Part I: Job-Related
Accounting & Finance including Sales Tax on Services – 80 Marks
Q. What is meant by the Consistency Principle in accounting?
Answer: The same accounting methods should be used from period to period to ensure comparability.
Q. Which ratio measures the proportion of a company’s debt relative to its equity?
Answer: Debt-to-Equity Ratio.
Q. What is the purpose of Adjusting Entries in accounting?
Answer: To ensure revenues and expenses are recorded in the correct accounting period.
Q. In auditing, what is a Qualified Audit Opinion?
Answer: An opinion issued when financial statements are fairly presented except for certain specific issues.
Q. What does the term Liquidity Ratio measure?
Answer: A company’s ability to meet short-term financial obligations.
Q. Which depreciation method spreads equal depreciation expense over the useful life of an asset?
Answer: Straight Line Method.
Q. What is meant by Accrued Expense?
Answer: An expense incurred but not yet paid or recorded.
Q. In auditing, what is meant by Audit Trail?
Answer: A chronological record that allows transactions to be traced from source documents to financial statements.
Q. What is the purpose of a Subsidiary Ledger?
Answer: To provide detailed information supporting a general ledger account.
Q. What does Return on Investment (ROI) measure?
Answer: Profitability relative to the investment made.
Q. What is Amortization in accounting?
Answer: The gradual write-off of the cost of an intangible asset over its useful life.
Q. In auditing, what is meant by Compliance Audit?
Answer: An audit conducted to determine whether an organization follows applicable laws and regulations.
Q. What does Net Profit Margin indicate?
Answer: The percentage of profit generated from total revenue.
Q. What is meant by Contingent Liability?
Answer: A potential liability that depends on the outcome of a future event.
Q. Which financial statement shows the retained earnings of a company?
Answer: Statement of Retained Earnings.
Q. Which authority supervises the administration of Sales Tax on Services in Punjab?
Answer: Punjab Revenue Authority (PRA).
Q. What is meant by Taxable Service under the Act?
Answer: A service listed in the Second Schedule on which sales tax is applicable.
Q. Under the Act, what is the normal tax period for filing sales tax returns?
Answer: One month.
Q. What is the purpose of registration under the PRA system?
Answer: To legally authorize a person to collect and pay sales tax on taxable services.
Q. Who has the authority to conduct a search of premises for tax records?
Answer: An authorized officer with a warrant issued by the Commissioner or a Magistrate.
Q. What is meant by Default Surcharge?
Answer: Additional charge imposed on unpaid tax for delayed payment.
Q. What is the role of the Appellate Tribunal under the Act?
Answer: To hear appeals against orders of the Commissioner (Appeals).
Q. What is meant by Zero-Rated Services?
Answer: Services on which the tax rate is zero but input tax adjustment is allowed.
Q. What action can PRA take if a taxpayer fails to pay due tax?
Answer: Recovery proceedings including attachment of bank accounts or property.
Q. What is meant by Tax Assessment?
Answer: Determination of tax liability by the tax authority.
Q. Under the Act, what is the purpose of audit of records?
Answer: To verify the accuracy of declared tax and compliance with tax laws.
Q. What does De-registration mean in PRA taxation?
Answer: Cancellation of registration when a person ceases to provide taxable services.
Q. What is meant by Input Tax Adjustment?
Answer: Deducting tax paid on business inputs from output tax liability.
Q. Who may apply for Alternate Dispute Resolution (ADR)?
Answer: A taxpayer involved in a dispute with the tax authority.
Q. What is the purpose of a Tax Return under the PRA system?
Answer: To declare taxable services and calculate the sales tax payable for a tax period.
