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FA – May 2013 – L1 – SA – Q31 – Double Entry Accounting Principles

This question asks for the double-entry accounting treatment for goods taken from inventory for personal use by the sole trader.

A sole trader took some goods costing N1,000 from inventory for his own use. The normal selling price of the goods is N2,500. What are the double-entry postings required?

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FA – May 2018 – L1 – SA – Q13 – Partnership Accounts

Identifies the correct double entry for partners' drawings in a partnership account.

The double entry for partners’ drawings is to:
A. Debit appropriation account and credit drawings account
B. Debit partners’ current accounts and credit cash account
C. Debit cash account and credit appropriation account
D. Debit partners’ current accounts and credit appropriation account
E. Debit appropriation account and credit cash account

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FA – May 2022 – L1 – SA – Q2 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Identify the correct posting when a proprietor withdraws cash from a business for private use.

When a proprietor of a business withdraws cash from the organization for private use, the proper postings are:

DR CR
A. Cash account Drawings account
B. Drawings account Capital account
C. Bank account Drawings account
D. Drawings account Cash account
E. Bank account Cash account

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FA – Nov 2022 – L1 – SA – Q17 – Accounting from Incomplete Records

Calculate the profit based on the opening and closing capital and drawings.

A business proprietor failed to maintain proper records, but you managed to ascertain that his opening capital, closing capital, and drawings during the year were N225,000, N260,000, and N10,000 respectively. Determine the profit for the period.
A. N25,000
B. N45,000
C. N55,000
D. N65,000
E. N75,000

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FA – May 2021 – L1 – SA – Q10 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Calculate the profit for the year using opening and closing capital with drawings.

A business proprietor failed to maintain proper records, but you managed to ascertain that his opening capital, closing capital, and drawings during the year were ₦225,000, ₦260,000, and ₦10,000 respectively.
How much will be the profit during the period?
A. ₦45,000
B. ₦50,000
C. ₦270,000
D. ₦485,000
E. ₦495,000

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FA – May 2017 – L1 – SA – Q14 – Accounting from Incomplete Records

Calculates profit or loss for a sole trader based on capital and drawings.

The following information is obtained from the books of a sole trader:
(i) Opening capital as at January 1, 2015 N300,000
(ii) Closing capital as at December 31, 2015 N65,000
(iii) Additional capital introduced during 2015 N120,000
(iv) Cash withdrawn during 2015 N320,000

Calculate the profit or loss during the period.

A. N285,000 loss
B. N35,000 loss
C. N35,000 profit
D. N225,000 profit
E. N522,500 profit

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FA – May 2016 – L1 – SB – Q5 – Accounting from Incomplete Records

Calculate profit or loss and prepare the statement of financial position for Mr. Mala's bookshop using incomplete records.

Mr. Mala, the proprietor of a small bookshop, has requested you to prepare his accounts. He did not keep complete records of account. From his passbook, notebook, bank statements, and oral information obtained during a meeting with him, you put together the following figures for the year ended December 31, 2015:

Item January 1, 2015 (N’000) December 31, 2015 (N’000)
Cash in hand 400 890
Bank overdraft 18,000 14,000
Furniture & Fittings 2,000 2,000
Delivery van 3,600 3,600
Inventories 20,400 22,400
Trade receivables 12,400 9,800
Trade payables 9,120 8,400
Bills payables 2,210 2,200
Bills receivables 3,100 3,200

During the year, Mr. Mala used part of the inventories for domestic affairs which was agreed at N1,200,000. He drew cash for private expenses at frequent intervals. He estimated his drawing in cash at N2,800,000 for the year.

He also agreed with the following suggestions:

  1. To write off irrecoverable debts of N300,000 owed by a customer who died in May 2015.
  2. To charge a notional rent of N1,000,000 per annum for the shop premises owned by him.
  3. To allow 15 percent per annum depreciation on furniture and fittings and 20 percent per annum on the delivery van.

Required:

a. Ascertain Mr. Mala’s bookshop’s profit or loss for the year ended December 31, 2015. (8 Marks)

b. Prepare the statement of financial position of the bookshop at December 31, 2015. (12 Marks)

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FA – May 2016 – L1 – SA – Q4 – Financial Statements Preparation

A question regarding the net assets of a sole trader after considering profit, drawings, and additional capital.

Ajonibode runs a business as a sole trader and the following information relates to the business:
On January 1, 2015, the net assets of the business were N1,675,000. During the year to December 31, 2015, the business made a profit of N625,000 and Ajonibode took out N550,000 in drawings. Due to a shortage of cash, he paid in additional capital of N100,000 in early December 2015.
What are the net assets of the business as of December 31, 2015?
A. N1,675,000
B. N1,850,000
C. N2,300,000
D. N2,400,000
E. N2,950,000

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FA – May 2024 – L1 – SA – Q2 – Recording Financial Transactions

Calculates profit based on opening and closing capital with drawings.

