May/June 2022

Which activity would be undertaken by a book-keeper?

Books of prime entry

Once Abdul’s draft financial statements had been prepared, two mistakes were found. The purchase of a machine by bank transfer, $5000, had been left out of the accounts. The purchase of a motor vehicle, $15000, had been recorded in the motor vehicle repair account. What effect will the correction of these mistakes have on the non-current assets and the working capital?

Correction of errors

Raj’s cash book showed a debit balance of $10800 in the bank column. He found that purchases worth $890, which had been settled by cheque, were entered as $980. The bank statement included the following items, but they were not yet recorded in the cash book: bank charges $76 interest received $120 What debit balance was shown in the bank column of Raj’s cash book after these items were adjusted?

Bank reconciliation

Why is a sales ledger control account usually drawn up by a different member of staff from the person who keeps the sales ledger?

Control accounts

Tamal gave the following details for March, his first month of trading. credit purchases $9100$ credit purchases returned $322$ total payments to credit suppliers $5358$ At some point during the month, Tamal paid a supplier $94$ too much. He made no additional purchases from this supplier in March. What balance(s) did Tamal’s purchases ledger control account show on 1 April?

Control accounts

John paid the following amounts when he bought a machine. purchase of machine $10000$ delivery charge $1200$ insurance $800$ installation charge $900$ pre-paid maintenance charge $400$ How much ought to have been debited to the machinery account?

Capital and revenue expenditure and receipts

On 1 January, Zac recorded the cost of repairing equipment, $420$, in the equipment account. At 31 December, depreciation at $20\%$ per annum, applied by the straight-line method, was charged against the balance in the equipment account. What effect did this have overall on the book value of the equipment on 31 December?

Capital and revenue expenditure and receipts

Atif charges depreciation on his motor vehicles at the rate of $20\%$ per annum by the reducing balance method. On 1 May 2021, Atif had motor vehicles that originally cost $35000$. By that date, the motor vehicles had accumulated depreciation of $12600$. What amount was in Atif’s provision for depreciation account balance on 1 May 2022?

Accounting for depreciation and disposal of non-current assets

Yeung’s financial year finishes on 31 March. He bought a machine for $4000$ on 1 April 2021. He expected it to last for $3$ years in use and to have a residual value of $100$. Yeung applies the straight-line method of depreciation. The machine was then sold on 1 April 2022 for $1500$. Calculate the loss on disposal.

Accounting for depreciation and disposal of non-current assets

On 1 April 2021, commission receivable of $210$ had not yet been received. Commission received in the year ending 31 March 2022 was $4850$. Which journal entry ought to have been recorded at the close of the financial year on 31 March 2022?

Other payables and other receivables

Which of the following statements about a debts recovered account is accurate?

Irrecoverable debts and provision for doubtful debts

What does the accounting equation mean?

Accounting principles

Nula’s accounting year finishes on 31 December. She keeps a provision for doubtful debts equal to $5\%$ of trade receivables. At 1 January 2021, the provision was $800$. By 31 December 2021, trade receivables totalled $13400$, and $600$ of this was considered irrecoverable. What amount was shown for the provision for doubtful debts at 1 January 2022?

Irrecoverable debts and provision for doubtful debts

While drawing up his financial statements, a trader valued his inventory at cost. He later discovered that $10$ units of inventory, with a cost of $12$ per unit, had been damaged. If he paid $2$ per unit for repairs, he would be able to sell them for $9$ each. What effect would the incorrect inventory valuation have on the income statement?

Valuation of inventory

At the close of his financial year, Marek was due $200$ in interest from a loan he had advanced to an employee. He entered this in his financial statements. What effect did this loan interest have on Marek’s profit for the year, and in which part of his statement of financial position was it shown?

Other payables and other receivables

What is the purpose of drawing up a partnership appropriation account?

Partnerships

Raj and Seema are partners, with profits and losses shared in the ratio $2:1$. During the year, Raj took out $5000$ and interest at $3\%$ was charged on this amount. Seema made no withdrawals in the year. The profit for the year came to $30000$. What amount was entered in Raj’s current account at the end of the year?

Partnerships

A limited company obtained finance through a debenture issue. Which statement is correct?

Limited companies

A limited company gave the following data. equity total at 1 January 2021: $500\,000$ ordinary share dividend paid on 30 June 2021: $25\,000$ amount transferred to general reserve on 31 December 2021: $12\,000$ equity total at 31 December 2021: $558\,000$ How much profit was earned during the year?

