment
• [To record depreciation on Building & Equipment]
• Dec 31. Interest exp. 2,000
• Interest payable
• [To record unpaid interest]
• Con Salaries exp. 3,000
• Salaries payable [To record unpaid salaries]
• 31. Utilities exp. 1200
• Utilities payable
• [To record unpaid utilities]
• Dec 31. Bad debts exp. 1128
• Allowance for doubtful a/c
• [To record bad debts exp.]
• Dec 31. Supplies exp. 5,000
• Supplies (7,500 – 2,500)
• [To record supplies exp.]
• Con Tower Holdings Ltd. , Adjusted trial Balance , Dec.31, 2019
Debit Credit
SL. No. Accounts title Ref.
Tk. Tk.
1 Cash 25400
2 Accounts Receivable 37600
3. Merchandise inventory 90000
4. Prepaid insurance 1600
5. Investment 5000
6 Land 276000
7. Preliminary exp.(4,000 – 2,000) 2000
8. Amortization preliminary exp. 2000
9. Building 197000
10. Acc. Dep.-Building (84,000+15,000) 99000
11. Depreciation exp.-Building 15000
12 Equipment 83500
• Con
13. Depreciation exp.- Equipment 12000
14. Acc. Dep.- Equipment (52,400+12,000) 64400

15. Notes Payable 50000
16. Accounts Payable 37500
17. Tax Payable 17000
18. Bank loan 80000
19. Tower Holding Ltd.- Capital 260500
20. Tower Holding Ltd.- Drawings 4600
21. Sales 993825
22. Sales discount 4100
23. Cost of goods sold 709000

Con
24. Salaries exp.(69,000+9,000) 72,000
25. Salaries Payable 3000
26. Utilities exp. (19,000+1,200) 20200
27. Utilities Payable 1200
28. Repair exp. 6000
29. Gas & Oil exp. 7000
30. Insurance exp. 3500
31. Advertising exp. 15000
32. Interest exp. (4,600+3,400) 8000
33 Interest Payable 3400
34. Supplies exp. 5000

• Con 35. Supplies (7,500 - 5,000) 2500
36. Traveling exp 1500
37. Interest Receivable 175
38. Interest Revenue(175+175) 350
39. Bad debts exp. 1128
40. Allowance for doubtful a/c 1128
41. Difference in trial balance 4500

16,11,303 16,11,303
Con
• Q. 3. Radison company started his own consulting firm. Radison company. on June 1, 2018.
The Trial balance at June 30 is as follows:-
• Radison Company , Trial Balance , June 30, 2018
Particulars Debut(Tk.) Credit(Tk.)
Cash 7,150
Accounts receivable 6,000
Prepaid Insurance 3,000
Supplies 2,000
Office Equipment 15,000
Unearned Service Revenue 4,000
Radison, Capital 21,750
Salaries expenses 4,000
Rent expenses 1,000
38,150 38,150
• Con
• Others data:-
• (i) Supplies on hand at June 30, are Tk. 1,100.
• (ii) A utility bill for Tk. 300 has not been recorded and will not be paid until
next month.
• (iii) The insurance policy is for a year.
• (iv) Tk. 2,500 of unearned service revenue has been earned at the end of the
month.
• (v) Salaries of Tk. 1,500 are accrued.
• (vi) The office equipment has a 5 years life no salvage value. It is being
depreciation at Tk. (vii) 250 per month for 60months
• (vii)Invoices responding Tk. 2,000 of services performed during the month
have not been recorded as of June 30.
• Required:-
• Prepared the adjusting entries for the month of June.
• Prepared an adjusted trial balance at June 30. 2018.
• Con Ans:
• Req: (a Radison company , Adjusting Journal Entries
• Jun 30. Supplies exp.(2000-1100) 900

• Supplies
• [To record supplies expense]
• Jun 30. Utilities exp. 300
• Utilities payable
• [To record utilities expense]
Jun 30. Insurance exp [3000 / 12 ] 250
• Prepaid Insurance
• [To record prepaid insurance expired]
• Jun 30. Unearned Service Revenue 2,500
• Service Revenue
• [To record Unearned Service Revenue earned]
• Con Jun 30. Salaries exp. 1,500
• Salaries payable
• [To record unpaid salaries expense]
• Jun 30. Depreciation Exp.-Office equipment 250
• Accumulated dep.-Office equipment
• [To record depreciation exp. on office equipment]
• Jun 30. Accounts Receivable 2,000
• Service revenue
• [To record service revenue on account
• Con Req. (b) Radison company Adjusted Trial Balance , June 30, 2018
• (i) Cash 7,150.

