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Mba 8210-Question

The document outlines a series of accounting questions relevant to a newly established SME in the pharmaceutical industry, focusing on accounting principles, stakeholder needs, transaction recording, cash book preparation, and financial statements. It includes specific tasks such as discussing accounting concepts, identifying stakeholders, and preparing financial documents like cash books and profit/loss statements. The questions aim to assess understanding of practical accounting applications in a business context.

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Adebiyi Saint Skempo
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11 views2 pages

Mba 8210-Question

The document outlines a series of accounting questions relevant to a newly established SME in the pharmaceutical industry, focusing on accounting principles, stakeholder needs, transaction recording, cash book preparation, and financial statements. It includes specific tasks such as discussing accounting concepts, identifying stakeholders, and preparing financial documents like cash books and profit/loss statements. The questions aim to assess understanding of practical accounting applications in a business context.

Uploaded by

Adebiyi Saint Skempo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Question 1

You are the CEO of a newly established SME in the pharmaceutical industry located in Abuja. As the
company prepares to produce its first financial statements, a sound understanding of accounting
principles and the needs of various stakeholders is crucial.
Required:
a) Discuss five accounting concepts that are relevant in the preparation of financial information for
your SME. (5 marks)
b) Identify and discuss five stakeholders of accounting information and explain how each would use
the information from the financial statements of your SME. (5 marks)
Total = 10 Marks
Question 2
During a lunch meeting, an accounts intern at a pharmaceutical company in Abuja shared his
observations from the day's accounting activities with you. The intern noted the following transactions:
purchase of a new laptop computer for the accounts department with payments to be made in two
week, sales of drugs to a customer with immediate payment via the company’s POS terminal, return of
defective chemicals used in production of drugs to a supplier, return of drugs by a customer due to
wrong specification, purchase of packaging materials from a supplier on credit. Intrigued, the CEO
asked for clarification on how these transactions are recorded in the books.
Required:
a) Identify and explain the source documents used to support any five of the transactions mentioned
by the intern. (5 Marks)
b) Discuss the types of journals that would be used to record the five transactions identified in part
‘a’. (5 Marks)
Total = 10 Marks
Question 3
Below are the transactions for Kaduna Grocery Store for the month of December 2024. The cash and
bank account balances were 10,000 and N80,000 respectively on November 30, 2024

December 1, 2024 – The owner deposited N50,000 cash into the business bank account.
December 2, 2024 – Paid rent for the shop amounting to N10,000 in cash.
December 3, 2024 – Sold groceries worth N25,000 to a customer for cash.
December 5, 2024 – Purchased stock for N15,000 from a supplier, paid by cheque.
December 6, 2024 – Received N18,000 from a customer for a previous sale, paid into the bank.
December 7, 2024 – Bought groceries worth N8,000 for cash.
December 10, 2024 – Paid a utility bill of N5,000 from the business bank account.
December 12, 2024 – Received a cash discount of N2,000 on a N10,000 purchase of stock, paid by
cheque.
December 15, 2024 – Sold groceries worth N40,000, of which N20,000 was paid in cash and N20,000
was paid into the bank.
December 20, 2024 – Paid N3,000 for repairs of store equipment in cash.
December 23, 2024 – Paid N70,000 cash into bank.

Required: Prepare a three-column cash book.

10 Marks
Question 4
Below is the trial balance of Kingstone Limited as at 31 December, 2024.
. Dr. Cr.
N’000 N’000
Property, Plant and Equipment at cost 86,000
Accumulated Depreciation on Property, Plant and
17,200
Equipment as at January 1, 2024
Inventory at December 31, 2024 43,960
Receivables 15,700
Cash 850
Share Capital 100,000
Retained Earnings at January 1, 2024 9,650
Long-term borrowing 20,000
Trade Payables 5,600
Bank 600
Current tax liability 3,000
Revenue 206,350
Cost of Sales 158,500
Administrative expenses 14,480
Selling cost 20,330
Interest paid 2,000
Tax expense 1,280
Total 352,750 352,750

Additional Information:
The company charges 5% depreciation on the cost of property, plant and equipment and this is
apportioned among cost of sales, selling cost and administrative expenses in the ratio 2:2:1.
You are required to prepare the:
a) Statement of profit or loss for the year ended 31 December 2024 (6 marks)
b) Statement of financial position as at 31 December 2024 (4 marks)
Total = 10 Marks

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