SEPTEMBER 2023 DIET REVISION GUIDE

ON
BASIC ACCOUNTING PROCESSES & SYSTEMS

COMPILED BY
GABRIEL ONUCHE, ACA, ACTI

SECTION A: MULTIPLE-CHOICE QUESTIONS (30 MARKS)

INSTRUCTION: YOU ARE REQUIRED TO ANSWER ALL QUESTIONS IN
THIS SECTION

1. When cash taken from the till is banked, the transaction is recorded as a
A. Bank entry
B. Till entry
C. Cash entry
D. Debit entry
E. Contra entry

2. The processes involved in book-keeping are as follows, EXCEPT

A. Classification of business transactions using source documents
B. Recording of transactions in appropriate subsidiary books
C. Extraction of the Trial Balance
D. Extracting future cash flow
E. Posting of entries from subsidiary books to the ledger

3. The following are non-current assets, EXCEPT

A. Land
B. Goodwill
C. Building
D. Receivable
E Machinery

4. Which of the following is NOT a characteristic of business?

A. It is a social service to the public
B. It exits to make profits
C. It supplies goods that it either makes or buys from other parties
D Its reward for accepting risk is profit
E. The profit earned by it belongs to its owners

5. Which of the following is NOT a content of the partnership agreement that can affect
partnership account?
A. Capital contribution
B. Division of profits or losses
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 C. Interest on capital
D Partners’ drawings
E. Partners’ domestic expenses

6. Which of the following is NOT a key characteristic of Public Sector Entities?

A. There is no equity ownership
B. The entities’ right, powers & responsibility are derived from the law setting them up
C. They have multiple objectives
D. Public accountability by the operators is very important
E. It involves profit-sharing

7. Which of the following is NOT one of the elements of financial statements recognized by the
IASB’ s conceptual framework?
A. Receipt and Payment Account
B Asset
C. Liabilities
D. Equity
E. Income and Expenditure

8. Which of the following is NOT recognised as Generally Accepted Accounting Principles?

A. Concepts
B. Principles
C. Conventions
D. Laws, rules and regulations
E. Theories

9. The meaning of entity concept to a partnership business is that the

A. Partners can issue ordinary shares
B. Liability of all the partners are limited
C. Partner’ s drawing reduces capital contribution
D. Current Account is not necessary for the partners
E. Partners cannot own private assets

10. Which of the following is NOT a main source document that is used for recording in the
books of original entry?
A. Quotations
B. Pro-forma invoices
C. Credit notes
D Sales Ledger
E. Payment Vouchers

11. The following source documents do not contain full information to make recording possible
in the book of original entries, EXCEPT

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 A. Purchase order
B. Delivery note
C. Credit note
D. Good received note
E. Bin cards
12. The source document issued by employer to the employee showing details of his gross
emoluments and deductions is known as
A. Payslip
B. Payroll
C. Pay docket
D. Pay envelope
E. Pay ticket

13. A ledger containing details of capital account, drawing accounts, loan account and
investment account could be classified as a
A. Bought ledger
B. Sales ledger
C. Equity ledger
D. Private ledger
E. General ledger

14. State the correct entry to the transaction: Paid cash into bank account N50,000
A. Dr Cash N50,000(Bank column); Cr Bank N50,000 (cash column)
B. Dr Bank N50,000(Cash column); Cr Cash N50,000 (bank column)
C. Dr Cash N50,000(Cash column); Cr Bank N50,000 (bank column)
D. Dr Bank N50,000 (Bank column); Cr Cash N50,000 (cash column)
E. Dr Cash N50,000 (Bank column); Cr Bank N100,000 (cash column)

15. State the correct entry to the transaction: Soji Limited bought equipment on credit from
Bosun Limited N75,000
A. Dr Bosun Ltd N75,000 Cr Soji Ltd N75,000
B. Dr Soji Ltd N75,000 Cr Bosun Ltd N75,000
C. Dr Equipment a/c N75,000 Cr Soji Ltd N75,000
D. Dr Soji Ltd N75,000 Cr Equipment Ltd N75,000
E. Dr Equipment a/c N75,000 Cr Bosun Ltd N75,000

16. Which of the following appear on the debit side of Receivable Ledger Control account?
A. Cash received on account
B. Discount allowed
C. Irrecoverable debt written off
D. Dishonored bills
E. Bill receivables

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17. Which of the followings appear on the credit side of Payable Ledger Control account?
A. Cash refund from suppliers
B. Bills payable
C. Discount received
D. Credit notes
E. Return outwards