Limited companies

Which set includes only items that make up a manufacturer’s prime cost?

Manufacturing accounts

On 1 January, ZT Manufacturers' work in progress had a value of $6200$. By the end of the year, it had been valued at $5400$. How did this affect the cost of production for the year?

Manufacturing accounts

A trader does not maintain complete accounting records, but the following details were supplied. capital at 1 January 2021: $26\,000$ capital at 31 December 2021: $37\,000$ drawings made during year: $6500$ Over the year, $9500$ was taken from the owner’s personal bank account to buy a motor vehicle for use in the business. What was the profit for the year?

Incomplete records

Sarah made a credit sale of goods to Zafar. How would this be entered in Sarah’s books of account?

Books of prime entry

A business supplied the information below. opening inventory: $6800$ closing inventory: $6000$ rate of inventory turnover: $5$ times What were the purchases for the year?

Calculation and understanding of accounting ratios

Jerry launched his business on 1 January 2022 with no opening inventory. A fire completely destroyed all of his inventory on 19 April 2022. For the period from 1 January 2022 to 19 April 2022, Jerry gave the following figures. revenue: $30\,200$ purchases: $25\,600$ gross margin: $25\%$ What amount of inventory was destroyed on 19 April 2022?

Valuation of inventory

A trader supplied the information below. profit earned in the year: $24\,000$ working capital: $20\,000$ capital: $120\,000$ non-current liability: $30\,000$ Calculate the return on capital employed.

Calculation and understanding of accounting ratios

Which actions might a clothing retailer take to improve his rate of inventory turnover?

Interpretation of accounting ratios

A trader is thinking about supplying goods on credit to a new customer. What might be worked out from the customer’s financial statements to show the usual length of time taken to pay for goods bought on credit?

Calculation and understanding of accounting ratios

Which accounting policy states that the information shown in financial statements should be free from material errors and bias?

Accounting policies

Omar issued Miriam with a credit note for the goods she returned. How should Miriam enter this transaction in her books?

Books of prime entry

In a trader’s cash book, the total in the discount column on the debit side was $1300, and the total in the discount column on the credit side was $700. How much discount was received by the trader?

Books of prime entry

Kai purchased office equipment from Meena and settled the amount straight away by bank transfer. How should Kai enter this in his accounting records?

Books of prime entry

Jabari keeps a petty cash book under the imprest system. At the end of each month, the imprest is topped up. Which amount tops up the imprest at the end of a month?

Books of prime entry

Which statement about a trial balance is accurate?

The trial balance

Provide one example of a compensating error.

Correction of errors

Which duty would be performed by a book-keeper?

Books of prime entry

What item would be entered on the credit side of a sales ledger control account?

Control accounts

For the year ended 31 March 2022, Maria’s draft income statement reported a profit for the year of $38750. A $4800 bank loan at $5\%$ was obtained by Maria on 31 December 2021, but it was wrongly recorded as a revenue receipt. Also, the draft income statement for the year ended 31 March 2022 mistakenly included interest for a full year on the bank loan. What should the correct profit for the year ended 31 March 2022 be?

Capital and revenue expenditure and receipts

Which statement concerning the reducing balance method of depreciation is incorrect?

Accounting for depreciation and disposal of non-current assets

Yeung’s financial year finishes on 31 March. On 1 April 2021, he bought a machine for $4000. He judged that its useful working life would be 3 years and that its residual value would be $100. Yeung applies the straight-line method of depreciation. The machine was sold on 1 April 2022 for $1500. What was the loss on disposal?

Accounting for depreciation and disposal of non-current assets

On 1 April 2021, commission receivable of $210 remained unpaid. Commission received in the year ended 31 March 2022 totalled $4850. What journal entry ought to have been recorded at the end of the financial year on 31 March 2022?

Other payables and other receivables

Nula’s accounting year finishes on 31 December. She keeps a provision for doubtful debts of 5% of trade receivables. At 1 January 2021, the provision stood at $800. By 31 December 2021, trade receivables were $13 400, including $600 that was considered irrecoverable. What was the provision for doubtful debts on 1 January 2022?

Irrecoverable debts and provision for doubtful debts

Once the financial statements for the year ended 30 April 2022 were completed, a trader found that closing inventory had been overstated. What effect will this error have?

Valuation of inventory

Mariam operates a business that offers accounting services. She supplied the information below for the financial year ended 31 March 2022: fees due from clients on 1 April 2021 $4500; fees received from clients during the year ended 31 March 2022 $22 500; fees due from clients on 31 March 2022 $1500. What amount of fees was recorded in the income statement for the year ended 31 March 2022?