• (2) Accounts Receivable 8,000
• (3) Pre Paid insurance 2750
• (4) Supplies 1100
• (5) Office Equipment 15,000
• (6) Accumulated dep.-Off. 250
• (7) Equipment Accounts Payable 4500
• (8) Utilities payable 4500
• (9) Salaries payable 300
• (10) Unearned Service Revenue 1500
• (11) Radison’s Capital 21,750
• (12) Service Revenue 12,400
• (13) Salaries exp. 5500
• (14) Rent Exp. 1,000
• (15) Depreciation exp.-Off. 250
• (16) Insurance exp. 250
• (17) Utilities exp. 300
• (18) Supplies exp. 900
• Total 42,200 42200
co
Perpetual Inventory System: An inventory system
under which a concern keeps detailed records of the
cost of each inventory purchase & sale, & the records
continuously show the inventory that should be on
hand.
Periodic Inventory System: 1. Merchandise inventory
& cost of goods sold are not updated continuously. 2.
Purchases are recorded in purchases account & each
sale transaction is recorded via a single journal entry.
3. Cost of goods sold account does not exist during
the accounting period. It is determined at the end of
accounting period via a closing g entry n
• Journal entries
1.Mr. Karim started business with Tk.200000
2, Bought office furniture from B on credit for Tk.12000
3. Bought office equipment of Tk. 100000
• Bought goods worth Tk.10000 for cash from Mr. X
• Sold goods to Y worth Tk.12500 for cash
• Bought goods from & on credit for Tk.10500
• Sold goods on credit to Mr. Ali for Tk.2555
• Paid Mr.X Tk.12000 on account
• Received from Mr. Ali Tk.4500 on account
• Received interest from Mr. Y Tk.1250
• Paid salaries Tk.8750
• Paid Tk.5000 into Bank from office cash
• Paid office rent Tk.2500
• Bought office stationery on credit from Alam & Co. Tk.750
• Paid for office stationery Tk.1500
• Received interest on investment Tk.2000
• Paid electric charges Tk.550
Si. Date Particulars Debit (Tk.) Credit (Tk.)
No.
01 Cash A/C Dr 200000

Mr.Karim’s Capital Cr 200000
(As investment/started business)
02 Office furniture A/C Dr 12000
B’s/AP Cr 12000
(As buy furniture on credit)
03 Office equipment A/C Dr 10000
Cash Cr 10000
04 Purchase A/C Dr 10500
Cash Cr 10500
05 Cash A/C Dr 12500
Sales Cr 12500
06 Purchase A/C Dr 10500
B’s A/C /Account payable Cr 10500
07 Mr. Ali’s A/C /Account receivable A/C Dr 2555
Sales Cr 2555
08 Mr. X’s/ Account payable A/C Dr 12000
Cash Cr 12000
09 Cash A/C Dr 4500
Mr. Ali’s A/C /Account receivable Cr 4500
10 Cash A/C Dr 1250
Interest received Cr 1250
11 Salaries Expenses A/C Dr 8750
Cash Cr 8750
12 Bank A/C Dr 5000
Cash Cr 5000
13 Office rent expense A/C Dr 2500
Cash Cr 2500
14 Stationery A/C Dr 750
Alam & Co./ AP Cr 750
15 Stationery A/C Dr 1500
Cash Cr 1500
16 Cash A/C Dr 2000
Interest on investment Cr 2000
17 Electric charge expenses A/C Dr 550
Cash Cr 550
Ledger: (B/d = brought down , opening balance and C/d = carried down or carry
forward, closing balance)
• cash Account ( T shape)
• Dr Cr
Date Particulars J. Amount Date Particulars J. Amount

Or F (Taka) F (TK.)
S.N
1.1,2022 Opening balance b/d 3. Office equipment 1,00,000

Capital 2,00,000 4. Purchases 10,500
Sales 8. Account payable (Mr. X) 12,000
5. Account receivable 12,500 Salary expenses
9. (Ali’s A/C) 11. Bank 8,750
Inst received 4,500 12. Office rent 5,000
Inst on investment 13. Stationery 2,500
10. 1,250 15. Electricity charges
16. 17. Closing Balance c/d 1,500
2000 31.1.22 (balancing figure) 550
Total 79,450
--------------- Total
2,20,250 2,20,250
Opening balance b/d ======== =======
Feb 1, 22
79,450
• Ledger
• Capital Account
• Dr Cr
Date Particulars J. Amount (Taka) Date Particulars J. Amount
Or F F (TK.)
S.N
Closing Balance c/d 1.1.22 Opening balance b/d 2,00,000
(balancing figure) 2,00,000
31.1,22 Total -------------
Total --------------- 2,00,000
2,00,000 =======
==========
Office furniture Account

