Method of Accounting & Records Chapter- 11
ICMAP PAST PAPERS THEORECTICAL QUESTIONS
Q. NO. 3 (a) Autumn 2016
Pearl Limited is incorporated o n July 1 , 2015 and engaged in the business of construction. During the
tax year 2016 the company has got some long-term contracts of construction. The Managing Director
of Pearl Limited is of the view that these contracts will mature after three to five years, therefore, there
will be no income or loss for tax purpose for at least three years, and hence no tax treatment i s
required. Assume management i s seeking yo ur advice as Tax Advisor in the light of section 36 of the
Income Tax Ordinance, 2001.
Required:
Discuss the term ‘long-term cont ra ct’ and method for computing i n co m e/ loss arising under such
long-term contract for tax purpose.
Q. No. 3 (b) Spring As per rule 29 of the Income Tax Rules, 2002 every taxpayer deriving income
chargeable under the head Income from business shall maintain proper books of accounts,
documents and records. List down such documents and records and also state the period for which these
records shall be maintained by the taxpayer.
Q. NO. 1(c) February 2013 (i) You have been appointed as Tax Adviser of Mr. Lodhi who has various residential
and commercial properties in the various parts of the city, He has rented out his properties to different tenants.
Advise Mr. Lodhi about the list of records which shall be issued and maintained by every taxpayer deriving income
from property.
Q. NO. 3 (b) SUMMER 2011 List down the minimum books of account, documents and records of
taxpayers with business income upto Rs. 200,000 under Rule 30 of the Income Tax Rules, 2002:
Q. NO. 3 (a) SUMMER 2009 What records are required to be maintained under Rule 29 of the Income Tax
Rules, 2002 to determine income from business?
Q. NO. 2 (b) SUMMER 2007 Define the following terms as per the provisions of Section 35 of the Income
Tax Ordinance, 2001:
- Prime-cost-method
- Stock-in-trade
Q. NO. 2(a) SUMMER 2006 How are following defined under the Income Tax Ordinance, 2001?
(i) Cash-basis accounting
(ii) Accrual basis accounting
Q.NO. 3(b) Spring 2006 What is the basis of stock-in-trade computation under the Income Tax Ordinance,
2001 when the taxpayer follows the cash basis of accounting?
Q.NO. 4(a) Autumn 2006 A company may account for income chargeable to tax under the head ‘income
from business’ on cash basis or on accrual basis. Briefly discuss the rules relating to accrual of income and
expenditure as explained in the ITO, 2001.
Q. NO. 3 (a) WINTER 2005 Explain the following terms as defined in Income Tax Ordinance, 2001.
(i) Absorption cost method
(ii) Factory overhead costs
(iii) Prime cost method
(iv) Stock-in-trade
Q.NO. 3(a) Autumn 2003 Describe the method of accounting to be adopted by a person deriving business
income from a ‘Long Term Contract’?