18. Which of the following is NOT the aim of good internal control on cash?
A. Prevention of theft of cash
B. Always maintaining equal level of cash position
C. Maintaining proper banking system for cash transaction
D. Keeping optimal level of cash
E. Ensuring issuance of receipt for all cash and cheque received

19 A statement of affairs is similar to a (n)

A. Cash book
B. Income and expenditure account
C. Trial balance
D. Statement of financial position
E. Statement of comprehensive income

Use the information below to answer Questions 20 to 21

The payslip of Kofi Mustapha for the month of April 2020 revealed the following:
Basic Salary GH¢250,000
Income Tax 12.5% of basic salary Social Security Contribution:
Employer: 15% of basic salary
Employee: 7.5% of basic salary
CTTS deductions GH¢50,000 per month
Medical bill for April GH¢15,000
Professional allowance: GH¢35,000 per month

20. What was the total deduction from Kofi Mustapha’ s basic pay in April 2020?
A. GH¢115,000
B. GH¢133,750
C. GH¢150,000
D. GH¢152,500
E. GH¢155,000

21. What was the net salary paid to Kofi Mustapha for April 2020?
A. GH¢100,000
B. GH¢132,500
C. GH¢135,000
D. GH¢150,000
E. GH¢170,000

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22 Which of the following is NOT an Accounting package?
A. Sage
B. Quick Books
C. Microsoft Excel
D. Tally
E. Oracle
23. Which of the following is an example of capital expenditure?
A. Cost of repairing non-current assets
B. Cost incurred in acquiring trading inventories
C. Expenses in connection with rent and insurance of office building
D. Legal charges on acquired land or buildings
E. Directors’ remuneration and fees

24. Several factors contribute to depreciation of non-current assets, where depreciation is due
to wear and tear, such could be classified as
A. Physical deterioration
B. Obsolescence
C. Inadequacy
D. Depletion
E. Time factor

25. From the following information, calculate the cash paid to the supplier during the year.
Payable at the beginning of the year GH¢250,000
Payable at close of the year GH¢400,000
Credit purchases for the year GH¢510,000

A. GH¢340,000
B. GH¢360,000
C. GH¢380,000
D. GH¢520,000
E. GH¢660,000

26 The relevant accounting standard on inventory account is

A. IAS 1
B. IAS 2
C. IAS 16
D. IFRS 1
E. IFRS 2

Use the data below to answer Questions 27 and 28

Charles Barber Limited has the following information at 31/12/2019
N
Cost of raw materials 7,650,000
Manufacturing overheads 2,980,000

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Productive wages 3,750,000
Work in progress 1/1/2019 1,200,000
Work in progress 31/12/2019 1,900,000
Payment of royalties 1,650,000
Closing inventories of finished goods 2,000,000
Manufactured goods transferred to Sales Dept at cost plus 20%

27. The prime cost is

A. N 7,650,000
B. N11,400,000
C. N13,050,000
D. N16,030,000
E. N18,030,000

28. The transfer value is

A. N13,050,000
B. N15,330,000
C. N15,960,000
D. N16,030,000
E. N18,396,000

29. Which of the following is NOT true about the accounts of clubs and societies?
A. A deficit on income and expenditure account reduces accumulated fund
B. Income and expenditure account does not contain capital receipts and expenditure.
C. The excess of total assets over total liabilities represents Accumulated fund
D. The closing balance of receipt and payments account is transferred to income and
expenditure account.
E. A surplus on Income and Expenditure Account increases accumulated fund

30. Factors to consider when deciding on which package to use or buy, EXCLUDE
A. Cost
B. Flexibility
C. Types of processing
D. Timing of processing
E. Location of computer centre

SECTION A PART II SHORT-ANSWER QUESTIONS (20 MARKS)

ANSWER ALL QUESTIONS
1. In ledger classification, a type of account which consists of income and expenses is
called …………..

2. In ledger accounting, an account of Yinka will be classified as ............

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3. A chartered accountant working in an accounting firm to offer a variety of accounting
services to their clients is described as -------------

4. In a subsidiary record, ----- is a source document to record into sales journal.

Use the following to answer questions 5 and 6

Given that the total revenue for the year ended June 30, 2022 was given as GH¢1,500,000 and
profit mark-up was 33 ⅓%

5. What is gross profit?

6. Calculate the cost of goods sold

7. In a computerised accounting system, the acronym EFTPOS means...............

8. Given that standard time is 300 hours and actual time taken to do a job by an employee was
240, the wage rate is Le50 per hour, using the Rowan Scheme, what is the total wage pay?

