56 questions. Try each one, then open the answer to check yourself and read the explanation.
A suspense account is used to
Answer: A (agree the trial balance)
When a trial balance does not agree, the difference is put in a suspense account so it balances until the errors are found.
To correct an error, the Purchases Account was debited while Suspense Account was credited. Which of the following was the cause of the error?
Answer: A (Undercasting of purchases)
The correction adds to the purchases debit, so purchases had been added up too low (undercast).
Subscription in advance is treated in the Balance Sheet of non-profit making organizations as
Answer: C (current liability)
Subscriptions paid in advance are owed back to members as next year's membership, so they are a current liability.
A Sales Day Book is used to record
Answer: B (credit sales of stock)
The sales day book lists credit sales of the goods the business trades in.
Which of the following is not a capital expenditure to a local government?
Answer: E (Drugs.)
Drugs are used up quickly, so buying them is recurrent (revenue) spending; the others are long-lasting assets.
Creditors Control Account
Dr: Bank "X"; Discount N30; Balance c/d N450
Cr: Balance b/d N1,200; "Y" N1,800
How much is "X"?
Answer: B (N2,520)
Credit side total = 1,200 + 1,800 = 3,000, so X = 3,000 − 30 − 450 = N2,520.
Creditors Control Account
Dr: Bank "X"; Discount N30; Balance c/d N450
Cr: Balance b/d N1,200; "Y" N1,800
"Y" represents
Answer: B (purchases)
Credit purchases increase the amount owed to suppliers, so they appear on the credit side of the creditors control account.
Creditors Control Account
Dr: Bank "X"; Discount N30; Balance c/d N450
Cr: Balance b/d N1,200; "Y" N1,800
The balance of N450 in the above account represents
Answer: D (current liability)
The balance carried down on the creditors control is money owed to suppliers, a current liability.
A Receipt and Payments Account reveals
Answer: C (cash in hand)
A receipts and payments account is a summary of cash, so its closing balance is the cash (or bank) in hand.
An example of appropriation of profit in a company is
Answer: E (dividend.)
Dividends are shares of profit given to owners, so they are appropriations; the others are expenses or income.
In a partnership goodwill is recognized when
Answer: A (a new partner is admitted)
Goodwill is valued and brought into account when the partnership changes, for example on admitting a new partner.
Which of the following is a nominal account?
Answer: D (Salaries)
Nominal accounts record expenses and incomes; salaries is an expense.
An asset was bought on 1st January, 1992 for N20,000. Depreciation was provided for annually at 20% on cost. It was sold for N7,000 on 1st July, 1995.
The net book value at the time of sale was
Answer: E (N6,000.)
Depreciation is N4,000 a year for 3½ years = N14,000, so NBV = 20,000 − 14,000 = N6,000.
An asset was bought on 1st January, 1992 for N20,000. Depreciation was provided for annually at 20% on cost. It was sold for N7,000 on 1st July, 1995.
Accumulated depreciation at the time of sale was
Answer: B (N14,000)
20% × N20,000 = N4,000 a year; from 1/1/92 to 1/7/95 is 3½ years, so N14,000.
An asset was bought on 1st January, 1992 for N20,000. Depreciation was provided for annually at 20% on cost. It was sold for N7,000 on 1st July, 1995.
The profit on sale was
Answer: E (N1,000.)
Profit on sale = proceeds 7,000 − NBV 6,000 = N1,000.
In Manufacturing Account, prime cost plus factory overhead is known as
Answer: D (production cost)
Prime cost + factory overheads (adjusted for work in progress) = cost of production.
Which of the following is an advantage of the imprest system?
Answer: D (Meeting small items of expenditure)
The imprest (petty cash) system gives a fixed float for paying small, frequent expenses conveniently.
Where a business is purchased, the full amount of the purchase consideration is credited to
Answer: C (Vender's Account)
The buyer debits the business purchase account and credits the vendor (seller) with the purchase consideration owed to him.
