1.

Which of the following statement / statements true in relation to management accounting

A - It is used to planning, supervising and controlling the operational activities of an
organization.
B - It provides information to external parties to make their decisions and to control
C - It is a part of the information management system.
D - Government can obtain information to prepare rules and regulation.
1. A only 2. B only 3. A and C only
4. A,B and C only 5. All above (…..)
2. Following have been given some accounting environmental factors and some changes in accounting due
to those factors. Select the correct answer.
Environmental Factor Change
1' Economic environment Using international standards
2' Legal environment Introducing social responsibility accounting
3' Professional environment Introducing inflation accounting
4' Technological environment Introducing computerize accounting systems
5' Economic and political Introducing environmental management
(…..)
environment accounting

3. Some steps of accounting procedure are given below.

A - Posting to ledger
B - Transactions and events
C - Preparing source documents
D - Recording in prime entry books
E - Preparing the trial balance
What the correct sequence in which the above activities take place in the accounting process?
1' BACDE 2' BCADE 3' BCDAE 4' DABEC 5' BCAED (…..)

1
4. Select the answer having transactions which help to change equity.
A - Investing a motor vehicle worth of Rs. 1,500,000 by the owner
B - Paying an electricity bill of the owner's home by the business
C - Paying a telephone bill of the business for Rs. 10,000
D - Purchasing furniture's worth of Rs. 100,000 for the use of the business
E - Receiving Rs. 25000 as the interest for the fixed deposit.
1' ABCE 2' ABCD 3' ABDE 4' BCDE 5' ABC only (…..)
5. A building was air-conditioned by paying Rs. 1,000,000. The effect of above transaction to the
accounting equation is,
1. Decrease in assets Rs. 1,000,000 increase in expense Rs. 1,000,000
2. Decrease in assets Rs. 1,000,000 increase in assets Rs. 1,000,000
3. Decrease in assets Rs. 1,000,000 increase in liabilities Rs. 1,000,000
4. Decrease in assets Rs. 1,000,000 decrease in liabilites Rs. 1,000,000
5. Decrease in assets Rs. 1,000,000 increase in equity Rs. 1,000,000 (…..)
6. Thilina settled a creditor worth of Rs. 100,000 by paying Rs. 90,000 from his personal money. Received
discount is Rs. Rs. 10,000 . The effect of above transactions is shown in the accounting equation as,
Assets (Rs.) = Equity (Rs) + Liabilities (Rs.)
1' -90,000 = +10,000 -100,000
2' +10,000 = +100,000 -90,000
3' -10,000 = +90,000 -100,000
4' - = +90,000 -90,000
5' - = +100,000 -100,000 (…..)

7. The total assets of a business has been increased by Rs. 180,000 during the year ending 313/2018.
Liabilities has decreased by Rs. 40,000. Owner has withdraw Rs.400 per week within the year. He has
invested Rs. 50,000. as additional capital Calculate the profit for the period.
1. Rs. 60,800 2. Rs. 70,800 3. Rs. 110,800 4. Rs. 180,800 5. Rs. 190,800 (…..)

8. What is the correct sequence of the source documents in which the following activates take place in the
accounting process of a textile shop?
A - Selling clothes on cash basis
B - Destroying some clothes by flood
C - Purchasing clothes on credit basis
D - Returning some clothes due to mismatching the fashion.
1. Counterfoil, Journal voucher, Invoice, Credit note
2. Receipt, Journal Voucher, Invoice , Debit note
3. Invoice, Journal Voucher, Receipt, Debit note
4. Receipt, Voucher, Invoice, Debit note
5. Receipt, Invoice, Debit note, Journal voucher. (…..)

2
  Use following information to answer question No. 09 and 10
A business sold a stock on credit basis which the marked price was Rs. 100,000 under a trade
discount of 5%. The customers returned Rs. 20000 worth of goods stating that these goods are
damaged. Later customer paid cash to settle the remaining balance under discount of 5%.