9. An item of Plant, Property and Equipment (PPE) was bought on October 31, 2021 for
N1,900,000, rate of depreciation is 10% annually, the accounting year ended June 30, 2022.
Assuming depreciation is charge on time basis when the PPE was bought, the depreciation
charge to the income statement for the year ended 30 June, 2022 is.......................

10. In Purchases Ledger Control Account, discount received is recorded on the ........
side of the account.

11. In the preparation of pay roll, union dues paid by staff is an example of .............deduction

12. Mr. Akpan received the following monthly income: salary GMD150,000, transport
GMD20,000 and rent GMD30,000, what is his annual consolidated salary

13. A cost incurred to transport goods for sale from the point of purchase to an entity is
called ……………..

14. In not-for-profit organisation account, subscription to a club in advance is usually treated

as ………..in the Statement of Financial Position.

15. In a Non-profit entity, annual depreciation is normally debited into………account.

16. An entity paid L$1,200,000 to buy a prepaid electricity token on January 1, 2021 for the
period ended March 31, 2022, assuming the accounting year ended December 31, 2021;
how much was prepaid as electricity for the year ended December 31, 2021?

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17. In IAS 16, a resource controlled by an entity as a result of past events, and from which
future economic benefits are to be received by an entity is called.......

18. In bank reconciliation statement, a cheque received from a customer and lodged into the
bank but deny payment is known as …………..

19. In a banking system, the bank on which a cheque is written is known as …………..

20. An equipment cost GH¢800,000, the installation cost was GH¢150,000 and general
overhead cost amounted to GH¢90,000. What is the cost of the equipment to be recognized in
the Statement of Financial Position?

SECTION B: ATTEMPT ANY FOUR QUESTIONS IN THIS SECTION (50 Marks)

QUESTION 1
a. i Mention 6 users of financial statement and their information needs
ii. What is Double entry principle?
Explain FIVE main importance of the Ledger Accounts.
State and explain FOUR groups of ledger. (March, 2021)

iii. Nyumah is a sole trader involved in sewing and selling COVID 19 face mask.
Nyumah introduced the capital of L$200,000 into the business on the March 2,
2020 in form of cash. He bought a laptop computer worth L$50,000 on March 4,
2020 for the office but gave the laptop to her daughter to use for her University
Degree programme.

Required: You are required to show the double entries as the Accounting
technician. (March, 2021)

iv. Use the accounting equation to fill the gaps in the table below
Assets Liabilities Equity
N N N
(x) - 34,000 22,000
(y) 246,000 - 134,000
(z) 144,000 65,000 -

v Inventory bought for N25,000; sold for N40,000

Inventory bought for N15,000; Loss on sale N3,000
Goods sold for N23,500 and profit on sale is N4,500

Required: using the accounting equations:

(x) Determine the profit
(y) Determine the revenue
(z) Determine the Expenses

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 b.
Crown Enterprises started its business with ₦800,000 on 2/1/2022 and paid it into the bank on
4/1/2022. Its transactions for the rest of the month were as follows:
Jan 5 Purchases by cheque N270,000
Jan 6 Electricity paid by cheque N5,000, Rent by cheque N7,000
Jan 7 Drew cash for office use N12,000
Jan 7 Sales by cheque N425,200, cash N4,800
Jan 8 Paid Lekan by cheque N151,000 and received discount of N3,200
Jan 9 Cash sales N171,150, cash wages paid N5,000
Jan 10 Paid into bank the sales made on 9/1/2022
Jan 10 Bought stationeries by cash N5,000
Jan 12 Received from Abaya N392,000 by cash and allowed discount of N8,000
Jan 22 Paid Audu gross of N279,000 by cheque and received discount of 12%
Jan 27 Paid salary N36,000 cash
Jan 30 Drew cheque for personal use N50,000
Jan30 Received from a customer named Chukwu N784,000 cheque and allowed
discount N16,000

You are required to:

