Nabteb GCE 2022 Financial Accounting Answers – 30th November

Nabteb GCE 2022 Financial Accounting Answers – 30th November 2022

2022 NABTEB ALEVEL FINANCIAL ACCOUNTING ANSWERS

SECTION A (INSTRUCTIONS: ANSWER ALL QUESTIONS FROM THIS SECTION)

(1)
(i) Supplies.
(ii) Utilities.
(iii) Office equipment rental.

(iv) Desktop computers and cell phones.

(2)
(CHOOSE ANY FOUR)
(i) Trial balance cannot be prepared as the double entry system is not followed. Therefore, the accuracy of the accounts cannot be ensured.
(ii) Evaluation of results of business cannot be determined properly.
(iii) There will be issues in raising funds as the analysis of liquidity, solvency, and profitability are not possible.
(iv) There will be difficulties faced by owners while filing insurance claims for theft or fire.

(v) There will be issues while convincing the income tax authorities about the reliability of the calculated income.

(3)
(CHOOSE ANY DEFINITION YOU LIKE)
(i) Contribution Margin is a cost-accounting calculation that measures the profitability of a product or the revenue that is left after covering fixed costs.

(ii) Contribution Margin shows the aggregate amount of revenue available after variable costs to cover fixed expenses and provide profit to the company

(4)
(i) A bill of exchange must be in written form.
(ii) It is an order to make payment.
(iii) The order to make payment is unconditional.

(iv) The payment to be made must be certain.

(5)
(i) Income & Expenditure Accounts are on an accruals basis WHILE Receipts & Payments Accounts show only the cash and bank transactions in that accounting period.
(ii) Income and expenditure account does not start with any balance. WHILE Receipt and Payment Account must start with the opening balance of cash brought over from the preceding period

(iii) Income and expenditure account must include only income and expense items belonging to the period under review WHILE Receipt and payment account may include receipts and payments relating to the period immediately before or after.

(6) It refers to the distribution of various overhead items in proportion to the department on a logical basis. The apportionment will share the cost among multiple cost units in the proportion of expected benefit received.

(7)
(CHOOSE ANY FOUR)
(i) Sharing of profits and losses.
(ii) Interest on partner’s capital.
(iii) Interest on partner’s drawings.
(iv) Interest on partner’s loan.

(v) Salary to a partner.

(8a)
(i) It’s recorded separately to keep the balance sheet clean and organized.
(ii) the actual amount of bad debt is written off the balance sheet.

(8b)

(i) It decreases the debit balance of profit and loss Account and ultimately net profit would increase.

(9i)
An Interim Dividend: This is a Dividend payment made before a company’s Annual General Meeting (AGM) and the release of final financial statements. This declared dividend usually accompanies the company’s interim financial statements.

(9ii) Proposed Dividend Refers to the Dividend to be Distributed among the Shareholders of the Company during a Financial Year which will be Paid in the Next Year . The Final Dividend is Proposed by the Directors of the Company only when the Final Accounts are Finalized.

(9iii) Bonus Shares: These are additional shares given to the current shareholders without any additional cost, based upon the number of shares that a shareholder owns. These are company’s accumulated earnings which are not given out in the form of dividends, but are converted into free shares.

(10a) A Container is Anything in which goods are packed for sale.

(10b)
(i) Containers returned by customers at return price.
(ii) Containers retained by customers at return price.

(iii) Provision necessary at return price for those containers which are in the hands of customers.