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Explanation

• The normal balance of a Revenue account is a Credit.
• Revenue increases owner’s equity, and equity accounts normally have credit balances.
• Revenue is credited when earned and debited when reduced or closed.
• At the end of the accounting period, revenue accounts are closed to the Income Summary/retained earnings or capital account.

Last verified on 08-08-2026

Explanation

• The normal balance of a liability account is a credit balance.
• Liabilities represent amounts owed by a business to outsiders.
• When a liability increases, it is generally credited.
• When a liability decreases, it is generally debited.
• Examples include accounts payable, loans payable, and accrued expenses.

Last verified on 08-08-2026

Explanation

• The perpetual inventory system commonly uses the moving weighted average method to value inventory.
• Under this system, inventory records are updated continuously after each purchase and sale.
• A new average cost is calculated after every purchase.
• The system provides real-time inventory information.

Last verified on 06-08-2026

Explanation

• A broker deals in the buying and selling of shares and other securities on behalf of investors.
• Brokers act as intermediaries between buyers and sellers in the stock market.
• They execute trades through a stock exchange.
• Brokers earn income through brokerage commissions or fees.
• They may also provide investment advice, depending on their services.

Last verified on 06-08-2026

Explanation

• According to IAS 23, borrowing costs are capitalized when they are directly attributable to a qualifying asset.
• A qualifying asset is one that takes a substantial period of time to get ready for its intended use or sale.
• Capitalization begins when asset expenditures, borrowing costs, and preparation activities are in progress.
• It stops when the asset is substantially ready for use or sale.

Last verified on 06-08-2026

Explanation

• Warehouse cost is generally classified as a distribution cost.
• It includes the cost of storing finished goods before they are delivered to customers.
• Warehouse expenses are incurred after production and before final delivery.
• These costs support the distribution and supply chain process.
• They are not treated as production or administrative costs.

Last verified on 06-08-2026

Explanation

• Bank Reconciliation is the process of identifying differences between the cash book and the bank statement.
• It explains why the balances in the cash book and bank statement do not match.
• The reconciliation helps ensure the accuracy of financial records.
• It detects errors, omissions, and unrecorded transactions.
• It is usually prepared at the end of an accounting period.

Last verified on 06-08-2026

Explanation

• The first census in Pakistan was held in 1951.

Additional information:

Total nationwide censuses in Pakistan: 7

• 1st Census: 1951
• 2nd Census: 1961
• 3rd Census: 1972
• 4th Census: 1981
• 5th Census: 1998
• 6th Census: 2017
• 7th Census: 2023

Frequency: Every 10 years (approx.)

Historical start: 1872 (British rule, first census in the region)

Last verified on 17-01-2026

Explanation

• Urine is produced in the kidneys by filtering the blood.
• The kidneys remove excess water, salts, and waste products from the blood.
• Urine is formed in tiny filtering units called nephrons.
• After formation, urine passes through the ureters to the urinary bladder.
• The kidneys help maintain the body's fluid and electrolyte balance.

Last verified on 04-08-2026

Explanation

• The Indus Waters Treaty was signed on September 19, 1960, in Karachi.
• It was signed between Pakistan (President Ayub Khan) and India (Prime Minister Jawaharlal Nehru).
• It was brokered by the World Bank.

It became effective on April 1, 1960.

• Western Rivers (given to Pakistan): Indus, Jhelum, Chenab
• Eastern Rivers (given to India): Ravi, Beas, Sutlej

Last verified on 30-03-2026