A financial plan of action expressed in monetary terms is known as
Answer: D (budget)
A budget is a plan for a future period expressed in money.
Which of the following is not a source document for recording sales?
Answer: D (Sales journal)
The sales journal is a book of original entry, written up from source documents such as invoices.
A company charges out goods to a branch at cost plus 25 percent. It invoiced N12,000 worth of goods.
The mark-up is
Answer: E (N2,400.)
Goods sent to the branch are invoiced at cost plus 25%, so the invoice price of N12,000 is 125% of cost. The mark-up is 12,000 × 25/125 = N2,400 (cost N9,600).
A company charges out goods to a branch at cost plus 25 percent. It invoiced N12,000 worth of goods.
The double entry required for the mark-up is debit Branch
Answer: C (Stock Account, credit Branch Adjustment Account)
Goods sent are recorded in branch stock at selling price, so the mark-up is debited to branch stock and credited to branch (stock) adjustment.
A ledger is a
Answer: A (book of accounts)
The ledger is the main book containing all the accounts of the business.
A real account is the account of
Answer: C (physical tangible items)
Real accounts record assets (property) such as land, buildings and machinery.
An item is fictitious because it
Answer: A (does not exist)
A fictitious asset (such as preliminary expenses) has no real physical existence; it is only a debit balance carried forward.
Which of the following is not a personal account?
Answer: D (Cash Account)
Cash is a real (asset) account; the others relate to persons, firms or the owner.
A provision is
Answer: D (an expense the amount of which is not certain)
A provision is set aside for a known liability or loss whose exact amount cannot be measured precisely, e.g. bad debts.
A cash discount is a
Answer: B (Profit and Loss Account item)
Discounts allowed and received are expense and income items in the profit and loss account.
Kudi Local Government Council incurred the following expenditure in 1995:
Payment of salaries: N140,000
Purchase of drugs for dispensaries: N80,000
Purchase of books for Library: N30,000
Sinking of wells: N70,000
Extension of Council offices: N160,000
The amount of capital expenditure for 1995 was
Answer: A (N260,000)
Capital items are library books 30,000 + wells 70,000 + office extension 160,000 = N260,000.
Kudi Local Government Council incurred the following expenditure in 1995:
Payment of salaries: N140,000
Purchase of drugs for dispensaries: N80,000
Purchase of books for Library: N30,000
Sinking of wells: N70,000
Extension of Council offices: N160,000
The amount of revenue expenditure for 1995 was
Answer: C (N220,000)
Revenue items are salaries 140,000 + drugs 80,000 = N220,000.
An expense becomes an accrual because it
Answer: A (is due for payment)
An accrual is an expense that has been incurred and is due but not yet paid at the end of the period.
The amount for which a business is sold is known as
Answer: C (purchase consideration)
The agreed price paid for a business is the purchase consideration.
The person who is responsible for the formation of a company is called the
Answer: A (promoter)
Promoters carry out the work of forming a company.
The amount of a company's profit given to a shareholder is known as
Answer: B (dividend)
A dividend is the share of profit paid to shareholders.
Which of the following best describes the path of a transaction?
Answer: A (Source documents to Journal to Ledger)
A transaction is shown on a source document, recorded in a book of original entry (journal), then posted to the ledger.
Opening stock – Footwears Department N800; Stationery Department N600
Purchases – Footwears Department N1,600; Stationery Department N2,800
Wages of shoe packers – N600
Salaries – N1,200
Sales – Footwears N4,000; Stationery N6,000
Additional Information: (i) No closing stock (ii) Common expenses are to be shared in the ratio of sales.
The net profit of the Footwears Department is
Answer: D (N520)
Cost of goods 800 + 1,600 = 2,400; share of salaries 4/10 × 1,200 = 480; profit = 4,000 − 2,400 − 600 wages − 480 = N520.
