Expenses – Knowsia

FR – L2 – Q3 – Conceptual Framework for Financial Reporting

Appraise the validity of a statement claiming the statement of financial position is sufficient for assessing business performance, defining key terms.

Question

“A statement of financial position is a snapshot of a business at a point in time. It shows the assets that an entity owns and the liabilities that it owes. This is all that is required to convey a business’s performance, position and adaptability.

As income generated and expenses incurred by a business are already reflected within the assets and liabilities shown in the statement of financial position, a statement of profit or loss is a superfluous statement.”

Required

Briefly appraise the validity of the above statement, defining the words underlined.

Answer

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Tags: Assets, Conceptual Framework, Expenses, Financial Statements, Income, Liabilities, Statement of Financial Position, Statement of profit or loss
Level: Level 2

Topic: Conceptual Framework for Financial Reporting

PSAF – L2 – Q11.1- Preparation and Presentation of Financial Statements for Central Government

Prepare 2023 financial performance statement for Republic of Zamara Consolidated Fund.

Question

(a) Prepare the Republic of Zamara Consolidated Fund Account: Statement of financial performance for the year ended 31st December 2023.

(b) Prepare the Republic of Zamara Consolidated Fund Account: Statement of financial position as at 31st December 2023.

(d) Prepare the Kwevadum District Assembly: Statement of financial position as at 31st December 2024.

(e)Prepare the Kwevadum District Assembly: Statement of changes in net assets for the year ended 31st December 2024.

Answer

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Tags: Central Government, Consolidated Fund, Expenses, Financial Statements, IPSAS, Non-Tax Revenue, Public Sector Accounting, Revenue, Statement of Financial Performance, Surplus
Level: Level 2

Topic: Preparation and Presentation of Financial Statements for Central Government

FA – L1 – Q97 – Preparation of accounts from incomplete records

Prepare statement of profit or loss, statement of affairs, and statement of financial position for Ansah Ventures for 20X9 using incomplete records.

Question

ANSAH VENTURES

Kwame Ansah is a vehicle spare parts dealer in Kumawu. He pays into his bank account the amount of his cash takings after keeping an amount of GH¢2,000 per week for personal use and after payment of wages and other expenses, which for the accounting period ending 31st December 20X9, were as follows:

Expenses	GH¢
Staff wages	1,440
Goods	120,580
Cleaning	1,200
Carriage	600
Sundry	5,000

The following are his bank transactions:

Bank Transactions	GH¢
Income tax	3,000
Telephone	650
Bank lodgements	15,000
Cash sales	6,000
Bulk sales (cheques)	10,000
Treasury bill interest	5,000
Payments to suppliers	15,000
Rent	11,000
Electricity	650
Balance as at 1st January 20X9	6,000

The following additional information was also provided:

Assets and Liabilities	01/01/20X9 (GH¢)	31/12/20X9 (GH¢)
Furniture & fittings	1,200	1,200
Stocks in trade	10,500	7,650
Payables – Goods purchased	1,670	2,750
Payables – Rent	5,000	6,000
Payables – Electricity	500	650
Payables – Telephone	150	200
Payables – Accountancy fee	–	750
Treasury bills	10,000	15,000
Receivables – Bulk sales	8,000	15,000

Required:
(i) Prepare statement of profit or loss for the year ending 31st December 20X9. (10 marks)
(ii) Prepare statement of affairs as at 1st January 20X9. (2 marks)
(iii) Prepare statement of financial position as at 31st December 20X9. (8 marks)

Answer

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Tags: Capital, Depreciation, Expenses, Incomplete records, Inventory, Payables, Receivables, Statement of affairs, Statement of Financial Position, Statement of profit or loss
Level: Level 1

Topic: Preparation of accounts from incomplete records

FA – L1 – Q42 – Accruals and prepayments

Calculate amounts for profit or loss for a hotel's expenses and revenue for the year ended 30 April 20X9.

