AKENTEN APPIAH-MENKA UNIVERSITY OF

SKILLS TRAINING AND ENTREPRENEURIAL

DEVELOPMENT
FACULTY OF BUSINESS EDUCATION

BSC ACCOUNTING EDUCATION, BSC

INFORMATION TECHOLOGY EDUCATION, BBA
MANAGEMENT, DIPLOMA IN BUSINESS
ADMINSTRATION (MANAGEMENT &
ACCOUNTING), DIPLOMA IN INFORMATION
TECHOLOGY

ACC 111/BME 111/DAC 111/DGC 111/ITC 114: BASIC

ACCOUNTING I/BASIC ACCOUNTING/PRINCIPLES
OF ACCOUNTING

GROUP ASSIGNMENT

General Instructions
1. This assignment contains SECTIONS A to C.
2. Answer ALL Questions.
3. Credit will be given for the following:
a) Orderly presentation of ideas
b) Clear/legible text.
4. Use Time New Roman font and 12 font size. Distribute your text evenly
between the margin (justify), and use 1.5-line spacing.
5. Layout: Use A4 page size and adjust margins using the normal
inches/size.

MEMBERS IN A GROUP: MINIMUM – 5; MAXIMUM - 15

DEADLINE: 14TH APRIL, 2024, 11:59 PM

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 SECTION A
MULTIPLE CHOICE QUESTIONS

1. The methodical or systematic recording of business transaction in appropriate books

is referred to as
a. budgeting b. book keeping
c. costing d. interpretation of accounts

2. Which of the following users of accounting information is more concerned about the
credit worthiness of a firm?
a. Employees b. Government
c. Analysts d. Creditors

3. Accounting information is used by investors and creditors to predict the

a. tax payment of the company
b. branch locations for the company
c. remuneration of the company’s staff
d. profitability of the company

4. The assumption that a business will exist for a long time into the future is the……….
a. objectivity concept b. business entity concept
c. going concern concept d. realization concept

5. If a firm capitalizes fixed assets only if the cost is above GHS100 million, then it is
using the
a. matching concept b. accrual concept
c. materiality concept d. cost concept

6. The concept which views the relationship between a business and its owner as
separate and distinct from each other is
a. objectivity b. materiality
c. business entity d. consistency

7. Which of the following accounting concepts requires that revenues and expenses
associated with a particular accounting period be brought into the calculation of
income of that period whether or not a cash is received or paid?
a. Business entity b. Accrual
c. Realization d. Going concern

8. The accounting concept which requires that profitability should be measured between
revenues and expenses for the year rather than between cash receipts and expenditure
is known as
a. materiality concept b. accrual concept
c. dual concept d. realization concept

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9. Which of the following accounting concept serves as the basis of the double entry
principle?
a. Money measurement b. Dual aspect
c. Materiality d. Consistency

10. The basic guidelines that underlies the periodic financial statement prepared by a
business are known as
a. accounting principles b. accounting controls
c. accounting limitations d. accounting transactions

11. The going concern rule assumes that

a. a business continues its activities into the foreseeable future without reducing
the volume of its activities
b. a business is expected to continue its operation but reduce its volume of
activities annually
c. a business is to run its affairs smoothly and every employee is expected to
continue to work indefinitely
d. once a business starts to operate, it should always last for a specific period

12. Accounting principles form the basis of …………………………………

a. Accounting Equation b. Accounting Concepts and
Conventions
c. Financial Reporting Standards (FRS). D. Financial Statement

How will each of the following transactions in questions 13-15 effect the accounting
equation?
13. Receipt of cash from debtors
a. increase in assets, decrease in another asset
b. increase in assets; increase in liability
c. increase in assets; increase in capital
d. decrease in assets; decrease in liability

14. Payment of rent in advance

a. increase in asset; decrease in capital
b. increase in asset; decrease in capital
c. increase in asset; decrease in another asset
d. decrease in asset; decrease in liability

15. Withdrawal of cash by owner of a business for personal use

a. decrease in asset, increase in capital
b. decrease in capital, decrease in assets
c. increase in asset, decrease in another asset
d. increase in asset, decrease in capital

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16. Which of the following is the basis accounting equation?
a. Assets + Liabilities = equity
b. Assets + equity = liabilities
c. Assets – liabilities = equity
d. Liabilities – equity = assets

17. Which of the following is an advantage of extracting a trial balance? It is used to

a. post items to the purchases day book
b. check the arithmetical accuracy of accounting records
c. post terms to the sales day book
d. check the validity of entries

18. Fatima Sule buys goods worth ¢500, 000 on credit from Ibrahim. How will this
transaction be recorded in the ledger of Fatima Sule?
a. Debit purchases account, credit Ibrahim’s account
b. Debit purchases account, credit Fatima Sule’s account
c. Debit Fatima’s account, credit Ibrahim’s account.
d. Debit-Fatima’s account, credit sales account.