Other payables and other receivables

Which item would not be included in a partnership appropriation account?

Partnerships

Carol and Denise are partners, and they share profits and losses in the ratio 2:1. Denise’s current account showed these balances: on 1 May 2021, $2000 debit; on 1 May 2022, $7000 credit. She took no drawings during the year. What total profit did the partnership earn in the year ended 30 April 2022?

Partnerships

The ledger account shown below was recorded in Leah’s books, where Leah is a trader. Which statement is correct?

The trial balance

Which of the following statements are correct?

Accounting principles

The provisional financial statements of a limited company showed retained earnings of $31 820. It was later discovered that no adjustment had been made for the following items: commission receivable accrued $450; insurance prepaid $175. What should the corrected amount of the retained earnings be?

Other payables and other receivables

Which of the following statements about club accounts is correct?

Clubs and societies

A sports club gave the following details for the financial year ended 31 December 2021: subscriptions paid in advance at 1 January 2021 $200; subscriptions owing at 31 December 2021 $450; subscriptions collected during the year $8800. What total subscriptions belonged to the year ended 31 December 2021?

Clubs and societies

On 1 January, ZT Manufacturers’ work in progress was worth $6200. By the end of the year, this had fallen to $5400. What impact did this have on the cost of production for the year?

Manufacturing accounts

A manufacturing company supplied these figures: cost of production $345 000; finished goods 1 January 2021 $42 000; finished goods 31 December 2021 $36 000; purchases of finished goods $15 000. What was the cost of sales?

Manufacturing accounts

Tahir gave the following figures for his first year of trading: sales $170 000; sales returns $6000; purchases $129 000. Tahir’s gross margin was 25%. What was the value of closing inventory?

Valuation of inventory

A business supplied the following figures: inventory at the start of the year $6800; inventory at the end of the year $6000; rate of inventory turnover 5 times. What were the purchases for the year?

Valuation of inventory

By the end of the financial year, a trader gave the information shown below. Revenue: $80\,000$ Gross profit: $20\,000$ Expenses: $12\,000$ What profit margin was achieved?

Calculation and understanding of accounting ratios

A trader gave the details below. Profit earned in the year: $24\,000$ Working capital: $20\,000$ Capital: $120\,000$ Non-current liability: $30\,000$ What was the return on capital employed?

Calculation and understanding of accounting ratios

Sarah supplied goods to Zafar on credit. How would this be entered in Sarah’s ledgers?

Books of prime entry

Samuel, a trader, decided to send out statements of account every month. Which ratio does Samuel aim to improve by doing this?

Calculation and understanding of accounting ratios

In year $1$, John’s rate of inventory turnover stood at $10$ times, but in year $2$ it fell to $8$ times. What could explain the change in the inventory turnover rate?

Interpretation of accounting ratios

Maya recorded annual revenue of $100\,000$. In year $1$, her gross margin stood at $45\%$ and her profit margin stood at $5\%$. In year $2$, her gross margin was $40\%$ and her profit margin was $3\%$. What change occurred to Maya’s cost of sales and expenses in year $2$?

Interpretation of accounting ratios

For what reason would a bank manager want to look at a business’s financial statements?

Interested parties

‘Revenue should be recognised only once the legal title of goods and services passes from the seller to the buyer.’ Which accounting principle is being referred to by this statement?

Accounting principles

‘The information shown in financial statements should be able to be independently checked.’ Which accounting policy is being described by this statement?

Accounting principles

Omar issued Miriam with a credit note for the goods that were returned. How should Miriam enter this transaction in her records?

Books of prime entry

Ben received $900 in cash from David in exchange for goods. In which book of prime entry should David enter this transaction?

Books of prime entry

A petty cashier was given $100 by the chief cashier and $10 by an employee who had used the business telephone for private calls. In what way would these sums be entered in the petty cash book and the cash book?

Books of prime entry

Give one example of a compensating error.

Correction of errors

Following the preparation of Abdul’s draft financial statements, two mistakes were found. The purchase of a machine, paid for by bank transfer, $5000, had been left out of the accounts. The purchase of a motor vehicle, $15 000, had been recorded in the motor vehicle repair account. What impact will the correction of these errors have on the non-current assets and the working capital?

Correction of errors

Why is a sales ledger control account usually prepared by someone other than the staff member who keeps the sales ledger up to date?

Control accounts

Which activity would be performed by a book-keeper?

Books of prime entry

What item would be entered on the credit side of a sales ledger control account?

