Principles of Accounting Final Summer 2026 Question Paper

Instruction: Answer all the questions Question 1: Marks: 2.5*2 = 5 (a) Distinguish between a periodic inventory system and a perpetual inventory system. Explain the major differences in their recording, updating, and reporting procedures. [CLO-1, L-2] (b) Explain why are adjusting entries usually prepared at the end of the accounting period? What problems might arise if such adjustments are not made? [CLO-1, L-2] Question 2: Marks: 8 Kem's Book Warehouse distributes hardcover books to retail stores and extends credit terms of 1/10, n/30 all of its customers. During July, following merchandising transactions occurred. July Purchased books on account for Tk. 1,800 from Binsfeld Publishers, FOB Destination. Seller’s proprietor also made a cash payment of Tk. 50 for the freight on this date. 3 Sold books on account to Reading Rainbow for Tk. 2,000. The cost of the books sold was Tk. 1,200. terms 1/10, n/30. 9 Paid Binsfeld Publishers in full, less discount. 12 Received payment in full from Reading Rainbow 18 Purchased books on account for Tk. 1,700 from McGrirn Publishers, FOB shipping point. The proprietor also made a cash payment of Tk. 100 for the freight on this date. 20 Purchase return to McGrirn Publishers Tk. 300. 30 Paid McGrirn Publishers in full. Requirement: Apply the perpetual inventory system to journalize the transactions of Kem's Book Warehouse for the month of July. [CLO-2, L-3] Question 3: Marks: 4 At the end of the accounting period (31 December 2025), ABC Traders has the following partial trial balances. | Account Title | Debit (Tk.) | Credit (Tk.) | |:---------------------------|:------------|:-------------| | Drawings | 20,000 | | | Prepaid Insurance | 96,000 | | | Unearned Service Revenue | | 300,000 | | Salaries Expense | | 500,000 | | Utilities Expense | 20,000 | | | Wages Expense | 5,000 | | | Interest Income | | 7,000 | Requirement: Prepare the necessary closing journal entries. [CLO-2, L-3]