Post the above transactions in the relevant cash book (5½ Marks) (March, 2023 diet)

c.
ILLUSTRATION 1
The following is a summary of petty Cash transactions of Manley Limited
for the month of June 2022.
The business maintains a petty cash float of ₦100,000
₦
June 1 Petty cash float given to petty cashier
June 3 Postages 4,000
June 5 Transport Fare 9,000
June 8 Cleaning materials 7,000
June 9 Stationery 3,400
June 14 Petrol for delivery van 17,600
June 16 Taxi fare 7,800
June 20 Postages 3,600
June 21 Disinfectant for cleaning toilet 5,600
June 23 Petrol for General Manager’ s car 13,200
June 24 Servicing of delivery van 8,000
June 28 Writing materials 6,200
June 30 Transport fare 2,400
You are required to:
i. Prepare a petty cash book with columns for postages, transport and travelling, cleaning
materials, stationery and motor expenses and enter the month’ s transactions including the
reimbursement on 30 June 2019. (Sept. 2019 Diet)

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ii. Enumerate FOUR characteristics of an imprest system (March, 2023 Diet- Ques. 2b)

QUESTION 2

a) The following ledger balances are extracted from the books of Broad Street
bookshop on 31 December 2016
₦
Sales 56,000
Purchases 46,000
Salaries & wages 16,200
Discount allowed 15,000
Allowance for doubtful debt 5,000
Buildings 100,000
Receivables 7,000
Payables 4,100
Equity 128,810
Staff Loan 4,800
Accumulated depreciation 6,000
Discount received 4,000
Irrecoverable debt 9,600
Motor vehicles 16,400
Returns outward 1,490

Required:
Prepare a trial balance as at 31 December 2016 (Sept., 2018 Diet)

b) The following balances were brought forward from the previous period:

January 1, 2021 L$
Cash at bank 210,000
Inventory 75,000
Trade receivables 65,000
Capital 350,000

February 3, 2021 Wazobia introduced an additional capital of L$150,000 into the

business and paid the money into the business account.

March 7, 2021 The business purchased an item of furniture and fittings for L$55,000 and
paid by cheque.

April 8, 2021 Purchased inventory for L$45,000, paid L$30,000 by cheque and the
balance outstanding.

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May 11, 2021 Sold inventory for L$95,000. Received L$60,000 through cheque and the
balance yet to be paid for.

June 14, 2021 Wazobia drew L$12,500 from the business bank account for his personal
use.

July 15, 2021 Purchased additional inventory for L$150,000, L$100,000 was paid
through cheque and the balance is outstanding.

August 18, 2021 Brought forward trade receivable were collected through the bank
account.

September 21, 2021 Sales were made for L$120,000 and full payment received by cheque.

October 24, 2021 Purchased printing and stationery amounting to L$22,500 and paid by
cheque.

November 27, 2021 Ovia, a friend of Wazobia sold a motor vehicle worth L$200,000 on credit
to him for his business use. Payment to be made in 2 years time.

December 31, 2021 Closing inventory is L$125,000.

You are required to:

a) Post all transactions to the appropriate ledger accounts. (10 Marks)
b) Balance off each account and extract a trial balance. (2½ Marks)
(March,2023 Diet- Ques. 6)

C. The following balances were extracted from the books of Mesh Mensah Company as at
December 31, 2021:
Le’000
Cash 284,600
Prepaid insurance 16,000
Inventory of spare parts 108,000
Heavy duty machine 1,049,600
Accumulated depreciation 90,000
Loan notes 120,000
Share capital 750,000
Retained earnings 56,000
Salaries and wages 250,000
Maintenance expenses 84,000
Fuel and lubrication expenses 63,000
Water, gas and electricity 56,400
Rental expenses 24,000

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Sales income 967,600
Advertising expenses 48,000
3,967,200
Additional information:
i. On January 2, 2021, Mesh Mensah paid 4 years insurance premium to his insurance
company amounting to Le16,000,000.
ii. The heavy-duty machine was purchased in February 2021, at a cost of Le1,049,600,000.
Estimated life is ten years, with an estimated residual value of Le49,600,000. Full
depreciation is charged in the year of purchase.
iii. On March 1, 2021 the company borrowed Le120,000,000 from Paramount Bank Plc, on
a 5-year 8% loan. Interest is payable annually.
iv. Mesh Mensah collected Le7,500,000 from a customer for a special sealing valve which
was recorded as sales income.
v. Le24,000,000 rent was paid during the year, though Le4,000,000 is for January and
February 2022 and the total amount was recorded as rental expenses in 2021.
vi. Inventory of maintenance parts was determined to be Le65,000,000 on December 31,
2021. All purchases are debited to inventory of spare parts.

