Course Content
New Accounting Model (Exam-2009)
Books references: 1. Account Code (Volume III). 2. Chart of Accounts (Issued by CGA). 3. Manual Accounting Principles. 4. Accounting Policies and Procedures Manual.
Private: DAO Part-I Examination 2024 (Fresh Candidates) Past Papers
About Lesson
Question No. 2:
write short note on the below questions;
1. Briefly explain the Accounting Equation?

Accounting Equation:

    • The accounting equation, also known as the balance sheet equation, states that the total assets of a business are equal to the sum of its liabilities and equity. It is expressed as:
      • Assets = Liabilities + Equity
    • This equation ensures that the financial position of a company remains balanced. Assets represent what the company owns, liabilities represent what it owes, and equity represents the owner’s interest in the business.
2. What are the rules of Debit and Credit for all Accounting Elements?

Rules of Debit and Credit:

    • Debit:
      • Increases assets and expenses.
      • Decreases liabilities and equity.
    • Credit:
      • Increases liabilities and equity.
      • Decreases assets and expenses.
    • These rules apply to all accounting elements (accounts) and ensure that transactions are recorded accurately.
3. Identify the most common reconciling items of Bank Reconciliation Statement?

Common Reconciling Items in Bank Reconciliation Statement:

    • Outstanding checks: Checks issued but not yet presented for payment.
    • Deposits in transit: Deposits made but not yet reflected in the bank statement.
    • Bank errors: Errors made by the bank in recording transactions.
    • Interest or service charges: Bank charges not yet recorded in the company’s books.

4. What is the difference between Consolidated Fund and Public Account?

Difference between Consolidated Fund and Public Account:

    • Consolidated Fund: Holds government revenues, public debt, and other receipts. It can be used for any purpose authorized by the legislature.
    • Public Account: Holds funds of individuals, corporations, or other entities held temporarily by the government (e.g., tax refunds, trust funds). It cannot be used for government expenditure.
5. For what these abbreviations stand? (IPSAS, SAE, GFS, APPM, FABS)


    • IPSAS: International Public Sector Accounting Standards
    • SAE: Statement on Auditing Standards
    • GFS: Government Financial Statistics
    • APPM: Accounting Policies and Procedures Manual
    • FABS: Financial Accounting and Budgeting System
6. How would you define the Accounting Framework for Pakistan?

Accounting Framework for Pakistan:

    • The accounting framework for Pakistan includes the adoption of International Financial Reporting Standards (IFRS) and compliance with local regulations. It ensures consistency, transparency, and comparability in financial reporting.
7. Define transactions between entities of same as well as different governments. How you would sub divide Exchange Account?

Transactions between Entities of Same/Different Governments:

    • Exchange Account: Records transactions between entities of the same government (e.g., one department paying another for services).
    • Subdivision: Exchange account can be subdivided into intra-governmental and inter-governmental transactions.
8. What are the main components of Domestic Debt?

Main Components of Domestic Debt:

    • Treasury bills: Short-term debt instruments issued by the government.
    • Bonds: Long-term debt securities with fixed interest payments.
    • Loans: Borrowings from domestic sources.
9. Enlist three main components of Manual accounting record of DAO?

Components of Manual Accounting Record of DAO:

    • Cash book: Records cash transactions.
    • Ledger: Contains individual accounts.
    • Journal: Records original entries.
10. Highlight weaknesses in the NAM?

Weaknesses in the NAM (New Accounting Model):

    • Complexity: NAM can be intricate and challenging to implement.
    • Transition difficulties: Moving from traditional accounting to NAM can be disruptive.
    • Training requirements: Staff needs training to adapt to NAM.
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