Opening stock – Footwears Department N800; Stationery Department N600
Purchases – Footwears Department N1,600; Stationery Department N2,800
Wages of shoe packers – N600
Salaries – N1,200
Sales – Footwears N4,000; Stationery N6,000
Additional Information: (i) No closing stock (ii) Common expenses are to be shared in the ratio of sales.
The profit of the Stationery Department is
Answer: A (N1,880)
6,000 − (600 + 2,800) − 6/10 × 1,200 = 6,000 − 3,400 − 720 = N1,880.
Opening stock – Footwears Department N800; Stationery Department N600
Purchases – Footwears Department N1,600; Stationery Department N2,800
Wages of shoe packers – N600
Salaries – N1,200
Sales – Footwears N4,000; Stationery N6,000
Additional Information: (i) No closing stock (ii) Common expenses are to be shared in the ratio of sales.
The cost of goods for the Stationery Department is
Answer: B (N3,400)
Opening stock 600 + purchases 2,800 − no closing stock = N3,400.
Opening stock – Footwears Department N800; Stationery Department N600
Purchases – Footwears Department N1,600; Stationery Department N2,800
Wages of shoe packers – N600
Salaries – N1,200
Sales – Footwears N4,000; Stationery N6,000
Additional Information: (i) No closing stock (ii) Common expenses are to be shared in the ratio of sales.
The cost of goods for the Footwears Department is
Answer: E (N2,400.)
Opening stock 800 + purchases 1,600 = N2,400.
Where there are no proper books of account, the capital at the commencement of a period is ascertained by preparing
Answer: C (Statement of Affairs)
A statement of affairs lists assets and liabilities to find capital when records are incomplete.
Rent receivable is a
Answer: A (current asset)
Rent receivable is money owed to the business, so it is a current asset.
Which of the following is a factory overhead?
Answer: E (Depreciation of factory equipment.)
Depreciation of factory equipment is an indirect factory cost; the others are part of prime cost.
A business whose assets consisted of stock N15,000 and debtors N8,000 was bought by issuing 20,000 ordinary shares of N1 each at a premium of 20 percent.
The purchase consideration was
Answer: A (N24,000)
20,000 shares × N1.20 = N24,000.
A business whose assets consisted of stock N15,000 and debtors N8,000 was bought by issuing 20,000 ordinary shares of N1 each at a premium of 20 percent.
The amount of goodwill was
Answer: E (N1,000.)
Goodwill = consideration 24,000 − net assets (15,000 + 8,000) = N1,000.
When a share is sold for less than its nominal value, the difference is called
Answer: A (discount)
Issuing below nominal value is issuing at a discount.
Which of the following serves the same purpose as a Trading Account?
Answer: C (Branch Stock Account)
The branch stock account (kept at cost, or with the adjustment account) brings out the branch's gross profit, like a trading account.
The Receipts and Payments Account of Acada Club for the year ended 31st December, 1995 is as follows:
Receipts: Balance b/f N800; Subscriptions N3,600; Donations N650; Dance tickets N1,200; total N6,250
Payments: Printing and Stationery N320; Postages and Telephone N160; Rent N1,200; Library books N2,500; Anniversary dance expenses N945; balance c/d N1,125; total N6,250
The amount of income credited to Income and Expenditure Account for the year was
Answer: B (N5,450)
Income = subscriptions 3,600 + donations 650 + dance tickets 1,200 = N5,450 (the opening balance is not income).
The Receipts and Payments Account of Acada Club for the year ended 31st December, 1995 is as follows:
Receipts: Balance b/f N800; Subscriptions N3,600; Donations N650; Dance tickets N1,200; total N6,250
Payments: Printing and Stationery N320; Postages and Telephone N160; Rent N1,200; Library books N2,500; Anniversary dance expenses N945; balance c/d N1,125; total N6,250
The total expenses debited to Income and Expenditure Account for the year was
Answer: C (N2,625)
Expenses = 320 + 160 + 1,200 + 945 = N2,625; library books are capital.