You are required to:

Prepare the extended trial balance showing the adjustments as at December 31, 2021.
(March,2023 Diet- Ques. 5)

QUESTION 3

i. State four (4) uses of control account.

ii. The following were extracted from the books of Chegbe Enterprise, that is into electronic
business in Abuja for the month of November, 2019:
N’ 000
Sales Ledger balance –1 November, 2019 9,404
Purchases ledger balances –1 November, 2019 5,514
Sales journal balances –30 November, 2019 74,874
Purchases journal balances –30 November, 2019 81,600
Returns inwards 1,820
Returns outwards 1,498
Receipts from Customers –Cash 77,058
Discount allowed 2,690
Payment to Suppliers 70,830
Discount received 1,492
Irrecoverable debts written off 230
Sales ledger set off 418
Purchases ledger set off 220

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On 30 November, 2019, it was discovered that a supplier was paid twice in error. The amount
was refunded on that date.

Required:
Prepare the Sales and Purchases ledger balances as at 1 December, 2020. (March, 2021 Que.1b)

iii OBI-DATTI Enterprises controls his Trade payables accounts by drawing up monthly Trade
Payables Ledger Control Account in two parts A and B. The following figures are available at
January 31,2022 when there is a difference on the Trial balance of ₦2,000,000.
A B
₦’000 ₦’000
Jan-1 Balances on Trade Payables (credit side) 18,400 13,600
Jan-1 Balances on Trade Payables Ledger(debit side) 150 184
Jan-31 Purchases 114,512 17,372
Jan-31 Returns outwards 11,000 1,652
Jan-31 Sundry charges by suppliers 1,200 144
Jan-31 Cheques paid to suppliers 17,980 13,420
Jan-31 Discount received from suppliers 1,420 1,180
Jan-31 Balances carried down to debit side 150 132

The book-keeper in charge of the A Ledger makes his Ledger accounts balance ₦103,712,000
while the clerk in charge of the B Ledger makes his Ledger balances total ₦16,812,000.

Required: Prepare the two Control Accounts and determine if there is any discrepancy.
(March, 2020 Ques. 5a)

QUESTION 4
a. An expenditure can be classified into capital or revenue expenditure.
Explain capital expenditure and revenue expenditure with FIVE examples each (Sept, 2022 6a)

State TWO distinctive differences between capital and revenue expenditure(Sept, 2021 Que. 3b)

b. Kofi Mensah, a cocoa merchant in Accra, presents the following information for the
month of April, 2020:
GH¢ ’000
Bought a motor vehicle to transport produce to the market 5,000
Renovated the warehouse to pave way for new produce 2,000
Procured more produce into the warehouse 3,500
Acquired additional warehouse 6,700
Legal and agreement fees on the warehouse acquired 1,000
Repair and maintenance of motor vehicle 500
Salaries and wages for the month 1,000
Paid insurance premium on motor vehicle 200
Bought computer equipment for office use 750

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You are required to:
Classify the expenditures into capital and revenue (Sept, 2021 Diet Que. 3c)

c.
i. On January 1, 2016 Achim bong Limited purchased a motor vehicle for GH¢3,750,000.
The motor vehicle has a useful life of five years with a salvage value of GH¢200,000.

You are required to:

Calculate the depreciation charge and accumulated depreciation for each of the years and show
the carrying amount as at the end of 2020 accounting period using the straight-line method.
(SEPT, 2021 Ques. 4b)

ii . On January 1, 2022 Jerry Limited purchased plant for N250, 000. It is the policy of Jerry Ltd to
depreciate Plant at 20% per annum.

You are required to:

Calculate carrying amount as at the end of 2026 accounting period using the reducing balance
method.

d.
A motor car was bought by Woodwork Limited on January 2018 at a cost of GMD1,600,000. The
car was expected to have a useful life of 5 years. It is the company’s policy to depreciate its
motor car at 20% per annum on cost and was expected to have zero residual value.

During the year ended December 31, 2020 the car suffered a serious damage as a result of an
accident it was involved in. The car was sold on January 1, 2022 for GMD560,000 to facilitate
the acquisition of another motor car.

You are required to: Prepare the following ledger accounts

i. Motor car account
ii. Provision for depreciation account (Accumulated depreciation Account)
iii. Asset disposal account
iv. Statement of financial position extract as at December 31, 2021.
v List THREE methods of computing depreciation (March,2023 Diet- Ques. 4)
e.
On January 1, 2018 Obi-Datti Limited purchased Motor Vehicle for 800. It is the policy of the
Company to depreciate all equipment at 20% per annum using reducing balance method.

