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Assignment Cover: Muzondo Itai Lionel, P2019517B, Bcom (Hons) Marketing Management 1
Assignment Cover: Muzondo Itai Lionel, P2019517B, Bcom (Hons) Marketing Management 1
Intake : 35
Contact Number : +263 77 396 9160 / +263 77 449 8984 / +263 71 410 5122
Marker’s Comments :
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Capital $ 412,000.00
Accounts Payable $ 96,200.00
Fixtures $ 124,800.00
Vehicles $ 159,900.00
Inventory $ 111,800.00
Accounts Receivable $ 53,300.00
Cash at Bank $ 20,800.00
Cash in hand $ 37,700.00
During the month, Gambaza bought more inventory on credit valued at $14 300, bought a laptop
by cheque for $7 930, and received cheque of $5 850 from his debtor Mr. Ncube for goods that
he had sold to him on credit.
Solution to Question 1:
a) Personal accounts are those accounts that relate to debtors and creditors (Wood, F. and
Sangster, A.,2005). These are sub-categorised into Natural accounts and Artificial
accounts. Natural Personal Accounts (NPAs) are those accounts that relate to physical
human beings. An example of an NPA is Molline’s account. Artificial Personal accounts
(APAs) relate to non-physical entities. These may be institutions or associations of
persons. Examples of Artificial Personal Accounts ABC (Pvt) Ltd account as well as
charitable trusts.
Impersonal accounts are those that are concerned with income, gain, expenditure and loss
related to the business (Cox, D.,2005). These are sub-categorised into Real accounts and
Nominal accounts. Real accounts are asset based and include both tangible and intangible
Muzondo Itai Lionel, P2019517B, Bcom (Hons) Marketing Management 2|Page
assets. Tangible assets consist of physical assets such as loose tools, cash, stock,
buildings et cetera. Intangible assets relate to securities, that is, bonds, patents,
copyrights, shares, goodwill et cetera.
Nominal accounts are associated with the preparation of financial statements such as
income and expenditure accounts. Examples of such accounts include, but not limited to,
sales, purchases, gain (or loss) on sale of fixed asset, interest earned et cetera.
economic
event occurs:
Stage 1:
Stage 8: Closure of Identification
accounts andtransition
into next fiscal period
Stage 2:
Journalism
Stage 7: Financial
Reporting (income
statement, balance sheet,
statemement of cashflows) Stage 3:
Posting to
Nominal
Ledger
Stage 6: Adjusting
entries & preparation
of final Trial Balance Stage 4:
Unadjusted
Stage 5: Error Trial Balance
analysis (use of
Worksheet)
The transaction is then recorded in the books of prime entry (journal). This process is called
journalism and information recorded is acquired from the source document in this case a
carbon copy of the cash receipt or invoice. The $15,000.00 is credited to Sales journal and
debited to Cashbook. The dual aspect concept is maintained throughout the whole process.
Once the trading period defined has lapsed, the transactions are then posted to the Nominal
Ledger. The Nominal Ledger contains all the accounts relating to the business’ activities.
Care should be taken to maintain the double entry concept to minimise errors.
The balances from the completed Nominal Ledger are extracted and are used to prepare
the Unadjusted Trial Balance. At this point any debit-credit total variations constitute error
existence.
Variations from the Unadjusted Trial Balance are checked for errors and adjustment entries
made in the journal to correct errors of omission, commission and principle. Usually a
worksheet is used to solve these errors as well as the suspense account and journal.
Corrected errors are then reposted to the nominal ledger and the balances extracted to
prepare the final or Adjusted Trial Balance. This process of error checking may be repeated
to make sure errors are eradicated.
Once all errors have been cleared, financial reporting commences. This process involves
the creation of comprehensive income statement for the period, statement of financial
position, cashflow analysis. At this point the accounting cycle is near complete.
The last stage of the accounting cycle is to close the books. This process involves clearing
data in the accounts and retaining balances in the balance sheet. The balance sheet are then
filed for future reference as well as record keeping.
522,600.00 522,600.00
Capital $ 412,100.00
Current Liabilities
Details $
Purchases 61,420
Sales 127,245
Inventory (1 January 2018) 7,940
Capital 25,200
Bank overdraft 2,490
Cash 140
Discount allowed 2,480
Discount received 62
Returns inwards 3,486
Returns outwards 1,356
Rent and insurance 8,870
Allowance for doubtful debts 630
Fixtures and Fittings 1,900
Van 5,600
Accounts receivable 12,418
Accounts payable 11,400
Drawings 21,400
Wages and Salaries 39,200
General expenses 319
Carriage outwards 3,210
Required:
(15 marks)
Sales 127,245.00
Capital 25,200.00
Bank overdraft 2,490.00
Discount received 62.00
Return outwards 1,356.00
Accounts payable 11,400
Allowance for doubtful debts 630.00
Purchases 61,420.0
Inventory (1 January 2018) 7,940.00
Cash 140.00
Discount allowed 2480.00
Return inwards 3,486.00
Rent and insurance 8,870.00
Fixtures and fittings 1,900.00
Van 5,600.00
Accounts receivable 12,418.00
Drawings 21,400.00
Wages and Salaries 39,200.00
General expenses 319.00
Carriage outwards 3,210.00
. .
168,383.00 168,383.00
B. OPERATING EXPENSES
Financed By:
Capital 25,200.00
add Net Profit 3,927.00
29,127.00
less Drawings 21,400.00
7,727.00
Current Liabilities
Maxwell Titi’s trial balance failed to agree by $1,800. The following errors were later
discovered;
i. Show journal entries necessary to correct the above errors (16 marks)
ii. Complete the suspense account (9 marks)
Solution to Question 3:
3,550.00 3,550.00