Question Tag: Purchases

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MI – Nov 2020 – L1 – SB – Q1 – Budgeting

Prepare the cash budget for the first three months of the year based on provided sales, expenses, and additional company details.

Question

WXYZ is preparing for the first half of the next year. The following information was available:

a. Sales – 15% of monthly sales are in cash, while the balance is sold on credit. Collections from receivables are 50% in the first month after sales, 30% in the second month, and the balance in the third month after sales.
b. Purchases are usually 55% of sales and paid in the month of purchase.
c. Insurance company is expected to pay the sum of N525,000 in February based on the company’s accidented vehicles.
d. Salary deductions are paid on a preceding-month basis.
e. Company income tax of N475,550 will be paid in March.
f. Cash and cash equivalent balance as at December is N502,760.
g. Bank charges are 1% of total payments for the month.
h. Additional Information:

Month	October (N)	November (N)	December (N)	January (N)	February (N)	March (N)
Sales	750,000	600,000	850,000	520,000	670,000	800,000
Net Salaries	230,000	200,000	250,000	210,000	240,000	270,000
Other Expenses	200,700	187,500	197,500	177,200	187,500	192,700
Salaries Deductions	29,400	28,400	39,400	28,700	32,750	27,650

Required:
Prepare the cash budget for the first three months of the year. (Total 20 Marks)

Answer

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Tags: Cash Budget, Forecasting, Payables, Purchases, Receivables, Sales
Level: Level 1

Topic: Budgeting
Series: NOV 2020

PSAF – Nov 2020 – L2 – Q4a – The Budgeting Process in the Public Sector

Prepare a monthly cash budget for the fishpond from January to March 2020, considering expected sales, purchases, and allocation.

Question

The Chairman of Okoko Local Government set up pond farming to fulfill a campaign promise. However, the Chairman is concerned about the project’s viability and its ability to finance itself due to increasing production costs. The expected cash-in-hand as of January 1, 2020, is N3,300,000.

The following information concerns the budgeted sales and purchases of the fish farm.

Month	Sales (N’000)	Purchases (N’000)
November 2019	55,000	35,000
December 2019	100,000	55,000
January 2020	114,000	75,000
February 2020	142,000	95,000
March 2020	145,000	80,000

Analysis of records shows that debtors settle according to the following pattern:

70% within the month of sale
30% in the following month

All purchases are on credit. Past experience shows that 80% of the purchase costs are settled in the month of the transaction, and the balance is settled in the subsequent month. Overhead costs amounting to 65% of the purchases of the month are to be paid monthly. Additionally, the Local Government will receive a monthly allocation of N15,000,000.

Required:

Prepare for the Chairman of Okoko Local Government a monthly cash budget for the fish pond for the first quarter (January to March) of 2020. (10 Marks)

Answer

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Tags: Budgeting, Cash Budget, Debtors, Fish Farm, Monthly Allocation, Purchases
Level: Level 2

Topic: The Budgeting Process in the Public Sector
Series: NOV 2020

FA – Nov 2012 – L1 – SA – Q7 – Control Accounts

Identifying a source that does not provide information for preparing control accounts.

Question

Source of information for preparing Control Accounts EXCLUDES:

A. Purchases journal
B. Cash discount
C. Sales day book
D. Cash account
E. Opening Statement of Financial Position

Answer

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Tags: Cash, Control Accounts, Prime Entry, Purchases
Level: Level 1

Topic: Control Accounts
Series: NOV 2012

FA – May 2013 – L1 – SA – Q8 – Recording Financial Transactions

This question defines purchases in financial accounting.

Question

Which of the following correctly describes the meaning of “purchases”?

A. Items bought
B. Goods bought on credit
C. Goods bought for resale
D. Goods paid for
E. Goods returned by customers

Answer

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Tags: Goods for Resale, Purchases
Level: Level 1

Topic: Recording Financial Transactions
Series: MAY 2013

FA – May 2014 – L1 – SA – Q6 – Correcting Errors

Corrects an error in recording machinery purchase.

Question

A company purchased machinery for ₦900,000. The company’s Accountant recorded the transaction in the company’s books by debiting the Purchases Account instead of debiting a Non-Current Asset Account. Raise journal entries to correct the error.

