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  • 15 Marks

FA – Nov 2012 – L1 – SB – Q4 – Financial Statements Preparation

Prepare a bank cash book, retained earnings, and statement of financial position for Fehintola Enterprises.

On 1 January 2011, Mrs. Fehintola decided to invest her retirement benefit of N1,000,000 in the wholesale business of Fehintola Enterprises. She lodged the amount into the business bank account and paid for the following by cheque:

  • Motor Van: N600,000
  • Warehouse fittings: N340,000
  • Rent: N12,500

Proper accounting records were not kept, but the financial position as at 31 December 2011 revealed the following:

  • Inventories of goods in the warehouse: N150,000
  • Trade receivables: N125,000
  • Cash at Bank: N751,750
  • Trade payables for supplies: N100,000
  • Accrued rent: N15,000

The following were paid for by cheque:

  • Electricity bill at N2,500 per quarter up to 31 March 2012
  • Suppliers: N1,500,000
  • Personal expenses: N150,000

On 31 December 2011, it was agreed that the Motor Van and Warehouse fittings should be valued at N560,000 and N320,000, respectively.

Required:

a. Prepare the Bank Cash Book (5 Marks)
b. Prepare a statement showing the retained earnings for the year ended 31 December 2011 (5 Marks)
c. Prepare the Statement of Financial Position as at 31 December 2011 (5 Marks)

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  • 1 Marks

FA – Nov 2012 – L1 – SA – Q8 – Bank Reconciliation

Identifying the cause of discrepancy between the cash book and the bank statement.

Which of the following does NOT cause a discrepancy between cash book and bank statement balances?

A. Direct credit found in the bank statement
B. Credit sales posted to the debit side of the cash book (bank column)
C. COT and other finance costs credited in the bank statement
D. The company’s credit balance in the bank statement
E. Subscription paid by the bank on behalf of the company’s manager and debited in the bank statement

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  • 20 Marks

FA – Nov 2015 – L1 – SB – Q2 – Bank Reconciliation

Preparing an adjusted cash book and bank reconciliation for a club with discrepancies.

a. Bank Statement is a mirror of any entity’s cash book, and they are expected to have equal balances at any point in time. However, this is not usually the case. Based on the ongoing statement, state five reasons that could cause the bank statement balance to differ from the cash book balance. (5 Marks)

b. The Treasurer of Young Star Social Club (YSSC) did not keep proper records for receipts and payments for the month of December 2014, causing mistrust among members. He has decided to seek your assistance to prepare a bank reconciliation statement before presenting the account to the club members.

The bank statement and the receipts and payments cash book of the club on December 31, 2014, showed a credit balance of N205,000 and N2,078,000, respectively. A comparison of the bank statement with the receipts and payment cash book of the club revealed the following:

i. Cheque drawn but not presented N3,160,000
ii. Amount lodged in the bank but not credited N725,000
iii. Entries in bank statement not recorded in receipts and payments cash book:

  • Standing order for loan refund N35,000
  • Interest received on deposit account N18,000
  • Bank charges N15,000
  • Cheque paid-in but returned with “refer to drawer” N120,000

Required:
i. Prepare an adjusted cash book as at December 31, 2014; (8 Marks)
ii. Prepare the Bank Reconciliation Statement showing the balance on December 31, 2014. (7 Marks)

(Total 20 Marks)

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  • 1 Marks

FA – Nov 2015 – L1 – SA – Q16 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

This question identifies the items that should be included in an adjusted cash book.

Which of the following should be included in the adjusted cash book?
A. Cheque issued, presented and cashed
B. Opening bank balance
C. Bank charges and commission
D. Bank deposit
E. Cash payment made by the firm

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  • 1 Marks

FA – Nov 2015 – L1 – SA – Q12 – Recording Financial Transactions

This question identifies which document is not used to update a Cash Book.

Which of the following is NOT a source document used to update a Cash Book?
A. Cheque stub
B. Payment voucher
C. Receipts
D. Paying-in-slip
E. Debit note

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  • 20 Marks

FA – May 2018 – L1 – SB – Q1 – Recording Financial Transactions

Prepares a three-column cash book, ledger accounts, and a trial balance for a sole trader.

