1' The basic objective of accounting is,

1. To provide information of an entity to interested parties for make decisions.

2. To convert transactions and events of a business to financial information.
3. To provide information of a business to managers for planning and control.
4. To analyse the information presented by final financial statements.
5. To record transactions and events of a business in accounting records. (…..)
2 The government decided to decrease the value added tax (VAT) imposed on goods and servies above
incident related to,
1' Social and cultural environment 2' Economic and political environment
3' Legal environment 4' Technical and professional environment
5' Tehnological environment (…..)
3 The correct sequence of following activites take place the accounting process is,
A - Posting transactions to ledger accounts
B - Occuring transactions
C - Preparing source documents
D - Recording in the prime entry books
E - Preparing trial Balace
1' A,B,C,D,E 2' B,C,D,A,E 3' C,A,B,D,E 4' D,A,B,C,E 5' E,A,B,C,D (…..)
4' The owner settled a bank loan instalement of Rs. 15000 induding interest of Rs. 3000 by his personal
money. The effect of above transaction to equity and liabilities is,
Equity Liabilities
1' Decrease by Rs. 15,000 Decrease by Rs. 15,000
2' Decrease by Rs. 12, 000 Decrease by Rs. 12,000
3' Increaset by Rs. 12,000 Decrease by Rs. 12,000
4' Increase by Rs. 15,000 Decrease by Rs. 15,000
5' Decrease by Rs. 12,000 Increase by Rs. 12,000 (…..)
1
5' Which of the following transactions is effect to owner's equity,
1' Receiving cash from debtors 2' Paying cash to creditors
3' Returning sold goods 4' Purchasing furniture on cash basis
5' Obtaining a bank loan (…..)
6' Which of the following is not a correct effect to accounting equation (Assets = equity + Liabilities)
1' Increasing assets, decreasing equity 2' Increasing assets, Increasing equity
3' Decreasing assets, decreasing liabilities 4' Increasing assets, Decreasing assets
5' Increasing liabilities, Decresing liabilities (…..)
7' Which of the following equation uses to calculate profit of a business.
1' Opening net assests - closing net assets + additional capital - Drawings
2' Opening net assests - clossing net assets + Drawings - additional capital
3' Clossing net assests + opening net assets - Drawings - additional capital
4' Clossing net assests - Opening net assets - Drawings + additional capital
5' Clossing net assests - Opening net assets + Drawings - additional capital (…..)
8' A firm has purchased goods with a list price of Rs. 600 000 on credit subject to a 5% trade discount
and thereafter, sold for Rs. 650 000 on cash. The amount due to creditors has not been settled. The net
effect of these transactions is shown in the accounting equation as,
Assets Equity Liabilies
1' Increased by 50 000 Increased by Rs. 50000 -
2' Increased by Rs. 80 000 Increased by Rs. 80 000 -
3' Increased by Rs. 80 000 Increased by Rs. 650 000 Decreased by 57 0000
4' Increased by Rs. 650000 Increased by Rs. 80000 Increased by 570 000
5' Increased by Rs. 650000 Increased by 50000 Increased by 600000 (…..)
 Use the following information to answer question No. 9,10 and 11
Ashan commenced a business by investing. Rs. 500 000 on 1/1/2020. Following transactions occurred
in the month of January 2020.
Date Transaction
2020.01.10 - Purchased goods of Rs. 300000 from Hirushas' business on credit
2020.01.12 - Returned some goods of Rs. 20000 to Hirusha's business.
2020.01.15 - Sold goods for Rs. 300000 which the cost was of Rs. 100 000 to praneth on cash.
2020.01.24 - Settlded the dues to Hirusha subjects to a discount of Rs. 10000.
9' The Source documents used to record transactions with Hirusha's business in the books of Ashan's
business in the order of their occurrence.
1' Invoice, Credit Note, Payment voucher
2' Invoice, Debit Note, Payment Voucher
3' Invoice, Journal Voucher, Payment voucher
4' Invoice, Debit Note, Receipt, Payment Voucher
5' Invoice, Credit Note, Receipt, Journal voucher (…..)

2
10' The prime entry books used to record the transactions occurred from 12/1/2020 - 24/1/2020 in Ashans
business are,
1' Return outward Journal, cash receipt Journal and cash payment Journal
2' Return outward Journal, Sales Journal, Sales Journal, Cash Payment Journal
3' General Journal, Cash receipt Journal, Cash Payment Journal
4' Purchase Journal, Sales Journal, Cash Payment Journal
5' Purchase Journal, Cash receipt Journal and cash payment Journal (…..)