19. Which of the following is a summary of ledger at the end of a period?

a. Control account b. Trading account
c. Profit and loss account d. Trial balance

20. An entry made on the left hand side of an account in respect of value received is
described as a
a. credit entry b. double entry
c. debit entry d. contra entry

21. Which of the following does not belong to the group?

a. Office premises account b. Rent receivable account
c. Fittings account d. Plant and machinery account

22. The trial balance is

a. an interim profit and loss account
b. a statement showing assets and liabilities
c. a list of balances extracted from the ledger
d. an account showing the financial position

23. A sale of goods on credit to Johnson for ¢45,000 was debited to sales as ¢54,000.
What effects would this have no profit? Profit would be
a. increase by ¢9,000 b. reduced by ¢99,000
c. increased by ¢99,000 d. reduced by ¢9,000

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 Use the items listed below to answer questions 24 and 25
i. Standing order
ii. Unpresented cheques
iii. Uncredited cheques
iv. Customers cheque dishonoured
v. Direct payment by customers to bank

24. Which of the items could result in a higher bank statement balance when compared to
thecash book?
a. II and III only
b. II and IV only
c. I, II and III only
d. II, III and IV only

25. Which of the items will be entered in the adjusted cash book?
a. II and III only
b. I, II and III only
c. I, IV and V only
d. III, IV and V only

26. The entry to be made when a debtor’s cheque is dishonoured is debt

a. cash and credit dishonoured cheque
b. customer and credit cash
c. bank and credit customer
d. customer and credit bank

27. Which of the following items can cause a bank statement balance to be less than cash
book (bank column) balance?
a. Cheques honoured by the bank
b. Unpresented cheques
c. Standing order payments
d. Wrong credit entry on the bank statement

28. On a bank reconciliation statement, which of the following is added to a favourable

balance as per bank statement?
a. Unpresented cheques
b. Uncredited cheques
c. Bank charges
d. Bank interest received

29. A document sent by a bank to its customers detailing the customer’s transactions over
a given period is
a. bank statement
b. bank reconciliation statement

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 c. standing order

Use the following to answer question 30

¢
Balance per bank statement 24,192
Amount paid in but not yet credited 1,278
Unpresented cheques 972

30. The balance as per cash book is

a. ¢26,442
b. ¢24,498
c. ¢23, 886
d. ¢21, 942

31. Purchases and sales figures in a system of incomplete records may be obtained by
preparing
a. control accounts b. statement of affairs
c. receipts and payments account d. income statement

32. Which of the following is a set-off in control accounts?

a. Sales b. Contra
c. Bills receivable discounted d. Bills payable

33. A receipts and payments account of a non-trading organization is one in which

a. profit is calculated
b. opening and closing balances of cash can be obtained
c. balanced of opening and closing capital are shown
d. losses are written off

34. The following bank reconciliation statement has been prepared by an inexperienced
bookkeeper of an Agro Chemicals company at 31 December 2017.
Bank reconciliation statement
GHȼ
Balance per bank statement (overdrawn) 38,640
Add: cheques not credited 19,270
–––––––
57,910
Less: unpresented cheques 14,260
–––––––
Balance per cash book 43,650
–––––––

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What should the final cash book balance be when all the above items have been properly
dealt with?
(a) GHȼ 43,650 overdrawn
GHȼ 33,630 overdrawn
(b) GHȼ 5,110 overdrawn
(c) GHȼ 72,170 overdrawn

35. Which of the following concepts states that all expenses incurred must be recorded in
the accounting period?
(a) Matching
(b) Consistency
(c) Cost
(d) Entity

