FINANCIAL ACCOUNTING QUESTIONS AND ANSWER NOW AVAILABLE HERE
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Account OBJ:
1-10: ABBCCBACCA
11-20 CCACCACCAB
21-30: CACBCCABBD
31-40: BCCDADDBBD
41-50: DBABAABBDC
1a.
Choose 4
- delivery dockets
- sales and purchase invoices
- credit and debit notes
- deposit slip
- cheques
1b.
- period charged to income
- relationship to planning, controlling and decision making
- ability to trace
- relationship to volume
1c
- to find out the unpresented cheques which have been already issued to the creditors.
- to find out what are the reasons behind why either bank statement or cash book shows the different amounts apart from the expected balances.
2a.
A trial balance is a bookkeeping or accounting report that lists the balances in each of an organization's general ledger accounts.
2b.
- to detect any errors that has occurred in the double entry accounting system
- it helps in the preparation of financial statements
2c
1. Errors of Principle:
An error of principle is an error which violates the fundamentals of book-keeping. For instance, purchase of furniture is debited to Purchase Account, instead of Furniture Account; Wages paid for the erection of plant is debited to Wages Account, instead of Plant Account; the amount spent on extension of building is debited to Repairs Account instead of Building Account etc. These types of errors do not affect the total debits and total credits but affect the principle of book-keeping.
2. Errors of Omission:
If a transaction is completely omitted, there will be no effect on the Trial Balance. When a transaction goes completely unrecorded in both aspects or a transaction after being recorded in the books of primary entry is not at all posted in the ledger, the error is an error of omission. For instance, if a credit purchase is omitted to be recorded in the Purchase Day Book, then it will be omitted to be posted both in the Purchase Account and the Supplier’s Account. This error will not, however, result in the disagreement of Trial Balance.
3. Posting to Wrong Account:
Posting an item to wrong account, but on the correct side. For instance, if a purchase of Rs 200 from Ramu has been credited to Raman, instead of Ramu and this error will not affect the agreement of Trial Balance. Thus, Trial Balance will not detect such an error.
4. Error of Amounts in Original Book:
If an invoice for Rs 632 is entered in Sales Book as Rs 623, the Trial Balance will come out correctly, since the debit and credit have been recorded as Rs 623. The arithmetical accuracy is there, but in fact there is an error.
3a) It is not a legally binding practice; rather, it is a generally accepted convention based on customs and designed to help accountants overcome practical problems that arise out of the preparation of financial statements.
3b) Materiality:
An important convention. As we can see from the application of accounting standards and accounting policies, the preparation of accounts involves a high degree of judgement. Where decisions are required about the appropriateness of a particular accounting judgement, the "materiality" convention suggests that this should only be an issue if the judgement is "significant" or "material" to a user of the accounts. The concept of "materiality" is an important issue for auditors of financial accounts.
(4a)
Depreciation is the measure of the wearing out, consumption or other loss of value of a fixed asset whether arising from use, effluxion of time or obsolescence through technology and market changes
(4b)
I. Physical deterioration
ii. Obsolescence
iii. The time factor
iv. Economic factor
v. Inadequacy
___
2a.
A trial balance is a bookkeeping or accounting report that lists the balances in each of an organization's general ledger accounts.
2b.
- to detect any errors that has occurred in the double entry accounting system
- it helps in the preparation of financial statements
2c
1. Errors of Principle:
An error of principle is an error which violates the fundamentals of book-keeping. For instance, purchase of furniture is debited to Purchase Account, instead of Furniture Account; Wages paid for the erection of plant is debited to Wages Account, instead of Plant Account; the amount spent on extension of building is debited to Repairs Account instead of Building Account etc. These types of errors do not affect the total debits and total credits but affect the principle of book-keeping.
2. Errors of Omission:
If a transaction is completely omitted, there will be no effect on the Trial Balance. When a transaction goes completely unrecorded in both aspects or a transaction after being recorded in the books of primary entry is not at all posted in the ledger, the error is an error of omission. For instance, if a credit purchase is omitted to be recorded in the Purchase Day Book, then it will be omitted to be posted both in the Purchase Account and the Supplier’s Account. This error will not, however, result in the disagreement of Trial Balance.
3. Posting to Wrong Account:
Posting an item to wrong account, but on the correct side. For instance, if a purchase of Rs 200 from Ramu has been credited to Raman, instead of Ramu and this error will not affect the agreement of Trial Balance. Thus, Trial Balance will not detect such an error.
4. Error of Amounts in Original Book:
If an invoice for Rs 632 is entered in Sales Book as Rs 623, the Trial Balance will come out correctly, since the debit and credit have been recorded as Rs 623. The arithmetical accuracy is there, but in fact there is an error.
3a) It is not a legally binding practice; rather, it is a generally accepted convention based on customs and designed to help accountants overcome practical problems that arise out of the preparation of financial statements.
3b) Materiality:
An important convention. As we can see from the application of accounting standards and accounting policies, the preparation of accounts involves a high degree of judgement. Where decisions are required about the appropriateness of a particular accounting judgement, the "materiality" convention suggests that this should only be an issue if the judgement is "significant" or "material" to a user of the accounts. The concept of "materiality" is an important issue for auditors of financial accounts.
(4a)
Depreciation is the measure of the wearing out, consumption or other loss of value of a fixed asset whether arising from use, effluxion of time or obsolescence through technology and market changes
(4b)
I. Physical deterioration
ii. Obsolescence
iii. The time factor
iv. Economic factor
v. Inadequacy
From www.042portal.blogspot.com
(4a)
Depreciation is the measure of the wearing out, consumption or other loss of value of a fixed asset whether arising from use, effluxion of time or obsolescence through technology and market changes
(4b)
I. Physical deterioration
ii. Obsolescence
iii. The time factor
iv. Economic factor
v. Inadequacy
Reasons to prepare BRS
1)To detect items not entered and errors in the cash book. To ensure that the cash book entries are complete.
2) Items missing from the cash book will not have been recorded in other ledger accounts and the business records will be unreliable
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💎💎💎 *FINANCIAL ACCOUNTING EXAMINATION SCHEME*💎💎💎
_There will be two papers – Paper 1 and Paper 2, both of which will constitute a composite paper to be taken at one sitting._
*PAPER 1*: _Will comprise fifty multiple choice questions to be taken in 1 hour for 50 marks._
*PAPER 2:* _Will be made up of two sections: Sections A and B and will last 2½ hours._
*Section A:* _Will contain five essay questions on theory of financial accounting. Candidates will be required to answer two out of the four questions for 15 marks each._
*Section B:* _Will contain five essay questions on financial accounting practice. Candidates will be required to answer three out of the questions for 15 marks each._
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