Control accounts

Maria’s draft income statement for the year ended 31 March 2022 reported a profit for the year of \$38 750. On 31 December 2021, Maria obtained a 5% bank loan of \$4800, but this was wrongly recorded as a revenue receipt. Through an error, interest for a full year on the bank loan was included in the draft income statement for the year ended 31 March 2022. What was the correct profit for the year ended 31 March 2022?

Capital and revenue expenditure and receipts

Which statement regarding the reducing balance method of depreciation is incorrect?

Accounting for depreciation and disposal of non-current assets

Yeung's financial year finishes on 31 March. On 1 April 2021, he bought a machine costing $4000. He estimated that it would be useful for $3 years and that its residual value would be $100. Yeung applies the straight-line method of depreciation. The machine was sold on 1 April 2022 for $1500. What was the loss on disposal?

Accounting for depreciation and disposal of non-current assets

On 1 April 2021, commission receivable, $210, remained unpaid. The commission received during the year ended 31 March 2022 was $4850. Which journal entry ought to have been recorded at the end of the financial year on 31 March 2022?

Other payables and other receivables

Nula’s financial year finishes on 31 December. She keeps a provision for doubtful debts equal to $5\%$ of trade receivables. On 1 January 2021, the provision stood at $800. By 31 December 2021, trade receivables were $13\,400$, and $600$ of this amount was considered irrecoverable. What amount was shown for the provision for doubtful debts on 1 January 2022?

Irrecoverable debts and provision for doubtful debts

Once the financial statements for the year ended 30 April 2022 had been prepared, a trader realised that the closing inventory had been overstated. What effect will this error have?

Valuation of inventory

Mariam runs a business that offers accounting services. For the financial year ended 31 March 2022, she gave the following figures: fees outstanding from clients on 1 April 2021 $4500; fees received from clients during the year ended 31 March 2022 $22\,500; fees outstanding from clients on 31 March 2022 $1500. What amount of fees would appear in the income statement for the year ended 31 March 2022?

Other payables and other receivables

Which item would not be shown in a partnership appropriation account?

Partnerships

Carol and Denise are partners, with profits and losses divided in the ratio $2:1$. Denise’s current account showed these balances: on 1 May 2021 $2000$ debit; on 1 May 2022 $7000$ credit. She took no drawings over the year. What total profit did the partnership earn in the year ended 30 April 2022?

Partnerships

A ledger account was shown in the records of Leah, a trader. Amraz account: Debit side: April 26 purchases returns \$150; April 30 bank \$1900; April 30 discount \$100; balance c/d \$2950 (total \$5100). Credit side: April 1 balance b/d \$2100; April 20 purchases \$3000 (total \$5100). Which statement is correct?

Other payables and other receivables

Which of these statements are correct?

Accounting principles

The draft financial statements for a limited company reported retained earnings of $31\,820. It was later discovered that the following adjustments had not been entered: accrued commission receivable $450; prepaid insurance $175. What is the correct retained earnings figure?

Limited companies

Which of the following statements about club accounts is correct?

Clubs and societies

For the financial year ending 31 December 2021, a sports club gave the following figures: subscriptions paid in advance on 1 January 2021 $200; subscriptions outstanding on 31 December 2021 $450; subscriptions received during the year $8800. What was the total amount of subscriptions that belonged to the year ending 31 December 2021?

Clubs and societies

ZT Manufacturers’ work in progress was worth $6200 on 1 January. By the end of the year, it had fallen to $5400. How did this change affect the cost of production for the year?

Manufacturing accounts

A manufacturing company supplied the following details: cost of production $345\,000; finished goods at 1 January 2021 $42\,000; finished goods at 31 December 2021 $36\,000; purchases of finished goods $15\,000. What was the cost of sales?

Manufacturing accounts

For Tahir’s first year of trading, the information given was: sales $170\,000; sales returns $6000; purchases $129\,000. Tahir’s gross margin amounted to $25\%$. What was the value of closing inventory?

Valuation of inventory

A business gave the following figures: opening inventory $6800; closing inventory $6000; inventory turnover rate $5$ times. What were the purchases during the year?

Calculation and understanding of accounting ratios

By the end of the financial year, a trader gave the details shown below. revenue: 80 000 gross profit: 20 000 expenses: 12 000 What is the profit margin?

Calculation and understanding of accounting ratios

The details below were supplied about a trader. profit earned during the year: 24 000 working capital: 20 000 capital: 120 000 non-current liability: 30 000 What was the return on capital employed?