9' The order of source documents to record these transactions is,

1. Invoice, Debit note, Payment voucher 2. Invoice, Credit note, Payment voucher
3. Invoice, Credit note, Receipt 4. Invoice, Credit note, Journal voucher
5. Invoice, Journal voucher, Payment voucher (…..)
10. The cash discount allowed to the customer is,
1. Rs. 1000 2. Rs. 3800 3. Rs. 4000 4. Rs. 4750 5. Rs. 5000 (…..)
11. Which of the following transactions is not recorded in the general journal of an entity?
1. Purchasing office equipment's by a cheque
2. Providing for bad and doubtful debts
3. Investing a motor vehicle as an additional capital by the owner.
4. Purchasing furniture for the use of the business on credit basis.
5. Providing for depreciation for PPE. (…..)
12. Janith's business introduced a petty cash imprest stem. It is reimbursed at the ended date of every month.
There was Rs. 1200 at the petty cashier as at 31/05/2018 and there was only 1500 at the petty cashier as
at 30/06/2018. Total petty expenses within the month of May is Rs. 5600. It was decided to increases
petty cash float by Rs. 500. Calculate the amount should be reimbursed as at 30/06/2018
1. Rs. 5600 2. Rs. 5800 3. Rs. 5900 4. Rs. 6100 5. Rs. 6400 (…..)

13. The balance of the bank statement as at 31/3/2018 was Rs. 600,000. However, it did not agree with the
cash control account balance. The followings were revealed later.
- Value of the cheques issued but not presented is Rs. 180,00
- Value of the cheque deposited but not realized is Rs. 120,000
- Direct deposits which are not recorded in the cash control account are Rs. 50,000 and bank
charges Rs. 10,000
What is the balance of the cash control account before adjusting above,
1. Rs. 480,000 2. Rs. 500,000 3. Rs. 520,000
4. Rs. 530,000 5. Rs. 540,000 (…..)

14. Which of the following errors helps not to tally the trial balance.
A - Totally omitting a purchase invoice
B - Not recording a paid electricity expense to electricity expense A/C
C - Crediting a paid amount to creditor control account
D - Recording an expense to an asset account
1. A and B only 2. A,B and C only 3. A and D only
4. B and C only 5. B,C and D only (…..)

3
15. Draft net profit for the year ending 31/3/2018 of a business is Rs. 600,000. The subsequent investigation
revealed the following errors.
 An allowed discount for Rs. 6000 has been debited to creditors control account and credited to
discount received account.
 A stock which the cost was Rs. 2000 has been missed form the closing stock.
 Paid salaries for Rs. 52000 has been debited to salary account as Rs. 25,000
What is the corrected net profit after rectifying above errors,
1. Rs. 550,000 2. Rs. 555,000 3. Rs. 563,000
4. Rs. 570,000 5. Rs. 574,000 (…..)

16. Following have been given some ledger account,

A - Pre-paid telephone charges
B - Receivable commission
C - provision for warranty certificate.
D - Provision for depreciation
E - Drawings
Which of the following answers show the correct category of above accounts
Assets Liability Equity
1' A,B,D C E
2' A,B C,D E
3' A,D C B,E
4' A,E C,D B
5' A,B,C D E (…..)

17. The balance of the debtors control account as at 31/3/2018 of a business was Rs. 120,000 but the total of
debtor's balance as per debtors ledger was not agree. The subsequent investigation revealed the
following.
 The total of the sales journal of Rs. 750,000 has been recorded in the debtors control account
as Rs. 650,000
 Charged interest for Rs. 20000 from debtors balances has not been recorded in the debtors
ledger.
 An offsetting a debtor balance for Rs. 10,000 with a creditors balance has not been recorded
in the debtors ledger.
The total of the debtors ledger as at 31/3/2018 before rectifying above errors is,
1. Rs. 180,000 2. Rs. 190,000 3. Rs. 200,000
4. Rs. 210,000 5. Rs. 220,000 (…..)

