56 questions. Try each one, then open the answer to check yourself and read the explanation.
The books of accounts are opened by means of a
Answer: B (Principal Journal)
Opening entries (assets, liabilities and capital at the start) go through the journal proper (principal journal).
Which of the following is true of trade discounts?
Answer: C (They are recorded in the Journals only)
Trade discount is deducted on the invoice and day book (journal); it is never posted to a ledger account.
Return inwards was understated. The effect is that
Answer: E (amount of sales returns was understated.)
Returns inwards are sales returns; understating them understates sales returns (and so overstates net sales and gross profit).
Which of the following is not contained in the Sales Ledger Control Account?
Answer: C (Returns outwards)
Returns outwards are goods sent back to suppliers, so they belong in the purchases ledger control account.
Payment for future services are
Answer: A (prepayments)
Money paid now for services still to be received is a prepayment (a current asset).
Which of the following is a credit item on an Income and Expenditure account?
Answer: D (Subscriptions)
Subscriptions are income, so they are credited; the rest are expenses.
An excess of the value of the assets over the purchases consideration for acquisition of business is credited to
Answer: B (capital reserve)
Paying less than the net assets are worth gives a gain (negative goodwill), credited to capital reserve.
Shares are sold at less than nominal value. They are issued at a
Answer: C (discount)
Selling below nominal value is issuing at a discount.
A share is under-subscribed when
Answer: C (the number of shares applied for is less than the offer)
Under-subscription means the public applied for fewer shares than were offered.
Mark-up on goods sent to branch offices are recorded in the books by crediting
Answer: A (Stock Adjustment Account debiting Branch Stock Account.)
The branch stock account is kept at selling price; the mark-up part is credited to the branch stock adjustment account.
Cash stolen from branch-takings is recorded in the Head Office books by debiting
Answer: A (defalcations Account and crediting Branch Stock Account.)
Stolen takings never reach head office, so the loss is debited to defalcations and the branch stock account credited.
A Trial Balance is a proof of accuracy of
Answer: C (double entry in the ledgers)
It checks that every debit in the ledger has a matching credit.
The term bad debts means debts
Answer: D (that cannot be collected)
A bad debt is one the business will never be able to collect.
The equivalent of a Club's Receipt and Payment Account is
Answer: A (Cash Account)
A receipts and payments account is a summary of cash in and out, like a cash account.
Goodwill is
Answer: E (an intangible asset.)
Goodwill has value but no physical form: an intangible fixed asset.
Purchases in Accounting refer to goods bought for
Answer: C (resale)
The purchases account is only for goods bought to be sold again.
Use the following information:
10,000 ordinary shares of ₦1 each: ₦10,000
5,000 5% preference shares of ₦1 each: ₦5,000
Profit and Loss Account: ₦8,000
8% debenture: ₦10,000
Creditors: ₦3,000
Bank overdraft: ₦2,000
Plants and machinery: ₦10,000
Furniture and fittings: ₦3,000
Stock: ₦8,000
Debtors: ₦5,000
What is the amount of share capital?
Answer: D (₦15,000)
Ordinary 10,000 + preference 5,000 = ₦15,000.
Use the following information:
10,000 ordinary shares of ₦1 each: ₦10,000
5,000 5% preference shares of ₦1 each: ₦5,000
Profit and Loss Account: ₦8,000
8% debenture: ₦10,000
Creditors: ₦3,000
Bank overdraft: ₦2,000
Plants and machinery: ₦10,000
Furniture and fittings: ₦3,000
Stock: ₦8,000
Debtors: ₦5,000
What is the value of shareholders' equity?
Answer: B (₦23,000)
Share capital 15,000 + profit and loss 8,000 = ₦23,000.
Use the following information:
10,000 ordinary shares of ₦1 each: ₦10,000
5,000 5% preference shares of ₦1 each: ₦5,000
Profit and Loss Account: ₦8,000
8% debenture: ₦10,000
Creditors: ₦3,000
Bank overdraft: ₦2,000
Plants and machinery: ₦10,000
Furniture and fittings: ₦3,000
Stock: ₦8,000
Debtors: ₦5,000
What is the total value of long term liability?