Use the information below to answer questions 36 to 50

You receive the following pre-adjustment trial balance from Appiah Kubi Traders due
to Covid-19, as well as some additional information at the end of their financial year.
The Trial Balance for Appiah Kubi Traders as at 30 June 2020
Debit Credit
GH¢ GH¢
Revenue 49,750
Cost of sales 17,500
Telephone 375
Salaries 14,375
Rent received 8,750
Insurance 1,000
Stationery 3,000
Bad Debts 375
Commission received 2,500
Capital: Appiah Kubi 11,875
Long-term loan 15,000
Furniture and equipment 45,000
Accumulation depreciation: Furniture & Equip, 7,500
Trade receivables 7,500
Bank 6,250
93,375 95,375
Additional information
i. Accrued salaries, GH¢2,500.
ii. Prepaid insurance, GH¢250.
iii. Stationery on hand, GH¢375.
iv. A provision for doubtful debts of 2% of trade receivables must be created.
v. A commission received in advance, GH¢625
vi. Accrued rent received GH¢1,000 (rent received in arrears).
vii. Depreciation of 10% on the furniture and equipment cost must be taken into
account.

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36. What would be the balance for salaries in the Income Statement Account (Profit &
Loss Account) for the year ended 30th June 2020?
A. GHȼ2,500
B. GHȼ11,875
C. GHȼ14,375
D. GHȼ16,875
37. What would be the balance for insurance expense in the Income Statement Account
for the year ended 30th June 2020?
A. GHȼ250
B. GHȼ750
C. GHȼ1,000
D. GHȼ1,250

38. State the balance for stationery expense in the Income Statement Account for the year
ended 30th June 2020.
A. GHȼ375
B. GHȼ2,625
C. GHȼ3,000
D. GHȼ3,375

39. What would be the balance for Provision for Doubtful Debts only in the Income
Statement Account for the year ended 30th June 2020?
A. GHȼ150
B. GHȼ225
C. GHȼ375
D. GHȼ525
40. What would be the balance for Rent Receivable in the Income Statement Account for
the year ended 30th June 2020?
A. GHȼ1,000
B. GHȼ7,750
C. GHȼ8,750
D. GHȼ9,750

41. What would be the balance for Commission Receivable in the Income Statement
Account for the year ended 30th June 2020?
A. GHȼ625
B. GHȼ2,500
C. GHȼ1,875
D. GHȼ3,125

42. Calculate the Depreciation for Furniture & Equipment to be shown in the Income
Statement Account for the year ended 30th June 2020?
A. GHȼ3,000
B. GHȼ4,500
C. GHȼ7,500
D. GHȼ12,000

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43. Calculate the Gross Profit amount for the year ended 30th June 2020.
A. GHȼ32,250
B. GHȼ43,875
C. GHȼ49,750
D. GHȼ67,250

44. Calculate the total Expenses amount for the year ended 30th June 2020.
A. GHȼ18,750
B. GHȼ21,150
C. GHȼ25,650
D. GHȼ36,250
45. Calculate the Net Profit amount for the year ended 30th June 2020.
A. GHȼ6,600
B. GHȼ16,850
C. GHȼ18,225
D. GHȼ32,250

46. In the Statement of Financial Position as of 30th June 2020, what would be the Net
Book Value of Property, Plant, and Equipment?
A. GHȼ33,000
B. GHȼ37,500
C. GHȼ40,500
D. GHȼ42,000
47. The total current assets value in the statement of financial position as at 30th June
2020 is
A. GHȼ13,750
B. GHȼ14,375
C. GHȼ15,225
D. GHȼ15,375
48. Calculate the value of the total asset in the statement of financial position as at 30th
June 2020.
A. GHȼ46,750
B. GHȼ47,375
C. GHȼ48,225
D. GHȼ48,375

49. What is the total amount of current liabilities in the statement of financial statement as
at 30th June 2020?
A. GHȼ2,500
B. GHȼ3,125
C. GHȼ15,000
D. GHȼ18,125

50. What is the total liabilities amount in the statement of financial statement as at 30th
June 2020?
A. GHȼ2,500
B. GHȼ3,125
C. GHȼ15,000
D. GHȼ18,125

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 SECTION B
THEORY QUESTIONS

1. Discuss at least EIGHT reasons why the study of accounting is important.

2. Identify five branches of accounting and explain any two.

3. Identify the main users of accounting information for universities in Ghana. For what
purposes would different user group need information? Is there a major difference in
the ways in which accounting information for universities in Ghana be compared with
that of private-sector businesses in Ghana?

4. There are some basic accounting principles that are generally accepted by the
accounting profession as being essential for recording and reporting financial
information. As a non-accountant, you are required to list the 14 common accounting
rules under the three broad categories and briefly explain them.