11' The profit of Ashan's business for the month ending January 2020 and the cash balanes as at 31/1/2020
respectively is

Profit for the month (000) Cash balance (000)

1. 200 190
2. 200 530
3. 210 190
4. 210 530
5 210 680 (…..)

12' The following information of pettly cash transactions has been extracted from vishmias business.
- Petty cash balance as at 1/1/2020 Rs. 1450
- Reimbursed the petty cash imprest on 1/1/2020 Rs. 8550
- Petty cash balance as at 31/1/2020 is 1900
- The petty cash imprest is reimburst at the beginning in every month
- It was decided to increase the imprest by Rs. 5000 from February 2020
The Petty expense in the month of January 2020 and the reimbursed amount on 1st of February are,
Petty expense in the month of reimbursed amount on 1/2
January
1' 8,100 13,100
2' 8,100 15,000
3' 8,150 13,100
4' 8,150 15,000
5 10,000 15,000 (…..)

 Use following information to answer No 13 and 14

The accounting year of Nadun company Ltd is ended at 31/3/2019. The balance of the bank statement
as at 1/3/2019 Was tallied with the balance of the cash account but the balance of the bank statement of
120000 as at 31/3/2019 was not agree with the balance of the cash account followings were revealed
later.
- The value of the unpresented cheques Rs. 50 000
- The value of the unrealized cheques Rs. 30 000
- Bank Charges Rs. 30 00
- Deposited but dishounceired cheques Rs. 10 000
13' The balance of the cash control account as at 31/3/2019
1' Rs. 100,000 2' Rs. 113,000 3' Rs. 127,000 4' Rs. 130,000 5' Rs. 140,000 (…..)

14' The cash balance should be shown in the statement of financial position as at 31/3/2019
1' Rs. 97 000 2' Rs. 100 000 3' Rs. 114 000 4' Rs. 117 000 5' Rs. 127000 (…..)

3
15' The trial balance prepared as at 31/3/2019 of Pethum PLC was not tallied. Follwings were revealed
later.
- Purchased office equipment of Rs. 100000 has been recorded in the cash payment Journal and
credited to the cash account only.
- The total of the sales Journal over stated by Rs. 40000
- A discount allowed of Rs. 6000 has been credited to discount received account
- A credit purchase of goods of Rs. 26 000 has been correctly recorded in the Journal and it has
been posted to relevant creditors account as Rs. 62 000
The balance of the suspense account before rectifying above errors is,
1' Rs. 58500 Dr 2' Rs. 58500 Cr 3' Rs. 72 000 Dr
4' Rs. 112 000 cr 5' Rs. 112 000 Dr (…..)

16' The trial balance of Sayuru's business prepared as at 31/3/2019 was not tallied. The Draft profit has
been calculated and following errors were revealed later.
- A credit purchase of Rs. 120 000 has been credited only to the creditors control account
- A received discount of Rs. 20000 has been debited to discount allowed account.
- The opening stock has been over stated by Rs. 10000 when extracting to the trial balance.
The effect to the net profit due to above errors is,
1' Over stated by Rs. 40 000 2' Over stated by Rs. 50 000
2' Over stated by Rs. 70 000 4' Understated by Rs. 80 000
5' understated by Rs. 100 000 (…..)

17' Which of the following errors is not effect to the net profit.
1' Allowed discount colomn in the cash receipt journal has been under cast by Rs. 2000
2' A cash sale of Rs. 25 000 has been recorded the cast receipt Journal and sales account as Rs. 52000
3' Purchase account in the ledger has been over cast by Rs. 5000
4' The balance of the drawings account of Rs. 75000 has not been taken to trial balance.
5' Paid Rs. 600 for travelling expense has been debited to stationary account as Rs. 6000 (…..)

18' The balance of the debtors control account as at 31/1/2020 of tharidu's business was Rs. 400 000. This
was noagree with the total of the debtors list. Followings were revealed later.
- Credit sale of Rs. 80000 has not been recorded in the debtor's ledger.
- The total of the return inward journal has been under cast by Rs. 10 000
- A written off bad debts of Rs. 10 000 has not been recorded in the general ledger.
The total of the debtors list as at 31/1/2020 was
1' Rs. 300,000 2' Rs. 320,000 3' Rs. 340,000 4' Rs. 460,000 5' Rs. 500,000
(…..)
19' The following information relates to a business for the year ending 31/12/2019
Rs.
Credit purchases 780,000
Discount received 85,000
Return outward 35,000
Decrease the creditors balance in the period by 80000

The amount paid to creditors within the year ending 31/12/2019 is

1' Rs. 580,000 2' Rs. 660,000 3' Rs. 695,000
4' Rs. 715,000 5' Rs. 740000 (…..)

