BOOK KEEPING-OBJ
01-10: CDADDCDEBC
11-20: CCECDCDBAC
21-30: ADDDAACEDD
31-40: BDECBACDBA
41-50: CBDCECBDBC
51-60: CDEBDBEEEA
COMPLETED
BOOK KEEPING-ESSAY-ANSWERS
(2a)
A trading account is prepared to determine the gross profit or gross loss of a business from buying and selling goods during an accounting period. It shows the difference between sales and cost of goods sold (COGS).
(2b)
(i) Fixed Capital: This is capital invested in long-term assets like buildings, machinery, and land. It is not intended for day-to-day operations.
(ii) Working Capital: This is the capital used for daily operations of the business. It is calculated as current assets minus current liabilities.
(iii) Loan Capital: This is money borrowed by the business from external sources such as banks, to be repaid with interest.
(iv) Equity Capital: This refers to the money invested in the business by its owners/shareholders in return for ownership.
(v) Venture Capital: This is funding provided by investors to startups or small businesses with growth potential, often in exchange for equity or partial ownership.
(2c)
(i) Business Entity Concept
(ii) Money Measurement Concept
(iii) Going Concern Concept
(iv) Accrual Concept
(v) Consistency Concept
(vi) Prudence Concept.
(3a)
(i) First In First Out (FIFO): This method assumes that the earliest (first) stock purchased is the first to be issued or sold. It values closing stock using the cost of the most recent purchases.
(ii) Last In First Out (LIFO): This method assumes that the most recent (last) stock purchased is the first to be issued or sold. It values closing stock using the cost of the earliest purchases.
(iii) Weighted Average Price (WAP): This method calculates the average cost of all available stock (total cost divided by total quantity). All stock issued or remaining is valued at this average cost
(3b)
(i) Salaries and wages
(ii) Rent and rates
(iii) Insurance expenses
(iv) Depreciation of assets
(v) Repairs and maintenance
(vi) Advertising expenses
(vii) Electricity and water bills
(3c)
(i) Invoice
(ii) Receipt
(iii) Credit note
(iv) Debit note
(v) Cheque counterfoil