On January 1, 2016, Mr. Wale commenced business as a sole trader with N10,000,000, which he paid into the business bank account. He purchased a van for N6,000,000 from Mallam Tanko and paid half of the amount due by cheque on January 2, 2016. The following transactions took place in the month of January 2016:

  • Jan 2: Paid rent of N500,000 for two years in advance for the business premises by cheque.
  • Jan 3: Purchased goods worth N2,000,000 from Granules Limited and paid half of the amount by cheque so as to enjoy a cash discount of 4%.
  • Jan 4: Purchased furniture for N200,000 and computers for N250,000 by cheque.
  • Jan 6: Conducted sales promotion for one month, offering cash and trade discounts as follows:
    • 5% discount on cash sales
    • 10% trade discount for sales above N500,000
  • Jan 8: Sold goods for cash to Sanders Limited for N340,000.
  • Jan 10: Sold goods to Miles and Stone Limited for N1,000,000, who paid 75% by cheque.
  • Jan 12: Mr. Bobby purchased goods valued at N100,000 and paid in full by cash.
  • Jan 13: Deposited N300,000 cash in the bank.
  • Jan 15: Paid salaries by cheque (N80,000) and electricity bill by cheque (N10,000).
  • Jan 20: Paid the sum of N1,750,000 to Mallam Tanko for the van by cash.
  • Jan 27: Mr. Wale withdrew N10,000 for personal expenses.
  • Jan 30: Cash sales of N40,000 were made.

Required:
a. Prepare a three-column cash book. (6 Marks)
b. Prepare the ledger accounts for the transactions. (8 Marks)
c. Prepare a trial balance as at January 31, 2016. (6 Marks)

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  • 1 Marks

FA – Nov 2021 – L1 – SA – Q15 – Bank Reconciliation

This question focuses on which bank reconciliation items should not be adjusted in the cash book.

Which of the following bank reconciliation items should NOT be added or subtracted from the cash book balance to determine the adjusted bank balance?
A. Bank service charges
B. Unpresented cheques
C. Direct transfer
D. Cash book error
E. Value added tax charges

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  • 1 Marks

FA – Nov 2021 – L1 – SA – Q13 – Accounting Concepts

This question requires calculating the amount of cash paid out during a period.

In a cash book, the opening balance was N70,600, closing balance was N86,600 and the total cash received during the period was N180,000. What was the amount of cash paid out during the period?
A. N89,000
B. N98,000
C. N146,000
D. N164,000
E. N186,000

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  • 1 Marks

FA – Nov 2021 – L1 – SA – Q11 – Trial Balance

This question evaluates the treatment of discounts in the cash book and their impact on the trial balance.

If the total discount allowed in a cash book was N52,000 and the total discount received was N66,700, which of the following is TRUE concerning the two discounts?
A. They should not appear in the trial balance as they were already either received or paid out
B. They must be balanced in the cash book and the difference taken to the receivables
C. They must not appear in the general ledger
D. They must be balanced in the cash book and the difference taken to the trial balance
E. They should not be balanced in the cash book before being taken to the trial balance

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  • 1 Marks

FA – Nov 2021 – L1 – SA – Q4 – Accounting Concepts

This question relates to the ledger entry for a vehicle purchased on cash.

Success Motors bought three Toyota Jeeps on cash at the cost of N16,000,000. On debiting the vehicle account, the corresponding credit for the purchase will appear in the:
A. Sales day book
B. Purchase day book
C. Payable account
D. Cash book
E. Purchases account

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  • 1 Marks

FA – May 2022 – L1 – SA – Q15 – Bank Reconciliation

Identify which bank reconciliation item should not be added or subtracted from the cash book balance.

Which of the following bank reconciliation items should NOT be added or subtracted from the cash book balance to determine the adjusted bank balance?

