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FACULTY: EDUCATION AND LIBERAL STUDIES
SCHOOL: TECHNICAL AND VOCATIONAL EDUCATION
Extended Paper, Semester 1, A/Y 2021/22
Module Name: Introduction to Financial Accounting
Module Code: ACC1003
Date: November 29, 2021
Theory/ Practical: Theory
Groups: ADPM, AMT, BS, ComT, FSPM
Duration: 24 Hours
INSTRUCTIONS: Answer ALL questions. Label your answers clearly. No handwritten work
will be accepted. State in your email the number and type of documents you have
submitted (for example, one Word document and one Excel document). Name your file as
Intro to Fin Acc - First name Surname. You work is to be emailed to
XXXXXXXXXX ONLY.
Question 1
Joseph had a heated discussion with his amateur accountant, Tom, on how different items
are to be treated when recording accounting transactions. The following are some of the
issues discussed, and Tom has asked you to explain to him where he is wrong and to help
him explain the co
ect accounting entries to Joseph. Using the relevant accounting
concepts, explain to them how the items are to be treated XXXXXXXXXXmarks)
a. A customer had owed the business $200,000 for goods she purchased four months
ago. Joseph said they should not have recorded the $200,000 as Sales as the
customer had not paid for it when the transaction took place and now four months
had passed and they have not received “one cent from the customer” who they
heard is now bankrupt.
. Joseph had bought a pack of staples which he believes should be treated as a non-
cu
ent asset as it was bought to be used in the business and he expects to have it
for at least two years. Tom says it should be treated as an expense.
c. Joseph had bought a laptop for his daughter using funds from the business and said
the purchase should be included in the books of his business. Tom is not sure how to
treat the transaction.
d. The firm’s electricity bill for one month was $35,600. Joseph paid only $15,000 and
said that the amount that should be treated as the expense for the month is $35,600,
ut Tom insisted that it should be $15,000.
e. The inventory which can be sold for $68,000 was bought for $40,000. Tom is not
sure how to record the inventory.
UNIVERSITY OF TECHNOLOGY, JAMAICA
mailto: XXXXXXXXXX
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Question 2
The following information is available for the firm of Lois Jen for the financial year ended
31 March 2021.
$ $
Sales ................................................................................................ XXXXXXXXXX150,000
Purchases ........................................................... XXXXXXXXXX95,000
Inventory, 1 April 2020 ................................... XXXXXXXXXX5,000
Returns Inwards ..................................................... XXXXXXXXXX450
Returns Outwards ............................................................................ XXXXXXXXXX700
Ca
iage Inwards ................................................... XXXXXXXXXX250
Ca
iage Outwards ................................................ XXXXXXXXXX400
Bank Loan (repayable 2026) ...................................................... XXXXXXXXXX5,000
Bank loan interest.............................................. XXXXXXXXXX1,800
Capital ............................................................................................ XXXXXXXXXX210,900
Drawings ............................................................ XXXXXXXXXX25,000
Bank ..................................................................... XXXXXXXXXX39,200
Cash ........................................................................ XXXXXXXXXX1,000
Accounts Payables ........................................................................ XXXXXXXXXX41,300
Accounts Receivables .................................... XXXXXXXXXX35,000
Bad Debts .................................................................. XXXXXXXXXX500
Allowance for doubtful debts, 1 April 2020 .......................... XXXXXXXXXX3