Dr Cr
Or F F (TK.)
S.N
1.1.22 Opening balance b/d 1.1.22 Closing Balance c/d 12,000
Account payable (B’s (balancing figure)
2 A/c) 12,000 -------------
Total Total 12,000
--------------- =======
12,000
==========
• Ledger
• Account payable Account
• Dr Cr
Or F F (TK.)
S.N
8. Cash(X’s A/c) 1.1.22 Opening balance b/d
12,,000 2. Office furniture (B’s A/c) 12,000
Last date Closing Balance c/d 10,500 6. Purchase (B’s A/C) 10,500
(balancing figure) --------------- Total -------------
Total 22,500 2,2,500
========== =======
Con Principle of Acc 2nd page 92, pro—4.
Q. Mr. Haque is a business man. During the first month of operation of his business, the following events and transactions
occurred:
Jan-01: Haque invested TK. 25,000 cash in his business.
Jan-03: Purchased TK. 2,500 of Supplies on account from Mamun supply company.
Jan-07: Paid office rent of TK. 900 cash for the month.
Jan-11: Completed a tax assignment and billed client TK. 2,100 for service rendered.
Jan-12: Received TK. 3,500 advance on a management consulting engagement.
Jan-17: Received Cash of TK. 1,200 for services completed for Kajol Com.
Jan-31: Paid secretary TK. 2,000 salary for the month.
Jan-31: Paid 40% of balance due Mamun Supply Company.
Required: (i) Journalize the transactions. (ii) Post to the ledger accounts (iii) Prepare trial balance on January-31, 2024.
Ans: 1, Jan-01 Cash dr 25,000
Capital cr. 25,000 (As investment or started business)
2. Jan-02. no entry bcz it’s not transaction.
3. Supplies dr and A/P cr 2,500 ( As supplies on account)
4 j-07. Rent exp dr cash ac cr 900 ( As paid rent)
5. J-11. A/R dr Service revenue cr 2,100 ( As billed client for service rendered)
6. J-12. Csh dr Unearned revenue cr 35,00( As received cash in advance)
7. 7. J-17. Cash dr Servie revenue cr 1200 (As received cash for service completed)
8. 8. J- 31. Salary exp dr cash cr 2,000 ( As paid salary)
9. 9 J-31. A/P (40% of 2500) dr Cash ac cr. 1,000 ( As paid 40% due of Mamun supply com.)
Con Ledger Cash Account
Date Particulars L TK. J-7 Particulars LF TK.

J-1 Capital . 25,000 Date Rent exp 900
J-12 Unearned revenue F 3,500 J-31 Salary Exp 2,000
J-17 Service revenue 1200 J-31 J- A/P 1,000
J-31 29,700 31 Balance c/d 25,800
29,700
Feb - Balance bd 25,800 =====
01
Capital
J-1 Cash 25,000 Balance c/d 25,000

======= ====
Feb-01 Balance b/d 25,000
Service revenue
Q. From the following information pass the necessary journal entries
relating to the items of expenses and incomes. Also, show their treatment in
the Trading and Profit and Loss A/c and the Balance Sheet.
1.Interest on loan expenses TK.150000. The interest of TK.50000 is
outstanding.
2.Wages expense TK.72000. Out of this wages of TK.12000 pertains to
the next accounting year.
3.The commission received TK.15000. Amount of commission earned
but not received is TK.5000.
4.Rent received TK.50000. Rent of TK.10000 is received in advance.
Ans: Journal Entries

1. Interest on Loan A/c Dr. 50000
To Outstanding Interest on Loan A/c 50000
(Being recording the interest on a loan for the current year outstanding)
Con
2. Prepaid Wages A/c Dr. 12000
To Wages A/c 12000
(Being prepaid wages recorded)
3. Accrued Commission A/c Dr. 5000
To Commission A/c 5000
(Being recording of accrued commission)
4. Rent A/c Dr. 10000

To Rent Received in Advance A/c
10000
(Being rent received in advance recorded)
Trading and Profit and Loss A/c (extract)
For the year ending….
Particulars Amount (Dr.) Particular Amount (Cr.)

To Opening Stock A/c By Sales A/c
To Purchases A/c By Closing Stock A/c
To Wages A/c 72000

Less: Prepaid wages (12000) 60000
To Gross Profit c/d
xxx xxx
To Interest on Loan A/c 150000 By Gross Profit b/d
Add: Outstanding interest on a loan 50000 200000 By

