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Under: Neco 2020 FINANCIAL ACCOUNT Answers
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THEORY
1a)
(i)Time lag between writing a cheque and the payment appearing on the bank statement (unpresented cheques)
(ii)Time lag between depositing amounts into the bank account and these appearing on the bank statement (unrecorded lodgements)
(iii)Direct debits and standing orders are not yet recorded in the cash account (or cash book)
(iv)Bank charges not recorded in the cash account (or cash book)
(v)Errors, such as transposition errors, or casting errors in the cash account (or cash book)
(vi)Errors made by the bank on the bank statement
(1b)
(a)Changing sources
(b) Intergovernmental transfers
(c)Owns source revenue
(d) Long-term revenue growth
(e) Data Sources
(f) Crude oil
(g)Transportation
(h) Education
(i) Tax
(J) Agriculture
(1c)
-[pick any five]
(i)suppliers
(ii)banks
(iii)customers iv)investors (v)potential vi)investors
(vii)tax authorities.
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2a)
i)Ledger never creates or modifies your data. Your entries are kept in a text file that you maintain, and you can rest assured, no automated tool will ever change that data.
ii)The amount of data required by Ledger is minimal. It figures out from looking at your data what you mean by it and how you want it reported back to you. Accounts are created as they appear; currencies are created as they’re referenced. Anywhere that a value can be calculated, you can leave it out.
iii)Ledger is a double-entry accounting tool, meaning that all entries must balance. If an entry does not balance, it will cause an error and the report will not be generated. Ledger is always checking the accuracies of your entries at every run; you won’t ever run into problems with “unaccounted” sums in an account.
iv)Ledger is 100% currency-agnostic. You can store multiple currencies in any account, convert between them, or even pay in one currency and receive change in another.
v)Ledger is international. UTF8 is accepted anywhere in data files, Ledger uses ISO format dates, attaches no meaning to the naming of accounts, and can accept data in either US or European decimal formats. It will report currencies back to you following the manner of your own entries.
Choose only two
2b
i)The Net Loss of the company.
ii)The Promotional (Marketing) expenses of the company.
iii)The Preliminary Expenses of the Company.
iv)The Discount allowed on the issue of shares.
2c
i)Opening stock details of raw material, semi-finished goods and finished goods.
ii)Closing stock details of raw material, semi-finished goods, and finished goods.
iii)Total purchases of goods fewer Purchase Returns.
iii)Total sales of goods fewer Sales Returns.
iv)All direct expenses related to purchases or sales or manufacturing of goods.
v) closing stock details of raw matert, semi-finished goods and finished goods
Choose only two
(2d)
1] Active Partner/Managing Partner
An active partner is also known as Ostensible Partner. As the name suggests he takes active participation in the firm and the running of the business. He carries on the daily business on behalf of all the partners. This means he acts as an agent of all the other partners on a day to day basis and with regards to all ordinary business of the firm.
Hence when an active partner wishes to retire from the firm he must give a public notice about the same. This will absolve him of the acts done by other partners after his retirement. Unless he gives a public notice he will be liable for all acts even after his retirement.
2] Dormant/Sleeping Partner
This is a partner that does not participate in the daily functioning of the partnership firm, i.e. he does not take an active part in the daily activities of the firm. He is however bound by the action of all the other partners.
He will continue to share the profits and losses of the firm and even bring in his share of capital like any other partner. If such a dormant partner retires he need not give a public notice of the same.
3] Nominal Partner
This is a partner that does not have any real or significant interest in the partnership. So, in essence, he is only lending his name to the partnership. He will not make any capital contributions to the firm, and so he will not have a share in the profits either. But the nominal partner will be liable to outsiders and third parties for acts done by any other partners.
4] Partner by Estoppel
If a person holds out to another that he is a partner of the firm, either by his words, actions or conduct then such a partner cannot deny that he is not a partner. This basically means that even though such a person is not a partner he has represented himself as such, and so he becomes partner by estoppel or partner by holding out.
5] Partner in Profits Only
This partner will only share the profits of the firm, he will not be liable for any liabilities. Even when dealing with third parties he will be liable for all acts of profit only, he will share none of the liabilities.===================================================================
(3i)
Returns inwards; this are goods returned to the selling entity by the customer, such as for warranty claims or outright returns of goods for a credit. For the customer, this results in the following accounting transaction. A debit (reduction) of accounts payable.
(3ii)
Returns outwards; this are goods returned by the customer to the supplier. For the supplier, this results in the following accounting transaction. A debit (reduction) in revenue in the amount credited back to the customer.
(3iii)
prospectus; in finance is a disclosure document that describes a financial security for potential buyers. It commonly provides investors with material information about mutual funds , stocks, bonds and other investments, such as a description of the company’s business, financial statements , biographies of officers and directors, detailed information about their compensation, any litigation that is taking place, a list of material properties and any other material information.
(3iv)
Prepayments; this are amounts paid for by a business in advance of the goods or services being received later on. Any payment made in advance can be considered a prepayment. A prepayment is not dissimilar to a deposit, but generally falls under a more set time period for fulfillment of the goods or service purchased.
(3v)
Cost of goods sold is the carrying value of goods sold during a particular period. Costs are associated with particular goods using one of the several formulas, including specific identification, first-in first-out, or average cost.
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(4)
A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.
(4b)
-[Pick any five]
(i) Accruals concept
(ii) Conservatism concept.
(iii) Consistency concept.
(iv) Economic entity concept.
(v)Going concern concept.
(vi)Matching concept.
(vii)Materiality concept.
(4c)
-[pick any five]
(a) Individual result of each department can be known which helps to compare the performances among all the departments, i.e., the trading results can be compared.
(b) Departmental accounts help to understand or locate the success, failure, rates of profit, etc.
(c) It helps the management to make proper plan of action, policies in order to increase profit after analysing the results of operation of various departments.
(d) Departmental accounting helps us to understand which department should be expanded further or which one should be closed down as per the results of the operation.
(e) If also helps to encourage a healthy competitive spirit among the various departments which, ultimately, helps to increase profits of the firm as a whole.
(f) For additions or alterations of various departments, departmental accounts helps a lot as it supplies the necessary information.
(g) As detailed information about the firm is available from departmental accounting the users of accounting information, particularly, the auditors and investors
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