Q. The effect of writing off bad debts is on which accounts?
Answer: Profit & Loss Account and Debtors Account
Q. If a company uses the FIFO method, what does it affect?
Answer: Cost of Goods Sold and Inventory Valuation
Q. The acid-test ratio excludes which of the following?
Answer: Inventory
Q. Accrued revenue appears in which financial statement?
Answer: Balance Sheet as Current Asset
Q. Contingent liabilities are recorded where?
Answer: Notes to Accounts
Q. What is the consequence of late filing of a tax return under Punjab Sales Tax on Services Act 2012?
Answer: Penalty Rs. 10,000 + Rs. 200 per day after 15 days
Q. Who is liable to pay tax on services received from a foreign non-resident?
Answer: Service recipient in Punjab
Q. How does “Reverse Charge Mechanism” protect the government?
Answer: Ensures tax collection from recipient if provider is outside Pakistan
Q. Maximum adjustment allowed for input tax per period is:
Answer: 90% of output tax
Q. How is “Open Market Price” used in valuation of a taxable service?
Answer: When consideration is in kind, between associates, or invoice value is suspected incorrect
Q. Which officers can conduct a Special Audit under the Act?
Answer: Chartered Accountants, Cost & Management Accountants, Forensic Experts
Q. Under the Act, a registered person receiving a service from outside Pakistan must:
Answer: Deposit full tax via reverse charge
Q. Penalty for failure to produce records after 3 notices:
Answer: Presumption that records were never maintained
Q. Short-paid tax is treated as:
Answer: Underpayment liable for default surcharge and penalty
Q. Who can revise a tax order suo moto, and within what period?
Answer: Commissioner, within 5 years from end of financial year
Q. Tax rate for telecommunication services in Punjab is:
Answer: 19.5%
Q. Small hotels (<20 rooms) pay what tax rate?
Answer: 5%
Q. Cash payment at restaurants attracts what tax?
Answer: 16%
Q. Card / QR / Mobile wallet payment at restaurants attracts:
Answer: 5%
Q. Default surcharge for tax fraud is applied at:
Answer: 2% per month of tax evaded
Q. Maximum sealing period for business premises under the Act is:
Answer: 1 month
Q. Penalty for failure to issue tax invoice (1st default):
Answer: Rs. 20,000
Q. Penalty for charging excess tax (subsequent default):
Answer: Rs. 50,000
Q. Who bears the burden of proof in excess tax collection?
Answer: Tax collector / service provider
Q. Tax liability of a company wound up passes to:
Answer: Directors / partners / owners jointly and severally
Q. Input tax is not allowed for:
Answer: Personal consumption, exempt services, vehicles, gifts
Q. Time limit for filing a revised return:
Answer: 120 days from original return with permission
Q. Who can be arrested in case of tax fraud by a company?
Answer: Every Director or Officer responsible
Q. Maximum remand period for tax investigation:
Answer: 14 days
Q. Under 10% protection rule, how much must be deposited to stop recovery?
Answer: 10% of demanded tax
Q. Penalty reduction after show-cause notice is:
Answer: Pay tax + default surcharge + 50% of penalty
Q. Operating cycle formula:
Answer: Inventory period + Accounts Receivable period
Q. Net Profit Ratio = ?
Answer: Net Profit before interest & tax / Sales
Q. Letter of Credit is used for:
Answer: Bank guarantee to foreign bank for imports
Q. Zero Coupon Bond is also called:
Answer: Deep Discount Bond
Q. Agency theory explains conflict between:
Answer: Managers and Shareholders
Q. E-intermediary submits false info, liability falls on:
Answer: E-intermediary and taxpayer jointly
Q. Burden of proof in short-paid tax cases:
Answer: Taxpayer
Q. Who is liable to deposit tax for services from outside Pakistan:
Answer: Registered recipient
Q. Maximum input tax allowed for adjustment in a tax period:
Answer: 90% of output tax
Q. Penalty for obstructing officer ranges from:
Answer: Rs. 25,000 – Rs. 100,000
Q. Appeal to Commissioner Appeals must be filed within:
Answer: 30 days
Q. Fee for individual appeal:
Answer: Rs. 200
Q. Fee for company appeal:
Answer: Rs. 1,000
Q. Appeal to Appellate Tribunal must be filed within:
Answer: 60 days
Q. Appellate Tribunal appeal fee:
Answer: Rs. 2,000
Q. Who can conduct a joint audit with FBR?
Answer: Punjab Revenue Authority
Q. Deposit of admitted amount is required during:
Answer: Appeal filing
Q. Input tax is claimed based on:
Answer: Valid tax invoice
Q. Prepaid expenses are:
Answer: Expenses paid but not yet incurred
Q. Outstanding expenses are:
Answer: Expenses incurred but not yet paid
Q. Acid-test ratio excludes:
Answer: Inventory
Q. Depreciation is charged to:
Answer: Profit & Loss Account
Q. What is the main objective of a compliance audit?
Answer: To ensure that an organization follows laws, regulations, and internal policies.