Answer: E (₦10,000.)
The only long-term liability is the 8% debenture, ₦10,000.
Use the following information:
10,000 ordinary shares of ₦1 each: ₦10,000
5,000 5% preference shares of ₦1 each: ₦5,000
Profit and Loss Account: ₦8,000
8% debenture: ₦10,000
Creditors: ₦3,000
Bank overdraft: ₦2,000
Plants and machinery: ₦10,000
Furniture and fittings: ₦3,000
Stock: ₦8,000
Debtors: ₦5,000
What is the total amount of fixed assets?
Answer: D (₦13,000)
Plant 10,000 + furniture 3,000 = ₦13,000.
Use the following information:
10,000 ordinary shares of ₦1 each: ₦10,000
5,000 5% preference shares of ₦1 each: ₦5,000
Profit and Loss Account: ₦8,000
8% debenture: ₦10,000
Creditors: ₦3,000
Bank overdraft: ₦2,000
Plants and machinery: ₦10,000
Furniture and fittings: ₦3,000
Stock: ₦8,000
Debtors: ₦5,000
What is the value of current liabilities?
Answer: C (₦5,000)
Creditors 3,000 + bank overdraft 2,000 = ₦5,000.
Use the following information:
10,000 ordinary shares of ₦1 each: ₦10,000
5,000 5% preference shares of ₦1 each: ₦5,000
Profit and Loss Account: ₦8,000
8% debenture: ₦10,000
Creditors: ₦3,000
Bank overdraft: ₦2,000
Plants and machinery: ₦10,000
Furniture and fittings: ₦3,000
Stock: ₦8,000
Debtors: ₦5,000
What is the total of current assets?
Answer: B (₦13,000)
Stock 8,000 + debtors 5,000 = ₦13,000.
Which of the following is not a Nominal Account?
Answer: D (Land)
Land is an asset (real account); the others are income or expense accounts.
The amount of individual items on a government budget is called
Answer: A (a vote)
Each amount approved for an item in the budget is a vote.
Which of the following does not belong to the group?
Answer: E (Return inwards.)
Returns inwards is deducted from sales in the trading account; the others are profit and loss expenses.
John and Johnson are in partnership, sharing profit and losses in the ratio 3:2. Other information are as follows:
Capital: John ₦20,000; Johnson ₦10,000
Drawings: John ₦2,000; Johnson ₦3,000
Interest on capital: 5%
Interest on drawings: 10%
Profit: ₦6,000
The interest on Johnson's capital is
Answer: E (₦500)
5% × 10,000 = ₦500.
John and Johnson are in partnership, sharing profit and losses in the ratio 3:2. Other information are as follows:
Capital: John ₦20,000; Johnson ₦10,000
Drawings: John ₦2,000; Johnson ₦3,000
Interest on capital: 5%
Interest on drawings: 10%
Profit: ₦6,000
Interest on John's drawings is
Answer: C (₦200)
10% × 2,000 = ₦200.
John and Johnson are in partnership, sharing profit and losses in the ratio 3:2. Other information are as follows:
Capital: John ₦20,000; Johnson ₦10,000
Drawings: John ₦2,000; Johnson ₦3,000
Interest on capital: 5%
Interest on drawings: 10%
Profit: ₦6,000
What is John's share of the profit?
Answer: C (₦3,000)
6,000 + interest on drawings 500 − interest on capital 1,500 = 5,000; John gets 3/5 = ₦3,000.
John and Johnson are in partnership, sharing profit and losses in the ratio 3:2. Other information are as follows:
Capital: John ₦20,000; Johnson ₦10,000
Drawings: John ₦2,000; Johnson ₦3,000
Interest on capital: 5%
Interest on drawings: 10%
Profit: ₦6,000
What is Johnson's share of the profit?
Answer: E (₦2,000.)