Answer

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Tags: Error Correction, Non-current Assets, Purchases
Level: Level 1

Topic: Correction of errors
Series: MAY 2014

FA – Nov 2013 – L1 – SA – Q37 – Accounting from Incomplete Records

Calculating Adamu's purchases for the period using available data.

Question

Adamu does not keep complete accounting records. However, you were able to extract the following information from the available records for the year ended 31 December 2012:

	₦
Cash purchases	234,000
Cash and cheque payments for goods supplied	1,671,000
Trade payables at 1 January 2012	58,200
Trade payables at 31 December 2012	43,200

What was Adamu’s purchases for the period?

Answer

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Tags: Accounting Calculations, Incomplete Records, Purchases
Level: Level 1

Topic: Accounting from Incomplete Records
Series: NOV 2013

FA – Nov 2013 – L1 – SA – Q21 – Recording Financial Transactions

Identifying the accounting entries for recording container purchase.

Question

What are the accounting entries to record the purchase of containers?

Answer

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Tags: Containers, Journal Entries, Purchases
Level: Level 1

FA – Nov 2013 – L1 – SA – Q15 – Recording Financial Transactions

Determining the best definition of "purchases" in accounting.

Question

Which of the following best describes the meaning of “Purchases”?

A. Items bought
B. Goods bought on credit
C. Goods bought for resale
D. Goods paid for
E. Goods returned by customer

Answer

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Tags: Accounting Definitions, Financial Transactions, Purchases
Level: Level 1

FA – May 2018 – L1 – SA – Q11 – Double-Entry Accounting Principles

Determines the correct double-entry recording of a computer purchase transaction.

Question

Computer Company Limited recently bought ten computers for its use, which of the following is the correct method of recording this transaction?
A. Debit computers account and credit cash account
B. Debit purchases account and credit cash account
C. Debit cash account and credit purchases account
D. Debit cash account and credit computers account
E. Debit computers account and credit purchases account

Answer

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Tags: Asset Recording, Double Entry, Purchases
Level: Level 1

Topic: Double-Entry Accounting Principles
Series: MAY 2018

FA – May 2022 – L1 – SA – Q5 – Double-Entry Accounting Principles

Calculate the purchases made by a business given the opening and closing inventories and cost of sales.

Question

If the opening and closing inventories of an entity are ₦34,565 and ₦41,222 respectively, and the cost of sales is ₦160,545, how much are the purchases?

A. ₦119,323
B. ₦153,888
C. ₦167,202
D. ₦201,767
E. ₦236,332

Answer

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Tags: Accounting Equation, Cost of Sales, Inventory, Purchases
Level: Level 1

Topic: Double-Entry Accounting Principles
Series: MAY 2022

MI – Nov 2020 – L1 – SB – Q1 – Budgeting

Prepare the cash budget for the first three months of the year based on provided sales, expenses, and additional company details.

Question

WXYZ is preparing for the first half of the next year. The following information was available:

Month	October (N)	November (N)	December (N)	January (N)	February (N)	March (N)
Sales	750,000	600,000	850,000	520,000	670,000	800,000
Net Salaries	230,000	200,000	250,000	210,000	240,000	270,000
Other Expenses	200,700	187,500	197,500	177,200	187,500	192,700
Salaries Deductions	29,400	28,400	39,400	28,700	32,750	27,650

Required:
Prepare the cash budget for the first three months of the year. (Total 20 Marks)

Answer

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Tags: Cash Budget, Forecasting, Payables, Purchases, Receivables, Sales
Level: Level 1

Topic: Budgeting
Series: NOV 2020

PSAF – Nov 2020 – L2 – Q4a – The Budgeting Process in the Public Sector

Prepare a monthly cash budget for the fishpond from January to March 2020, considering expected sales, purchases, and allocation.

Question

The following information concerns the budgeted sales and purchases of the fish farm.