Commission A/c 15000
Add: Accrued commission
5000 20000
By Rent A/c 50000
Less: Rent received in advance
(10000)
To Net Profit
xxx
xxx
• Balance Sheet
• As at …
Liabilities Amount Assets Amount
Capital Fixed Assets:
Add: Net Profit Land and Building
Less: Drawings Plant and Machinery
Long-term liabilities: Furniture and Fixtures
Bank Loan Current Assets:
Current Liabilities: Stock
Outstanding Interest on Loan 50000 Debtors
Rent received in advance 10000 Prepaid Wages 12000
Accrued Commission 5000
xxx xxx
• Q.
• Special Journals
• Look at the following transactions of Fooz Ball Town:
• July 5 Sold $5,000 of merchandise inventory, terms 1/15, n 30, FOB Destination with a cost of
goods sold of $3,000 to Robby Red.
• July 6 Paid shipping cost of $200 on merchandise sold on July 5.
• July 10 Sold $1,500 of merchandise inventory for cash, FOB Shipping Point, with a cost of
goods sold of $1,000.
• July 12 Purchased $10,000 of merchandise inventory, terms 2/15, n 45, FOB Destination from
Gus Grass.
• July 15 Received payment from Robby Red from July 5 sale less the discount.
• July 16 Returned $2,500 of merchandise damaged in shipment from July 12 purchase.
• July 20 Paid the utility bill for $300.
• July 25 Paid for the July 15 purchase less the return and discount.
• July 30 Sold $7,000 of merchandise inventory, terms 1/15, n 30, FOB Shipping point with cost
of goods sold $5,000 to Bobby Blue.
• You can see how these journal entries (using the perpetual inventory method) would
be recorded in the general ledger as by clicking fooz ball town to save space.
• Note: The entries would be slightly different under the periodic inventory method as cost of
goods sold and merchandise inventory are not updated until the end of the period instead of
with each sale or purchase.
• The list of entries for these 9 transactions is long…can you imagine what it would look like
when a company has hundreds of transactions a day? It will be overwhelming so there needs to
be a better way. Special journals are a quicker and more efficient way to enter transactions.
Remember, we have 5 special journals:
• Q.
• 5 special journals:
• a sales journal to record ALL CREDIT SALES
• a purchases journal to record ALL CREDIT PURCHASES
• a cash receipts journal to record ALL CASH RECEIPTS
• a cash disbursements journal to record ALL CASH PAYMENTS; and
• a general journal to record adjusting and closing entries and any other entries that do not fit in one of the
special journals.
• Now we will classify Fooz Ball Town’s transactions into the proper special journals:
Date Transaction Summary Special Journal

July 5 Sold to Robby Red on credit. Sales Journal
July 6 Paid shipping cost. Cash Disbursements Journal
July 10 Sold inventory for cash. Cash Receipts Journal
July 12 Purchased inventory on credit. Purchases Journal
July 15 Received payment from Robby Red. Cash Receipts Journal
Returned damaged merchandise to
July 16 General Journal
supplier .
July 20 Paid utility bill. Cash Disbursements Journal
July 25 Paid for July 15 purchase. Cash Disbursements Journal
July 30 Sold to Bobby Blue on credit. Sales Journal
• Q.
• The July 10 sales is not recorded in the sales journal — why not? It was a cash sale and not on credit. The
discussion continues by looking at each special journal in detail.
• Sales Journal
• The sales journal is used to record all sales on credit. This means the customer has not paid but we will
receive payment in the future. The video shows an example of a sales journal under the periodic inventory
method:
• Under the perpetual inventory system, the Sales Journal would have another column to show Debit to Cost of
Goods Sold and a Credit to Inventory. For Fooz Ball Town, we identified the following transactions for the
sales journal:
• July 5 Sold $5,000 of merchandise inventory, terms 1/15, n 30, FOB Destination with a cost of goods sold of
$3,000 to Robby Red.
• July 30 Sold $7,000 of merchandise inventory, terms 1/15, n 30, FOB Shipping point with cost of goods sold
$5,000 to Bobby Blue.
• These entries would be recorded in the sales journal (instead of general journal entries) as:
Sales Journal
DR Accounts Receivable DR Cost of goods sold

Date Customer
CR Sales CR Inventory
July 5 Robby Red $5,000 $3,000
July 30 Bobby Blue 7,000 5,000
TOTALS $12,000 $8,000