18. Followings relevant for a business for the year ending 31/3/2018 which has been registered for VAT.
Rs. '000'
Sales (including VAT) 920
Purchase (including VAT) 460
Cost of the stock as at 1/4/2017 120
Cost of the stock as at 31/3/2018 80
VAT 15%
The gross profit for the year ending 31/3/2018 is
1. Rs. 360,000 2. Rs. 380,000 3. Rs. 400,000
4. Rs. 420,000 5. Rs. 440,000 (…..)
4
19. Followings were in a business
A - Sold a stock for Rs. 200,000 on credit basis while that was recognized as sales income
B - Providing for doubtful debts for above debtors
C - Recognizing debtors as an asset in the statement of financial position.
The most suitable accounting concept apply for above events respectively is ,
1. Realization, entity, Going concern
2. Realization, Prudence, Accrual
3. money measurement, Prudence, entity
4. Substance over form, realization, Accrual
5. Accrual, Materiality, Going concern (…..)
20. Which accounting concept provides the basis to reduce the closing stock when calculating cost of sales.
1. Prudence 2. Consistency 3. Matching
4. Going concern 5. Money measurement. (…..)
21. Which accounting concept provides the basis to recognize a stock damage as an expense from followings,
1. Historical cost 2. Money measurement 3. Periodic
4. Realization 5. Matching (…..)
22. The accounting concept provides the basis to providing for doubtful debts is,
A - Matching B - Going concern C - Prudence
1. A Only 2. B only 3. A and B only 4. A and C only 5. A,B and C all (…..)
23. Which of the following statement / statements is / are correct,
A - All the assets are considered as current assets of the business which have not a going concern
B - The increment of the value of a land should be accounted as per prudence concept.
C - The selected accounting policies should be used continuaslly as per consistency concept.
1. A only 2. B only 3. C only 4. A and B only 5. A and C only (…..)

24. Followings were extracted form a business which is not kept its accounts records propperly.
Rs.
Opening stock 340,000
Closing stock 360,000
Purchases 1,220,000
Gross profit margin is 40% on sales. The value of the Sales of this period is,
1. Rs. 1,200,000 2. Rs. 1,680,000 3. Rs. 2,000,000
4. Rs. 2,800,000 5. Rs. 3,200,000 (…..)

25. Followings were extracted form final financial statements of a business.

Rs.
Opening stock as at 1/4/2017 8,000
Purchases 52,000
Sales 60,000
Gross profit ratio is 20% on sales. The closing stock of this business destroyed due to fire. The insurance
company has agreed to recover 75% out of the above damage. The loss from above damage is,
1. Rs. 3000 2. Rs. 8000 3. Rs. 9000 4. Rs. 12000 5. Rs. 15000 (…..)

5
26. Following information related for a manufacturing business for the year ending 31/3/2018
Rs.
WIP - as at 1/4/2017 14,000
as at 31/3/2018 20,000
Used direct material 6000
Direct labour 4000
Manufacturing overheads 4000
The manufacturing cost of above goods is,
1. Rs. 6000 2. Rs. 8000 3. Rs. 10000 4. Rs. 12000 5. Rs. 14000 (…..)

27. Following information is relevant for "Hiru" sports club for the year ending 31/3/2018
As at 31/3/2018 as at 31/3/2017
Receivable members fee 120 100
Members fee received in advance 40 50
Life time members fee ? 800
There were 100 members at the sports club as at 1/4/2017 and 10 members are life time members out of
above 100. 5 new members were recruited on 1/4/2017 while the annual members subscription per
member is Rs. 10,000. Life time members were recruited on 1//4/2011 and it has been decided to
recognize 10% from above members subscription as annual income.
Calculate the members subscription income including life time members fee for the year ending
31/05/2018 and the members fee received by cash within the period.
Total members fee income Members fee received by
(Rs. 000) cash by (Rs. 000)
1' 950 900
2' 1000 900
3' 1150 920
4' 1150 950
5' 1100 980 (…..)