A. Bank service charges
B. Unpresented cheques
C. Direct transfers
D. Cash book errors
E. Value-added tax charges

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  • 1 Marks

FA – May 2022 – L1 – SA – Q6 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Identify the accounting record that serves as both a book of original entry and a ledger.

Which of the following accounting records serves as both a book of original entry and a ledger?

A. Sales day book
B. Purchases sales book
C. Returns inwards book
D. General ledger
E. Cash book

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  • 20 Marks

FA – Nov 2022 – L1 – SB – Q1 – Bank Reconciliation

This question requires preparing an adjusted cash book, a bank reconciliation statement, and an explanation of why the reconciliation is necessary.

On April 6, 2020, Alhaji Mogaji received his bank statements for the month ended March 31, 2020. The bank statement showed a balance of N41,740,000 (overdraft) as at March 31, while the cash book showed a balance of N52,599,000 (Credit) as at that date. On examination of the cash book and the bank statements, the following were discovered:

  • (i) Bank charges of N201,000 had not been recorded in the cash book;
  • (ii) Alhaji Mogaji exceeded his overdraft limit during the month of March. The bank had therefore charged him a default penalty of N250,000. This was not reflected in the cashbook;
  • (iii) A sum of N1,250,000 had been credited to Alhaji Mogaji’s bank account in error;
  • (iv) A cheque for N1,230,000 had been returned by the bank as dishonoured, and the bank charged Alhaji Mogaji N15,000. This was not reflected in the cash book;
  • (v) Cash receipts of N3,740,000 were posted as cash payments of N4,730,000 in the cash book;
  • (vi) On March 21, Alhaji Mogaji transferred cash of N650,000 to his personal bank account. This was credited to the business bank account in error by the bank;
  • (vii) Standing orders and direct debits of N1,115,000 had not been posted to the cash book;
  • (viii) Customers had transferred N2,170,000 directly to the bank account, and credit alert was received, but no record had been made in the cash book;
  • (ix) An amount of N5,120,000 lodged into the bank account on March 31, 2020, had not been credited by the bank;
  • (x) The following cheques, drawn on the bank account, had not been presented to the bank for payment as at March 31, 2020:
    • Cheque No. 4528 dated March 11, 2020, N840,000
    • Cheque No. 4535 dated March 28, 2020, N1,740,000
    • Cheque No. 4537 dated March 31, 2020, N3,670,000.

You are required to:
a. Prepare the adjusted cash book for the month of March, 2020. (9 Marks)
b. Prepare a statement on March 31, 2020, reconciling the bank statement balance with the adjusted cash book balance. (7 Marks)
c. Explain two reasons for preparing a bank reconciliation statement on a regular basis. (4 Marks)

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  • 1 Marks

FA – Nov 2022 – L1 – SA – Q13 – Recording Financial Transactions

Determine the cash paid out during the period based on the given cash book balances.

In a cash book, the opening balance was N70,600, closing balance was N9,200, and the total cash received during the period was N180,000. What was the amount of cash paid out during the period?
A. N79,000
B. N98,000
C. N100,200
D. N118,600
E. N241,400

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  • 1 Marks

FA – Nov 2022 – L1 – SA – Q5 – Bank Reconciliation

Identify the item that affects the cash book but is credited in the bank statement.

An item credited in the bank statement but yet to be recorded in the firm’s cash book is
A. Standing order
B. Direct transfer
C. Direct debit
D. Uncredited lodgements
E. Unpresented cheques

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  • 1 Marks

FA – Nov 2022 – L1 – SA – Q3 – Correction of Errors

Correct an error in recording a transaction in the books.

A cheque of N5,000,000 paid to Alhaji Dalami had been correctly entered in the cash book but was omitted in Alhaji Dalami’s account. To correct this error, debit Alhaji Dalami’s account and credit
A. Cash account
B. Bank account
C. Suspense account
D. Purchases account
E. Control account

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  • 14 Marks

FA – Nov 2014 – L1 – SB – Q4b – Bank Reconciliation, Correction of Errors

Preparing cash book adjustments and reconciling the bank balance with the cash book.