Johnson gets 2/5 of 5,000 = ₦2,000.
John and Johnson are in partnership, sharing profit and losses in the ratio 3:2. Other information are as follows:
Capital: John ₦20,000; Johnson ₦10,000
Drawings: John ₦2,000; Johnson ₦3,000
Interest on capital: 5%
Interest on drawings: 10%
Profit: ₦6,000
The balance on John's current account is
Answer: E (₦1,800 CR.)
Interest 1,000 + share 3,000 − drawings 2,000 − interest on drawings 200 = ₦1,800 credit.
John and Johnson are in partnership, sharing profit and losses in the ratio 3:2. Other information are as follows:
Capital: John ₦20,000; Johnson ₦10,000
Drawings: John ₦2,000; Johnson ₦3,000
Interest on capital: 5%
Interest on drawings: 10%
Profit: ₦6,000
The balance on Johnson's current account is
Answer: D (₦800 DR)
Interest 500 + share 2,000 − drawings 3,000 − interest on drawings 300 = −800, a debit of ₦800.
John and Johnson are in partnership, sharing profit and losses in the ratio 3:2. Other information are as follows:
Capital: John ₦20,000; Johnson ₦10,000
Drawings: John ₦2,000; Johnson ₦3,000
Interest on capital: 5%
Interest on drawings: 10%
Profit: ₦6,000
Interest on Johnson's drawings is
Answer: B (₦300)
10% × 3,000 = ₦300.
Which of the following is the most liquid?
Answer: B (Cash at Bank)
Cash at bank can be spent at once: it is the most liquid.
Which of the following does not belong to the group?
Answer: E (Overdraft.)
An overdraft is a liability; the others appear on the assets side.
A partner's drawing is debited to
Answer: D (Current Account)
When capitals are fixed, drawings are debited to the partner's current account.
Trade debts amounting to ₦300 were written off. Which of the following would be affected?
Answer: D (Sales Ledger)
The debtor's account in the sales ledger is credited to remove the debt (the expense later goes to profit and loss).
Debenture is a
Answer: C (long term liability)
Debentures are long-term loans to the company.
Which of the following is a Revenue Income?
Answer: D (Debt recovered)
A bad debt recovered is ordinary income; the others are capital receipts.
Which of the following is a fictitious asset?
Answer: C (Preliminary Expenses)
Preliminary expenses are shown as an asset only until written off; they have no real value.
Income received in advance is shown in the Balance Sheet as
Answer: E (Current Liability.)
Income received for a later period is owed back as a service, so it is a current liability.
Gavbon Ltd. failed to record ₦2,000 wages. The error committed is that of
Answer: A (omission)
Leaving a transaction out completely is an error of omission.
The excess of current assets over current liabilities is
Answer: E (Working capital.)
Working capital = current assets − current liabilities.
Carriage inwards are
Answer: B (debited to the Trading Account)
Carriage inwards adds to the cost of purchases, so it is debited in the trading account.
Purchases: raw materials ₦20,000; finished goods ₦15,200
Stock 1/1/89: raw materials ₦3,000; work-in-progress ₦2,500
Wages: direct ₦22,800; indirect ₦7,200
Factory expenses: electricity ₦12,000; insurance ₦2,000
Stock 31/12/89: raw materials ₦4,000; work-in-progress ₦4,500
What is the value of raw materials available?
Answer: A (₦23,000)
Opening raw materials 3,000 + purchases 20,000 = ₦23,000.
Purchases: raw materials ₦20,000; finished goods ₦15,200
Stock 1/1/89: raw materials ₦3,000; work-in-progress ₦2,500
Wages: direct ₦22,800; indirect ₦7,200
Factory expenses: electricity ₦12,000; insurance ₦2,000
Stock 31/12/89: raw materials ₦4,000; work-in-progress ₦4,500
The cost of materials used is
Answer: D (₦19,000)
23,000 − closing raw materials 4,000 = ₦19,000.