Q. Which method is used to value closing inventory under IFRS?
Answer: Lower of Cost or Net Realizable Value.
Q. What does working capital represent?
Answer: Current Assets minus Current Liabilities.
Q. In auditing, what is the purpose of a test of controls?
Answer: To assess the effectiveness of internal controls.
Q. What is the formula for debt-to-equity ratio?
Answer: Total Debt ÷ Shareholders’ Equity.
Q. Accrued expenses are recorded in the accounts when:
Answer: The expense is incurred but not yet paid.
Q. What is double entry accounting principle?
Answer: Every transaction affects at least two accounts, maintaining the accounting equation.
Q. Which financial ratio measures profitability relative to sales?
Answer: Net Profit Margin Ratio.
Q. In cost accounting, what is a variable cost?
Answer: A cost that changes with the level of production.
Q. Internal audit primarily focuses on:
Answer: Risk management, internal controls, and operational efficiency.
Q. Which document summarizes all cash inflows and outflows for a period?
Answer: Cash Flow Statement.
Q. What is the main purpose of a trial balance?
Answer: To ensure that total debits equal total credits.
Q. Operating profit is calculated as:
Answer: Gross Profit minus Operating Expenses.
Q. Which type of financial statement combines the parent and subsidiaries?
Answer: Consolidated Financial Statement.
Q. What is the difference between capital expenditure and revenue expenditure?
Answer: Capital expenditure creates future benefits; revenue expenditure is consumed in the current period.
Q. In auditing, what is meant by substantive procedures?
Answer: Audit tests to detect material misstatements in financial statements.
Q. Liquidity ratios assess a company’s:
Answer: Ability to meet short-term obligations.
Q. What is a fixed asset turnover ratio used for?
Answer: To measure how efficiently fixed assets generate revenue.
Q. Contingent liability arises when:
Answer: A possible obligation depends on a future event.
Q. Which is considered a non-current asset?
Answer: Land, Building, and Machinery.
Q. What is the main purpose of management accounting?
Answer: To assist management in planning, controlling, and decision-making.
Q. What is meant by amortization?
Answer: The gradual writing off of an intangible asset over its useful life.
Q. What is the difference between gross profit and net profit?
Answer: Gross profit excludes operating expenses; net profit includes them.
Q. Which accounting standard deals with revenue recognition?
Answer: IFRS 15.
Q. What is a deferred tax asset?
Answer: Taxes recoverable in the future due to deductible temporary differences.
Q. Which is a primary function of financial management?
Answer: Maximizing shareholder wealth.
Q. What is the purpose of a bank reconciliation statement?
Answer: To reconcile differences between bank and book balances.
Q. In auditing, what is inherent risk?
Answer: The susceptibility of an account balance to a material misstatement assuming no controls.
Q. What is working capital turnover ratio?
Answer: Net Sales ÷ Average Working Capital.
Q. What is a journal entry?
Answer: A record of financial transactions in chronological order.
Q. What is the purpose of cost-volume-profit analysis?
Answer: To analyze how changes in cost and volume affect profit.
Q. What is an operating cycle?
Answer: Inventory period plus accounts receivable period.
Q. What is a zero-coupon bond?
Answer: A bond issued at a discount that pays no interest.
Q. What is goodwill in accounting?
Answer: The excess of purchase price over the fair value of net assets acquired.
Q. Which is an example of a current liability?
Answer: Accounts Payable.
Q. What is the role of an external auditor?
Answer: To provide an independent opinion on financial statements.
Q. What is a petty cash fund used for?
Answer: To handle small day-to-day expenses.
Q. What is the main objective of cost accounting?
Answer: To control costs and assist in decision-making.
Q. Which financial statement shows the company’s financial position at a point in time?
Answer: Balance Sheet.
Q. What is a bank guarantee?
Answer: A promise by a bank to pay a third party if the client defaults.
Q. What is the main objective of internal control?
Answer: To safeguard assets and ensure accurate reporting.
Q. What is the difference between financial accounting and management accounting?
Answer: Financial accounting is for external reporting; management accounting is for internal decision-making.