Month	Sales (N’000)	Purchases (N’000)
November 2019	55,000	35,000
December 2019	100,000	55,000
January 2020	114,000	75,000
February 2020	142,000	95,000
March 2020	145,000	80,000

Analysis of records shows that debtors settle according to the following pattern:

70% within the month of sale
30% in the following month

Required:

Prepare for the Chairman of Okoko Local Government a monthly cash budget for the fish pond for the first quarter (January to March) of 2020. (10 Marks)

Answer

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Tags: Budgeting, Cash Budget, Debtors, Fish Farm, Monthly Allocation, Purchases
Level: Level 2

Topic: The Budgeting Process in the Public Sector
Series: NOV 2020

FA – Nov 2012 – L1 – SA – Q7 – Control Accounts

Identifying a source that does not provide information for preparing control accounts.

Question

Source of information for preparing Control Accounts EXCLUDES:

A. Purchases journal
B. Cash discount
C. Sales day book
D. Cash account
E. Opening Statement of Financial Position

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash, Control Accounts, Prime Entry, Purchases
Level: Level 1

Topic: Control Accounts
Series: NOV 2012

FA – May 2013 – L1 – SA – Q8 – Recording Financial Transactions

This question defines purchases in financial accounting.

Question

Which of the following correctly describes the meaning of “purchases”?

A. Items bought
B. Goods bought on credit
C. Goods bought for resale
D. Goods paid for
E. Goods returned by customers

Answer

Find Related Questions by Tags, levels, etc.

Tags: Goods for Resale, Purchases
Level: Level 1

Topic: Recording Financial Transactions
Series: MAY 2013

FA – May 2014 – L1 – SA – Q6 – Correcting Errors

Corrects an error in recording machinery purchase.

Question

Answer

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Tags: Error Correction, Non-current Assets, Purchases
Level: Level 1

Topic: Correction of errors
Series: MAY 2014

FA – Nov 2013 – L1 – SA – Q37 – Accounting from Incomplete Records

Calculating Adamu's purchases for the period using available data.

Question

Adamu does not keep complete accounting records. However, you were able to extract the following information from the available records for the year ended 31 December 2012:

	₦
Cash purchases	234,000
Cash and cheque payments for goods supplied	1,671,000
Trade payables at 1 January 2012	58,200
Trade payables at 31 December 2012	43,200

What was Adamu’s purchases for the period?

Answer

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Tags: Accounting Calculations, Incomplete Records, Purchases
Level: Level 1

Topic: Accounting from Incomplete Records
Series: NOV 2013

FA – Nov 2013 – L1 – SA – Q21 – Recording Financial Transactions

Identifying the accounting entries for recording container purchase.

Question

What are the accounting entries to record the purchase of containers?

Answer

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Tags: Containers, Journal Entries, Purchases
Level: Level 1

FA – Nov 2013 – L1 – SA – Q15 – Recording Financial Transactions

Determining the best definition of "purchases" in accounting.

Question

Which of the following best describes the meaning of “Purchases”?

A. Items bought
B. Goods bought on credit
C. Goods bought for resale
D. Goods paid for
E. Goods returned by customer

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounting Definitions, Financial Transactions, Purchases
Level: Level 1

FA – May 2018 – L1 – SA – Q11 – Double-Entry Accounting Principles

Determines the correct double-entry recording of a computer purchase transaction.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Asset Recording, Double Entry, Purchases
Level: Level 1

Topic: Double-Entry Accounting Principles
Series: MAY 2018

FA – May 2022 – L1 – SA – Q5 – Double-Entry Accounting Principles

Calculate the purchases made by a business given the opening and closing inventories and cost of sales.

Question

If the opening and closing inventories of an entity are ₦34,565 and ₦41,222 respectively, and the cost of sales is ₦160,545, how much are the purchases?

A. ₦119,323
B. ₦153,888
C. ₦167,202
D. ₦201,767
E. ₦236,332

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounting Equation, Cost of Sales, Inventory, Purchases
Level: Level 1

Topic: Double-Entry Accounting Principles
Series: MAY 2022

Question Tag: Purchases

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MI – Nov 2020 – L1 – SB – Q1 – Budgeting

Prepare the cash budget for the first three months of the year based on provided sales, expenses, and additional company details.

You're reporting an error for "MI – Nov 2020 – L1 – SB – Q1 – Budgeting"

PSAF – Nov 2020 – L2 – Q4a – The Budgeting Process in the Public Sector

Prepare a monthly cash budget for the fishpond from January to March 2020, considering expected sales, purchases, and allocation.

