Principles of Accounting Midterm Spring 2026 Question Paper

Question 1: Marks: 2+3=5 a) What is trial balance? Describe the limitations of a trial balance? [CLO 1, Level 2] b) Describe the following short notes: (i) Measurement Principle (ii) Internal Users (iii) Monetary Unit Assumption [CLO 1, Level 2] Question 2: Marks: 10+3=13 David opened her travel agency on January 1, 2025. During the first month of operations, the following transactions took place: Jan 1 David invested $10,000 cash and $ 4,000 of Equipment in the business. 4 Purchased Furniture of $14,000 of which 50% paid in cash. 12 Performed services to the clients for cash $2,500. 14 Receive a bill of S 300 for advertising on daily newspaper. 17 Borrowed $1,200 cash from a bank on a note payable. 22 Provide ticketing services on account $3,000. 27 David withdrew $800 cash for personal use. 28 $4,000 of the accounts payable is paid for credit purchase of furniture on January 4. 29 Receipt of $2,000 for service provided on July 22. 30 Paid monthly expenses for salaries $900, utilities $300, and Rent $400. Instruction: a) Examine the above transactions in preparing a tabular summary. [CLO 3, Level 4] b) By using the information of tabular summary construct Income Statement, Owner's Equity statement and Balance Sheet. [CLO 2, Level 3] Question 3: Marks: 5+2=7 Mr. Sharif is the owner of Sharif Consultancy Firm started their operation on 1st June 2025. The following information is related with the operations of June, 2025: June 1: Sharif invested Tk 200,000 cash, and Equipment of Tk 100,000 in the business. June 3: Purchase Supplies of Tk 5,000 from Smile Company and 60% paid in cash. June 12: Cash Tk 40,000 received in advance from Ektra Ltd. for providing consultancy.service. June 15: Paid two year rental of Tk 24,000 in advance. June 18: Provided consultancy services and billed Manufacturing company Tk. 35,000. June 22: Utility bill unpaid tk. 500 June 25: Paid Tk 16,000 to Smile Company for accounts payable due. June 27: Performed services for cash Tk. 15000. June 28: Monthly salary paid of Tk. 20,000. June 30: Received Tk. 25000 from Manufacturing company. Requirements: a. Use the transactions in preparing the journal entries. [CLO 2, Level 3] b. Use the journal entries in preparing the following ledger accounts i. Cash ii. Service Revenue [CLO 2, Level 3]