Calculation and understanding of accounting ratios

Sarah supplied goods to Zafar on credit. How would this be entered in Sarah’s ledgers?

Books of prime entry

Samuel, who is a trader, chose to send out statements of account every month. Which ratio is Samuel aiming to improve by doing this?

Calculation and understanding of accounting ratios

John’s inventory turnover rate was 10 times in year 1 and 8 times in year 2. What might have led to the change in the inventory turnover rate?

Interpretation of accounting ratios

Maya recorded annual revenue of $100 000. During year 1, her gross margin stood at 45% and her profit margin stood at 5%. During year 2, her gross margin fell to 40% and her profit margin fell to 3%. What change occurred to Maya’s cost of sales and expenses in year 2?

Interpretation of accounting ratios

Why might a bank manager want to examine the financial statements of a business?

Interested parties

‘Revenue ought to be recognised only when the legal title to goods and services moves from the seller to the buyer.’ Which accounting principle is being described by this statement?

Accounting principles

‘The figures shown in financial statements ought to be able to be checked and confirmed by an independent person.’ Which accounting policy does this statement refer to?

Accounting principles

Omar issued a credit note to Miriam for goods that were returned. How should Miriam record this transaction?

Books of prime entry

David bought goods from Ben and paid \$900 in cash. In which book of prime entry should David record this transaction?

Books of prime entry

A petty cashier was given \$100 by the chief cashier and \$10 from an employee who had used the business telephone for private calls. In which entries would these amounts be entered in the petty cash book and the cash book?

Books of prime entry

Give one example of a compensating error.

Correction of errors

Following the completion of Abdul’s draft financial statements, two mistakes were identified. • The bank transfer used to buy a machine, $5000, had been left out of the accounts. • The motor vehicle purchase, $15 000, was posted to the motor vehicle repair account. What impact will the correction of these mistakes have on the non-current assets and the working capital?

Correction of errors

Why is a sales ledger control account usually compiled by a different staff member from the one who keeps the sales ledger?

Control accounts

Nakul trades goods. He purchases and sells on credit. Most of his stock comes from one supplier, Nadia, who gives Nakul a trade discount of 20%. The transactions below occurred in January 2022. Jan 2 Paid $441 by cheque to Nadia, in full settlement of $450 owed to her at 1 January 2022. Jan 12 Bought goods on credit from Nadia, list price $350 Jan 14 Returned faulty goods to Nadia, list price $80 Jan 18 Bought goods on credit from Nadia, list price $400 Jan 23 Sold goods on credit, $800 Jan 29 Bought goods on credit, $60, from Sophie Jan 30 Returned goods to Sophie, $9

Books of prime entry

Fatima trades as a sole trader and prepares financial statements up to 31 March each year. On 31 March 2022, the balances in Fatima’s ledger accounts were as follows. Revenue $79400 Sales returns $3970 Purchases $36500 Rent and rates $9000 Wages $10100 General expenses $1287 Insurance $1800 Discount received $1095 Inventory at 1 April 2021 $3000 Fixtures and equipment at cost $80000 Fixtures and equipment - provision for depreciation $39040 Trade receivables $6400 Trade payables $4995 Provision for doubtful debts $156 Cash drawings $8580 Capital at 1 April 2021 $59000 The extra information is given below. 1 Inventory at 31 March 2022 amounted to $3120. 2 In the year ended 31 March 2022, Fatima withdrew goods for personal use from the business. These goods had cost $1300. 3 Depreciation on fixtures and equipment is to be charged at 20% per annum using the reducing balance method. 4 Accrued wages at 31 March 2022 were $800. 5 Rent includes a payment of $1500 for the 3 months from 1 March 2022 to 31 May 2022. 6 An irrecoverable trade receivable of $200 is to be written off. 7 The provision for doubtful debts is to be set at 3% of trade receivables.

Sole traders

Jules is a hairdresser. On 30 April 2022, he acquired some new energy-saving hairdrying equipment for $1900 on credit from YZH Limited.

Correction of errors

Ekua trades in household furnishings and has supplied the figures below. At 30 April 2022: Inventory $14650 Trade receivables $12700 Bank overdraft $5375 Trade payables $7125 For the year to 30 April 2022: Revenue $112300 Purchases $72250 Expenses $19820 All sales and purchases are on credit. Inventory at 1 May 2021 was valued at $12800.

