Below is a question with answer on the interpreation of accounts:
INTERPRETATION OF ACCOUNT ACCOUNTING TEST QUESTION NO.1
ANSWER TO INTERPRETATION OF ACCOUNT ACCOUNTING TEST QUESTION NO.1(PART A)
ANSWER TO INTERPRETATION OF ACCOUNT ACCOUNTING TEST QUESTION NO.1 (PART B)
ANSWER TO INTERPRETATION OF ACCOUNT ACCOUNTING TEST QUESTION NO.1 (PART C)
Below is an accounting or bookkeeping question with answer on simple limited company which asked for a profit and appropiration account and balance sheet to be drawn up:-
SIMPLE LIMITED COMPANY ACCOUNT ACCOUNTING TEST QUESTION NO.1
ANSWER TO LIMITED COMPANY ACCOUNT ACCOUNTING TEST QUESTION NO.1(PART A)
ANSWER TO LIMITED COMPANY ACCOUNT ACCOUNTING TEST QUESTION NO.1 (PART B)
Below is a question with answer on stock valuation:
STOCK VALUATION ACCOUNTING TEST QUESTION NO.1
ANSWER TO STOCK VALUATION ACCOUNTING TEST QUESTION NO.1(PART B)
ANSWER TO STOCK VALUATION ACCOUNTING TEST QUESTION NO.1(PART A)
More bookkeeping/accounting question and answer on Control or Total accounts:
CONTROL or TOTAL ACCOUNT ACCOUNTING TEST QUESTION NO.1
ANSWER TO CONTROL ACCOUNT ACCOUNTING TEST QUESTION NO.1
CONSIGNMENT ACCOUNT ACCOUNTING TEST QUESTION 1
ANSWER TO CONSIGNMENT ACCOUNT ACCOUNTING TEST NO. 1(PART A)
ANSWER TO CONSIGNMENT ACCOUNT ACCOUNTING TEST NO. 1 (PART B)
ANSWER TO CONSIGNMENT ACCOUNT ACCOUNTING TEST NO. 1(PART A)
Below is a bookkeeping/accounting question on Non Trading Organization:
NON TRADING ACCOUNT ACCOUNTING TEST QUESTION NO.1
ANSWER TO NON TRADING ACCOUNT ACCOUNTING TEST QUESTION NO.1
Below is a simple partnership account with question and answer:
SIMPLE PARTNERSHIP ACCOUNT ACCOUNTING TEST QUESTION NO.1
ANSWER TO PARTNERSHIP ACCOUNT ACCOUNTING TEST QUESTION NO.1 (PART A)
ANSWER TO PARTNERSHIP ACCOUNT ACCOUNTING TEST QUESTION NO.1 ( PART B)
Understand the basic of the different type of Organization Structure- Sole Proprietor ( Part 1 of 3)
In bookkeeping, a bookkeeper needs to at least understand the type of organization structure that one is going to help to prepare the books of accounts.
Below, we describe the three types of organization structure listed with characteristics/key features, advantages and disadvantages of having such structure:
(a) Sole Trade or Sole Proprietor ( Part 1 of 3)
(b) Partnership ( Part 2 of 3)
(c) Limited Company ( Part 3 of 3)
SOLE TRADER OR SOLE PROPRIETOR
CHARACTERISTICS OR KEY FEATURES:
• A one man shop completely responsible for running all aspect of the business
ADVANTAGES:
• A one man shop so able to move quickly to seize opportunity without consulting any other partners, etc,
• Able to have complete freedom to make decisions on the way the business is conducted without reference to anyone else,
• Any assets built up in the business belong 100% to the individual owner and
• The least formal in respect of compliance with government requirements as paperwork is lesser hence might suit the lifestyle and character of the individual
DISADVANTAGESs:
• Assume 100% responsibility for all the debts and liabilities of the business
• As the owner’s personal debt and its business debt is intermingle, hence potential liabilities may increase the debts of the business
• Lack of transparency as the accounts are not publicly inspected or audited. This makes it difficult to contract with public sector organizations who demand a degree of transparency in their business contracts with the private sector.
• Lack of funds to expand further.
• Might incur higher or maximum tax band/liabilities as tax is charged on the amount of net profit left after deducting allowable expenses
Double entry bookkeeping is the method used to transfer our weekly or monthly totals from our books of original entry into the nominal ledger.
Basic rule to remember is that:-
EVERY FINANCAL TRANSACTION gives RISE TO TWO ACCOUNTING ENTRIES, ONE A DEBIT AND THE OTHER A CREDIT.
Also note that:
(a) An increase in an expense ( example rent) or an increase in an asset ( office furniture) is a DEBIT
(b) An increase in revenue ( example sale of goods or services) or an increase in a liability( buying goods or service on credit) is a CREDIT
(c) A decrease in an asset( example making a cash payment) is a CREDIT
(d) A decrease in liability( example paying a creditor) is a DEBIT
EXAMPLES
(a) Purchase of office equipment
DEBIT: Office Equipment ( increase in asset)
CREDIT: Cash at bank ( decrease in asset re: cash at bank decreases)
(b) Purchase of stationery on credit
CREDIT: Accounts Payable ( increase in liability )
DEBIT: Purchases ( item of expense)
© Payment received from a credit customer
CREDIT: Accounts receivable ( decrease in asset)
DEBIT : Cash at bank ( increase in asset)
Question No.1:-
State which books of original entry the following transactions would be entered into:
(a) ABC pays you $100
(b) You return goods to AB to the value of $100
(c) Customer AC returns goods to the value of $150
(d) You pay Jim $500
(e) You receive an invoice from A for $120
(f) Your accounts clerk ask you for $15 to buy stationery
(g) You send customer D an invoice for $700
(h) Your business pays Mr.C, a supplier $1000
Answer to Question. No.1:-
(a) Cash book
(b) Purchase returns day book
(c) Sales returns day book
(d) Cash book
(e) Purchase day book
(f) Petty cash book
(g) Sales day book
(h) Cash book
Question No 2:-
Name the seven books of original entry
Answer to Question No.2:-
(1) Sales day book,
(2) Sales returns day book
(3) Purchase day book
(4) Purchase return day book
(5) Cash book
(6) Petty cash book
(7) Journal
Question No.3:-
What is the difference between the cash book and the petty cash book?
Answer to Question No.3:
The cash book records amounts into or out of the bank account. The petty cash book records payments of small amounts of cash.
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