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2018/2019 FINANCIAL ACCOUNT(THEORY &OBJ) QUESTIONS & ANSWERS FROM EXAMCROWN.COM
– It can result in a business exhausting the budget, leading to spending more than
what is coming in.
– Businesses may need to file for bankruptcy or shut their doors if they fail to keep adequate records from the
-It can result in problems with suppliers, payroll, utilities, and other vital components to a running successful business.
(i) Accounting information is historical in nature
(ii) There is no information as to usefulness, size or quantity because accounting is expressed in monetary terms
Direct materials consist of all of the materials that become an integral part of the finished product. Direct materials should include the actual cost of the materials, as well as freight in, import duties, purchasing costs, receiving costs, storage costs and other directly attributable costs of acquiring the materials.
Example- Orange in fanta making
Direct labor consists of all of the personnel costs required to manufacture the finished product. Direct labor should include wages, payroll taxes, and benefits associated with personnel who are integral to manufacturing the finished product.
Example- Wage of machine operator
Factory overhead consists of all of the other costs required to manufacture the finished product that do not fit into the direct material or direct labor elements. They consist mainly of indirect material, indirect labor, depreciation, utilities, rent, repairs and maintenance and insurance.
Example- Indirect wages.
These are the materials or goods purchased by the manufacturer. Manufacturing process is applied on the raw material to produce desired finished goods.
ii)WORK-IN-PROGRESS (WIP) These are the partly processed raw materials lying on the
These are the final products after manufacturing process
on raw materials. They are sold in the market.There are two kinds of manufacturing industries.
Where a big business with diverse trading activities is conducted under the same roof the same is usually divided into several departments and each department deals with a particular kind of goods or service. For example, a textile merchant may trade in cotton, woolen and jute fabrics. The overall performance for this type of business depends, however, on departmental efficiency.
(i) It helps the management to make proper plan of action, policies in order to increase profit after analysing the results of operation of various departments.
(ii) Departmental accounting helps us to understand which department should be expanded further or which one should be closed down as per the results of the operation.
Cash book Adjustment
Bal bld N48,500
interest on investment N2500
credit transfer N3000
Bank Charges N1000
Dishonured cheques N2000
bal cld N51,000
Total Bal bld N51,000
Bank Reconcilation statement at 31/12/2016
balance as per adjusted cash book N N51,000
add unpresented cheques 8850
add back wrong credit 3500
less uncredited cheques (8450)
balance as per bank statement N54,900
Obihan trading profit and loss account
SALES = 1,200,000
Less return inward =
Less cost of sales
Opening stock = 3000,000
Add purchase 1,050,000
Less return outward = 18,600
Cost of goods available. =1,331,400
Less closing stock=360,000
Cost of goods sold=971,400
LESS OPERATIVE EXPENSIVE
Rates (18,000 +1,500) = 16,500
Rates ( 18,000 + 660) = 3,660
Salaries (90,000 + 15,000) = 105,000
Bad Debits = 600
Insurance = 93,000
Depreciation: Furniture 9,000
Machineries = 18,000
Provision for bad debit = 540
NET LOSS 246,300
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