A business proprietor failed to maintain proper records, but you managed to ascertain that his opening capital, closing capital, and drawings during the year were N225,000, N260,000, and N10,000 respectively. Determine the profit for the period.

A. N25,000
B. N45,000
C. N55,000
D. N65,000
E. N75,000

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FA – Nov 2023 – L1 – Q2 – Preparation of Partnership accounts

Adjust the net profit or loss of a partnership firm and prepare the revised current accounts and statement of financial position.

Adu, Boateng, and Dogbe are trading in partnership under an agreement which provides for interest on partners’ capital accounts at the rate of 10% per annum, annual salaries of GHȼ7,500 and GHȼ4,000 for Boateng and Dogbe respectively, and the balance of the profit or loss shared among Adu, Boateng, and Dogbe in the proportion 5:3:2 respectively.

Partners’ cash drawings for the year ended 30 April 2021 were as follows:

Partner Amount (GHȼ)
Adu 8,000
Boateng 5,000
Dogbe 6,000

The draft Statement of Financial Position as at 30 April 2021 of Adu, Boateng, and Dogbe is as follows:

After the preparation of the draft final accounts for the year ended 30 April 2021, which disclosed a net loss of GHȼ10,500, it was discovered that:

  1. The partners’ cash drawings for the year under review have been debited to purchases.
  2. On 1 November 2020 it was agreed that Boateng should increase his partnership capital from GHȼ25,000 by transferring to the partnership a freehold property bought by Boateng five years earlier at a cost of GHȼ10,000 and currently valued at GHȼ30,000. Although the appropriate debit entry has been made in the non-current asset account, the corresponding credit entry appeared in the profit and loss appropriation account.
  3. The partners’ salaries for the year ended 30 April 2021 have been debited to staff salaries and credited to the relevant partners’ current accounts.

The partners have now decided that an allowance for receivables should be 4% of trade receivables.

Required:

a) Compute the revised net profit or loss of the partnership for the year ended 30 April 2021. (5 marks)
b) Prepare the revised partners’ current accounts for the year ended 30 April 2021. (Note: the partners’ current accounts should commence with the balances shown in the draft partnership Statement of Financial Position as at 30 April 2021). (7 marks)
c) Redraft the Statement of Financial Position of the partnership as at 30 April 2021. (8 marks)

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FA – May 2013 – L1 – SA – Q31 – Double Entry Accounting Principles

This question asks for the double-entry accounting treatment for goods taken from inventory for personal use by the sole trader.

A sole trader took some goods costing N1,000 from inventory for his own use. The normal selling price of the goods is N2,500. What are the double-entry postings required?

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FA – May 2018 – L1 – SA – Q13 – Partnership Accounts

Identifies the correct double entry for partners' drawings in a partnership account.

The double entry for partners’ drawings is to:
A. Debit appropriation account and credit drawings account
B. Debit partners’ current accounts and credit cash account
C. Debit cash account and credit appropriation account
D. Debit partners’ current accounts and credit appropriation account
E. Debit appropriation account and credit cash account

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FA – May 2022 – L1 – SA – Q2 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Identify the correct posting when a proprietor withdraws cash from a business for private use.

When a proprietor of a business withdraws cash from the organization for private use, the proper postings are:

DR CR
A. Cash account Drawings account
B. Drawings account Capital account
C. Bank account Drawings account
D. Drawings account Cash account
E. Bank account Cash account

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FA – Nov 2022 – L1 – SA – Q17 – Accounting from Incomplete Records

Calculate the profit based on the opening and closing capital and drawings.

A business proprietor failed to maintain proper records, but you managed to ascertain that his opening capital, closing capital, and drawings during the year were N225,000, N260,000, and N10,000 respectively. Determine the profit for the period.
A. N25,000
B. N45,000
C. N55,000
D. N65,000
E. N75,000

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FA – May 2021 – L1 – SA – Q10 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Calculate the profit for the year using opening and closing capital with drawings.

A business proprietor failed to maintain proper records, but you managed to ascertain that his opening capital, closing capital, and drawings during the year were ₦225,000, ₦260,000, and ₦10,000 respectively.
How much will be the profit during the period?
A. ₦45,000
B. ₦50,000
C. ₦270,000
D. ₦485,000
E. ₦495,000

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FA – May 2017 – L1 – SA – Q14 – Accounting from Incomplete Records

Calculates profit or loss for a sole trader based on capital and drawings.

The following information is obtained from the books of a sole trader:
(i) Opening capital as at January 1, 2015 N300,000
(ii) Closing capital as at December 31, 2015 N65,000
(iii) Additional capital introduced during 2015 N120,000
(iv) Cash withdrawn during 2015 N320,000

Calculate the profit or loss during the period.