Question

A hotel makes up its accounts to 30 April annually. The proprietor, Mrs Amponsah, informs you that she has paid the following amounts during the year to 30 April 20X9:

Item	GH₵(000)
Wholesaler	3,945
Butcher	4,261
Building supplies (repairs)	814
Electricity	935
Gas	566
Wages	1,150

She also informs you that she has received GH₵37,550,000 in cash from guests, of which GH₵4,300,000 relates to deposits paid in advance for holidays to be taken after 1 May 20X9.
You discover on further investigation that invoices for April 20X9 from the butcher and wholesaler, amounting to GH₵431,000 and GH₵292,000, were received on 15 May. The electricity bill for the quarter ended 31 May 20X9 totals GH₵220,000, and the chambermaids are paid a week in arrears at GH₵42,000 per week. Gas cylinders are purchased in advance at GH₵17,000 each, and two remain unused at 30 April.

Required
(a) Calculate the amounts to be included in the statement of profit or loss for each of the above items for the year ended 30 April 20X9.

(b) Calculate the relevant statement of financial position amounts at 30 April 20X9.

Answer

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Tags: accrual basis, Accruals, cash basis, Expenses, Financial Statements, hotel operations, Prepayments, Profit or Loss, Revenue Recognition
Level: Level 1

Topic: Accruals and prepayments

FA – L1 – Q13 – Preparing financial statements of a sole trader

Prepare a statement of profit or loss and financial position for Worthe's business for the year ended 30 June 20X9 using the given trial balance and inventory data.

Question

The following is a trial balance for Worthe after his first year’s trading. You are required to prepare a statement of profit or loss for the year ended 30 June 20X9 and a statement of financial position as at that date.

Worthe – Trial balance as at 30 June 20X9

	DR GH₵(000)	CR GH₵(000)
Sales		28,794
Purchases	23,803
Rent	854
Lighting and heating expenses	422
Salaries and wages	3,164
Insurance	105
Land and buildings	50,000
Fixtures and fittings	1,000
Receivables	3,166
Sundry expenses	506
Payables		1,206
Cash at bank	3,847
Drawings	2,400
Motor vans	5,500
Motor running expenses	1,133
Capital		65,900
Total	95,900	95,900

Inventory at 30 June 20X9 was GH₵4,166,000.

Answer

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Tags: Capital, Drawings, Expenses, Financial Statements, Inventory, Non-current Assets, Profit or Loss, Sole Trader, Statement of Financial Position, Trial Balance
Level: Level 1

Topic: Preparing financial statements of a sole trader

FA – L1 – Q11 – Preparing financial statements of a sole trader

Prepare statement of profit or loss and financial position for Blake's business for 20X9 using trial balance and inventory data.

Question

Using the following information, prepare the statement of profit or loss for Blake for the year ended 31 December 20X9 and a statement of financial position as at that date.

Blake – Trial balance as at 31 December 20X9

	Debit GH₵	Credit GH₵
Purchases	54,261
Sales		135,650
Sales returns	50
Purchase returns		61
Carriage inwards (delivery cost of purchases)	100
Carriage outwards (cost of deliveries to customers)	150
Inventory – 1 January 20X9	7,500
Wages and salaries	8,900
Rent	4,500
Telephone	560
Heat and lighting	890
Motor van running expenses	1,250
Bank interest	534
Land and buildings	60,000
Motor van	5,000
Payables		5,900
Bank overdraft		6,500
Receivables	8,700
Cash in hand	150
Drawings	15,000
Capital		19,434
Total	167,545	167,545

Inventory at 31 December 20X9 was GH₵9,500.

Required
Prepare the statement of profit or loss for the year ended 31 December 20X9 and a statement of financial position as at that date.

Answer

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Tags: Capital, Drawings, Expenses, Inventory, Payables, Receivables, Revenue, Statement of Financial Position, Statement of profit or loss, Trial Balance
Level: Level 1

Topic: Preparing financial statements of a sole trader

FA – L1 – Q9 – Preparing financial statements of a sole trader

Prepare profit or loss statement and financial position for Kwame's business for the year ended 31 December.