• Q
• Cash Receipts Journal
• The cash receipts journal is used to record all receipts of cash for any reason. Anytime money comes into the
company, the cash receipts journal should be used.
• The cash receipts journal, under the perpetual inventory would, would also contain a column to Debit cost of
goods sold and Credit inventory used for any cash sales. For Fooz Ball Town, we identified two transactions for
the cash receipts journal:
• July 10 Sold $1,500 of merchandise inventory for cash, FOB Shipping Point, with a cost of goods sold of
$1,000.
• July 15 Received payment from Robby Red from $5,000 sale less the 1% discount.
• The cash receipts journal for these transactions would be:
Cash Receipts Journal
DR Cost of goods
DR Sales CR Accounts
Sold
Date Account DR Cash CR Sales
Discounts Receivable CR Inventory
July 10 Checking 1,500 1,500 1,000
July 15 Checking 4,950 50 5,000
TOTALS 6,450 50 5,000 1,500 1,000
• At the end of the period, the TOTALS only would be recorded in posted directly into the accounts listed with no
journal entry necessary.
• Q.
• Purchase Journal
• The purchases journal is used to record all purchases on credit. This means purchases we have not paid
for but will pay for in the future. There was one transaction identified for the purchase journal for Fooz
Ball Town:
• July 12 Purchased $10,000 of merchandise inventory, terms 2/15, n 45, FOB Destination from Gus Grass.
• This would be record in a purchases journal (under the perpetual inventory system as):
Purchases Journal
DR Merchandise Inventory
Date Vendor
CR Accounts Payable
July 12 Gus Grass 10,000
TOTALS 10,000
• The purchase from Gus Grass would be recorded in the accounts payable subsidiary ledger and the total
would be recorded at the end on the period by posting directly to merchandise inventory and accounts
payable.
• Q. Cash Disbursement Journal
• The cash disbursement journal is used to record all payments of cash regardless of the reason. Anytime
cash leaves the company, it should be recorded in the cash disbursement journal. We identified these
transaction from Fooz Ball Town for the cash disbursement journal:
• July 6 Paid shipping cost of $200 on merchandise sold on July 5.
• July 20 Paid the utility bill for $300.
• July 25 Paid for the July 15 purchase from Gus Grass of $10,000 less the 2% discount and $2,500 return.
• These entries would be recorded into a cash disbursement journal (under the perpetual inventory
method) as:
Cash Disbursement Journalt
CR Mdse
Date Check # Account DR Accts Payable DR Other CR Cash
Inventory
Merchandise
July 6 200 200
Inventory
July 20 Utilities Expense $300 $300
July 25 Gus Grass 7,500 150 7,350
TOTALS $7,500 $300 $150 $7,650

• Con
• At the end of the period, we would post the totals of $7,650 credit to cash, the $7,500 debit to accounts
payable, and the $150 credit to merchandise inventory. The DR (debit) Other column would be handled a
little differently as you need to look to the account column to find out where these individual amounts
should be posted. In this case, we would post a $200 debit to merchandise inventory and a $300 debit to
utility expense. Under the periodic inventory method, the July 6 shipping costs would go to a
Transportation In account and the July 25 discount would go to Purchases Discounts.
• General Journal
When using special journals, the general journal is used to record all adjusting entries, closing entries and
anything else that doesn’t fit into the other special journals. An example of this would be any returns or
allowances coming from either the sales or purchase side. For Fooz Ball Town, there is one transaction for the
general journal:
• July 16 Returned $2,500 of merchandise damaged in shipment from July 12 purchase.
• This journal entry is recorded, under the perpetual inventory method as:
Date Account Debit Credit
July 16 Accounts Payable 2,500
Merchandise Inventory 2,500
• This entry would then be posted to the accounts payable and merchandise inventory accounts both for
$2,500. Under the periodic inventory method, the credit would be to Purchase Returns and Allowances.
Summary Comparison
Income Statement Balance Sheet Cash Flow