4
20' Which of the following statement is correct relevant for accounting process.
1' Petty cash payment journal uses as a ledger account in the general ledger
2' The summarized information relevant to credit sales of trade goods are recoded in the debtors
control account.
3' All the source document of a business are prepared by an accountant
4' Purchase journal is used to recod all the assets purcbased on credit basis
5' Balancing a trial balance ensures the correctness of the accounting process. (…..)
21 The cost of some petty equipemts, are recoreded in the profit and loss account in the purchased year
although that equipemt can be used more than one year. which of the following accounting concept
provide the guidance for above.
1' Prudence 2' Matching 3' Periodic 4' Materiality 5' Accrual (…..)
22' Which of the following accounting concept uses to record drawings.
1' Entity 2' Matching 3' Accrual 4' Money measurement 5' Going concern. (…..)

23' Which of the following accounting concept provides the basic to catogorize the trade goods as current
assest and motor vehicles of the business as non current assets.
1' entity 2' Matching 3' Accrual 4' Realization 5' Going concern (…..)

24' Which of the following accounting concept best decribes the cost of sales as an expense and closing
stock as an asset.
1' Prudence 2' Going Concern 3' Matching 4' Historical cost 5' Realization (…..)

25' Which of the following accounting concept provides the basis to provide for the depreciation of PPE
1' Historical cost 2' Going concern 3' Realization 4' Accrual 5' Substance over form (…..)
26' Which of the following accounting concepts provides the basis to recognize credtitors and debtors in
the final financial statements.
1' Entity 2' Accrual 3' Periodic 4' Matching 5' Reglization (…..)
27' Following have been given some trasactions and balance of some accounts of Isuru's business for the
year ending 31/12/2019
Rs.
- Electriciy expense - Paid in the period Rs. 60,000
Payables as at 1/1/19 Rs. 15,000
Payables as at 31/12/19 Rs. 25,000

- Investment income - Received in the period Rs. 30,000

Receivables as at 1/1/19 Rs. 3000
Per - received as at 31/12/19 Rs. 7000
Calculate the electricity expense and investment income recognize in the income statement prepared
for the year ending 2019
Electricity Expense Rs, Investment income Rs.
1' 50,000 40,000
2' 70,000 40,000
3' 70,000 20,000
4' 100,000 26,000
5 100,000 34,000 (…..)

5
28' Following information relates to sadeep's business.
^re'z000&
Inventory as at 1/1/2019 360
Purchases 840
Carriage inward cost 40
Sales 1400
Whole inventory was damage due to a fire on 31/12/2019. Gross profit ratio is 25% on sales.
Calculate the cost of goods damaged by fire.
1' Rs 150,000 2' Rs. 170,000 3' Rs. 190,000
4' Rs. 200,000 5' Rs. 240,000 (…..)

29' The colossing stock of Anura's business was under stated when preparing income statement. The
correct effect of above error to following items.
1' Decrease cost of sales - Decrease profit
2' Increase cost of sales - Profit for the period will not change
3' Cost of sales is not change - Increase the profit
4' Increase the cost of sales - Decrease the profit
5 Decrease the cost of sales - Profit not change (…..)

30' The following information relates to Madushan's business.

Rs.
Inventory as at 1/4/2018 300,000
Trade payables as at 1/4/2018 200,000
Inventory as at 31/3/2019 400,000
Trade payable as at 31/3/19 250,000
Rs. 1350000 was paid to creditors within the period ending 31/3/2019 while cash purchase was Rs.
1100,000. Business sells goods by adding a profit margin of 25% on cost.
The value of sales in the year ending 2019/03/31
1' Rs. 1,250,000 2' Rs. 1, 625,000 3' Rs. 3,000,000
4' Rs. 2,250,000 5' Rs. 2, 750,000 (…..)

 Write short answers for question No 31 - 50 on dotted lines.