Question

The following information is available for Kwame’s business for the year ended 31 December. He started his business on 1 January.

	GH¢’000
Trade payables	1,206
Trade receivables	3,166
Purchases	23,803
Revenue	28,794
Motor van	5,500
Drawings	2,400
Insurance	105
General expenses	506
Rent and rates	854
Salaries	3,164
Inventory at 31 December	4,166
Sales returns	50
Cash at bank	3,847
Cash in hand	100
Capital introduced	65,900

Required:
Prepare a statement of profit or loss for the year ended 31 December and a statement of financial position at that date.

Answer

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Tags: Expenses, Financial Statements, Inventory, Profit or Loss, Revenue, Sole Trader, Statement of Financial Position, Trial Balance
Level: Level 1

Topic: Preparing financial statements of a sole trader

Tag (SQ): Expenses

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FR – L2 – Q3 – Conceptual Framework for Financial Reporting

Appraise the validity of a statement claiming the statement of financial position is sufficient for assessing business performance, defining key terms.

PSAF – L2 – Q11.1- Preparation and Presentation of Financial Statements for Central Government

Prepare 2023 financial performance statement for Republic of Zamara Consolidated Fund.

FA – L1 – Q97 – Preparation of accounts from incomplete records

Prepare statement of profit or loss, statement of affairs, and statement of financial position for Ansah Ventures for 20X9 using incomplete records.

FA – L1 – Q42 – Accruals and prepayments

Calculate amounts for profit or loss for a hotel's expenses and revenue for the year ended 30 April 20X9.

FA – L1 – Q13 – Preparing financial statements of a sole trader

Prepare a statement of profit or loss and financial position for Worthe's business for the year ended 30 June 20X9 using the given trial balance and inventory data.

FA – L1 – Q11 – Preparing financial statements of a sole trader

Prepare statement of profit or loss and financial position for Blake's business for 20X9 using trial balance and inventory data.

FA – L1 – Q9 – Preparing financial statements of a sole trader

Prepare profit or loss statement and financial position for Kwame's business for the year ended 31 December.

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FR – L2 – Q3 – Conceptual Framework for Financial Reporting

Appraise the validity of a statement claiming the statement of financial position is sufficient for assessing business performance, defining key terms.

You're reporting an error for "FR – L2 – Q3 – Conceptual Framework for Financial Reporting"

PSAF – L2 – Q11.1- Preparation and Presentation of Financial Statements for Central Government

Prepare 2023 financial performance statement for Republic of Zamara Consolidated Fund.

You're reporting an error for "PSAF – L2 – Q11.1- Preparation and Presentation of Financial Statements for Central Government"

FA – L1 – Q97 – Preparation of accounts from incomplete records

Prepare statement of profit or loss, statement of affairs, and statement of financial position for Ansah Ventures for 20X9 using incomplete records.

You're reporting an error for "FA – L1 – Q97 – Preparation of accounts from incomplete records"

FA – L1 – Q42 – Accruals and prepayments

Calculate amounts for profit or loss for a hotel's expenses and revenue for the year ended 30 April 20X9.

You're reporting an error for "FA – L1 – Q42 – Accruals and prepayments"

FA – L1 – Q13 – Preparing financial statements of a sole trader

Prepare a statement of profit or loss and financial position for Worthe's business for the year ended 30 June 20X9 using the given trial balance and inventory data.

You're reporting an error for "FA – L1 – Q13 – Preparing financial statements of a sole trader"

FA – L1 – Q11 – Preparing financial statements of a sole trader

Prepare statement of profit or loss and financial position for Blake's business for 20X9 using trial balance and inventory data.

You're reporting an error for "FA – L1 – Q11 – Preparing financial statements of a sole trader"

FA – L1 – Q9 – Preparing financial statements of a sole trader

Prepare profit or loss statement and financial position for Kwame's business for the year ended 31 December.

You're reporting an error for "FA – L1 – Q9 – Preparing financial statements of a sole trader"

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