Time Period of time A point in time Period of time
Purpose Profitability Financial position Cash movements
Measures Revenue, expenses, Assets, liabilities, Increases and
profitability shareholders' equity decreases in cash
Starting Point Revenue Cash balance Net income
Ending Point Net income Retained earnings Cash balance
Gross Profit = Revenues – Cost of Goods Sold. Operating Income = Gross Profit – Operating
Expenses.
Amortization Expenses: These are also called depreciation expenses, and account for any long-
term assets over the life span of their use (such as cars or expensive technology)
Net Purchases (NP)= Purchases (P) + Freight in /Transport in /Carriage in (Pfi) --- Purchases Return (Pr)
--- Purchases Discount (Pd).
Net purchases = Purchases + Transportation in + Import duty ( if any) -- Purchase Return – Purchase
discount
NP = P+Pti + Imd – Pr --Pd
NP= P—Pr –Pd + Pfi
Net Purchases + freight in = Cost of Goods Purchases.
Net Sales (NS) = Sales (S) ---Sales Rerurn (Sr)--- Sales Discount (Sd)
NS = S---Sr ---Sd
Net Sales ---Cost of Goods Sold (COGS) = Gross Profit (GP)
Gross profit (GP) ---- Operating Expenses (Selling + Admin) = Income from Operations
Cost of Goods Sold:
Inventory, Jan 01 36,000Tk.
Purchases (P) 325,000
Less: Purchase Return 10,400
Purchase discount 6,800
17,200
Net Purchase 3,07,800
Add: Freight in 12,200
Cost of goods purchase / Net Purchase 3,20,000
Cost of goods available for sale 3,56,000
Less: Inventory, Dec. 31 40,000
Cost of goods sold 3,16,000
 Net Sales= Sales – Sales Return– Sales Discount
 Cost of goods purchases = purchases – purchase return—purchase discount +
freight in
 Cost of goods sold = Beginning inventory (BI) + Cost of goods purchased ---
Ending Inventory (EI)
COGS = BI+NP– EI
Gross profit = Net sales (NS) --- Cost of goods sold (COGS)
• Net Income / Operating Income = Gross profit (GP) – Operating Expenses
(OE)
• Operating Expenses (OE)= Selling Expenses (SE) + Administrative Exp (AdE)
• Selling Expenses (SE)= Sales Salaries Exp + Sales Commission Exp +
Depreciation of delivery Equipment + Bad debts + Other Selling Expenses
• Administrative Exp (AdE) = Office Salaries Exp + Dep of Assets used in Office
+ Prpperty Tax Exp + Utility Exp + Insurance Exp + Other Admin Exp
• Net Income before Tax (NIBT) = Operating Income (OI) + Non-Operating
Revenue (NOR) --- Non-Operating Exp (NOE)
• Non-Operating Revenue = Other Revenues & Gains [ i,e interest revenue on
investment, dividend, rental revenue, gain on sale of fixed assets etc].
• Net Income after Tax = NIBT --- Income Tax Exp
Con Con Interm fin Acc page 222. prob 3
Ans : 223 page a
Q. The adjusted trial balance columns of Apex Company’s worksheet for the year ended December 31, 2018
are as follows:
Particulars Debit TK. Credit TK.
1.Cash 15,500
2. A/R 10,100
3. Merchandise inventory 30,000
4. Prepaid insurance 2,500
5. Accumulated depreciation --------- 10,000
6 Note payable --------- 25,000
7. Store equipment 94,000
8. Owner’s drawing 12,000
9. Sales return and allowance 5,700
10. Owner’s capital -------- 90,000
11. Accounts payable -------- 10,600
12. Sales ----------------- 5,35,800
13. Interest revenue ----------2,500
14. Sales discount 5,000
15. Cost of goods sold 3,63,400
16. Freight-out 8.600
17. Advertising exp 11,000
18. Salary and wages exp 55.000
19. Utilities exp 17,000
20. Rent exp 25,000
21. Depreciation exp 9,000
22. Insurance exp 6,500
23. Interest exp 3.600
---------------------- -------------------------------
TOTAL 6,73,900 6,73.900
================= ================
Con Requirement : Prepare a multi-step Income
Statement of Apex Company.
Ans page 223
Con Intm fin acc page 243, prob 12
Q. The following is the trial balance of Taposi as on December- 31,2016.
Trial balance
December – 31, 2016
1. Capital --------------- 2,80,000
2. Sales -------------------- 370,000
3. Purchases return and allowance ------------ 5,000
4. Account payable -------------------- 36,000
5. Notes payable --------------------- 6,000
6. Purchase 3,20,000
7. Sales return and allowance 1,200
8. Accounts Receivable 1,00,000
9. Furniture 1,20,000
10. Office Equipment 82,000
11. Cash 30,0000
12. Opening inventory 14,000
13. Insurance exp 3,600
14. Office supplies 2,800
15. Rent exp 1.200
16. Salary exp 6,400
17. Drawings 1,800
18. Advertising exp 3,000
19. Delivery exp 7,000
20. Freight-in 4,000
--------------- --------------------
Total 6,97,000 6,97,000
========= ==========
Con page 244 prb 12 con
Adjustment data : 1. Inventory at closing TK. 61,000.
2. Unexpired insurance TK. 400.
3. Accrued salaries TK. 1,600.
4 Depreciation to be provided 5% on furniture and 10% on office equipment.
5. Office supplies in hand TK. 800.
6. The inventory at the end includes goods worth TK 1,500 for which bill have neither been received nor accounted for.
7. Goods costing TK. 250 were taken by the owner for personal use and no recorded of it was maintained in the books of accounts.
Requirements : Prepare a multiple-step income statement and owner’s euity statement and a classified balance sheet as of Dec-31.
Ans : Page 244 & 245

Con Sheet page 17.36 Illustration 6
Q. From the following trial balance of Hari and additional information prepare Trading and Profit and Loss Account for the year
ended 32st March 1995 and a Balance Sheet as on that date:
1. Capital -------------------------- 1,00,000
2. Furniture 20,000
3. Purchases 1,50,000
4. Debtors 2,00,000
5. Interest Earned --------------------- 4,000
6. Salaries 30,000
7. Sales ------------------------------ 3,21,000
8. Return ….. 10,000 ---- 5,000
9. Wages 20,000
10. Rent 15,000
11. Bad debt written-off 7,000
12. Creditors ------------------------ 1,20,000
13. Drawings 24,000
14. Provision for bad debts ----------- 6,000
15. Printing ad stationary 8,000
16. Insurance 12,000
17. Opening stock 50,000
18. Office exp 12,000
19. Provision for depreciation ------------------ 2,000
----------------------------------- -------------------------
Total 5,58,000 5,58,000
============ ========
Additional information: (i) Depreciate furniture by 10% on original cost. (ii) A provision for doubtful debt s is to be created to the extent of 5% on sundry
debtors. (iii) Salaries for the month of March 1995amounting to TK. 3,000 were unpaid which must be provided for . However, salaries included TK. 2,000
paid in advance. (iv) Insurance amounting to TK. 2,000 is prepaid. (v) Provide for outstanding office expenses TK. 8,000. (vi) Stock uses for private
purposes TK. 6,000. (vii) Closing stock –in-trading TK. 60,000.
Ans : Sheet page 17.36 Illustration 6
Con Interm fin Acc page 231. prob 7
Q. The trial balance of Green Fashion Center contained the following accounts at November 30, the end of the
company’s fiscal year.
SN Particulars Debit TK. Credit TK.