28. Following information was extracted from "Wayamba Tharu" sports club for the year ending 31/3/2018
Rs.
Building of the sports club 127,500
Furniture and sports equipment's 51,950
Members fee received in advance 6,500
Accrued members fee 10,500
Payable expenses 5,000
Stock at the juice bar 20,550
Cash at hand 4,600
The accumulated fund as at 1/4/2018 of the sports club is,
1. Rs. 162,000 2. Rs. 195,000 3. Rs. 195,600 4. Rs. 200,000 5. Rs. 203,600 (…..)
29. Not a term of section No. 24 of the partnership ordinance is,
1. Profit and loss should be shared equally.
2. Partners are entitled to an annual interest of 5% for the capital
3. all partners must engage in the administration of the business, there is no entitlement to a salary in
respect of such assistance.
4. Each partner is entitled to an interest of 5% per annum for the loan provided by them.
5. If a partner has spent his personal funds for business activities he is entitled to be reimbursed. (…..)

6
30. A partnership business was commenced by Akila and Kokila on 1/4/2017 by investing Rs. 600,000 and
Rs. 300,000 respectively. Profit and loss sharing ratio is 3:2 . Each partner is entitled to an annual interest
of 10% for the capital balances and a monthly salary for Rs. 8000. Net profit earned during the year
ending 31/3/2018 is Rs. 362,000. The current accounts balances as at 31/3/2018 are,
Akila (Rs.) Kokila (Rs.)
1' 198,000 164,000
2' 204,000 158,000
3' 217,200 144,800
4' 220,000 142,000
5' 804,000 458,000 (…..)

 Write short answers from Questions No. 31- 50

31. Indicate whether the following statements relating to the financial accounting in a firm are "True" or
"False"
True / False
A- It provides historical information '''''''''''''''''''''''''''''''''''''''
B- It provides information only to the internal parties '''''''''''''''''''''''''''''''''''''''
C- It provides information prescribed in the accounting standards '''''''''''''''''''''''''''''''''''''''
D- It is not a legal requirement for companies '''''''''''''''''''''''''''''''''''''''

32. State whether the equity of a business would "increase" , "decrease" or "not change" in each of the
following situations.
Increase / Decrease / Not change
A Owner withdrawing for his personal usage '''''''''''''''''''''''''''''''''''''''
B Owner settling an expense of the business by his
personal money '''''''''''''''''''''''''''''''''''''''
C Purchasing office equipment's for administrative
purposes '''''''''''''''''''''''''''''''''''''''
Owner setting a creditor of the business by his personal
D
money '''''''''''''''''''''''''''''''''''''''

33. A stock which the cost was Rs. 50000 was sold for Rs. 80000 on credit basis while a debtors balance of
Rs. 10000 was sett off with a creditors balance.
Write the net effect from above transactions to assets liabilities and the equity.

A Assets '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

B Liabilities '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

C Equity '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

7
34. Write the source document applicable to following transactions
Transaction Source document
A Owner investing furnitures worth of Rs. 50000 as capital '''''''''''''''''''''''''''''''''''''''
B Purchasing a stock for Rs. 180,000 for the purpose of resale on credit
basis '''''''''''''''''''''''''''''''''''''''
C Receiving Rs. 5000 for written off bad debts in the previous year '''''''''''''''''''''''''''''''''''''''
D Returning some goods worth of Rs. 15000 to creditors '''''''''''''''''''''''''''''''''''''''

35. The balance of the cash control account as at 31/3/2018 of Lahiru's business was Rs. 180,000 and it was
not agree with the balance as per bank statement. Followings were revealed later.
 A standing order payment for Rs. 15,000 and a deposited but dishonored cheques for Rs. 30,000
has not been recorded in the cash control account
 There were deposited but not realized cheques worth of Rs. 40,000 and unpresented cheques worth
of Rs. 75,000as at 31/3/2018
(a) Calculate the balance as per cash control account should be shown in the statement of financial
position as at 31/3/2018
'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
(b) Calculate the balance as per bank statement as at 31/3/2018
'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

36. State two possible items which are not adjusted in the cash control account when the balance as per cash
control account is not agree with the balance as per bank statement.
1.………………………………………………………………………………….............…..
2.………………………………………………………………………………….............…..