Purchases: raw materials ₦20,000; finished goods ₦15,200
Stock 1/1/89: raw materials ₦3,000; work-in-progress ₦2,500
Wages: direct ₦22,800; indirect ₦7,200
Factory expenses: electricity ₦12,000; insurance ₦2,000
Stock 31/12/89: raw materials ₦4,000; work-in-progress ₦4,500
The prime cost is
Answer: D (₦41,800)
Materials 19,000 + direct wages 22,800 = ₦41,800.
Purchases: raw materials ₦20,000; finished goods ₦15,200
Stock 1/1/89: raw materials ₦3,000; work-in-progress ₦2,500
Wages: direct ₦22,800; indirect ₦7,200
Factory expenses: electricity ₦12,000; insurance ₦2,000
Stock 31/12/89: raw materials ₦4,000; work-in-progress ₦4,500
The amount of factory overhead is
Answer: C (₦21,200)
Indirect wages 7,200 + electricity 12,000 + insurance 2,000 = ₦21,200.
Purchases: raw materials ₦20,000; finished goods ₦15,200
Stock 1/1/89: raw materials ₦3,000; work-in-progress ₦2,500
Wages: direct ₦22,800; indirect ₦7,200
Factory expenses: electricity ₦12,000; insurance ₦2,000
Stock 31/12/89: raw materials ₦4,000; work-in-progress ₦4,500
The cost of manufactured goods is
Answer: E (₦61,000.)
Prime cost 41,800 + overheads 21,200 + opening WIP 2,500 − closing WIP 4,500 = ₦61,000.
Use the following information:
Rent paid 31/12/89: ₦4,000
Rent owing 1/1/89: ₦500
Rent owing 31/12/89: ₦300
Rent for 1989 amounts to
Answer: D (₦3,800)
4,000 − 500 (last year's) + 300 (still owing) = ₦3,800.
Which of the following account is not kept by a local government?
Answer: E (Profit and Loss Account.)
Government bodies do not aim to make profit, so they keep no profit and loss account.
Section A (compulsory)
The following Trial Balance has been extracted from the ledgers of Mr. Jinadu as at 31st December 1990 (shown in the figure).
Additional Information: (a) Stock at close ₦16,442 (b) Outstanding expenses: Advertising ₦354; Salaries and wages ₦848; Interest on loan ₦750 (c) Rent, Rates and Insurance paid in advance ₦426 (d) Depreciation: Equipment 10% on cost; Furniture & Fittings 5%; Land and Building 10%; Motor Vehicles 25% (e) Salaries and wages includes ₦3,600 paid to Mr. Jinadu (f) Records of typewriter bought on Credit on 31st December 1990 for ₦10,000 have not been made in books. (g) Mr. Jinadu decided on 31st December 1990 to write off a further amount of ₦2,000 as bad debt (h) Mr. Jinadu's children consumed goods worth ₦5,500 during the year. (i) Provisions: doubtful debts 5% discount allowance 10%.
Prepare: (i) Trading, Profit and Loss Account for the year ended 31st December 1990; and (ii) A Balance Sheet as at that date.