5. Discuss FIVE reasons why the balance shown at the bank column of the cash book
does not agree with the balance shown on the bank statement.

6. a. State four limitation of accounting and briefly explain them.

b. Identify the rule that can be to solve the below problems
i. One of the owners of the company has invested his drawings in shares.
ii. The long-term future prospect of an entity is extremely uncertain.
iii. The company wishes that the good industrial relations are to be reflected in
the account.
iv. The motor van purchased by the company now cost more than when they
were initially bought.
v. A firm purchased GHS 10 worth of pens issued from stock and still in used
at the end of the year.

7. In recent years there have been attempts to put value on “human assets” of a business
in order to derive a figure that can be included on statement of financial statement
(balance sheet). Do you agree humans should be treated as assets? Would “human assets”
meet the characteristics of what assets means to be included in statement of financial
position?

8. State six subsidiary books used to record business transactions. Describe the function
of each book and state the source document from which details are entered into each
book.

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 The answer may be tabulated as shown below:
Name of Function of Source document from which details are
subsidiary day book entered
book

(i)

(ii)

(iii)
Etc

9. Complete the gaps in the following table:

Assets Liabilities Capital

GHS GHS GHS

a) 40,000 6,800 ?

b) 46,000 17,600 ?

c) 38,400 ? 6,400

d) 16,200 ? 13,000

e) ? 15,800 34,600

f) ? 37,000 103,800

10. Yaw Mensah is setting up a new business. Before selling anything, he bought a van for
GHS9,000; a transportable market stall for GHS1,800; a computer for GHS280; and an
inventory of goods for GHS11,200. Yaw did not pay in full for his inventory of goods and
still owes GHS5,000 for them. Yaw borrowed GHS8,000 from a financial institution. After
the events just described, and before trading starts, he has GHS900 cash in hand and
GHS6,300 in the bank. Calculate the amount of his capital.

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 SECTION C
PRACTICAL QUESTIONS

1. J.A Gyimah has the following purchases for the month of May 2020.
May 1 From Pope: 4 DVDs at ¢60 each, 3 mini hi-fi units at ¢240 each.
Less 25% trade discount.
May 3 From Lloyd: 2 washing machines at ¢280 each, 5 vacuum cleaners at
¢80 each, 2 dish-washers at ¢200 each. Less 20% trade discount.
May 15 From Sankey: 1 hi-fi unit at ¢600 each, 2 washing machine at ¢320
each. Less 25% trade discount.
May 20 From Wilson: 6 CD/radios at ¢45 each. Less 33 1/3% trade discount.
May 30 From Freer: 4 dish-washers at ¢240 each. Less 20% trade discount.

Required:
a. Enter them up in the Purchases Day Book and post to Suppliers’ accounts.
b. Transfer the total to the purchases account in the general ledger.

2. MKT & EOA is selling the following items at the recommended retail prices as
shown:
 White tape GH¢10 per roll
 Green felt at GH¢4 per metre
 Blue cotton at GH¢6 per sheet
 Black silk at GH¢20 per dress length.

They make the following sales on credit:

2020
May 1 To Jason: 3 rolls white tape, 5 sheet blue cotton, 1 dress length black
silk.
Less 25% trade discount.
May 4 To Addai-Poku: 6 rolls white tape, 30 metres green flat.
Less 20% trade discount
May 8 To Godwin: 1 dress length black silk. No trade discount.
May 20 To Mark:10 rolls white tape, 6 sheets blue cotton, 3 dress lengths black
silk, 11 metres green felt. Less 25% trade discount.
May 31 To Daisy:12 rolls white tape, 14 sheets blue cotton,9 metres green felt.
Less 20% trade discount.
Required:
a. Draw up a sales invoice for each of the above sales.
b. Enter them up in the Sales Day Book and post to the personal accounts.
c. Transfer the total to the sales account in the general ledger.