1. Cash 8,700
Inventory 44,700
Supplies 6,200
Equipment 1,33,000
Accumulated Depreciation – equipment ---------- 28,000
Notes Payable ---------- 51,000
Owner’s Capital --------- 48,500
Owner’s Drawing 12,000 90,000
Sales Revenue ------- 7,55,200
Sales Return and Allowances 8,800
Cost of Goods sold 4,97,400
Salaries and Wages Expenses 1,40,000
Advertising Expense 24,400
Utilities Expense 14,000
Maintenance and Repairs Expense 12,100
Freight – out 16,700
Rent Expense 24,000
----------------- -------------------
Totals 9,72,700 9,72,700
========= ==========
Con page 233, no. prob 8
•At the end of its first month of operations, Rupa Consulting Service has the following trial balance
• Rupa Consulting Service
• Trial Balance
S.N • Particulars
For the 31st August, 2021 Debit(Tk.) Credit(Tk)
1. Cash 5,400
2. Accounts receivable 2,800
3. Supplies 1,300
4. Prepaid insurance 2,400
5. Equipment 60,000
6. Note payable 40,000
7. Accounts payable 2,400
8. Owner’s capital 30,000
9. Owner’s drawing 1,000
10. Service revenue 4,900
11. Salaries and wages expenses 3,200
12. Utilities expenses 800
13. Advertising expenses 400
Total 77,300 77,300
•Adjustments:
•(i) Insurance expires @TK. 200 per month..
•(b) TK.1,000 of supplies are on hand at August 31.
•(c) Monthly depreciation on the equipment is TK. 900.
•(d) Interest of TK. 500 on the notes payable has accrued during August.
•
•Requirement:
• You are required to complete the final account at August 31 st, 2021
Q What is cost? Classify costs
Cost: Investments/expenditure made for purchasing
assets/property.
Accountants define cost as a resource sacrificed or forgone to
achieve specific objectives. It is usually measured as the monetary that
must be paid to acquire goods and services.
Classification of cost: Costs can be classified from different point of
views.
1. From the view point of cost tracing and cost allocation:
a.) Direct cost. b.) Indirect cost.
2. From the view point of cost behavior patterns:
a. )Variable cost. b) Fixed cost.
3. From the view point of relevant range:
a) Semi variable cost. b)Semi fixed cost.
4. From the view point of others:
a.) Historical cost. b) Opportunity cost. c) Out of pocket cost.
d) National cost. e) Sunk cost.
• Direct cost:
Direct cost of a cost object is related to the particular cost object & can be traced
to it in an economically feasible way, example- Direct material cost.
• Indirect cost:
Indirect cost of a cost object are related to the particular cost object but cannot
be traced to it in an economically feasible way. Example- lighting of
administrative building.
• Fixed cost:
Cost that remains unchanged in total for a given period deposit with changes in
the related level of total activity or volume.
• Period cost:
All cost in the income statement other than cost of goods sold.
• Product cost:
Sum of the costs assigned to a product for a specific purpose.
• Variable cost: Cost that change in the total proportion to changes in the
related level of total activity or volume.
• Semi Variable Cost:
Costs that have both variable & fixed cost components.
FC: Fixed costs are those that remain the same regardless of sales volume or production.
Rent, insurance, supervisory salary and real estate taxes are usually examples of fixed cost.
• Fixed cost remains the same whether the business produces nothing or is working at full
capacity
• Fixed cost per unit is variable, when production increase it decrease and vice versa.
VC: Variable costs are those which change as sales volume or production changes.
They are expressed usually as a percent of sold units like 8% of sales. Inventory, raw
materials and direct production labor, for example, are usually variable costs.
• Variable Cost = Variable Cost per Unit x Sold Units
• Variable cost per unit is fixed
Con
Total Cost: By adding fixed and variable cost we derive total cost
• Total Cost = Fixed Cost + Variable Cost
Q. Distinguishbetween costs and expenses/Compare and contrast between cost and
expenses/Write some features of them/ how can you distinguish costs from
expenses ?
Costs points Expenses
Investments/expenditure made for 1.Meaning Regular expenses required for
purchasing assets/property. maintaining the assets/property.
Is a balance sheet item. 2.Place in Is an income statement item
financial
statement
It does not directly affect profit margins 3.Impact on It directly affects profit margins of the
of the company. profit company.
margins
Purchase/addition of an asset. Motive Payment necessary to generate revenue
from these purchases/assets.
It does impact capital structure if the 4.Impact on There is no impact on a company’s
asset is non-current. capital capital structure.
structure
If current asset impact liquidity ratio. 5.Impact on There is no impact on liquidity ratio.
liquidity
ratio
Fixed asset, prepaid rent, inventory etc. 6.Examples Raw material, depreciation, labor cost
etc.
• Q. What Is Capital?
Capital can be held through financial assets or raised from debt or equity financing. Businesses
will typically focus on three types of business capital: working capital, equity capital, and debt
capital. In general, business capital is a core part of running a business and financing capital
intensive assets.
Capital assets can include cash, cash equivalents, and marketable securities as well as
manufacturing equipment, production facilities, and storage facilities.
capital structure equals debt obligations plus total shareholders' equity:
Capital Structure=DO+TSE
Where: DO=debt obligations, TSE=total shareholders’ equity
Types of Capital
1.Debt Capital. 2. Equity Capital , 3. Working Capital
Debt Capital: Sources of capital can include friends, family, financial institutions, online lenders,
credit card companies, insurance companies, and federal loan programs.:
Equity Capital: Public equity capital raises occur when a company lists on a public market
exchange and receives equity capital from shareholders. Private equity usually comes from select
investors or owners.
3. Working Capital
Working capital includes a company’s most liquid capital assets available for fulfilling
daily obligations. It is calculated on a regular basis through the following two
assessments:
Current Assets – Current Liabilities
Accounts Receivable + Inventory – Accounts Payable
Working capital measures a company's short-term liquidity—more specifically, its
ability to cover its debts, accounts payable, and other obligations that are due within
one year.
4. Trading Capital
Trading capital refers to the amount of money allotted to buy and sell various
securities. These methods attempt to make the best use of capital by determining the
ideal percentage of funds to invest with each trade.