A. N285,000 loss
B. N35,000 loss
C. N35,000 profit
D. N225,000 profit
E. N522,500 profit

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FA – May 2016 – L1 – SB – Q5 – Accounting from Incomplete Records

Calculate profit or loss and prepare the statement of financial position for Mr. Mala's bookshop using incomplete records.

Mr. Mala, the proprietor of a small bookshop, has requested you to prepare his accounts. He did not keep complete records of account. From his passbook, notebook, bank statements, and oral information obtained during a meeting with him, you put together the following figures for the year ended December 31, 2015:

Item January 1, 2015 (N’000) December 31, 2015 (N’000)
Cash in hand 400 890
Bank overdraft 18,000 14,000
Furniture & Fittings 2,000 2,000
Delivery van 3,600 3,600
Inventories 20,400 22,400
Trade receivables 12,400 9,800
Trade payables 9,120 8,400
Bills payables 2,210 2,200
Bills receivables 3,100 3,200

During the year, Mr. Mala used part of the inventories for domestic affairs which was agreed at N1,200,000. He drew cash for private expenses at frequent intervals. He estimated his drawing in cash at N2,800,000 for the year.

He also agreed with the following suggestions:

  1. To write off irrecoverable debts of N300,000 owed by a customer who died in May 2015.
  2. To charge a notional rent of N1,000,000 per annum for the shop premises owned by him.
  3. To allow 15 percent per annum depreciation on furniture and fittings and 20 percent per annum on the delivery van.

Required:

a. Ascertain Mr. Mala’s bookshop’s profit or loss for the year ended December 31, 2015. (8 Marks)

b. Prepare the statement of financial position of the bookshop at December 31, 2015. (12 Marks)

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FA – May 2016 – L1 – SA – Q4 – Financial Statements Preparation

A question regarding the net assets of a sole trader after considering profit, drawings, and additional capital.

Ajonibode runs a business as a sole trader and the following information relates to the business:
On January 1, 2015, the net assets of the business were N1,675,000. During the year to December 31, 2015, the business made a profit of N625,000 and Ajonibode took out N550,000 in drawings. Due to a shortage of cash, he paid in additional capital of N100,000 in early December 2015.
What are the net assets of the business as of December 31, 2015?
A. N1,675,000
B. N1,850,000
C. N2,300,000
D. N2,400,000
E. N2,950,000

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FA – May 2024 – L1 – SA – Q2 – Recording Financial Transactions

Calculates profit based on opening and closing capital with drawings.

A business proprietor failed to maintain proper records, but you managed to ascertain that his opening capital, closing capital, and drawings during the year were N225,000, N260,000, and N10,000 respectively. Determine the profit for the period.

A. N25,000
B. N45,000
C. N55,000
D. N65,000
E. N75,000

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FA – Nov 2023 – L1 – Q2 – Preparation of Partnership accounts

Adjust the net profit or loss of a partnership firm and prepare the revised current accounts and statement of financial position.

Adu, Boateng, and Dogbe are trading in partnership under an agreement which provides for interest on partners’ capital accounts at the rate of 10% per annum, annual salaries of GHȼ7,500 and GHȼ4,000 for Boateng and Dogbe respectively, and the balance of the profit or loss shared among Adu, Boateng, and Dogbe in the proportion 5:3:2 respectively.

Partners’ cash drawings for the year ended 30 April 2021 were as follows:

Partner Amount (GHȼ)
Adu 8,000
Boateng 5,000
Dogbe 6,000

The draft Statement of Financial Position as at 30 April 2021 of Adu, Boateng, and Dogbe is as follows:

After the preparation of the draft final accounts for the year ended 30 April 2021, which disclosed a net loss of GHȼ10,500, it was discovered that:

  1. The partners’ cash drawings for the year under review have been debited to purchases.
  2. On 1 November 2020 it was agreed that Boateng should increase his partnership capital from GHȼ25,000 by transferring to the partnership a freehold property bought by Boateng five years earlier at a cost of GHȼ10,000 and currently valued at GHȼ30,000. Although the appropriate debit entry has been made in the non-current asset account, the corresponding credit entry appeared in the profit and loss appropriation account.
  3. The partners’ salaries for the year ended 30 April 2021 have been debited to staff salaries and credited to the relevant partners’ current accounts.

The partners have now decided that an allowance for receivables should be 4% of trade receivables.

Required:

a) Compute the revised net profit or loss of the partnership for the year ended 30 April 2021. (5 marks)
b) Prepare the revised partners’ current accounts for the year ended 30 April 2021. (Note: the partners’ current accounts should commence with the balances shown in the draft partnership Statement of Financial Position as at 30 April 2021). (7 marks)
c) Redraft the Statement of Financial Position of the partnership as at 30 April 2021. (8 marks)

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