The Receipts and Payments Account of Acada Club for the year ended 31st December, 1995 is as follows:
Receipts: Balance b/f N800; Subscriptions N3,600; Donations N650; Dance tickets N1,200; total N6,250
Payments: Printing and Stationery N320; Postages and Telephone N160; Rent N1,200; Library books N2,500; Anniversary dance expenses N945; balance c/d N1,125; total N6,250
The capital expenditure of the Club for the year was
Answer: E (N2,500.)
Only the library books (N2,500) are a long-lasting asset.
Which of the following is not a revenue receipt?
Answer: D (cash on sale of fixed asset)
Cash from selling a fixed asset is a capital receipt; the others come from normal trading or income.
Section A (compulsory)
1. Ayodele and Adeolu are partners and manufacturers of men's singlets. They share profits and losses in the ratio 3:2 respectively. Their Trial Balance as at 31st December, 1995 is as follows:
Ayoade Singlet Manufacturer – Trial Balance as at 31st December, 1995
Capital: Ayodele N100,000 (Cr); Adeolu N70,000 (Cr)
Plant and Machinery at cost: N85,000 (Dr)
Motor Vehicles at cost: N62,000 (Dr)
Furniture and fittings at cost: N23,000 (Dr)
Stock of raw materials 1st Jan.: N35,000 (Dr)
Land and building: N120,000 (Dr)
Stock of finished goods 1st Jan.: N41,000 (Dr)
Purchases of raw materials: N140,500 (Dr)
Returns outwards: N3,500 (Cr)
Sales: N360,500 (Cr)
Debtors and creditors: N22,100 (Dr); N14,400 (Cr)
Direct labour: N43,800 (Dr)
Bank overdraft: N50,000 (Cr)
Direct expense: N1,300 (Dr)
Factory electricity: N12,400 (Dr)
Salaries: N28,500 (Dr)
Salesmen commission: N6,000 (Dr)
Motor Vehicle expenses: N5,900 (Dr)
Depreciation – Plant and Machinery 1st Jan.: N28,300 (Cr)
Depreciation – Motor Vehicles 1st Jan.: N23,000 (Cr)
Depreciation – Furniture and fittings 1st Jan.: N4,800 (Cr)
Provision for bad debt: N1,600 (Cr)
Cash in hand: N2,200
Current Account – Ayodele: N2,600
Current Account – Adeolu: N1,300
Rates: N5,000
Insurance: N6,600
Interest on loan: N4,500
Repairs – Plant and Machinery: N10,000
Totals: N657,400 / N657,400
Additional Information:
(a) Closing stock of raw materials was valued N48,000 while that of finished goods was valued N49,500.
(b) Insurance of N1,400 was prepaid while rate of N1,000 was owed. ¾ of the insurance was for plant and machinery.
(c) Wages in arrears was N6,200.
(d) Partners agreed on 10 percent interest on capital.
(e) Adeolu received monthly salaries of N500 which had been included in the salaries.
(f) Depreciate assets as follows: Plant and Machinery – 10% per annum on cost; Motor Vehicles – 15% per annum on cost; Furniture and fittings – 5% per annum on cost
(g) Provision for bad debt is to be made up to 10% of debtors.
You are required to prepare:
(i) Manufacturing Account
(ii) Trading, Profit and Loss and Appropriation Accounts for the year ended 31st December, 1995 and
(iii) Balance Sheet as at that date.
Note: the trial balance only totals 657,400 if Adeolu's current account (1,300) is a credit balance; treat it so.
Manufacturing account: raw materials 35,000 + purchases 140,500 − returns 3,500 − closing 48,000 = 124,000 used; direct labour 43,800 + 6,200 = 50,000; direct expenses 1,300; prime cost 175,300.
