CSS Accountancy & Auditing Simple Final Accounts

Adam’s Learning Centre, Lahore

CSS Accounting & Auditing (2001 to 2021)
Topic Vise Past Papers (Unsolved)

Simple Final Accounts

Q. 1 CSS – 2001, PAPER # 1, Q. # 1, Compulsory Question (40 Marks)
The following trial balance is extracted from the books of a merchant on December 31, 2000.
Debit Credit
Particulars
Rs. Rs.
Furniture fittings 6,400
Motor Vehicles 62,500
Buildings 75,000
Capital account 125,000
Bad debts 1,250
Provision for bad debts 2,000
Sundry debtors and creditors 38,000 25,000
Stock on January 1, 2000 34,600
Purchases and sales 54,750 154,500
Bank overdraft 28,500
Sales and purchases returns 2,000 1,250
Advertising 4,500
Mark up (on overdraft) 1,180
Commission 3,750
Cash 6,500
Taxes and insurance 12,500
General expenses 7,820
Salaries 33,000
340,000 340,000
The following adjustments are to be made:
(a) Stock in hand on December 31, 2000 was Rs. 32,000
(b) Depreciate building at the rate of 5%, Furniture & fittings @ 10% and motor vehicles @ 20%
(c) Rs. 850 is due for mark-up on bank overdraft.
(d) Salaries Rs.3,000 and taxes Rs. 1,200 are outstanding.
(e) Insurance amounting to Rs. 1000 is prepaid.
(f) One third commission received in respect of the work to be done next year.
(g)Write off a further sum of Rs. 1000 as bad debt and provision for bad debts to be made equal to
10% on Sundry debtors.
Required:
Prepare a Trading and Profit & Loss Account for the year ended December 31, 2000 and balance sheet as on that
date.

Q. 2 CSS – 2002, PAPER # 1, Q. # 5, Compulsory Question (40 Marks)

The unadjusted trial balance at the end of the first year of operation is shown below:
Debit Credit
Particulars (Rs. 000) (Rs.
000)
Cash 200
Accounts Receivable 1,500
Prepaid Advertising 400

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CSS Accountancy & Auditing Simple Final Accounts
Supplies on hand 3,000
Equipment 9,600
Accounts payable 800
Nasser’s Capital 10,000
Naseer’s drawing 3,600
Service fees earned 14,000
Rent expense and other 5,500
expense 1,000
Wage expense
24,800 24,800
Further information as at December 31, 2001 is as under:
1. Prepaid advertising covers the months of December 2001 to March 2002.
2. Supplies on hand at December 31 were Rs.1, 300,000.
3. Annual depreciation on the equipment is Rs.1, 200,000.
4. Service fee earned but not yet billed at December 31, 2001 was Rs. 400,000.
5. Rent of Rs. 500,000 for December had not been paid.
6. Accrued wages at December 31 were Rs. 150,000.
Required:
Prepare final account financial statements including balance sheet.

Q. 3 CSS – 2003, PAPER # 1, Q. # 5, Compulsory Question (40 Marks)

The following balances were extracted from the ledger of Mr. Irshad as on June 30, 2003.
Particulars Rs.
Property – at cost 90,000
Equipment – at cost 57,500
Stock 27,400
Purchases 259,600
Sales 405,000
Discount allowed 3,370
Provision for depreciation 12,500 - Property
- Equipment 32,500
Discount received 4,420
Salaries and wages 52,360
Bad debts 1,720
Loan interest 1,560
Carriage outward 5,310
Other operating expenses 38,800
Trade Debtors 46,200
Trade Creditors 33,600
Provision for doubtful debts 280
Cash in hand 151
Bank Overdraft 14,500
Drawings 28,930
Loan @ 15% 12,000
Capital July 1, 2002 98,101
The following additional information as at June 30, 2003 is available:
1. Stock at the close of business was valued at Rs.25,900.
2. Depreciation for the year ended on June 30, 2003 has yet to be provided as follows:
(a) Property: 1 % using straight line method.
(b) Equipment: 15% using straight line method.
3. Salaries and wages are accrued Rs.1, 400

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CSS Accountancy & Auditing Simple Final Accounts
4. Other operating expenses include certain expenses prepaid by Rs.l,500. Other expenses include this
heading are accrued by Rs.2,000.
5. The provision for doubtful debts is to be adjusted so that it is 0.5% of trade debtors as at June 30,
2003.
6. "Purchases" include goods valued at Rs.l ,040 which were withdrawn by Mr. Irshad for his personal
use.
Required:
1. Prepare Trading and Profit and Loss Account for the year ended on June 30, 2003 and Balance Sheet as on
the above date.
2. Present Adjusting and Closing entries.