31' Indicate whether the following statements relating to the role of management accounting in a firm are
true or False.
Statement T /F
A- It provides information for the managers of a firms to take decisions
'''''''''''''''''''''''''''''''''''''''

B- It provided both financial and non financial information

'''''''''''''''''''''''''''''''''''''''

C- It provides only the past information

'''''''''''''''''''''''''''''''''''''''

D- It uses accounting standard concpts when providing infromation

'''''''''''''''''''''''''''''''''''''''

6
32' Indicate whether the following staements are True or false.
Statement T/F
A task of the financial accounting is to analyze the
A
profitability '''''''''''''''''''''''''''''''''''''''
The task of management accounting is to use past and
B
future information. '''''''''''''''''''''''''''''''''''''''
Only the transactions can be measured by monetory
C
value are recorded in accounts '''''''''''''''''''''''''''''''''''''''
General purpose final financial statements are prepared
D
in accordance to accounting standards '''''''''''''''''''''''''''''''''''''''

33' State the source document use to record each of following transactions.
Prime entry book Source document
A Cash receipt Journal ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
B Return out ward Journal ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
C Petty cash Journal ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
D General Journal ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

34' Identify the accounting concept that is most applicable to each of following situations.
Situation Accounting concept
only the monetory transactions are recorded in the
A
final financial Statements. '''''''''''''''''''''''''''''''''''''''
Adjusting the payable expenses and pre - paid expense
B
in the final financial statemets '''''''''''''''''''''''''''''''''''''''
C PPE are recognized at cost '''''''''''''''''''''''''''''''''''''''
A loan granted to a director even if it is a small amount
D
it should be disclosed '''''''''''''''''''''''''''''''''''''''

35' A Business sold some goods for Rs. 432000 (including VAT.) This company has registered for VAT.
applicable percentage is 8%
Write The Journal entry to record above transaction.
'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

7
36' Catogorize following Accounts Elements of final financial statement.
Account Classification
A Accumulated depriciaton of furniture A/C ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
B Drawings A / C ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
C Return inward A / C ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
D Provision for Compensation A / C ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

37' The total assets of syamali's business as at 1/1/2019 and 31/12/2019 are Rs. 300 000 and Rs. 600 000
respectively. The owner says that closing liabilities are higher than the opening liabilities by Rs. 75
000. The owner has invested Rs. 150 000 as additional capital. she has takan Rs. 30 0000 for her
personal usage. The liabilities as at 1/1/19 was Rs. 150 000
Calucalte the profit or loss for the year ending 31/12/2019
'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
38' The petty cash at the petty cashier as at 1/3/2020 was Rs. 1250. The cash reimbursed to petty cashier as
at that date was Rs. 6750.
1' Calcuate petty cash imprest of this business
……………………………………………......………………………………………….............…..

2' Calcuate the petty cash expense in the month of February 2020
……………………………………………......………………………………………….............…..

39' State four items which are adjusted in cash control account when, reconciling the balance of the cash
control account with the balance of the bank statems.
1. ……………………………………………......………………………………………….............…..

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

3. ……………………………………………......………………………………………….............…..

4. ………………………………….......…………………………………………………….............…..

40' The balance of the debtors control account of Chamath's business as at 31/3/2019 was Rs. 100 000.
10% should be allowed for impairement losses on trade receivables. Complete the following table by
using above information.
Situations Journal entry (With he value)
Allowances for impairement losses at the
A-
first time ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
If The balance of the allowance for
B- impaimunt loss account as at 1/4/2018
was Rs. 8000 ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

8
41' The following information related to buildings of Lasith's business as at 1/4/2018
Rs.
Cost 800,000
Accumulated depreciation 160,000
Annual depriciation 10%
Complete following table by using above information.
Accomulated
Annual Useful life time Carrying amount
depreciation as at
depreciation (Rs) (Years) as at 31/3/19
31/3/19

''''''''''''''''''''''''''''''''''''''' ''''''''''''''''''''''''''''''''''''''' ''''''''''''''''''''''''''''''''''''''' '''''''''''''''''''''''''''''''''''''''

42' There can have errors and omission even thought the balance of the debtors control account agree with
the total of the debtors list. State two types of such errors.
1. ……………………………………………......………………………………………….............…..

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

43' State two situations that the reconciliation statements are prepared by a business.
1. ……………………………………………......………………………………………….............…..