Required:
Record the above in the under listed ledger accounts for the years ending December 31,2018,
2019, 2020, 2021 and 2022:
a. The Motor Vehicle account
b. The Accumulated Depreciation on Motor Vehicle Account

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c. The Depreciation Expense Account
d. The Statement of Profit or Loss (Extracts) for the respective years.
e. The Statement of Financial Position (Extracts)as at December 31, 2018–2022

QUESTION 5
a.
i. In accordance with International Accounting Standard No.1 on Preparation of Financial
Statements, state FIVE main components and elements of financial statements (March, 2021)
Ii. Explain the term “liabilities” . (March, 2021 Ques. 3a)

iii. The following Trial balance was extracted from the books of Ondugbe Ventures, as at
December 31, 2019
Dr Cr
N’000 N’000
Equity (Capital) 17,400
Office machines, at cost 1,120
Inventory January 1, 2019 4,800
Purchases of Inventory 22,000
Returns Inward 120
Returns outward 80
Bank 6,400
Carriage outwards 160
Carriage inwards 400
Payables 4,800
Wages 2,560
Drawings 4,000
Discount allowed 200
Discount received 600
Revenue 28,000
Accumulated Dep. (Office Machines) 320
Rent 3,360
Insurance 240
Receivables 6,000
Allowance for Doubtful debts - 160
51,360 51,360

Additional information:
(i) Inventory is valued at December 31, 2019 for N5,080,000.
(ii) As at December 31, 2019 receivables totaling N1,200,000 are considered to be
uncollectible and are to be written off. Thereafter, allowance for doubtful debts is to be
increased to 10% of debtors, while provision for discount on receivables is to be 2%.
(iii) Rent of N3,360,000 was paid October 1, 2019 and is to last for 12 months.
(iv) Depreciation on office machines is on equal installments at 5%.
(v) Accrued wages as at Dec. 31, 2019 is N160,000

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REQUIRED:
a) Prepare a Statement of Profit or Loss account for the year ended December 31, 2019.
b) Prepare a Statement of Financial Position as at that date. (SEPT, 2020 Ques. 1)

b.
Gastos Plastic Moulding Limited presented the following information for the year ended 31
December, 2019:
GH¢
Purchase of Raw Materials 360,000
Carriage inwards 24,000
Manufacturing wages 180,000
Depreciation of Plant 50,000
Inventory at January 1 2019:
Raw Materials 100,000
Work in progress 150,000
Finished products 80,000
Return outwards 25,000
Office salary 12,500
Insurance expenses –office 10,000
Factory expenses 25,000
Royalty paid 52,000
Depreciation –Office Equipment 12,500
Factory Fuel and Electricity 10,500
Revenue 950,000

The following additional information are also relevant:

(i) It is the policy of the company to transfer the finished product to the marketing section at
cost plus 15%;
(ii) Inventory at 31 December, 2019:
GH¢
Raw Material 125,000
Work in progress 140,000
Finished products 100,000

You are required to prepare:

i. Statement of manufacturing account
ii. Statement of profit or loss for the year ended 31 December, 2019 (Sept. 2021)

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 c.
Kehinde and Dike are in partnership business. The partnership agreement provides that:
(i) Partners are to be credited at the end of the year with salaries of L$2,000,000 to Kehinde and
L$1,000,000 to Dike; and with interest on Capital at the rate of 5% per annum on the
balances standing on their Capital accounts at the beginning of the year.
(ii) No interest on Drawings.
(iii) After charging partnership salaries and interest on Capital, Profit or losses are to be shared
in the ratio 6: 4.

The Trial balance of the firm as at December 31, 2021 was as follows:
Dr. Cr.
L$’000 L$’000
Partners’ Capital Accounts:
Kehinde - Balance as at 1st January, 2021 19,000
Dike - Balance as at 1st January, 2021 13,000
Partners’ Current Accounts:
Kehinde - Balance as at 1st January, 2021 4,000
Dike – Balance as at 1st January, 2021 3,200
Sales 93,000
Payables 7,400
Shop fittings at cost 33,200
Shop fittings provision for dep. as at 1/1/2021 2,800
Purchases 56,000
Inventories 1st January, 2021 8,400
Salaries and Wages 12,800
Office and Trade Expenses 9,040
Rent, Rates and Insurance 2,100
Professional fees 700
Receivables 4,120
Provision for doubtful debts 100
Balance at Bank 8,740
Drawings:
Kehinde 4,300
Dike 3,100
142,500 142,500

Additional information is as follows:

(i) Closing Inventory was valued at L$7,200,000

(ii) A debt of L$120,000 is to be written off and the provision against the
remaining Receivables should be 5%.
(iii) The partners had during the year been supplied with goods from Inventory as follows:
Kehinde L$120,000, Dike L$80,000

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(iv) As at year end, Rates in advance was L$500,000 while office and trade expenses owing was
L$480,000.
(v) Shop Fitting is to be depreciated at the rate of 5% per annum on cost.