Factory overheads: electricity 12,400; insurance ¾ × (6,600 − 1,400) = 3,900; repairs 10,000; depreciation of plant 10% × 85,000 = 8,500; total 34,800. Cost of production 210,100.
Trading: sales 360,500; opening finished goods 41,000 + 210,100 − 49,500 = cost of sales 201,600; gross profit 158,900.
Profit and loss: salaries 28,500 − 6,000 (Adeolu's) = 22,500; commission 6,000; motor expenses 5,900; rates 5,000 + 1,000 = 6,000; office insurance 1,300; interest on loan 4,500; depreciation of motor vehicles 9,300 (15% × 62,000) and furniture 1,150 (5% × 23,000); increase in provision 610 (2,210 − 1,600); total 57,260. Net profit 101,640.
Appropriation: interest on capital Ayodele 10,000, Adeolu 7,000; salary Adeolu 6,000; remaining 78,640 shared 3:2: Ayodele 47,184, Adeolu 31,456.
Current accounts: Ayodele −2,600 + 10,000 + 47,184 = 54,584 Cr; Adeolu 1,300 + 7,000 + 6,000 + 31,456 − 6,000 salary already drawn = 39,756 Cr.
Balance sheet: land and building 120,000; plant 85,000 − 36,800 = 48,200; motor vehicles 62,000 − 32,300 = 29,700; furniture 23,000 − 5,950 = 17,050; fixed assets 214,950.
Current assets: raw materials 48,000; finished goods 49,500; debtors 22,100 − 2,210 = 19,890; prepaid insurance 1,400; cash 2,200 = 120,990.
Current liabilities: creditors 14,400; overdraft 50,000; rates owing 1,000; wages owing 6,200 = 71,600. Working capital 49,390.
Net assets 264,340 = capital 170,000 + current accounts 54,584 + 39,756.
Split costs carefully between factory (manufacturing account) and office (profit and loss), and remember the partner's salary is an appropriation, not an expense.
Section B (answer three questions only from this section)
2. Naira Enterprises Ltd. decided to buy the business of Alhaji Kura Magoro on 1st January, 1995. The company is to take over all the assets and liabilities by issuing Alhaji Magoro 30,000 ordinary shares of N1 each at a price of N1.20 per share. The Balance sheets of Alhaji Magoro and Naira Enterprises Ltd. were as follows:
Alhaji Kura Magoro – Balance Sheet as at 1st January, 1995
Capital N41,000; Creditors N4,000; total N45,000
Machinery N30,000; Stock N9,000; Debtors N6,000; total N45,000
Naira Enterprises Ltd. – Balance Sheet as at 1st January
Share capital: 70 ordinary shares of N1 each N70,000; Share premium N10,000; Creditors N20,000; total N100,000
Machinery N50,000; Stock N15,000; Debtors N12,000; Bank balance N23,000; total N100,000
You are required to prepare in the books of Naira Enterprises Ltd:
(a) Purchase of Business Account,
(b) Balance sheet as at 1st January, 1995 immediately after the arrangement is concluded.
Purchase consideration = 30,000 shares × N1.20 = 36,000 (share capital 30,000 + share premium 6,000).
Net assets taken over = 45,000 − 4,000 = 41,000, so there is a capital reserve (negative goodwill) of 5,000.
(a) Purchase of business account: Dr creditors 4,000; Alhaji Magoro (vendor) 36,000; capital reserve 5,000 = 45,000. Cr machinery 30,000; stock 9,000; debtors 6,000 = 45,000.
(b) Balance sheet as at 1/1/95: machinery 80,000; stock 24,000; debtors 18,000; bank 23,000; total 145,000.
Share capital 100,000 ordinary shares of N1 = 100,000; share premium 16,000; capital reserve 5,000; creditors 24,000; total 145,000.
Compare the purchase price with the net assets taken over: paying more gives goodwill, paying less gives a capital reserve.