Q. 4 (CSS – 2004, PAPER # 1, Q. # 5, Compulsory Question (40 Marks)

The following balance appeared in the books of a merchant on 31st December, 2003.
Rs. Rs.
Building 70,000 Carriage on Purchases 1,291
Motor Trucks 12,000 Carriage on Sales 800
Furniture 1,640 Reserve for Bad Debts 1,320
Sundry Debtors 15,600 Establishment 2,135
Sundry Creditors 18,852 Taxes & Insurance 783
Stock 15,040 Interest (Cr.) 340
Cash in hand 988 Bad Debts 613
Cash at Bank 14,534 Audit Fee 400
Bills Receivable 5,844 General charges 3,950
Bills Payable 6,930 Travelling Expenses 325
Purchases 85,522 Discount (Dr.) 620
Sales 1,21,850 Investments 8,922
Capital 92,000 Sales Returns 285
Required:
Prepare Trading and Profit and Loss Account for the year ended 31st December 2003 and Balance Sheet as on that
date. In doing so take the following matters into consideration.
(i) Stock on 31st December, 2003 amounted to Rs. 15,500.
(ii) Depreciate Motor Trucks at 20 per cent and Furniture at 10 per cent.
(iii) Increase Bad Debts Reserve by Rs. 1,000.
(iv) Salaries Rs. 500 and Taxes Rs. 150 are outstanding.
(v) Un-expired Insurance Rs. 50.
(vi) Interest accrued on Investments Rs. 210.
(vii) Rent due for a portion of the Building let Rs. 150.
(viii) A bill receivable for Rs. 500 was discounted in December 2003 but was not due till January next.

Q. 5 CSS – 2005, PAPER # 1, Q. # 5, Compulsory Question (40 Marks)

Following is the Trial Balance of Rizwan & Brothers as on December 31, 2004.
Particulars Debit Rs. Credit Rs.
Drawings 42,600
Machinery 69,000
Opening Stock 87,600
Purchases 6,00,000
Capital Account 2,55,000
Sales 7,14,000
Sales Return 12,600
Purchases Return 11,400

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CSS Accountancy & Auditing Simple Final Accounts
Salaries 26,400
Stationary 19,200
Apprentice Fee 4,800
Received
Bank overdraft 8,400
Bad debts 10,200
Accounts Receivable 1,92,000
Accounts Payable 60,000
Provision for bad debts 6,000
Total 10,59,600 10,59,600
Adjustments:
1. Stock on December 31, 2004 was Rs.1,02,000.
2. Increase bad debts provision on account receivable to 5% and provide discount reserve on account
receivable at 2%.
3. Depreciate machinery by 10%.
4. Goods taken away by the owner for his personal use Rs. 2,400.
5. Machinery purchased Rs.6,000 was wrongly included in purchases.
6. Unused stationary for Rs.1,800 wrongly included in closing stock.
7. Apprentice fee to be adjusted for four years.
Note: No depreciation should be charged on the machinery purchased during the year and on carriage paid
on such machinery.
Required:
Trading and Profit and Loss Account for the year ended December 31, 2004 and Balance Sheet after
taking into account the above adjustments.

Q. 6 (CSS – 2006, Paper # 1, Q. # 3) (25 Marks)

The following is the trail balance of Metropolitan Company (Private) Limited as on June 30, 2005:
Particulars Debit Credit
Plant & Machinery 352,500
Wages 90,000
Vehicles 71,000
Furniture and Fixtures 30,000
Carriage inward 5,000
Carriage outward 6,250
Freehold Land 75,000
Purchasing expenses 28,750
Insurance 6,250
Rates and taxes 25,000
Office supplies 5,750
Electricity 48,500
Salaries 40,000
Opening stock 56,750
Purchases 325,000
Sales return 8,250
Discount 3,000
Bad debts 4,375
Mark-up & bank charges 5,625
Cash in hand 7,125
Short term deposit 50,000
Repairs & maintenance 14,500