37. Calculate the value of the net assets of Shanaka Traders as at 1/4/2017 by using following information.
assests Rs.
Net assests as at 31/3/2018 850,000
Profit for the year 250,000
Cash drawings within the period 100,000
Cost of the goods withdrawn by the owner within the period.
25,000
(This is not accounted)
Net assets as at 1/4/2017 ' '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

38. A sales invoice for Rs. 42000 has been recorded in the sales journal as Rs. 24000 and it has been posted
to general ledger as same.
(a) Write the journal entry to rectify above error. (Narration is not required)
……………………………………………………………………………………….............…..
……………………………………………………………………………………….............…..
(b) If this is not rectified state the effect to the profit whether it increase, decrease or not change
Rs. ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

8
39. State the accounting concept which has been violated by following situations.
Situation Accounting concept
A- An advance received for a service should be provided
for next year, considering as an income ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
B- Not categorizing assets as current and non- current in
the statement of financial position ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
C- An asset which is acquired on leasing is not recognized
as an asset ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
D- Not recoding owners cash drawings
''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

40. The following information relates to Harsha's Business for the year ending 31/3/2018 which is registered
for value added tax. All the sales and purchases are on cash basis.
Dr (Rs. '000') Cr (Rs.'000")
Balance as at 1/4/2017 - 300
Cash (added on sales) - 5000
Cash (paid on purchases) 1300 -
Cash (Paid to inland revenue dept.) 3400 -
Calculate the VAT liability as at 31/3/2018 '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
41. Categorize following cost items as manufacturing and non- manufacturing
Manufacturing / Non manifesting
A Storaging cost of finished goods ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
B Carriage inward cost of raw material ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
C Damaging of raw material stock ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

D Paid salaries for office staff ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

42. State two major elements of manufacturing cost

1. ……………………………………………………………………………………….............…..

2. ……………………………………………………………………………………….............…..
43. Followings relevant to a drama played by a commerce society of a school
(Rs. '000')
Income received by cash from selling tickets 170
Receivable income from tickets 30
Fee for the Troupe 50
Payable rent for the hall 30
Tickets printing expenses 20
Calculate the surplus or deficit from above show
''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

9
44. State two differences between an income statement and receipt and payment account (cash A/C) of a not
for profit motive organization.
1. ……………………………………………………………………………………….............…..

2. ……………………………………………………………………………………….............…..

45. State a similarity and a dissimilarity between Profit and loss statements of a profit motive organization
and an income statement of a not for profit motive organization.
Profit and loss statement of a Income statement of a not for
profit motive organization profit motive organization
1) Similarity
''''''''''''''''''''''''''''''''''''''''''''''''''''''''' '''''''''''''''''''''''''''''''''''''''''''''''''''''''''
2) Dissimilarity ''''''''''''''''''''''''''''''''''''''''''''''''''''''''' '''''''''''''''''''''''''''''''''''''''''''''''''''''''''

46. State two main characteristics should be there in a partnership business

1. ……………………………………………………………………………………….............…..

2. ……………………………………………………………………………………….............…..

47. State two instances that the profit and loss sharing ratio of a partner can be changed
1. ...………………………………………………………………………………….............…..

2. ……………………………………………………………………………………….............…..

48. State two differences between the partner's current account and partners capital accounts
Capital accounts Current accounts
1. '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''' ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

2. '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''' ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

49. Sumudu and Kumudu are the partners sharing profit or loss at 3:2 Pubudu was admitted for 1ൗ3 from the
profit. compute the new profit and loss sharing ratio
'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

50. Write the term in the section no 42 of the partnership ordinance

……………………………………………………………………………………….............…..
………...........……………………………………………………………………….............…..