You're reporting an error for "PSAF – Nov 2020 – L2 – Q4a – The Budgeting Process in the Public Sector"

FA – Nov 2012 – L1 – SA – Q7 – Control Accounts

Identifying a source that does not provide information for preparing control accounts.

You're reporting an error for "FA – Nov 2012 – L1 – SA – Q7 – Control Accounts"

FA – May 2013 – L1 – SA – Q8 – Recording Financial Transactions

This question defines purchases in financial accounting.

You're reporting an error for "FA – May 2013 – L1 – SA – Q8 – Recording Financial Transactions"

FA – May 2014 – L1 – SA – Q6 – Correcting Errors

Corrects an error in recording machinery purchase.

You're reporting an error for "FA – May 2014 – L1 – SA – Q6 – Correcting Errors"

FA – Nov 2013 – L1 – SA – Q37 – Accounting from Incomplete Records

Calculating Adamu's purchases for the period using available data.

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q37 – Accounting from Incomplete Records"

FA – Nov 2013 – L1 – SA – Q21 – Recording Financial Transactions

Identifying the accounting entries for recording container purchase.

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q21 – Recording Financial Transactions"

FA – Nov 2013 – L1 – SA – Q15 – Recording Financial Transactions

Determining the best definition of "purchases" in accounting.

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q15 – Recording Financial Transactions"

FA – May 2018 – L1 – SA – Q11 – Double-Entry Accounting Principles

Determines the correct double-entry recording of a computer purchase transaction.

You're reporting an error for "FA – May 2018 – L1 – SA – Q11 – Double-Entry Accounting Principles"

FA – May 2022 – L1 – SA – Q5 – Double-Entry Accounting Principles

Calculate the purchases made by a business given the opening and closing inventories and cost of sales.

You're reporting an error for "FA – May 2022 – L1 – SA – Q5 – Double-Entry Accounting Principles"

MI – Nov 2020 – L1 – SB – Q1 – Budgeting

Prepare the cash budget for the first three months of the year based on provided sales, expenses, and additional company details.

You're reporting an error for "MI – Nov 2020 – L1 – SB – Q1 – Budgeting"

PSAF – Nov 2020 – L2 – Q4a – The Budgeting Process in the Public Sector

Prepare a monthly cash budget for the fishpond from January to March 2020, considering expected sales, purchases, and allocation.

You're reporting an error for "PSAF – Nov 2020 – L2 – Q4a – The Budgeting Process in the Public Sector"

FA – Nov 2012 – L1 – SA – Q7 – Control Accounts

Identifying a source that does not provide information for preparing control accounts.

You're reporting an error for "FA – Nov 2012 – L1 – SA – Q7 – Control Accounts"

FA – May 2013 – L1 – SA – Q8 – Recording Financial Transactions

This question defines purchases in financial accounting.

You're reporting an error for "FA – May 2013 – L1 – SA – Q8 – Recording Financial Transactions"

FA – May 2014 – L1 – SA – Q6 – Correcting Errors

Corrects an error in recording machinery purchase.

You're reporting an error for "FA – May 2014 – L1 – SA – Q6 – Correcting Errors"

FA – Nov 2013 – L1 – SA – Q37 – Accounting from Incomplete Records

Calculating Adamu's purchases for the period using available data.

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q37 – Accounting from Incomplete Records"

FA – Nov 2013 – L1 – SA – Q21 – Recording Financial Transactions

Identifying the accounting entries for recording container purchase.

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q21 – Recording Financial Transactions"

FA – Nov 2013 – L1 – SA – Q15 – Recording Financial Transactions

Determining the best definition of "purchases" in accounting.

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q15 – Recording Financial Transactions"

FA – May 2018 – L1 – SA – Q11 – Double-Entry Accounting Principles

Determines the correct double-entry recording of a computer purchase transaction.

You're reporting an error for "FA – May 2018 – L1 – SA – Q11 – Double-Entry Accounting Principles"

FA – May 2022 – L1 – SA – Q5 – Double-Entry Accounting Principles

Calculate the purchases made by a business given the opening and closing inventories and cost of sales.

You're reporting an error for "FA – May 2022 – L1 – SA – Q5 – Double-Entry Accounting Principles"

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