On 30 June 2014, Maxwell’s cash book showed that he had an overdraft of N300,000 on his current account at the bank. The bank statement as at the end of June 2014 showed that Maxwell was in credit by N65,000.

On checking the cashbook with the bank statement, the following discrepancies were found:

i. Cheque drawn amounting to N500,000 had been entered in the cash book, but had not been presented.
ii. Cheque received amounting to N400,000 had been entered in the cash book, but had not been credited by the bank.
iii. On instructions from Maxwell, the bank had transferred interest of N60,000 from his savings account to his current account, recording the transfer on 5 July 2014. This amount had been posted into the cash book as at 30 June 2014.
iv. Bank charges of N35,000, shown in the bank statement, had not been entered in the cash book.
v. The payment side of the cash book had been under-cast by N10,000.
vi. Dividend received amounting to N200,000 had been paid directly to the bank and not entered in the cash book.
vii. A withdrawal of N50,000 from the savings account had been shown in the cash book as a drawing from the current account.
viii. A cheque for N25,000 issued to Jones over six months ago had been stale and was later replaced. It was entered again in the cash book, and no other entry was made. Both cheques were included in the total of unpresented cheques shown above.

Required:

i. Indicate the appropriate adjustments in the cash book. (8 Marks)
ii. Prepare a statement reconciling the amended balance with that shown in the bank statement. (6 Marks)
(Total 20 Marks)

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  • 1 Marks

FA – Nov 2014 – L1 – SA – Q15 – Bank Reconciliation

Identifying the correct overdrawn bank balance after corrections in cash book entries.

The cash book shows an overdrawn bank balance of N65,000 at 30 September, 2014. It was subsequently discovered that a standing order of N12,500 has been recorded twice and that a dishonored cheque for N9,000 has been debited in the cash book instead of being credited. What is the correct bank balance?

A. N66,700 O/D
B. N67,500 O/D
C. N70,500 O/D
D. N71,600 O/D
E. N72,500 O/D

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  • 20 Marks

FA – May 2023 – L1 – SB – Q5 – Recording Financial Transactions

Preparation of a two-column cash book from given transactions and balancing off at month-end.

a. Write up a two-column cash book from the following details and balance off as at the end of the month.

  • January 1: Started business with capital N1,000,000 cash
  • January 2: Paid rent of N100,000 cash
  • January 3: I.K. Opara lent N5,000,000 by cheque
  • January 4: Ebenezer was paid by cheque N650,000
  • January 5: Cash sales N980,000
  • January 7: Ileri paid us cheque, N620,000
    Cash sales, N530,000
    Received cash of N650,000 from Robert
  • January 9: Paid George N220,000 cash
  • January 16: Took N500 out of the cash till and paid into the bank account.
  • January 19: I.K. Opara was repaid N1,000,000 by cheque
  • January 22: Cash sales paid directly to the bank N600,000
  • January 26: Motor expenses of N120,000 was paid by cheque
  • January 30: N1,000,000 cash was withdrawn from bank for business use
  • January 31: Paid wages of N970,000 by cash

    (10 Marks)

b. i. Explain the uses of the Journal. (4 Marks)
ii. The following transactions took place in the books of Olson Limited in June 2019:

  • A machine is bought on credit from Sylva Enterprises for N186,000 on June 1.
  • A motor vehicle is sold to Adefela on credit for N360,000 on June 8.
  • Wonu, a customer, owed N160,000. She offers a motor in full settlement of the debt on June 16 and the offer was accepted.

Required:
Journalize the transactions. (6 Marks)

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  • 1 Marks

FA – May 2023 – L1 – SA – Q7 – Bank Reconciliation

Determining the impact of specific transactions on the bank statement balance.

The bank statement of a trader shows a debit balance before reconciliation with the cash book balance. Which of the following transactions will reduce the balance when necessary adjustments are completed?

A. Dividends received directly by the bank on behalf of the trader

B. Outstanding deposits

C. Unpresented cheques

D. Error committed in the cash book of the trader

E. Dishonoured cheques

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