10
01. Anura, Binara and Chameera were carrying a partnership business. The terms of the agreement are
given below
 Profits and losses are shared between Anura, Binara and Chameera in the ratio of 2:2:1
 Each partner is entitled to an annual salary of Rs. 240,000
 Partners are entitled to an interest of 10% per annum for the invested capital
 All transactions relating to partners should be done through their current accounts.
The trial balance as at 31/3/2018 is given below.
Description Dr. (Rs.'000') Cr (Rs. '000')
PPE (at cost 1/4/2017) 18,000
Trade receivables 420
Stock as at (1/4/2017) 150
Purchases 6,800
Distribution expenses 720
Administrative expenses 1900
Drawings Anura 60
Binara 40
Chameera 30
Cash 1050
Petty cash 10
Capital Accounts 1/4/2017
Anura 5000
Binara 4800
Chameera 2500
Sales 12000
Current Accounts 1/4/2017
Anura 200
Binara 100
Chameera 50
PPE Accumulated deprecation (1/4/2017) 3000
Provision for doubtful debts (1/4/2017) 30
Loan provided by Anura (1/10/2017) 40
Additional capital invested by Binara (1/10/2017) 100
Trade payables 1100
29,230 29,230
1
 Additional information ,
i. The cost of inventory as at 31/3/2018 was Rs. 300,000. On this date, the net realizable value
of the inventory was estimated as Rs. 350,000
ii. The invoice price of the goods sent on sale or return basis was Rs. 120,000. That stock has
not been sold yet while the allowed date has not expired. The invoice price has been marked
by adding a 20% profit margin on cost.
iii. All PPE except land are depreciated on cost at 10% per annum on straight line method. Cost
of the land is Rs. 8000000
iv. A building belongs to Chameera is used for the partnership business as the warehouse from
1/10/2017. There is no any entry has been recorded regarding this.
v. During the year Anura and Binara have obtained goods worth of Rs. 30,000 and Rs. 20,000
respectively as drawings. No any entry has been recorded for that.
vi. Every partner has been settled 6 month salary by cash and paid salary has been recorded in
administrative expenses.
vii. Rs. 20,000 should be written off as bad debts and 10% should be provided for doubtful debts
on the remaining balance of debtors.
viii. The interest for the loans provided by the partners have not been accounted yet.

Required,
1) Income statement (Including appropriations to partners) for the year ending 31/3/2018
2) Partners capital and current accounts for the year ending 31/3/2018
3) The statement of financial position as at 31/3/2018 (20 marks)

02. Tikiri engage in curd retail and whole sale distributing business. Following accounts balances were
there as at 1/06/2018
1/6/2018 Trade receivables (Rs. 000)
Amal Traders 120
Bimal groceries 100
chamal Traders 90
1/6/2018 Trade payables (Rs. 000)
Nimal stores 80
Mali Traders 70
pathum Groceries 65
(Rs.'000')
Cash balance as at 1/6/2017 480
Transactions in the month of June 2018 are given below.
i. Cash purchases 400,000
ii. Cash sales 900,000
iii. Paid expenses 140,000
iv. Class fee for his son 5000
v. Invested additional capital 200,000

2
 vi. Information relates to credit sales are given below
Transactions
Customer Credit sales Return in word Cash received Discounts
(Rs.'000') (Rs. '000') (Rs.'000') (Rs.'000')
Amal traders 200 20 180 20
Bimal Groceries 150 - 108 12
Chamal Traders 140 40 135 15
Demel Stores 100 - 54 6
vii. Information relates to credit purchases

Transactions
Credit purchase Return out Paid cash Discounts
Supplier
(Rs.'000') ward (Rs.'000') (Rs.'000')
(Rs. '000')
Nimal stores 150 10 190 10
Mali Traders 130 20 152 8
Patum Groceries 120 - 95 5

Business has registered for value added Tax (VAT). All above sales, Purchases, Return inward
and return outward values have been given excluding VAT . The applicable VAT rate is 15%
Required,
1) Following prime entry books
i. Cash receipts journal
ii. Cash payments journal
iii. Sales and sales return journals
iv. Purchase and purchase return journals
2) Following accounts in general ledger
i. Cash control account
ii. Sales Account
iii. Purchase account
iv. Sales return account (Return inward)
v. Purchase return Account (Return outward)
vi. VAT control Account
vii. Debtors control account
viii. Creditors control account (20 marks)