(i) Trading, Profit and Loss Account for the year ended 31 December 1990
Sales 233,120 − returns inwards 5,000 = 228,120
Purchases 142,448 + carriage inwards 2,500 − returns outwards 3,000 − goods taken for own use 5,500 = 136,448; + opening stock 14,308 − closing stock 16,442 = cost of sales 134,314
Gross profit ₦93,806; add discount received 1,368 = 95,174
Expenses: discount allowed 2,412; carriage outwards 5,176; rent, rates and insurance (11,946 − 426) 11,520; postage and stationery 2,426; advertising (3,704 + 354) 4,058; salaries and wages (26,152 − 3,600 + 848) 23,400; bad debts (2,468 + 2,000) 4,468; loan interest 750; increase in provision for doubtful debts (5% × 36,600 = 1,830 − 500) 1,330; provision for discounts (10% × 34,770) 3,477; depreciation: equipment 10% × 107,400 = 10,740, furniture 5% × 5,000 = 250, land and buildings 10% × 40,000 = 4,000, motor vehicles 25% × 20,000 = 5,000; total 79,007
Net profit ₦16,167
(ii) Balance Sheet as at 31 December 1990
Fixed assets (NBV): land and buildings 36,000; equipment 107,400 − 54,040 = 53,360; motor vehicles 15,000; furniture 4,750; total 109,110
Current assets: stock 16,442; debtors 36,600 − 1,830 − 3,477 = 31,293; prepayments 426; bank 6,108; cash 624; total 54,893
Current liabilities: creditors 23,280; typewriter creditor 10,000; accrued advertising 354, salaries 848, loan interest 750; total 35,232; working capital 19,661
Less 5% loan 15,000; net assets ₦113,771
Capital 107,566 + net profit 16,167 − drawings (862 + 3,600 + 5,500) 9,962 = ₦113,771
Salary paid to the owner and goods his family used are drawings, not business expenses.
Section B
On January 1, 1991 the Sales Ledger balance of Ola was ₦2,400 debit while the bought Ledger balance was ₦970 credit. The following transactions took place in the month of January 1991
Credit Sales ₦35,180
Bad debt ₦845
Dishonoured cheque ₦1,250
Credit Purchases ₦18,060
Returns Inwards ₦1,570
Bills receivable ₦4,500
Cash received from debtors ₦15,600
Cash paid to creditors ₦11,400
Discount allowed ₦450
Discount received ₦945
Cheques from debtors ₦7,500
Bills Payable ₦2,150
Debit Balance in Bought Ledger transferred to Sales Ledger ₦260
Discount allowed but subsequently disallowed ₦150
Discount received but subsequently withdrawn ₦145
Prepare: (a) Total Debtors Account (b) Total Creditors Account
(a) Total Debtors Account: Dr balance b/d 2,400; credit sales 35,180; dishonoured cheque 1,250; discount disallowed 150; total 38,980 / Cr bad debts 845; returns inwards 1,570; bills receivable 4,500; cash 15,600; discount allowed 450; cheques 7,500; transfer to bought ledger (contra) 260; balance c/d 8,255; total 38,980
(b) Total Creditors Account: Dr cash 11,400; discount received 945; bills payable 2,150; transfer (contra) 260; balance c/d 4,420; total 19,175 / Cr balance b/d 970; credit purchases 18,060; discount withdrawn 145; total 19,175
A discount disallowed puts the debt back: debit debtors (and credit creditors for a discount withdrawn).
Abass and Okafor are in partnership sharing profits and losses in the ratio 2 : 3 respectively. The following balances were extracted from the partnership books on 31st December, 1991.
Capital Accounts: Abass ₦15,500; Okafor ₦18,070
Current Accounts: Abass ₦29,800; Okafor ₦9,500
Drawings: Abass ₦1,100; Okafor ₦1,760
Motor Vehicles ₦54,000
Office Furniture ₦23,800
Advertisement ₦5,900
Sales ₦149,500
Returns Inwards ₦3,000
Purchases ₦70,600
Returns Outwards ₦5,500
Opening Stock ₦24,600
Carriage Inwards ₦3,300
Discount Allowed ₦3,400
Discount Received ₦2,300
Rent and Rates ₦3,950
Salaries and Wages ₦16,000
Carriage Outwards ₦5,600
Electricity ₦2,300
Provision for depreciation: Motor Vehicles ₦13,500; Office Furniture ₦7,140
Bills Payable ₦7,500
Creditors ₦28,000
Bills Receivable ₦6,600
Debtors ₦48,000
Cash ₦12,400
Additional Information: (a) Closing stock ₦18,000 (b) Salaries and Wages accrued ₦60 (c) Interest on Capital is ₦2,425 for Abass and ₦1,475 for Okafor. (d) The partners maintain fixed capital accounts (e) Salaries payable to partner: Abass ₦1,400; Okafor ₦1,600 (f) Provision for depreciation: Motor Vehicles 25% on cost; Office Furniture 15% on cost.