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3. General Goods Ltd. operates a petty cash on the imprest system with a float of
GH¢1,000.00. Reimbursements are made such that cash on hand does not fall below
GH¢120.00. Below is a summary of petty cash transaction for the period to
September 30th 2020
GH¢
Sept 1: received reimbursement by cheque from cashier … 835.00
2: paid wages … 340.00
4: paid rent and rates … 150.00
5: paid wages and salaries … 300.00
8: paid electricity expenses … 86.00
9: paid for taxi … 30.00
10: paid for taxi … 40.00
paid wages … 180.00
11: paid rent and rates … 54.39
paid wages … 220.00
paid J. Amuh a creditor in full less 10% cash discount 180.00
12: paid for taxi … 100.00
14: paid electricity expenses … 25.00
15: paid B. Boso, a creditor … 40.00
18: paid for taxi … 35.00
paid rent and rates … 183.00
24: paid wages and salaries … 480.00
30: paid for taxi … 136.00
You are required to
(a) Write up the petty cash book
(b) Show the nominal ledger

4. Enter the following transactions of an antiques shop in the accounts and extract a trial
balance as at 31 March 20.

March, 2017

1 Started in business with GHS8,000 in the bank.

2 Bought goods on time from: L. Frank GHS550; G. Byers GHS540; P. Lee
GHS610.
5 Cash sales GHS510.
6 Paid wages in cash GHS110.
7 Sold goods on time to: J. Snow GHS295; K. Park GHS360; B. Tyler GHS640.
8 Bought goods for cash GHS120.
10 Bought goods on time from: G. Byers GHS410; P. Lee GHS1,240.
12 Paid wages in cash GHS110.
15 Sold goods on time to: K. Park GHS610; B. Tyler GHS205.
15 Bought shop fixtures on time from Stop Ltd GHS740.

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 17 Paid G. Byers by cheque GHS700.
19 We returned goods to P. Lee GHS83.
21 Paid Stop Ltd a cheque for GHS740.
24 B. Tyler paid us his account by cheque GHS845.
27 We returned goods to L. Frank GHS18. 30 G. Prince lent us GHS1,000 by cash.
31 Bought a van paying by cheque GHS6,250.

5. The Cash book and Bank Statement of Farm Vivi Enterprise are given below

Cash book
April 2020 ¢ April 2020 ¢
10 A. Shash 440,000 1 Balance b/f 2,598,500
16 M. Nash 122,000 6 T. Lullock 61,000
21 A. Klexander 166,000 9 S. Baba 499,000
22 B. Sheriff 1,008,000 14 K. Kaba 949,000
30 S. Unclair 80,000 30 A. Annet 104,000
30 Balance c/d 2,640,000 30 S. Jaw 245,000
4,456,000 4,456,000

Bank Statement
April 2020: DR CR BALANCE
¢ ¢ ¢
1. Balance b/f 2,598,500 (O/D)
8. T. Lullock 61,000 2,658,500 (O/D)
16 Cheque ---- 122,000 2,537,500 (O/D)
20 B. Annet 104,000 ---- 2,641,500 (O/D)
21 Cheque ----- 166,500 2,475,000 (O/D)
31 T. Murnbull: Credit transfer ----- 28,500 2,446,500 (O/D)
31 B.E.D: Standing order 24,500 ---- 2,471,000 (O/D)
31 Bank charges 14,000 ---- 2,485,000 (O/D)
31 Dividend: Investment ----- 2.005,000 480,000 (O/D)

You are required to:

a. write up the adjusted Cash book;
b. prepare a bank reconciliation statement as at 30th April, 2020.

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6. You receive the following pre-adjustment trial balance from Mavuzo Traders, as well
as some additional information at the end of their financial year.
Trial balance for Mavusa Traders at 30 June 2020
Debit Credit
GH¢ GH¢

Revenue 398,000
Cost of sales 140,000
Telephone 3,000
Salaries 115,000
Rent received 70,000
Insurance 8,000
Stationery 24,000
Credit losses 3,000
Commission received 20,000
Capital: Mavuso 95,000
Long-term loan 120,000
Furniture and equipment 360,000
Accumulation depreciation: Furniture & Equip, 60,000
Trade receivables 60,000
Bank 50,000
763,000 763,000
Additional information
i. Accrued salaries, GH¢20, 000.
ii. Prepaid insurance, GH¢2, 000.
iii. Stationery on hand, GH¢3, 000.
iv. A provision for credit losses of 2% of trade receivables must be created.
v. Commission received in advance, GH¢5, 000.
vi. Accrued rent received, GH¢8, 000 (rent received in arrears).
vii. Depreciation of 10% on the cost price of furniture and equipment must be taken
into account.

Required
a. Show the general journal entries for the above-mentioned adjustments.
b. Prepare a post-adjustment trial balance.

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