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CSS Accountancy & Auditing Simple Final Accounts
Postage, telegram & telephone 5,000
Sundry debtors 116,100
Capital 500,000
Investments 37,500
Sales 795,000
Purchases return 10,750
Sundry Creditors 61,600
Bank overdraft 29,375
Reserve for doubtful debt 7,500
Discount & Commission 4,250
Interest received 3,125
Dividend income 5,625
1,417,225 1,417,225
The following adjustments are required to be made into the accounts:
(1) Closing stock Rs.73,000.
(2) Depreciation to be provided at the following rates:
(a) Freehold land .......................................... 5%
(b) Vehicles…………………………………20%
(c) Other assets……………………………..10%
(Plant & Machinery and furniture & fixtures)
(3) Reserve for doubtful debt is required to be kept at 5% of the debtors balance.
(4) Prepaid insurance Rs.1,500 and rates & taxes – Rs.375.
(5) Outstanding wages Rs.3,000 and salary Rs.8,375
Required:
Prepare trading, profit and loss account and balance sheet as at 30-06-2005.

Q. 7 (CSS – 2011, PAPER # 1, Compulsory Question (20 Marks)

A trial balance and supplementary information needed for adjustments at September 30, 2004 are shown on the
following page for Cinepax Stage & Theater. The company follows a policy of adjusting and closing its accounts
at the each of the month.
CINEPAX STAGE & THEATER
Trial Balance
September 30, 2004

Cash .......................................... Rs. 17,500

Prepaid film rental ...................... 65,000
Land ........................................... 75,000
Building ...................................... 210,000
Accumulated Depreciation: building Rs. 6,125
Projection equipment………….. 90,000
Accumulated Depreciation:
Projection equipment…… 7,500
Notes Payable………………….... 200,000
Accounts payable……………….. 8,500
Unearned admissions revenue… 5,200
Ahmad Khan, capital…………… 200,925
Ahmad Khan, drawing…………. 10,500
Admissions revenue……………. 68,750
Salaries expenses……………….. 21,250

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CSS Accountancy & Auditing Simple Final Accounts
Light and power expense.. ……... 7,750
Rs. 497,000 Rs. 497,000
(a) Rental expense for the month is Rs. 42,275, all of which had been paid in advance.
(b) The building is being depreciated over a period of 20 years (240 months).
(c) The projection equipment is being depreciated over a period of 5 years (60 months).
(d) No entry has yet been made to record interest payable accrued during September. At September 30, accrued
interest totals Rs. 1,800.
(e) When tickets are sold to future performances, Cinepax credits its Unearned Admissions Revenue account. No
entry has yet been made recording that Rs. 3,650 of these advance ticket sales were for performances given
during September.
(f) Cinepax receives a percentage of the revenue earned by Variety Corp., the concessionaire operating the snack
bar. For snack bar sales in September, Variety Corp., owes Cinepax Rs. 6,200, payable on October 10. No
entry has yet been made to record this revenue. (Credit Concessions Revenue)
(g) Salaries earned by employees, but unpaid as of September 30, amount to Rs. 3,750. No entry has yet been
made to record this liability and expense.
INSTRUCTIONS: Prepare;
(a) An income statement, a statement of changes in owner’s equity, and a balance sheet.
(b) The adjusting and closing entries required at month’s end.

Q. 8 (CSS – 2012, PAPER # 1, Compulsory Question (20 Marks)

At the beginning of 2000, Mr. Saadiq decided to open an advertising agency called The Best Agency. During
2000 the following transactions occurred.
Saadiq invested Rs.300,000 cash in the business. In addition, the local bank lent the firm Rs.100,000. The firm
used the cash to purchase land for Rs.50,000, a building for Rs.100,000, and office furniture and fixtures for
Rs.80,000. In addition, the firm purchased another Rs.50,000 of furniture and fixtures on account, all of which
will be paid for next year.
The following summary of revenue and expense transactions and other transactions took place during 2000.
1. Commissions earned during the year amounted to Rs.125,000. By the end of the year, Rs.110,000 of these
commissions had been collected in cash. The firm expects to collect the remaining cash early next year.
2. Various operating expenses of Rs.105,000 were incurred and paid in cash during the year.
3. Saadiq withdrew Rs.5,000 from office to pay the utility bills of his residence.
REQUIRED:
Using the above information, prepare the following financial statements:
1. Income Statement for the year ended December 31, 2000.
2. Statement of owner’s equity at December 31, 2000.
3. Balance Sheet as at December 31, 2000.