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

44 Rs. 10000 has been paid for the insurance expense of sanira's business in the year of 2019. The pre paid
insurance charges as at 1/1/2019 was Rs. 2000 further payable insurance expense as at 31/12/2019 was
Rs. 3000
1. Calculate the insurance expense relevant for the year of 2019
……………………………………………......………………………………………….............…..
2. State two accounting concepts relevant for above calculations.
a) ……………………….......…………………………………………………….............…..
b) ……………………….......…………………………………………………….............…..

45' State whether the following statements relating to a sole proprietorship are true or false.
T /F
Drawings should be deducted when calculating profit
A-
orloss according to profit equation ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
The total of the invested capital and retained earnings
B-
are equal to the equity. ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
Drawings are recognized as an expense in the income
C-
statement ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
Matching concept is used when preparing income
D-
statement. ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

9
46' State how the following transactions of a business Will effect to the equity. (Increase / Decrease / Not
change)
I / D / NC
Setting a bank loan of Rs. 50 000 including an interest of
A- ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
Rs. 5000
Settling the advertising expense of Rs. 20000 of a
B- ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
business by owners personal money.
C- Receiving a discount of Rs. 2000 when setting a creditor ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
D- Donating a stock worth of Rs. 10 000 ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
47. State two exeption to the historical cost concept
1. ……………………………………………......………………………………………….............…..

2. ………………………………….......…………………………………………………….............…..
48. Following information was extracted from Amila's business as at 31/3/2019.
Rs.
Inventory (Physicall) as at 31/3/19 150,000
Debtors 130,000
Sales 860,000
A stock which the cost was Rs. 80000 has been sent for Rs. 120 000 on the goods sent on sale or return
basis.
on 31/3/19 It was revealed that 50 % out of above stock has been sold and the time given for other is
not expired. When sending above stock it has been recorded as a sale.
1. Stock as at 31/3/2019 …………………......…………………………………………...............…..
2. Value of the debtors as at 31/3/19 ………………………………….......……………….............…..
3. Value of the sales ….....................…………......………………………………………….............…..

49' A Stock worth of Rs. 50000 was damaged. An insurance company has agreed to settle 60% from that
damage. Write the journal entries to record above. (With values)
......……………………………………………......………………………………………….............…..
......……………………………………………......………………………………………….............…..
......……………………………………………......………………………………………….............…..

50. Following information relavant for Didula's business for the year ending 31/3/2019
Rs 000
Inventory (as at 1/4/2018) 500
Purchases 2000
Carriage inward cost 500
inventory (as at 31/3/19) 2000
Gross profit ratio is 50% on cost Calculate followings.
^1& Cost of sales - '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
^2& value of the sales - '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''


10
01' The trial balance as at 31/3/2019 of Sumudumali's business, which trades finished garments is given
below. This business has registered for VAT
Description Rs. z000
Sales 5400
Purchases 1080
Land and Building 3800
Machineries 1200
MV (purchased on 1/10/2018) 500
Accumulated depreciation (as at 1/4/18)
Building 160
Machineries 120
Trade receivables 460
Salaries 200
15% Fixed deposits 600
advertising expense 50
Interest for bank loan 20
VAT on expenses 120
Stationery expense 40
Stock as at 1/4/2018 1884
Cash balance 46
10% Bank loan 200
Received interest for FD 70
VAT on income 100
Allowances for impairment losses on trade receivables (1/4/18) 30
Payable EPF 20
Capital 3900
10,000 10,000
For the year ending 31/3/2019 adjustments for the following have to be made.
1' As at 31/3/2019 there were 1000 units at the store which the cost per unit is Rs. 600. it has been
estimated that above units can be sold for Rs. 650 per unit by spending Rs. 100 per unit.
2' All the non current assets exuding land (Worth of Rs. 3600 000) are depreciated 10% per annum.
3' purchases and sales are given including VAT
1
 4' Rs. 10000 should be written off as impairment losses on trade receivables and Rs. 50000 should
be allowed for impairment losses.
5' The contribution for the EPF by the employee and employer are 10% and 15% respectively. The
contribution for ETF by the employer is 3%. There is no any entry has been recorded except the
contribution for EPF by the employer.
6' Payable advertising expense is Rs. 50000
7' Bank loan has been obtained on 1/1/2019 and the annual interest on bank loan has been paid on
above date.
8' There is no any entry for the garments worth of Rs. 10000 taken by the employer for his personal
usage.
9' The value of the Remained stationeries as at 31/3/19 is Rs. 10000
10' Garments worth of Rs. 5000 has been donated to a children orphanage (creches)
Required
1. Income statement for the year ending 31/3/2019
2. Statement of financial position as a 31/3/2019 (40 marks)
02' All the assets and liabilities of Manel traders as at 1/1/2020 are given below.
Description Rs. 000
Property plant and equipments 360
Accumulated depreciation (120) 240
Inventory 100
Trade receivables 25
Cash 50
415
Bank loan 125
Trade payment 40
165
The following transactions took place in the business during the month of January 2020
1' Goods costing Rs. 40000 was sold for Rs. 60000 on credit.
2' Purchased office equipment of Rs. 50000 on cash.
3' Goods costing 8000 which was sold for Rs. 12000 on credit was returned.
4' Paid Rs. 10000 for the bank loan installment and the included interest is Rs. 1000
5' Set off a receivable amount of Rs. 25000 from a debtor with a payable amount of Rs. 24 000 for a
creditor.
6' Paid Rs. 5000 for the insurance instatement of Manel's child.
7' Paid employee salaries Rs. 15000
8' Rs. 5000 received for rent income.
9' Office expense of the business Was Rs. 15000 and Rs. 10000 out of above amount settled by
Manel's Personel money and remaining was settled by the business.
Required
1&' Show the impact of above transactions from 1 to 10 (With values) using the accounting
equation and state whether each value increases (+) or decreases (-) in front of the value (In
answering this question, use a format similar to the one given below.)
Assets Liabilities Equity
Transaction Trade Bank Retained
PPE Inventory cash Payables Capital
receivables loan earnings
1
2
……
2
 2& Income statement for the year ending 31/1/2020
4& Statement of financial position as at 31/1/2020 (40 marks)

