EXAMSHARE

Western Delta University, Oghara Delta State

department of accounting and finance
college of social and management sciences
western delta university

second semester examination 2022/2023 session

ACC102 - introduction to financial accounting II time: 3hrs

attempt all questions in section A and B. attempt question 1 and any other 2 questions in section c

  1. Section A: (10 marks)

    1. _______ is not a reason for disagreement between the cash book and the bank statement (a) Unpresented cheques (b) Uncredited cheques (c) Bill receivable (d) Standing order
    2. _______ is an obligation which a business is legally bound to pay (a) Liabilities (b) Income (c) Capital (d) Assets
    3. _______ is the depreciation method that ensures reduction in depreciation charged agaisnt income on non-current asset (a) Straight line method (b) Sinking fund method (c) Revaluation method (d) Reducing balance method
    4. _______ is an order made by a customer to the bank to make regular payment to somebody (a) Credit transfer (b) Standing order (c) Dividend (d) Direct debits
    5. _______ ratio shows the number of times stock is turned over within the period. (a) Currency ratio (b) Inventory turnover (c) Debtor ratio (d) Dividend yield
    6. _______ method assumes that inventories purchased or produced first are sold first. (a) LIFO method (b) FIFO method (c) weighted Average Method (d) Net Realisable Value
    7. _______ account can be defined as the account used to record the difference on a trial balance temporarily until the errors are detected and corrected. (a) Suspense (b) Trading (c) Cash (d) Purchases
    8. _______ method makes provision for equal amount to be charged as depreciation for each year of useful life of an asset. (a) Straight line (b) Revaluation (c) Depreciation (d) Accrual
    9. The following are methods of inventory valuation except _______ (a) LIFO (b) FIFO (c) WAP (d) IFRS
    10. The following are examples of intangible assets except _______ (a) Goodwill (b) Inventory (c) Patent right (d) Copy right

  2. Section B: (10 marks)

    1. The acronym LIFO stands for
    2. List two reasons for disagreement between the cash book and the bank statement
    3. List two methods of depreciation
    4. List two types of accounting ratios
    5. List the two formats for preparing financial statements

  3. Section C: (50 marks)

    1. Question 1

      Azazi commenced business as a sole trader in March 2023 as a textile merchant. The following are the details of "Ankara" purchased and sold by him in March, 2023.

      March 4thpurchased 100 bundles at N1,000 each

      March 6thpurchased 150 bundles at N1,000 each

      March 8thsold 80 bundles at N1,800 each

      March 13thsold 90 bundles at N1,850 each

      March 18thpurchased 70 bundles at N1,200 each

      March 22ndsold 50 bundles at N1,950 each

      March 25thsold 60 bundles at N1,800 each

      March 28thpurchased 90 bundles at N1,250 each

      March 31stsold 50 bundles at N1,900 each

      Required: Using First-In-First-Out (FIFO), calculate the value of closing inventory at 31st March, 2023 and prepare the profit or loss account for the month (20 marks)
    2. Question 2
      1. What is a Bank Reconcilation Statement? (5 marks)
      2. List and explain five reasons for disagreement between cash book and bank statement (10 marks)
    3. Question 3

      Use the following information from the books of Ojo enterprises to answer the question below:

      SalesN45,000

      Opening inventoryN20,000

      Closing inventoryN30,000

      ExpensesN15,000

      Non-current asset40,000

      ReceivablesN10,000

      PayablesN5,000

      Purchases25,000

      Required: Calculate the following:
      1. Cost of goods sold
      2. Net profit
      3. Current ratio
      4. Working capital
      5. Net profit percentage
      (15 marks)
    4. Question 4
      1. Define depreciation (2 marks)
      2. List 3 causes of depreciation (3 marks)
      3. Stephanie & Co. bought a laptop on the 1/7/2023 for office use at a cost of #120,000. The equipment is expected to have a useful of 4 years. The scrap value of the computer is estimated at #20,000. Using sum-of-the-digit method, calculate the annual depreciation. (10 marks)
    5. Question 5

      The following information has been extracted from the books of WDU enterprises:

      SalesN50,000

      Opening inventoryN5,000

      PurchasesN20,000

      Returned outwardsN1,000

      Closing inventoryN2,500

      Carriage inwardN2,500

      WagesN5,000

      Marketing expenses5,000

      Return inwards2,500

      You are required to prepare the trading account of the business (15 marks)