3. The following is the summarised Cash Book of James Nwanagwu for the year ended 31st March, 1995:
Receipts: Opening balance N2,343; Cash from debtors N18,235; Additional capital N6,000; total N26,578
Payments: Cash paid to creditors N11,056; Salaries N1,080; Postages and stationery N240; General expenses N1,234; Drawings N2,500; Rent and rates N570; Balance c/d N9,898; total N26,578
Additional Information – Balances (1st April, 1994; 31st March, 1995):
Stock: N560; N340
Debtors: N1,202; N988
Creditors: N980; N1,051
Accrued salaries: N420; N75
Prepaid rent: N44; N67
You are required to prepare:
(a) Statement of Affairs as at 1st April, 1995;
(b) Debtors and Creditors Control Accounts;
(c) Trading, Profit and Loss Accounts;
(d) Balance Sheet as at 31st March, 1995.
(a) Statement of affairs at 1st April 1994: stock 560 + debtors 1,202 + prepaid rent 44 + cash 2,343 = 4,149; less creditors 980 and accrued salaries 420; opening capital 2,749.
(b) Debtors control: balance b/f 1,202 + credit sales 18,021 = cash received 18,235 + balance c/d 988. Creditors control: cash paid 11,056 + balance c/d 1,051 = balance b/f 980 + purchases 11,127.
(c) Trading: sales 18,021; opening stock 560 + purchases 11,127 − closing stock 340 = 11,347; gross profit 6,674.
Profit and loss: salaries 1,080 + 75 − 420 = 735; rent and rates 570 + 44 − 67 = 547; postage and stationery 240; general expenses 1,234; total 2,756; net profit 3,918.
(d) Balance sheet at 31/3/95: stock 340, debtors 988, prepaid rent 67, cash 9,898 = 11,293; less creditors 1,051 and accrued salaries 75 = 10,167.
Capital 2,749 + additional capital 6,000 + net profit 3,918 − drawings 2,500 = 10,167.
Find opening capital from the statement of affairs, then use the control accounts to turn cash figures into sales and purchases.
4. The following Trial Balance was extracted from the books of Koiwo Enterprises on 31st December, 1995.
Stock 1st January, 1995: N6,225 (Dr)
Purchases and Sales: N8,625 (Dr); N21,450 (Cr)
Returns: N338 (Dr); N225 (Cr)
Discounts: N555 (Dr); N608 (Cr)
Land and Buildings at cost: N22,500 (Dr)
Provision for depreciation – Land and buildings: N4,500 (Cr)
Debtors and Creditors: N1,080 (Dr); N600 (Cr)
Bad debts: N97 (Dr)
Provision for bad debts 1st January: N255 (Cr)
Rent: N4,500 (Dr)
Electricity: N1,373 (Dr)
Wages and Salaries: N3,563 (Dr)
Drawings: N1,550 (Dr)
Cash and bank balances: N10,382 (Dr)
Capital: N33,150 (Cr)
Totals: N60,788 / N60,788
Additional Information:
(a) Stock on hand at 31st December, 1995 was N5,288.
(b) Wages owing amounted to N488.
(c) Provision for bad debt is to be reduced to N112.
(d) Provide for depreciation on Land and buildings at 10% on cost.
You are required to prepare Trading, Profit and Loss Accounts for the year ended 31st December, 1995.
Trading: sales 21,450 − returns inwards 338 = 21,112. Opening stock 6,225 + purchases 8,625 − returns outwards 225 = 14,625 − closing stock 5,288 = cost of sales 9,337. Gross profit 11,775.
Profit and loss: add discount received 608 and decrease in provision 143 (255 − 112) = 12,526.
Expenses: discount allowed 555; bad debts 97; rent 4,500; electricity 1,373; wages and salaries 3,563 + 488 = 4,051; depreciation of land and buildings 10% × 22,500 = 2,250; total 12,826.
Net loss = 12,826 − 12,526 = 300.
A reduction in the provision for bad debts is a gain credited to profit and loss.