3
03. Wishwa Kumar commenced a computer and mobile phone repairing business on 1/4/2018. Some
transactions of the business which took place during April 2018 have been recorded using the
accounting equation as follows.
(Rs.'000')
Bank loan
Repair Trade Trade
Date PPE Cash and other Equity
materials receivables payables
loans
4/1 +500 +100 +600
4/2 +200 -60 +140
4/5 +50 +20 +70
4/8 +80 +80
4/10 -20 -20
4/12 -120 -120
4/15 +150 +150
4/18 -30 +27 -3
4/20 +100 +100
4/22 -15 -15
4/25 -5 -5
4/28 -10 -8 -2
4/29 -72 -80 +8
4/30 -5 -5
4/30 595 60 15 220 40 172 678
Required,
1) Describe transactions from 1/4 -30/4 with values. (The owner has not withdrew or invested
additional capital)
2) Calculate the profit or loss for the month ending 30/4//2018
3) Statement of financial position as at 30/4/2018 by categorizing assets and liabilities as current
and non- current (15 marks)
04. Siriyalatha makes doormats by using waste pieces of clothes. Some information for the year ending
31/3/2018 given below.
Stocks 31/3/2018 Rs. 1/4/2017 Rs.
Raw material 120,000 45,000
WIP 126,000 195,000
Finished goods ? 100,000

(Rs.)
Raw material purchases 873,000
Carriage inward cost 10,000
Loading and unloading charge 5000
Return outward of raw material 48,000
Direct salary 400,000
EPF expense for the employees engage in manufacturing
60,000
process
Rent and rates at factory 36,000
Sewing machine depreciation 12,000
Machinery repair 4,000
Production supervisor's salary 120,000
Factory electricity 14,000
Lubricants 2000
4
 Additional information,
1. 30,000 door mats were produced withing the year. There were 2500 finished door mats as at
1/4/2017 and 31000 doormats including opening finished doormats have been sold within the
period.
2. There was no any entry has been recorded for payable EPF Rs. 18000 for supervisors salary.
3. Door mats are sold by adding a 25% profit margin at cost.

Required,
1) Manufacturing account for the year ending 31/3/2018 (cost sheet)
2) Cost of a doormat
3) Cost of finished goods as at 31/3/2018
4) Calculate the gross profit by selling 1000 doormats. (15 marks)

05. (a) A summary of the bank statement which was sent by the bank as at 31/5/2018 for Bandara's
business is given below.
Date Description Debit (Rs.) Credit (Rs.)
2018.05.01 Balance 50,000
Cash deposits 180,000
Cheque deposits 425,000
Cheque paid 520,000
Interest for FD 40,000
Loan installment and 32,000
interest
Cheque book charges 2,000
Standing order 16,000
(Insurance)
570,000 695,000
2018.05.31 Balance 125,000
Additional information,
1. Details of the unpresented cheques and unrealized deposits as at 1/5/2018 are given below.
Balance as at Amount in the bank statement
1/5/2018 in the month of May 2018
Unpresented cheques 90,000 75,000
Unrealized deposits 120,000 65,000

2. In addition to above, cheques issued to suppliers amounting Rs. 130,000 from the issued cheques
by the business in the month of May 2018 have not been presented and cheques deposited in the
bank amounting Rs. 215,000 have not been realized.
3. Following have been recorded only in the bank statement
- Interest for FD Rs. 40,000
- Loan installment and interest 32,000
- Insurance fee paid by a standing order 16,000
Required,
1) Balance of the cash control account as at 1/5/2018
2) Value of the unpresented cheques and unrealized cheques as at 31/5/2018
3) The balance of the adjusted cash control account as at 31/5/2018
4) Bank reconciliation statement as at 31/5/2018 (10 marks)
5
 (b) The trial balance of Kalpa Traders as at 31/3/2018 did not tally. The difference was transferred
to a suspense A/C. There was a profit for Rs. 640,000 in the draft financial statement prepared on
that date. The subsequent investigation revealed the following errors and omissions.
1. A cash sale amounting Rs. 30,000 has been recorded in the sales journal as a credit sale.
2. Purchased furniture worth of Rs. 120,000 on 1/1/2018 has been debited to purchase A/C. PPE
are depreciated 20% on straight line method.
3. The total of the discount column in the cash receipt journal amounting Rs. 7500has been
credited to discount received account as Rs. 5700
4. The balance of the creditors control account for Rs. 225,000 has been recorded in the trial
balance as Rs. 252,000.
5. There is no any entry for written off bad debts amounting Rs. 8000.