Prepare: (i) The Trading, Profit and Loss Appropriation Account for the year ended 31st December 1991, and (ii) A Balance Sheet as at that date.
(i) Trading, Profit and Loss and Appropriation Account for the year ended 31 December 1991
Sales 149,500 − returns 3,000 = 146,500
Opening stock 24,600 + purchases 70,600 + carriage inwards 3,300 − returns outwards 5,500 − closing stock 18,000 = cost of sales 75,000
Gross profit ₦71,500; add discount received 2,300 = 73,800
Expenses: advertisement 5,900; discount allowed 3,400; rent and rates 3,950; salaries and wages (16,000 + 60) 16,060; carriage outwards 5,600; electricity 2,300; depreciation motor vehicles 13,500, office furniture 3,570; total 54,280
Net profit ₦19,520
Appropriation: interest on capital Abass 2,425, Okafor 1,475; salaries Abass 1,400, Okafor 1,600; residue 12,620 shared 2:3: Abass 5,048, Okafor 7,572
Current accounts: Abass 29,800 + 2,425 + 1,400 + 5,048 − 1,100 = 37,573; Okafor 9,500 + 1,475 + 1,600 + 7,572 − 1,760 = 18,387
(ii) Balance Sheet as at 31 December 1991
Fixed assets: motor vehicles 54,000 − 27,000 = 27,000; office furniture 23,800 − 10,710 = 13,090; total 40,090
Current assets: stock 18,000; debtors 48,000; bills receivable 6,600; cash 12,400; total 85,000
Current liabilities: creditors 28,000; bills payable 7,500; accrued wages 60; total 35,560; working capital 49,440
Net assets ₦89,530 = capitals (15,500 + 18,070) 33,570 + current accounts (37,573 + 18,387) 55,960
With fixed capitals, interest, salaries, profit shares and drawings all go through the partners' current accounts.
Amanabo could not keep proper books of his business transactions during the year 1991. The following were extracted from his books:
Purchases - Cash ₦15,000; Credit ₦25,000
Cash received from debtors ₦65,000
Purchase of furniture ₦2,400
Cash Sales ₦25,000
Expenses paid: Salaries of Office Assistants ₦7,200; Electricity ₦1,200; Rent ₦2,400; Insurance ₦4,000; Rate ₦600; Advertisement ₦1,200
Additional Information: (a) (1st January, 1991 | 31st December, 1991): Stock ₦5,000 | ₦7,000; Electricity ₦80 | ₦120; Rent owing ₦200 | ₦180; Insurance prepaid ₦180 | ₦200; Debtors ₦2,500 | ₦3,200; Creditors ₦1,500 | ₦2,220; Rates paid in advance ₦150 | ₦120 (b) Fixed Assets on 1st January 1991 are: Furniture ₦3,600; Motor Vehicles ₦25,000; Buildings ₦35,000 (c) Cash at Bank on 1st January 1991 was ₦10,000 (d) Fixed Assets should be depreciated as follows: Furniture and Building 5%; Motor Vehicle 20%
Prepare: (i) Cash book: (ii) Trading, Profit and Loss Account for the year ended 31st December, 1991.
Workings (taking ₦25,000 as the year's credit purchases): paid to creditors = 1,500 + 25,000 − 2,220 = 24,280; credit sales = 65,000 + 3,200 − 2,500 = 65,700
(i) Cash Book: Dr balance b/d 10,000; debtors 65,000; cash sales 25,000; total 100,000 / Cr cash purchases 15,000; creditors 24,280; furniture 2,400; salaries 7,200; electricity 1,200; rent 2,400; insurance 4,000; rates 600; advertisement 1,200; balance c/d 41,720
(ii) Trading, Profit and Loss Account for the year ended 31 December 1991: sales (25,000 + 65,700) 90,700; opening stock 5,000 + purchases 40,000 − closing stock 7,000 = cost of sales 38,000; gross profit ₦52,700
Expenses: salaries 7,200; electricity (1,200 + 120 − 80) 1,240; rent (2,400 + 180 − 200) 2,380; insurance (4,000 + 180 − 200) 3,980; rates (600 + 150 − 120) 630; advertisement 1,200; depreciation: furniture 5% × 6,000 = 300, buildings 5% × 35,000 = 1,750, motor vehicle 20% × 25,000 = 5,000; total 23,680
Net profit ₦29,020
Adjust each expense: paid + closing accrual − opening accrual, or paid + opening prepayment − closing prepayment.