03' Following information relates to mayara's business as at 31/3/2019

(Rs.)
1. Cash balance 90,000
2. Draft net profit 165,000
On reviewing the accounts, the followings were discovered.
1' The total of the sales Journal has been under casted by Rs. 10000
2' The cheque value Rs. 60000 which was issued for cash purchases has been recorded in the cash
payment Journal as Rs. 6000
3' The stock of finished goods as at 31/3/19 has been overcast by Rs. 12 000
4. A received discount of Rs. 8000 has been recorded only in the creditors control A/C. There is no
any entry recorded for above transaction.
5' Following were there in the bank statement as at 31/3/2019 but those were not been recorded in
the books of the business.
i. Paid insurance installment on a standing Order is Rs. 15000
ii. Direct deposits by debtors Rs. 25000
iii. Bank charges Rs. 5000
6' The value of the unrealized deposits is Rs. 90000 and the value of the unpresented cheques is Rs.
50 000
Required
1. Journal entries to rectify errors (1 - 5) including the narration.
2. Suspense account
3. A statement to rectify the draft net profit
4. Adjusted cash account
5. Bank reconciliation statement (40 marks)

04' a. Following information relates to Pradeep's business. The business has been registered for VAT.
(applicable VAT percentage is 8%) (All the amount are shown exuding VAT)
Rs.
1' Amount invested by Pradeep
Required 250,000
1&2' Cash
Cashreceipt
Purchases
Journal (Including VAT column) 100,000
3' Credit purchase from palitha
2& Cash payment Journal ^ Including VAT column 150,000
4' Paid expenses by cash 50,000
3& Purchase Journal
5' Cash sales 200,000
4&6' Sales Journal
Credit sales to Ramani 400,000
5&7' Return
Incomeinward Journal
Received 30,000
6&8' Return
Paid tooutward
palitha Journal (30received
90,000 discount marks)is 10%
b. 9' Received from Ramini 150,000 discount allowed is 10000
10' Credit Ssales to Rangana 160,000
11' Pradeep withdrew Rs. 5000 for his personal usage
o
12' Retuned inward by Rangana 60,000
m
13' Obtained a bank loan 500,000
e goods for from Nalika
14' Purchased 300,000
15' Returned some goods by Nalika 100,000
16' Received
e from Nalika 120,000 10% discount
17' Settledxthe bank loan instatement of 50,000
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 tracted Balances as at 1/4/2018 and 31/3/2019 of Malika's business are given below.
Item as 1/4/2018 as 31/3/2019
Rs. Rs.
1' interest for the loan payable 2000 Pre - paid expense 4000
2' Investment income Income received in receivable
advance 5000 2000