You are required to prepare:

a. Statement of Profit or Loss for the year ended 31st December, 2021.
b. Partners Current account in columnar form. (Sept, 2022)

QUESTION 6
a.
In tabular form, mention four errors that do not affect the trial balance and errors that affect
the trail balance

b
The trial balance of a firm showed a difference of GHȻ124,400 and this has been carried to the
credit side of a suspense account. On investigation, the following were discovered:
i. Purchase of an adding machine for GHȻ190,000 was debited to the office expenses account.
ii. Discount allowed GHȻ156,800, has not been posted from cash book to the ledger.
iii. Drawings in a form of goods costing GHȻ160,000 has not been recorded anywhere in the
books.
iv. Sales day book was overcasted by GHȻ200,000
v. An invoice for GHȻ104,600 received from a supplier was entered correctly in the purchases
Day book but was posted to the debit side of the supplier’s personal account.
vi. A debtor who owed a sum of GHȻ24,000 died without leaving anything behind. This amount
was written off his account as a bad debt but no other entry was made in the books.
vii. A credit note of GHȻ124,000 issued to a debtor was entered in the return inwards Book as
GHȻ52,000 and was posted to the ledger accordingly.
viii. A payment of GHȻ26,000 for wages and salaries was entered correctly in the cash book but
as GHȻ62,000 in the wages and salaries accounts.
ix. A motor vehicle was bought for GHȻ260,000 and the payment was made by cheque, this
transaction was only recorded in the motor vehicle account.

You are required to show:

a. Define Suspense Account and briefly explain its uses.
b. Journal entries necessary to correct the errors
c. Suspense account, duly balanced. (March, 2023 Diet Que. 3)

c.
After extracting the Trial Balance of Gbengus Enterprises on 31 December, 2019, It was
discovered that the debit side was higher than the credit side by N7,110.
A review of the ledger revealed the following errors:

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i. A sum of N1,080 on a receivables’ account was omitted from the balance of Trade Receivables.
ii. A computer top bought for N8,640 had been debited to repairs.
iii. The payments side of the cash account had been undercast byN5,850
iv. The total of one page of the sales day book had been carried forward as N19,386, instead of
the correct amount of N22,626.
v. A debit note of N1,890 received from a customer had been posted to the wrong side of his
account.
vi. Mr. Lucky whose debts of N4,680 to the business had been written off, paid during the year.
His personal account was credited but no corresponding entry was made.

You are required to:

a) Prepare the journal entries to correct the errors
b) Write up the Suspense account (Sept, 2021 Diet Que. 2b)

QUESTION 7
a.
Mention four (4) factors that causes disagreement between an entity’s cashbook and bank
statements
b.
Margai cash book showed a debit balance of Le358,000 on March 31, 2019. A careful
examination of cash book with the bank statement showed the following differences.
(i) The bank had debited his account with bank charges of Le102, 000.
(ii) Internet charges were Le328,000.
(iii) Cheques credited in the cash book not yet presented for payment was Le344, 900.
(iv) ATM charges to his bank account was Le200,000
(v) The sum of Le478, 000 has been credited to his account as interest on his deposit account.
(vi) Mrs. Milton, a customer has been issued with a cheque for the sum of Le302, 400. The
cheque has not been paid by Margai„s bank.

Required:
i. Prepare the adjusted cash book.
ii. Prepare the bank reconciliation statement (Sept., 2020 Ques. 3a)

c.
The following information was extracted from the book of a sole trader as at 31
December, 2019:
- Balance per Bank statement N5,000 credit
- Cash book balance (bank column) N37,000 credit
- The following entries appear in the bank statement not in cash book
Bank charges N5,000
Bank loan interest N2,500
Income on investment N7,500
Dividend from shares N9,000

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In addition, a cheque for N25,000 issued in favour of a supplier, Majekobaje Enterprises, was
dishonoured for insufficiency of funds. Another cheque for N15,000 issued to Jamali Limited
was unpresented. A cheque for N7,000 from Damingo Plc was not credited.