Required,
1) Journal entries to rectify above errors
2) Calculate corrected net profit for the year ending 31/3/2018.
3) Suspense account (05 marks)
(15 all marks)

06. Narilatha who conducts a retail business had not maintained proper books of accounts. Following
information has not been provided for the year ending 31/3/2018
Assets and liabilities as at 31/3/2018 and as at 1/4/20217 are as follows.
31/3/2018 (Rs.) 1/4/2017 (Rs.)
PPE (carrying amount) 1,500,000 900,000
Stock 130,000 125,000
Trade receivables 81,000 36,000
Pre- paid electricity expense 3000 2000
Trade payables 54,000 72,000
Accrued rent 4000 -
Cash ? 68,000
Cash receipts and payments recorded by Narilatha as follows.
(Rs.)
Electricity expense 12,000
Received from debtors 319,000
Paid for creditors 288,000
Paid rent 44,000
Cash purchase of furniture 640,000
Obtained bank loan 1,200,000
Paid interest 15,000
Cash sales 260,000
Salaries 24,000
Drawings 6000
All the purchases are only on credit basis and sales on cash and credit basis
Required,
1) Cash balance as at 31/3/2018
2) Income statement for the year ending 31/3/2018
3) Statement of financial position as at 31/3/2018 (15 marks)

6
07. A commerce society was established in a school of North Western Province by 50 old commerce
student on 1/4/2017. Followings are relates for that society.
i). Entrance fee per member is Rs. 2000 and it is recognized as an income in the received year.
Monthly members subscription is Rs. 500. 20 new members were admitted on 1/10/2017
ii). 10 members have not settled their members subscription for 3 months while 15 members have
settled their members subscription for two months in the next year.
iii). First annual general meeting was conducted on 31/3/2018and following information is relavent
for that.
(Rs.)
Printing expenses for the sournior 20,000
Payable printing expense for the sournior 5000
Refreshment expenses 70,000
Stage decoration expenses 8,000
Received cash from well wishers 50,000
Purchased stationaries 4000

iv). A laptop worth of Rs. 120,000 was purchased on 1/10/2018 and the useful life time of above was
estimated as 4 years.
v). A walk was organized to commence a Library found. Received amount from above walk is Rs.
800,000. The library was built up and completed on 31/3/2018 by using above fund
vi). Closing stock of stationary is Rs. 1200
vii). Rs. 100,000 was invested in a fixed deposit.

Required,
1) Cash account for the year ending 31/3/2018
2) Income statement for the year ending 31/3/2018
3) The accumulated fund of the commerce society as at 31/3/2018 (15 marks)



7
Third Term Test - 2018 - Answer Paper
Accounting - Grade 12
Part I
^1& 3 ^11& 1 ^21& 5
^2& 4 ^12& 2 ^22& 4
^3& 3 ^13& 2 ^23& 5
^4& 1 ^14& 4 ^24& 3
^5& 2 ^15& 3 ^25& 1
^6& 5 ^16& 1 ^26& 2
^7& 5 ^17& 4 ^27& 3
^8& 2 ^18& 1 ^28& 5
^9& 3 ^19& 2 ^29& 2
^10& 2 ^20& 3 ^30& 2 (Marks 120)

Part II

-1-
3) Erros by the bank (2 marks for each correct item)

-2-
3) Usually there are fixed balance Balance are undergoing changes

120

Total

-3-
Part - II

-4-
 01

-5-
-6-
-7-
-8-
-9-
B| C| D 24 93

(One mark for two items maximum 03)

(22 + 18 = 40)
-10-
loading and unloading charge

03

Lubricants

-11-
 125000

have been prepared

(12 marks)

-12-
 120000

5700

Can be prepared as a statement

-13-
-14-
-15-
 Refreshment

Refreshment

-16-