Accounting

Daffodil International University Faculty of Science & Information Technology Department of Computing and Information System Mid-Term Examination, Fall-2026 Course Code: ACC213, Course Title: Accounting Level: 2 Term: 1 Exam Duration: 1.5 Hours Marks: 25 Answer ALL Questions [The figures in the right margin indicate the full marks and corresponding course outcomes. All portions of each question must be answered sequentially.] 1. a) Identify and describe the steps in the Accounting process. 02 CO1 b) What is the Economic Entity Assumption? Explain it with one appropriate example. 03 CO1 2. On April 1, Julie even established Julie's Travel Agency. The following transactions were completed during the month. 1. Invested $15,000 cash to start the agency. 2. Paid $600 cash for April-office rent. 3. Purchased equipment for $3,000 cash. 4. Paid $900 cash for office supplies. 5. Performed services worth $10,000: $3,000 cash is received from customers and the balance of $7,000 is billed to customers on account. 6. Received $4,000 in cash from customers who have previously been billed in transaction (5). a) Prepare a tabular analysis of the above transactions (Omit Explanation). 03 CO2 3. On October 1, 2026, Noor Jahan commenced a restaurant business under the name The Saffron Table. During the first five days of operation, the business engaged in several financial transactions. The following transactions occurred during the period from October 1 to October 5, 2026. 1. October 1: Noor Jahan invested Tk. 250,000 in cash to commence the restaurant business. 2. October 2: Purchased furniture on account from Elite Furnishers for Tk. 45,000. 3. October 3: Purchased food ingredients for cash amounting to Tk. 15,000. 4. October 4: Paid one-third of the amount due to Elite Furnishers in cash. 5. October 5: Paid employee salaries in cash amounting to Tk. 12,000. a) Journalize the above transactions in the books of The Saffron Table (Omit Explanation). 05 CO2 b) Post the relevant entries to the Cash Account only in the ledger and determine the closing cash balance as of October 5, 2026. 02 4. The ledger of Smith Lake Lumber Supply on July 31, 2020 includes the selected accounts below before Adjusting Entries have been prepared, Debit | Credit Notes Payable | | $ 20,000 Supplies | $ 24,000 | Prepaid Rent | 3,600 | Buildings | 250,000 | Accumulated Depreciation-Buildings | | 140,000 Unearned Service Revenue | | 11,500 An analysis of the company's accounts shows the following. 1. The notes payable pays interest at a rate of 6% per year. 2. Supplies on hand at the end of the month totaled $18,600. 3. The balance in Prepaid Rent represents 4 months of rent costs. 4. Depreciation on buildings is $6,000 per year. 5. During the month, the company satisfied obligations worth $4,700 related to the Unearned Services Revenue. a) Prepare the adjusting entries at July 31 assuming that Adjusting Entries are made monthly 05 CO2 b) Explain the impact of each transaction before Adjustment (understated or overstated). 05