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Con Ch-01, Basic concept of accounting.

• Q. Definition/ what is Accounting/ importance (why needed)/ objectives/ features or characteristics/

• i. To manage the recourse held by specific entities.

Q. What r the Objectives of Accounting ? Explain the objectives of Acc

Business (We): Motive to earn profit.

Liabilities (what it owes to other)the claims of third parties

Assumptions Principles Third level how

1. Economic entity 1. Historical cost Constraints implementation (related

2nd level bridge between

1st level The why goals &

Third level how

2nd level bridge

The Users of Accounting Information:

The objective of general purpose financial reporting:

Elements of the financial statements (Financial position)

Revenue: Actual sale proceed.

1. To furnish information useful in making investment & credit decisions:

2. To provide information useful in assessing cash flow prospects:

• Losses ..............when future economic benefits are reduced or eliminated

Assets(A) = Liabilities(L) + Owners’ equity(OE)

2. Liabilities (what it owes to other)the claims of third parties

3. Owners’ Equity (the difference between assets and liabilities)/owner’s claims

• Assets ---are a company’s resources-things the company owns. Examples of assets

Owner’s investment/capita & income/revenue/profit increase the OE, and owner’s

• Journal: Chronological listing of a business/firm’s transactions

01 1.1.20 Cash A/C Dr 500000

2 Accounts payable 3000

• Trial Balance and it’s purpose

Service Revenue [Service performed in cash] 5,000

Cash [[Paid salaries secretary receptionist]

Cash [[Paid to Dhaka company]

Date Explanation Ref Debit Credit Balance

• Office rent exp.

Date Explanation Ref Debit Credit Balance

Date Explanation Ref Debit Credit Balance

Date Explanation Re Debit Credi Balance

(c) Mr. Fira Trial Balance June 30, 2008

Account. Accounts Title Ref Debit Credit

Date Explanation Ref Debit Credit Balance

January 1 10,000 10,000

Date Explanation Ref Debit Credit Balance

Date Explanation Ref Debit Credit Balance

• Req: (iii) In the Books of consult Sohan

[Cash invested by owner in his business]

Rent exp. 1,000

Washer and dryer 25,000

N otes payable 15,000

[Purchase Washer and dryer in cash and on

[Receive advertising bill from daily news]

[Withdraw by owner for his personal use]

30 Laundry Service Revenue 6,200

Req: 1 Auhon Trial Balance

4, Credit off supp 2,000 2,000

10, Revenue 25,000 25,000

11, personal withd (1,500) (1500)

15, on account 25,000 25,000

17, cash rcv 23,000 (23,000

Date Explanation Assets = Liabilities + Owner’s equity