Q. What is a liquidity ratio example?
Answer: Current ratio.
Q. What is capital gearing ratio?
Answer: Long-term debt ÷ Shareholders’ Equity.
Q. What is a lease in accounting?
Answer: A contractual agreement to use an asset in exchange for payments.
Q. What is the purpose of a stock ledger?
Answer: To record and monitor inventory movements.
Q. What is operating leverage used for?
Answer: To measure the impact of fixed costs on profits.
Q. What is a capital reserve used for?
Answer: To record profits from capital transactions not available for dividends.
Q. In auditing, what is negative confirmation?
Answer: Requesting a third party to respond only if they disagree with the stated balance.
Part II: General Knowledge
Islamic Studies / Ethics & Urdu
Q. Which treaty signed by Prophet Muhammad (SAW) established peace between Muslims and the Quraysh of Makkah?
Answer: Treaty of Hudaybiyyah
Q. What is the significance of “Ijtihad” in Islamic jurisprudence?
Answer: Ijtihad is the process of independent reasoning used by scholars to interpret Islamic law when clear guidance is not found in the Quran or Sunnah.
Q. During which Caliphate was the compilation of the Quran into a single book form completed?
Answer: During the Caliphate of Hazrat Uthman (RA)
Q. غالب کا مشہور شعر “دل ہی تو ہے نہ سنگ و خشت، درد سے بھر نہ آئے کیوں” کس صنف میں آتا ہے؟
Answer: غزل
Q. اردو ادب میں “افسانوی ناول” اور “روایتی ناول” میں کیا فرق ہے؟
Answer: افسانوی ناول میں خیالی کردار اور واقعات ہوتے ہیں، جبکہ روایتی ناول میں حقیقی زندگی کی عکاسی ہوتی ہے
Q. اردو محاورہ “اندھیر نگری چوپٹ راجا” کا مطلب کیا ہے؟
Answer: ایسی جگہ جہاں کوئی قانون یا نظام نہ ہو اور سب کچھ انتشار میں ہو
Pakistan Studies , Current Affairs & Geography
Q. The first census (مردم شماری) in Pakistan was conducted in which year?
Answer: 1951
Q. Who was the first Muslim Commander-in-Chief of the Pakistan Army?
Answer: Field Marshal Ayub Khan
Q. In which year did the 18th Amendment pass, granting provincial autonomy?
Answer: 2010
Q. Which mountain range is known as the ‘Roof of the World’?
Answer: Pamir Mountains (specifically the plateau)
Q. Pakistan’s coastline length is approximately:
Answer: 1,046 km (along the Arabian Sea)
Q. Which city hosted the ‘COP-30’ Climate Summit in 2025?
Answer: Belém, Brazil
English
Q. What is the meaning of the idiom “To burn the candle at both ends”?
Answer: To work excessively hard without enough rest.
Q. What is the antonym of the word “Prosaic”?
Answer: Imaginative / Creative.
Q. Which is correct: “Neither of the two candidates (is/are) eligible”?
Answer: Neither of the two candidates is eligible.
Q. What is the synonym of “Abnegation”?
Answer: Self-denial / Renunciation.
Q. Complete the sentence: “The jury ______ divided in their opinions.”
Answer: Were.
Q. Change the voice: “The chef prepared a delicious meal.”
Answer: A delicious meal was prepared by the chef.
Q. What figure of speech is used in “The camel is the ship of the desert”?
Answer: Metaphor.
Computer Science & Everyday Science
Q. Which protocol is used to securely access and manage a remote server?
Answer: SSH (Secure Shell).
Q. What is SQL Injection in cybersecurity?
Answer: A vulnerability where malicious code is inserted into input fields to manipulate a database.
Q. Which system converts domain names (like google.com) into IP addresses?
Answer: DNS (Domain Name System).
Q. Which vitamin is known as Ascorbic Acid and helps in wound healing?
Answer: Vitamin C.
Q. The Richter Scale used for measuring earthquake magnitude is what type of scale?
Answer: Logarithmic scale.
Q. Why is carbon dioxide (CO₂) used in fire extinguishers?
Answer: Because it is denser than air and does not support combustion, so it smothers the fire.
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