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1a) General journal is the accounting version of our
personal journals. It doesn't record everything that
happens to the business, of course, but it does record
every financial transaction that takes place (sometimes
alone, sometimes as a group of similar transactions). Like
our personal journal entries, it notes the date, the
accounts involved, and the amounts of money, as well as
providing a brief description of what happened.
1b)
i. Recording of disposal of fixed asset
ii. For recording opening entries
iii. Transfer of items between accounts
iv. Correction of errors
v. Double entry transaction
vi. For recording closing balance of entries
2ai.)Discount Allowed
Bills receivable
Bad debts
Return inwards
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2aii).Discount Received
Bills Payable
Cash to suppliers
Return outwards
2b) Error of original entry
2. Error of omission
3. Error of commission
4. Error of principle
5. Compensating errors
6. Complete reversal of entry
4a) Depreciation is the measure of the wearing out, consumption or other loss of value of a fixed asset whether arising from use, effluxion of time or obsolescence through technology and market changes
4b)
I. Physical deterioration
ii. Obsolescence
iii. The time factor
iv. Economic factor
v. Inadequacy
4c.)
i. Straight line: This allows an equal amount to be charged as depreciation for each year of expected use of the asset. The basic formulae is
Cost- Estimated residual value/ number of years of expected use.
Advantage: it is simple to calculate
ii. It is time oriented
Disadvantage:
i. Assumption of equal or constant revenue per year is unrealistic
ii. Might lead to a misleading picture of the financial statement
Cii) Reducing balance: Under this method, the depreciation charged per annum is determined by applying a fixed rate of depreciation on the net book value of the asset at the beginning of each year.
Disadvantage of reducing balance:
Difficulty in calculating the rate of depreciation
4ciii) Revaluation: By this method, the asset is revalue each year, any difference will be charged as depreciation to the profit and loss account. The value of the asset at the beginning and end of the year must be known..
The calculations is as follows
Opening stock **
Add: purchase. **
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Less: closing stock. (5)Adjusted Cash book:
Debit side:
Bal b/f(4500)
dividend(320)
under(180)
5000
Credit side:
subscri(350)
charges(500)
electricity(70)
insurance(100)
medical(120)
bal(3860)
5000
bank reconcilation statement:
bal as per adj cash book(3860)
add unpresented chequer(4800)
8660
uncredited cheque(1990)
bal as per bank statement(6670)