Question Number 01:
Recall the accounting equation and answer the following:
1. Total Assets of a business are Rs. 100,000/- and Total Liabilities are Rs. 40,000/-. What
will be the amount of Owners’ Equity? (1 mark)
2. Total Assets of a business are Rs. 500,000/- and Owners’ Equity is Rs. 300,000/-. What
will be the amount of Total Liabilities? (1 mark)
3. Total Liabilities of a business are Rs. 400,000/- and Owners’ Equity is Rs. 500,000/-.
What will be the amount of Total Assets? (1 mark)
Question Number 02:
‘Waqas Rentals started a business on January 01 2011; the selected transactions related
to the organization were as follows:
1- Waqas invested total capital of Rs. 1,200,000/- in the business on January 01, 2011 out
of which he deposited Rs. 600,000/- in the bank account of the business
2- Purchased two cars worth Rs. 100,000/- on cash on February 01, 2011
3- Bought office furniture costing Rs.70,000/- on February 01, 2011 and made payment
through cheque
4- Collected Rs. 4,000/- on accounts receivable on June 05, 2011
5- Paid accounts payable of Rs 3,200/- on July 11, 2011 by issuing cheque
6- Borrowed Rs. 10,000/- from Mr. Ali on August 01, 2011 and signed a note payable for
the amount
Required:
1- Record the Journal entries for the above transactions. (6 marks)
2- Prepare the cash account and bank account for the above given transactions (3+3)
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