Alhaji Mohammed Garuba started business on January 1, 1991 with a capital of ₦16,000. The following transactions were carried out during the month of January:
Jan.
1. Purchased furniture by cash ₦2,400
2. Purchased stationery ₦200 cash
3. Purchased goods by cash ₦3,500
4. Purchased goods on credit from Mallam Nagogo ₦5,000
15. Sold goods for cash ₦6,000
18. Sold goods to Charlotte Umedo on credit ₦2,400
20. Paid advertisement expenses ₦200 cash
25. Paid Mallam Nagogo ₦3,500 cash being part of settlement of goods purchased
28. Paid rent in cash ₦300
31. Paid salaries and wages ₦600 cash.
You are required to write up Ledger Accounts recording the above transactions and extract a Trial Balance
Cash Account: Dr capital 16,000; sales 6,000; total 22,000 / Cr furniture 2,400; stationery 200; purchases 3,500; advertising 200; Mallam Nagogo 3,500; rent 300; salaries and wages 600; balance c/d 11,300
Capital Cr 16,000; Furniture Dr 2,400; Stationery Dr 200; Purchases Dr 3,500 + 5,000 = 8,500; Mallam Nagogo: Cr 5,000, Dr 3,500, balance 1,500 Cr; Sales Cr 6,000 + 2,400 = 8,400; Charlotte Umedo Dr 2,400; Advertising Dr 200; Rent Dr 300; Salaries and wages Dr 600
Trial Balance as at 31 January 1991: Dr furniture 2,400, stationery 200, purchases 8,500, Charlotte Umedo 2,400, advertising 200, rent 300, salaries and wages 600, cash 11,300 = ₦25,900; Cr capital 16,000, Mallam Nagogo 1,500, sales 8,400 = ₦25,900
Every cash payment, including the furniture on 1 January, must appear in the cash account.
The following information was extracted from the Staff Establishment Department of the Logo State Commission for Women Affairs on 30th September, 1990 (post, grade level, number in post and salary scale shown in the figure).
Additional Information: Housing and Transport allowances by Grade Level: 12 and above: Housing ₦2,400 p.a, Transport ₦1,800 p.a; 07 - 11: ₦1,800 p.a, ₦1,200 p.a.; 05 – 06: ₦1,200 p.a., ₦600 p.a.; Others: ₦600 p.a., ₦400 p.a. (b) All the employees are on first step of their salary. You are required to prepare the personnel cost budget for the commission for 1991.
Personnel Cost Budget for 1991 (number × first-step salary + housing + transport)
Director-General (GL17): 1 × 26,000 = 26,000; housing 2,400; transport 1,800; total 30,200
Directors (GL16): 3 × 20,000 = 60,000; housing 7,200; transport 5,400; total 72,600
Chief Accountant (GL14): 2 × 15,000 = 30,000; housing 4,800; transport 3,600; total 38,400
Accountant I (GL09): 6 × 7,000 = 42,000; housing 10,800; transport 7,200; total 60,000
Executive Officers (GL06): 20 × 4,500 = 90,000; housing 24,000; transport 12,000; total 126,000
Messengers (GL02): 10 × 2,500 = 25,000; housing 6,000; transport 4,000; total 35,000
Totals: 42 staff; salaries 273,000; housing 55,200; transport 34,000; personnel cost budget ₦362,200
Only posts with staff in them cost money; use the first figure of each salary scale.