3' Stationery Balance 1500 Balance 3000

4' Rent Pre - paid 1000 Payable 5000
5' Received commission Receivable 4000 Pre - received 2000
Following transaction took place in the year ending 31/3/19
1' Paid interest of for the loan Rs. 8000
2' Received Investment income Rs. 6000
3' Purchased stationary Rs. 7500
4' Paid rent Rs. 9000
5' Received Commission Rs. 10000
Required
1&' The amounts should be recorded in the income statement for the year ending 31/3/19
2& The Current assets and current liabilities should be shown in the statement of financial
position as at 31/3/19 (10
marks)
(40 marks)
05' a. Following adjustments should be done in Sithumi's business as at 31/3/19
1' The cost of the closing stock as at 31/3/2019 was Rs. 85000 and on this date the net realizable
value of above has been estimated as Rs. 80000
2' The value of the trade receivables as at 31/3/19 is Rs. 125000. It was informed that a debtor for
Rs. 5000 has died. Rs. 20000 should be allowed for impairment losses on remaining trade
receivables.
3' There is no any entry for the for 15000 taken by Sithum for his personal usage.
4' Monthly insurance fee is Rs. 6000 and the balance of the insurance expense account as at
31/3/19 is Rs. 60000
5' Received Rs. 85000 as a sales advance. An Stock worth of Rs. 50000 form above stock has
been sent to the customer but there is no any entry for above.
6' i. Purchased a motor vehicle of Rs. 600000 on 1/10/18
ii. Motor vehicles are depreciated 10 % per annum. There is no any entry posted for above two
transactions.
7' A stapler machine has been purchased for Rs. 200 There is no any entry for above.
Required
Write the Journal entries for above adjustments and write the relevant accounting concept in front
of the journal entry.
Use a format Similar to the one given below.

Journal entry Concept

1& '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
- '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
(20 marks)
b. The Final Financial statements of Pasindu's business for the year ending 31/3/2019 are given
below.

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 Pasindu's Business (A)
Income Statements
For the year ending 31/3/2019 (B)
Sales 5000
Cost of sales (C) (3000)
Gross profit 2000

Operating expenses (500)

Transferred the profit for the year to the 1500
capital account (D)

Pasindu's Business
Statement of Financial postan as at 31/3/2019 (Rs. 000) E

Acc. Carrying
Cost (G)
depreciation amount
Non current assets (F)
Mv 5000 500 4500
Current assets
Pre paid rent (H) 200
Inventory (Cost) (I) 700
Capital 5000 (20 marks)
- Drawings
Required (J) (100)
Current
State liabilities concept that are applicable in presenting the information indicated with letters.
the accounting
Payable electricity (K) 50 (40 marks)
06' Following balances could be seen in parami's business as at 1/4/2018
(Rs)
Debtors Nimesh 150,000
Ramesh 450,000
Kamesh 300,000

Creditors Dehemi 90,000

Ruwini 85,000
Hashini 60,000
The summary of the transactions occurred in the year are given below.
(Rs.)
The total of the sales Journal 650,000
Credit purchases Dehemi 100,000
Ruwini 150,000
Hashini 90,000
The total of the return in word 60,000
Journal
Rs.

The total of the discount column in cash 7,000

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 receipt journal is
The total of the debtors column in cash 390,000
receipt journal is

In the cash payment Journal

Discount
Payment to creditors
received
Dehmi 95,000 10,000
Ruwini 100,000 5,000
Hashini 50,000 8,000

Information extracted from General Journal (Rs.)

Written off impairment losses 8,000
Dishonored Cheques that received form debtors 6,000
Cancelled discount allowed 5,000

Return out ward Dehemi 15,000

Hashini 12,000
The balance of the debtors control A/C as at 31/3/2019 was not agree with the total of the debtors list.
Following errors were revealed later
1. The total of the sales Journal has been over cast by Rs. 3000
2. A debtor with a Rs. 1000 credit balance has been missed from the list.
3. The total of the discount allowed column has been recorded in the debtors control Account as
Rs. 5000
4. Written off bad debts has been recorded in the general Journal as Rs. 18 000
5. A credit Note of Rs. 5000 has been missed from the books
6. The dishonored cheque (received from a debtor) and the cancelled discount has not been
recorded in the sub ledger.
Required
1. The debtors control account and the creditors control account before rectifying above errors.
2. Creditors sub ledger and creditors list
3. Adjusted debtors control A / C
4. A statement to reconcile the balance of the debtors control account with the total of the
debtors list.
(40 marks)

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