THE OPEN UNIVERSITY OF SRI LANKA
BACHELOR OF MANAGEMENT STUDIES HONOURS DEGREE
PROGRAMME
LEVEL 3
ACADEMIC YEAR: 2020/2021
MCU1206/ MSU3506 – FINANCIAL AND COST ACCOUNTING
Tutorial 01
Duration: two (02) hours
Date: 12.02.2022 Time: 3.30 pm – 7.30 pm
INSTRUCTIONS
Answer all Four (04) questions.
Marks have been mentioned end of each question.
All the workings should be shown clearly.
Use of non-programmable calculator is
allowed. Question 01.
Following transactions took place in Mr. Perera’s business, during the month of February 2022.
(a) Put each transaction into the accounting equation. State whether it is increase (+) or
decrease (-).
E.g.1. The owner invested money to the business Rs.500,000.
A = E + L
+500,000 = +500,000 + L
1) The business bought a motor vehicle Rs.75,000 on cash.
2) The business took a bank loan Rs.100,000.
3) The business purchased goods Rs.150,000 on credit.
4) The business purchased goods Rs.200,000 on cash.
5) Sold the goods worth Rs.80,000 for Rs.100,000 on credit.
6) Sold the goods worth Rs.50,000 for Rs.85,000 on cash.
7) Received money from debtors Rs.75,000.
8) Paid money for creditors Rs.100,000.
9) Paid house rent Rs.60,000.
10) Received income Rs.80,000.
11) Paid electricity bill Rs.36,000.
12) Purchased furniture Rs.70,000.
13) Owner withdraw Rs.25,000 for personal use
14) Donated Rs.5,000 worth goods
15) Received Rs.120,000 Income
(15 Marks)
1
(b) Record above transactions in to the ledger accounts of Mr. Perera’s Business and
prepare the Trial Balance as at 30th June 2020 (15 Marks)
(Total 30 Marks)
Question 02.
I. “Accounting is known as the “language of business.” What does this mean? Briefly
Explain (05 Marks)
II. What are the main functions of accounting? (06 Marks)
III. What is the business entity concept? Briefly explain with an example.
(05 Marks)
IV. Write down name of the primary books and source documents against each of the
following transactions.
No Transactions Primary Book Source Documents
a. Goods purchase for credit ? ?
b. Return outwards ? ?
c. Cash receipts ? ?
d. Petty cash payments ? ?
e. Correction of errors ? ?
f Cash payments ? ?
g Goods Sale for credit ? ?
h Return inwards ? ?
i Bad debt written off ? ?
j Damage of Inventory ? ?
k Acquisition of Fixed Assets ? ?
l Electricity bills paid ? ?
(24 Marks)
(Total 40 Marks)
2
Question 03.
Mr. Perera commenced a service business on 01st June 2020. The transactions that took place in the
month of January are presented on accounting equation form as follows.
No Cash Debtors Inventory Furniture = Creditors Capital
(Rs) (Rs) (Rs) (Rs) (Rs) (Rs)
1 +2,000,000 +2,000,000
2 -400,000 +550,000 +150,000
3 -560,000 +560,000
4 +60,000 +150,000 +210,000
5 -35,000 -35,000
6 -100,000 -100,000
7 -5,000 -5,000
8 -50,000 -50,000
9 -32,000 +32,000
10 +25,000 -25,000
You are required to describe each transaction together with their associated amounts.
(20 Marks)
Question 04.
Briefly explain following accounting concepts
i. Going concern
ii. Money measurement
iii. Accrual concepts
iv. Material concepts
v. Cost concept (5*2 = 10 Marks)
(Total 100 Marks)
All Rights Reserved