5. Okoro's Cash Book showed a debit balance of N3,344 on 31st January, 1995. His bank statement for January, 1995 however showed a credit balance of N3,424. On investigation, it was discovered that
(a) The opening balance in the Cash Book for the month had been wrongly brought down as N1,505 instead of N1,550.
(b) Payment for rent N250 had been debited in the Cash Book.
(c) A customer had paid N600 direct into the bank.
(d) The bank had paid, on a standing order, N300 to an insurance company.
(e) A cheque for N870 deposited in the bank on 25th January, was not credited until 3rd February, 1995.
(f) Cheques paid to suppliers totalling N1,875, had not been presented for payment.
(g) Cost of cheque book and other charges by bank totalling N90 had not been entered in the Cash Book.
(h) The bank had paid a cheque of N680 in error from Okoro's Account.
You are required to prepare:
(i) Adjusted Cash Book;
(ii) Bank Reconciliation Statement as at 31st January, 1995.
(i) Adjusted cash book: balance 3,344 + opening balance undercast 45 (1,550 − 1,505) + direct payment by customer 600 = 3,989; less rent wrongly debited 500 (250 to cancel + 250 to record the payment), standing order 300, bank charges 90 = 890; adjusted balance 3,099 (Dr).
(ii) Bank reconciliation statement at 31/1/95: balance as per bank statement 3,424; add uncredited lodgement 870 and cheque wrongly paid by the bank 680 = 4,974; less unpresented cheques 1,875; balance as per adjusted cash book 3,099.
Correct the cash book first for items the bank knows about; only timing differences and bank errors go into the reconciliation.
6. On 30th June, 1995, the cash Book balance of Etefia sub-treasury was as follows:
Cash N301,275; Bank N700,000
On 1st July, 1995, the following transactions were carried out in the sub-treasury:
TRV 1001 N5,000 cash from Maigoloma
TRV 1002 N17,500 cheque from Mrs. Wayas
TRV 1003 N1,550 cash from Mr. Ikemesit
TRV 1004 N1,130 cash from Mr. Attah
TPV 2001 N150,000 cheque to Mr. Rabi
TPV 2002 N61,430 cheque to Mr. Yekini
TPV 2003 N7,550 cheque to Mr. Akpan
TRV 1005 N7,550 cheque from Alhaji Rafindadi
TRV 1006 N12,500 cheque from Mr. Ishaya
TPV 2004 N5,000 cash to Mr. Ajeni
TPV 2005 N3,525 cash to Mrs. Adisa
TPV 2006 N95,015 cheque to Mr. Olori
TPV 2007 N78,075 cheque to Mr. Oluwi
TRV 1007 N2,205 cash to Mrs. Rakiya
TRV 1008 N3,505 cheque to Mr. Hamza
TRV 1009 N100,000 cheque Remittance
TPV 2008 N12,000 cash to Mr. David
TPV 2009 N62,000 cheque to Mr. Zyad
You are required to post the transactions into the main Cash Book, showing the new cash and bank balances.
TRV = treasury receipt voucher (debit side); TPV = treasury payment voucher (credit side).
Main cash book (cash and bank columns)
Dr cash: balance b/f 301,275; TRV 1001 5,000; 1003 1,550; 1004 1,130; 1007 2,205 = 311,160.
Dr bank: balance b/f 700,000; TRV 1002 17,500; 1005 7,550; 1006 12,500; 1008 3,505; 1009 100,000 = 841,055.
Cr cash: TPV 2004 5,000; 2005 3,525; 2008 12,000 = 20,525; balance c/d 290,635.
Cr bank: TPV 2001 150,000; 2002 61,430; 2003 7,550; 2006 95,015; 2007 78,075; 2009 62,000 = 454,070; balance c/d 386,985.
New balances: cash 290,635; bank 386,985.
Post receipt vouchers to the debit side and payment vouchers to the credit side, using the cash column for cash and the bank column for cheques.