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Accounting Exam Solutions 2023

The document provides solutions to accounting exam questions, including a Statement of Profit or Loss and a Statement of Financial Position for the year ended 31 December 2023, detailing sales, expenses, assets, and liabilities. It also explains the term accounting, its nature, and identifies five users of accounting information. The solutions are based on the information provided in the question paper, acknowledging potential alternative interpretations.

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11 views2 pages

Accounting Exam Solutions 2023

The document provides solutions to accounting exam questions, including a Statement of Profit or Loss and a Statement of Financial Position for the year ended 31 December 2023, detailing sales, expenses, assets, and liabilities. It also explains the term accounting, its nature, and identifies five users of accounting information. The solutions are based on the information provided in the question paper, acknowledging potential alternative interpretations.

Uploaded by

sanusitomisin62
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd

Here's the solution to the accounting exam questions:

Question One
Statement of Profit or Loss for the year ended 31 December 2023
Particulars Amount (N)
Sales 3,005,010
Less: Sales Return 11,759
Net Sales 2,993,251
Cost of Goods Sold:
Opening Stock 200,750
Add: Purchases 2,054,553
Less: Closing Stock 437,310
Cost of Goods Sold 1,817,993
Gross Profit 1,175,258
Operating Expenses:
Motor Van Expenses 6,000
Advertising 3,610
Postage 4,140
Electricity 2,730
Salaries 5,110
Entertainment 2,030
Telephone 1,020
Furniture Depreciation 3,312
Bad Debts 700
Bad Debt Provision 9,000
Rates (Prepaid) 450
Telephone (Outstanding) 1,550
Total Operating Expenses 39,652
Net Profit 1,135,606
Statement of Financial Position as at 31 December 2023
Assets Amount (N)
Non-Current Assets:
Premises 150,000
Less: Depreciation 7,500
Net Premises 142,500
Motor Vans 27,910
Less: Depreciation 6,000
Net Motor Vans 21,910
Furniture 33,120
Less: Depreciation 3,312
Net Furniture 29,808
Total Non-Current Assets 194,218
Current Assets:
Inventory 437,310
Trade Receivables 145,400
Less: Bad Debt Provision 9,000
Assets Amount (N)
Net Trade Receivables 136,400
Prepaid Rates 450
Cash in Hand 10,560
Bank 113,760
Total Current Assets 698,580
Total Assets 892,798

Equity and Liabilities Amount (N)


Equity:
Capital 483,720
Add: Net Profit 1,135,606
Total Equity 1,619,326
Current Liabilities:
Trade Payables 252,150
Outstanding Telephone 1,550
Total Current Liabilities 253,700
Total Equity and Liabilities 1,873,026
Question Two
(a) Explain the term Accounting
Accounting is the process of identifying, measuring, and communicating economic information
to permit informed judgments and decisions by users of the information.
(b) Explain five natures of accounting
1.​ Accounting is a service activity: It provides useful information to decision-makers.
2.​ Accounting is a continuous process: It involves a series of steps that are performed
repeatedly.
3.​ Accounting is based on double-entry system: Every transaction affects at least two
accounts.
4.​ Accounting information is both quantitative and qualitative: It includes financial data
as well as narrative information.
5.​ Accounting is a social science: It is influenced by the environment in which it operates.
(c) State and explain five users of accounting information
1.​ Owners: To assess the profitability and financial position of the business.
2.​ Managers: To make informed decisions about the operations of the business.
3.​ Employees: To assess the job security and future prospects of the business.
4.​ Lenders: To assess the creditworthiness of the business.
5.​ Government: To collect taxes and regulate the activities of the business.
Note: The solutions provided above are based on the information given in the question paper.
Please note that there may be other valid interpretations and approaches to solving these
questions.
●​ [Link]

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