Q. 9 (CSS – 2013, Paper # 1, Section – A, Q.# 2) (20 Marks)

The following information is available:
Trial Balance as at
December 31, 2011
Particulars Debit Rs. Credit Rs.
Capital 6400000
Drawings 1813800
Goodwill 3618200
Land & Buildings 2400000
Plant & Machinery 1600000
Loose Tools 120000
Bills Receivable 145800
Bills Payable 1352000
Creditors 3068840
Purchase Returns 106000

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CSS Accountancy & Auditing Simple Final Accounts
Sales 8720000
Stock, 1st Jan 2011 1677800
Purchases 2050800
Wages 858000
Carriage Outward 22160
Carriage inward 55000
Coal & gases 234160
Salaries 1414560
Rent, Rates & Taxes 113000
Discount 60520
Cash at Bank 1016840
Cash in Hand 18600
Sundry Debtors 1800000
Repairs & maintenance 74600
Printing & Stationery 20600
Bad Debts 48520
Advertisements 140840
Sales Returns 85000
Furniture 48000
General Expenses 210040
19646840 19646840
The following adjustments are to be made:
1. Closing Stock as on December 31, 2011 was Rs 1400000.
2. Depreciation is to be provided on the following assets:
–Plant & Machinery 10%
–Loss Tools 10%
–Furniture 10%
–Land & Buildings 2.5%
3. Provide for the following payables:
–Wages – Rs. 60000
–Advertisements – Rs. 20000
–Salaries – Rs. 120000
–Repairs & Maintenance – Rs. 15000
4. Provide 5% on the debtors against bad debts and 2% against discounts.
Required: Prepare Trading, Profit & Loss Account and Balance Sheet as at December 31, 2011 from the above
Data.

Q. 10 (CSS – 2015, Paper # 1, Section – B, Q. # 8) (20 Marks)

Lane Insurance Agency began business on April 1, 2012. Assume that the accounts are closed and financial
statements prepared each month. The company occupies rented office space but owns office equipment estimated
to have a useful life of 10 years from date of acquisition, April 1. The trial balance for Lane Insurance Company
at June 30, 2012, is shown below:
$ $
Cash 1,275
Accounts receivable 605
Office equipment 6,000
Accumulated depreciation: office equipment 100
Accounts payable 1,260
Richard Lane, Capital, May 31, 2012 6,500
Richard Lane, drawing 1,000
Commissions earned 3,710
Advertising expenses 500
Rent expenses 370

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CSS Accountancy & Auditing Simple Final Accounts
Telephone expenses 120
Salaries expenses 1,700
11,570 11,570
(a) Prepare the adjusting journal entry to record depreciation of the office equipment for the month of June.
(b) Prepare an adjusted trial balance at June 30, 2012.
(c) Prepare an income statement for the month ended June 30, 2012 and a balance sheet in report form at June 30,
2012. In the owner’s equity section of the balance sheet, show the changes in the owner’s capital account
during the period.

Q. 11 (CSS – 2015, Paper # 1, Section – A, Q. # 2) (20 Marks)

Malcolm’s trial balance as at 30th June, 2012 was as follows: -
£ £
Capital account as at 1st July, 2011 29,000
Creditors 21,000
Debtors 22,650
Cost of goods sold 144,000
Drawings 32,100
Sales 243,000
Stock 36,000
Vehicles 21,000
Wages expenses 14,250
Sundry expenses 3,000
Rent expenses 13,500
Insurance expenses 2,000
Cash at bank 4,500
293,000 293,000
The following information is relevant:
1. Wages payable but unpaid at 30th June, 2012 amounted to £ 750.
2. Rent accrued and unpaid to 30th June, 2012 amounted to £ 3,000.
3. The figure of insurance expenses includes a prepayment at 30th June, 2012 of £ 1,000.
4. The vehicle to be depreciated at the rate of 25 percent per annum. As the vehicle was purchased at the
beginning of the year, no depreciation has yet been charged. A full year’s depreciation is now to be charged.
5. Bad debts of £ 2,650 are to be written off and provision is to be made for doubtful debts to 10 percent of the
remaining debtors.
Required: Prepare Malcom’s profit and loss account for the year ended on 30th June, 2012 and his balance sheet
as at that date.