Valuation of inventory

The Sew and Soup Club gives membership to people who want to exchange sewing and knitting patterns. It also runs a café selling refreshments to members. At 31 December, the club had the following assets and liabilities. 2020 / 2021 Subscriptions in advance $2260 / $1745 Subscriptions in arrears $1820 / $2115 Inventory of refreshments $1070 / $1130 Rent paid in advance $500 / $500 Trade payables for refreshment supplies $1940 / $1580 Bank balance $4628 / $7743 For the year ended 31 December 2021, the totals below were recorded. Receipts: Subscriptions received (all by cheque) $13900 Cash sales of refreshments $17650 Payments: Rent $6000 Wages $7000 Other expenses $5000 Trade payables for refreshment supplies $10435

Clubs and societies

Peter works as a trader. The transactions below occurred during April 2022. April 2 Cash sales, $410, were banked straight away. April 3 A cheque for $798 was paid to Rahat in full settlement of a debt of $840. April 8 $42 cash was paid for repairs to a motor vehicle. April 15 Goods with list price $320 were bought on credit from Rahat after a trade discount of 10%. April 18 Cash sales, $460. April 20 $392 was sent to Samir by telephone transfer after deducting 2% cash discount from the amount due. April 25 A cheque for commission receivable, $115, was paid into the bank account. April 29 $285 was paid to Rafael in cash, settling a debt of $300 in full.

Books of prime entry

Stalla began trading on 1 April 2021. Every receipt is paid into the bank and every payment is made from the bank. She has not kept a full set of accounts, but she has supplied the information below. Summary of receipts and payments for the year ended 31 March 2022 Receipts: Capital introduced $8000 Loan received (repayable 2027) $5000 Sales (all in cash) $36000 Payments: Trade payables $17850 Fixtures and fittings $12000 General expenses $1920 Rent and insurance $7100 Drawings ? Bank balance at 31 March 2022 $2330

Incomplete records

Mosi trades goods. His trial balance totals at 30 April 2022 failed to match, so the difference was entered in a suspense account. Later, Mosi found these errors. 1 Commission received, $96$, had been posted to discount received account. The bank account entry was correct. 2 The total from the sales journal for April 2022, $1258$, was transferred into sales account as $2185$. 3 A cheque payment for motor expenses, $77$, had not been entered in the accounting records. 4 A payment by electronic transfer, $135$, was shown as a payment in the petty cash book. 5 An invoice received from Tracey, $160$, was entered in Stacey's account.

Correction of errors

Nala trades in stationery, buying and selling it. She gave the following figures for her inventory as at 28 February 2022.

Valuation of inventory

As at 30 November 2021, the trial balance for M Limited was given below. M Limited Trial Balance at 30 November 2021

Limited companies

Peter works as a trader. The transactions below occurred in April 2022. April 2 Cash sales, $410, were paid directly into the bank account April 3 By cheque, $798 was paid to Rahat in full settlement of a debt of $840 April 8 $42 cash was paid for a motor vehicle repair April 15 Goods with a list price of $320 were bought on credit from Rahat, subject to a trade discount of 10% April 18 Cash sales, $460 April 20 $392 was paid to Samir by telephone transfer after a 2% cash discount had been deducted from the amount due April 25 A cheque for commission receivable, $115, was paid into the bank account April 29 $285 was paid to Rafael in cash in full settlement of a debt of $300

Bank reconciliation

Stalla began trading on 1 April 2021. Every receipt is banked, and every payment is made through the bank. She has not kept a complete set of books, but she has supplied the information below. Summary of receipts and payments for the year ended 31 March 2022 Receipts: Capital introduced $8000; Loan received (repayable 2027) $5000; Sales (all cash) $36000 Payments: Trade payables $17850; Fixtures and fittings $12000; General expenses $1920; Rent and insurance $7100; Drawings $? Bank balance at 31 March 2022 $2330

Incomplete records

Mosi trades as a trader. At 30 April 2022, the totals of his trial balance were not equal, so the difference was entered in a suspense account. Mosi subsequently found these errors: 1 Commission received, $96$, had been posted to the discount received account on the debit side. The bank account entry was posted correctly. 2 The April 2022 sales journal total of $1258$ was entered in the sales account as $2185$. 3 A cheque payment for motor expenses of $77$ was left out of the book-keeping records. 4 An electronic transfer payment of $135$ was written into the petty cash book instead. 5 A supplier invoice from Tracey for $160$ had been credited to Stacey’s account.

Correction of errors

Nala trades in stationery. She gave the following details about her inventory at 28 February 2022.

Valuation of inventory

The trial balance for M Limited on 30 November 2021 was presented as follows.

Limited companies