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In a business enterprise that has not kept proper books of accounts, what does an increase in capital at the end of the year over capital at the beginning of the year represent?
A. Increase in capital
B. Decrease in capital
C. Underutilization of resources
D. Inefficient management of capital
E. Improved operating performance
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Where there are no proper books of account, the equity at the commencement of a period is ascertained by preparing:
A. Statement of profit or loss
B. Statement of financial position
C. Statement of affairs
D. Bank reconciliation statement
E. Receivables and payables account
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Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
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?
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Find Related Questions by Tags, levels, etc.
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In preparing a set of final accounts from incomplete records, which of the following information need NOT be considered?
A. Business structure
B. Accounting and business equations
C. Credit sales and trade receivables
D. Purchases, inventory, and the cost of sales
E. Stolen goods, goods destroyed, or goods taken by the owner of the business
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For most small businesses, accounting records are either not available or incomplete. Which of the following business equations will be most appropriate to use in determining closing net assets?
A. Opening net assets + drawings – profit + capital introduced
B. Capital introduced + profit + drawings – opening net assets
C. Opening net assets + capital introduced + loss – drawings
D. Opening net assets + capital introduced + profit + drawing
E. Opening net assets + capital introduced + profit – drawings
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Peju runs a big grocery store in Ibadan, but many of her accounting records were destroyed by a flood incident close to the end of the financial year of the business. From the records that were retrieved after the incident, the following balances were gathered in respect to her assets and liabilities at the beginning of the year:
In addition, you were informed that:
(i) Inventory was valued at N46,510,000, trade receivables at N20,680,000, and trade payables at N15,430,000.
(ii) Sundry expenses accrued amounted to N370,000 for 2016.
(iii) Depreciation is to be provided as follows: furniture and fittings 10% and motor vehicle 20% on reducing balance method.
(iv) Peju took some groceries from the store costing N2,060,000. She is yet to pay.
(v) Allowances for doubtful debts are raised at the beginning and end of the year at 5%. Bad debts of N600,000 had been written off the trade receivables as at December 31, 2017.
(vi) The insurance policy redeemed was to be used as additional capital.
Required:
a. Calculate the capital as at January 1, 2017. (6 Marks)
b. Prepare the statement of profit or loss for the year ended December 31, 2017. (8 Marks)
c. Prepare the statement of financial position as at December 31, 2017. (6 Marks)
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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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Igba Enterprises, a small business, has incomplete records for the month of September 2023. Suspecting discrepancies, the proprietor has invited an accountant to assist in investigating the books. The available information includes the following details:
Required:
Using the information provided, calculate any missing figure and clearly show all necessary calculations.
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Which of the following best describes incomplete records in accounting?
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Shoema is a sole proprietor who has not kept a complete set of books for his business. He has now asked you to prepare his accounts. The following information is made available to you.
| Account | 31 December 2015 (₦) | 31 December 2014 (₦) |
|---|---|---|
| Plant and machinery | 242,550 | 272,195 |
| Inventories | 116,424 | 132,864 |
| Trade receivables | 87,749 | 100,254 |
| Trade payables | 46,354 | 49,804 |
| Rates paid in advance | – | 2,695 |
| Rent accrued | 7,007 | 1,348 |
| Salary accrued | 6,468 | 8,085 |
Shoema pays all cash received into the bank and makes all payments by cheque. A summary of his bank account for the year is as follows:
| Bank Account | Amount (₦) |
|---|---|
| Balance b/f | 14,122 |
| Cash sales | 897,758 |
| Trade receivables | 439,930 |
| Trade payables | 917,162 |
| Salaries | 143,751 |
| Rent | 40,425 |
| Insurance | 87,641 |
| Rates | 13,475 |
| New machine | 53,900 |
| Drawings | 58,212 |
| Balance c/f | 37,244 |
| Total | 1,351,810 |
Required:
Prepare Shoema’s statement of profit or loss for the year ended December 31, 2015, and statement of financial position as at December 31, 2015.
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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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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:
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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