Q. 12 (CSS – 2016, Paper # 1, Section – A, Q. # 3 (b) (10 Marks)

The trial balance before and after adjustment for Mushtaq company at the end of its fiscal year is presented
below.
Mushataq Company
Trial Balance
December 31, 2015
Account Titles Before adjustment After adjustment
Debit Credit Debit Credit
Cash 10,400 10,400
Accounts receivable 8,800 10,000
Supplies 2,300 700
Prepaid insurance 4,000 2,500
Equipment 14,000 14,000
Accumulated Depreciation-
equipment 3,600 4,900
Accounts payable 5,800 5,800
Salaries and wages payable 1,100

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CSS Accountancy & Auditing Simple Final Accounts
Unearned rent revenue 1,500 800
Share capital ordinary 12,000 12,000
Retained earnings 3,600 3,600
Service revenue 34,000 35,200
Rent revenue 11,000 11,700
Salaries and wages expense 17,000 18,100
Supplies expense 1,600
Rent expense 15,000 15,000
Insurance expense 1,500
Depreciation expense 1,300
71,500 71,500 75,100 75,100

Instructions: Prepare the adjusting journal entries that were made during the period.

Q. 13 (CSS – 2017, Paper # 1, Section – A, Q. # 2) (20 Marks)

Bella Beauty Salon's unadjusted trial balance for the current year follows:

Additional information:
a. An insurance policy examination showed $1,240 of expired insurance.
b. An inventory count showed $210 of unused shop supplies still available.
c. Depreciation expense on shop equipment, $350.
d. Depreciation expense on the building, $2,220.
e. A beautician is behind on space rental payments, and this $200 of accrued revenues
was unrecorded at the time the trial balance was prepared.
f. $800 of the Unearned Rent account balance was earned by year-end.
g. The one employee, a receptionist, works a five-day workweek at $50 per day. The
employee was paid last week but has worked four days this week for which she has
not been paid.
h. Three months' property taxes, total $450, have accrued. This additional amount of property
taxes expense has not been recorded.
i. One month's interest on the note payable, $600, has accrued but is unrecorded.

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CSS Accountancy & Auditing Simple Final Accounts

Required: Based on the above information, prepare the adjusting journal entries for Bella's Beauty
Salon and adjusted trial balance for Bella's Beauty Salon.

Q. 14 (CSS – 2018, Paper # 1, Section – A, Q. # 2) (20 Marks)

Following is the summary of closing balances (unadjusted trial balance) of Muddasar Co. for the year
ended on December 31, 2016.
Accounts Amount (Rs.) Accounts Amount (Rs.)
Cash 80000 Accounts Receivable 35200
Store Supplies 5000 Prepaid Rent 11240
Furniture 7600 Insurance 8500
Accumulated Dep. on Capital 165000
Furniture 1520 Drawings 31000
Plant & Machinery 45000 Salaries Expenses 9500
Accumulated Dep. on Commercial Expenses 5460
Plant & Machinery 9000 Sales Returns 3000
Accounts Payable 8500 Miscellaneous Expenses 5000
Sales Revenue 212980 Purchases 95000
Advertising Expenses 7000 Purchase Returns 6500
Wages 10 000 Opening Inventory 45000
Additional Information (adjustments) needs settlements at the end of period to show the true picture of the
financial performance of Co.
i. Closing Merchandise Inventory valued at Rs. 35 000
ii. Store supplies on hand at the end of year is Rs. 1500
iii. It is noticed that Prepaid Rent amounting Rs. 9240 was expired during the period
iv. Prepaid Insurance is valued Rs. 1500 at the end of the period
v. Outstanding salaries are Rs. 3000
vi. Depreciation is charged @ 10 % for Plant & Machinery and @ 7% for Furniture
Required: Based upon above information, prepare Adjusting Entries, Adjusted Trail Balance
and Income Statement & Balance Sheet.

Q. 15 (CSS – 2021, Paper # 1, Section – A, Q. # 2) (20 Marks)

st
You are required to prepare Income Statement for the period ending 31 December, 2019:

Merchandise Opening Inventory. 18,000 Office Rent Expenses 2000

Sales Discount 4,000 Traveling Expenses 1,300
Sales Return & Allowances 2,000 Office Supplies Expense 700
Purchases 1,80,000 Interest Expense 1,700
Carriage 1,600 Postage Expense 200
Sales Salaries 12,000 Insurance Expense 400
Rent Expense-selling 1,200
Advertising expense 1,400 Sales 2,17,000
Utilities expense-selling 900 Purchases Discount 1,700
Depreciation exp.-selling 400 Purchases Return. & Allow. 1,300
Office Salaries 8,000 Interest Earned 3,800

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