You are required to:

i. Prepare the Adjusted Cash Book (4½ Marks)
ii. Bank Reconciliation Statement (4 Marks) (Sept, 2021 Diet Que. 6b)

QUESTION 8
a.
The Main City Club‟s Bank current account for the year ended September 30, 2019 was as
follows:
Le’000 Le’000
Balance at 1/10/2018 16,800 Purchases for shop 7,490
Subscriptions received 12,870 Shop wages 8,000
Donations 1,200 General expenses 3,000
Cash taken at door 7,000 Cost of Annual Dance 2,980
Grant from local council 12,000 Transfer to Deposit account 32,000
Annual Dance receipts 2,800 New equipment 4,000
Shop takings 14,336 Rent 16,000
Balance at 30/09/2019 6,464
73,470 73,470

In order to increase funds, the club has a shop which sells energy drinks. In addition to an
annual membership subscription, members pay Le1,000 each time they visit the club. This
is referred to as „Cash taken at door‟.
The annual membership subscription was Le80,000 until September 30, 2019 when it was
raised to Le90,000.There was 150 members at October 1, 2018. At that date 15 of them
had not paid their subscriptions for the year ended September 30, 2018, and 12 had
already paid their subscriptions for the year ended September 30, 2019. By September 30,
2019, all members had paid their due subscriptions, and some had paid in advance for
the year ending September 30, 2020, but the treasurer had not yet calculated how many.

Other balances were as follows:

At October 1, 2018 At September 30, 2019
Le’000 Le’000
Shop inventory 1,000 1,700
Cash float for shop 100 140
Payables for shop 2,900 2,520
Deposit account 30,000 62,000
Equipment at cost 16,000 20,000

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The equipment at October 1, 2018 had been depreciated at Le3,200,000 per annum for five
years. The new equipment is to be depreciated at the same annual percentage rate.

The local council‟s grant was for Le20,000,000 and the remainder of the grant is yet to be
received. This will be treated as revenue income in the final accounts. Interest of Le160,000 is
due on the deposit account for the year ended September 30, 2019. At September 30, 2019,
general expenses of Le130,000 were due and unpaid.

Required:
a. Calculate the Accumulated Fund at October 1, 2018. (3 Marks)
b. Prepare Main City Club Shop Trading account for the year ended Sept. 30, 2019. (2½ Marks)
d. Prepare Main City Club Subscriptions account for the year ended Sept. 30, 2019. (2¾ Marks)
iii. d. Prepare Main City Club Income and expenditure account for the year ended Sept. 30, 2019.
(4¼ Marks) (Sept., 2020 Ques. 6)

b.
The following information relates to Dayo Plc. GHȻ
Monthly pay 201,615
Rent 52,600
Hazard allowance 2,500
Transport allowance 20,000
Loan advance 23,560
Pension contribution 12,400
PAYE 27,880
Staff cooperatives 12,500
Staff club 500
Trade unions 650

Required: Compute Gross pay and net pay

c.
The following are the extracts of the payroll of Holly Bakery for the month of November 2019.
N‟000 N‟000
Basic salary 10,000
Rent allowance 1,000
Transport allowance 600
Hazard allowance 800
12,400
Less Statutory and other deductions
Taxation 1,400
Staff loan 1,000
Private pension/social security 500
Co-operatives 1,500 4,400
Net pay 8,000

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From the above, you are required to raise journal entries to record the above payroll
transactions for;
i. Expense of payroll cost
ii. Making appropriate payroll payments (March, 2020 Ques. 6b)

d.
Write short note on the following
i. Accounting concepts and conventions with 8 examples (March, 2019 Ques. 6b)
ii. “Cash discount (March, 2019 Ques. 2a)
iii. Bonus Schemes and list four advantages of bonus schemes (March, 2019 Ques. 4a)
iv. Ethical issues (ICAN professional code of conduct that guide student & members)
v. Private & Public company
vi. Current, saving and fixed deposit account and mention information/document
required in opening bank account.
vii. The fundamental and enhancing qualitative characteristics of accounting
information. (Sept., 2020 Ques. 5a)
viii. Subsidiary books/book of original entry and list 6 examples
ix. Sources document & list 8 examples (March, 2020 Ques. 5b)
x. Application packages and state FOUR merits and demerits each of using
application packages in a computerized environment. (Sept., 2020 Ques. 5b)
xi. Microsoft Excel and explain FIVE of the main features of Microsoft Excel Spread
sheet. (March, 2021 Ques. 5a)
xii. “Data Entry” for Accounting transactions (with examples). (March, 2021 Que. 5a)

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