NABTEB 2023 FINANCIAL ACCOUNTING ESSAY AND OBJ ANSWERS;-ExamgrandComNg

FINANCIAL ACCOUNTING-ESSAY- ANSWERS;-Examgrand
INSTRUCTION: ANSWER FIVE QUESTIONS ONLY

2023 NABTEB F/ACCOUNTING
01-10: DBCDCAACCC
11-20: BCDCBCDDCC
21-30: BBDCCCAACC
31-40: ACBDDABACB
41-50: BDADACDABB
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NABTEB ESSAY

(1)
(i) Account sales refer to the sales made by a consignee on behalf of the consignor. When a consignment of goods is sent to a consignee, the consignee sells the goods to customers and generates sales revenue.

(ii) Del credere commission is a special type of commission paid by the consignor to the consignee in addition to the regular commission. It is paid to compensate the consignee for undertaking the risk of bad debts from the customers

(iii) A consignment account is a special type of account used to record the transactions related to consignment sales. It is maintained by the consignor and shows the details of goods sent on consignment, expenses incurred, sales made, and the settlement of accounts with the consignee.

(iv) The consignment outwards account is maintained by the consignor to record the goods sent on consignment to the consignee. It is a nominal account and represents the cost of goods transferred from the consignor’s books to the consignee’s books.

(v) E and O.E stands for “Errors and Omissions Excepted.” It is a disclaimer commonly used in financial documents, including consignment accounts. This disclaimer implies that the account statement or document is subject to possible errors and omissions. It indicates that if any mistakes or omissions are found, they can be corrected without invalidating the entire document.

(2a)
Subscription in advance refers to a situation where a customer pays for a service or subscription before receiving it. The revenue is recognized as a liability or unearned revenue initially and is recorded as a liability on the balance sheet. As the service is provided over time, the revenue is gradually recognized as earned revenue on the income statement WHILE Subscription in arrears, on the other hand, refers to a situation where a customer pays for a service or subscription after receiving it. The revenue is recognized immediately as earned revenue on the income statement when the service is provided, even though the payment is received later.

(2b)
(PICK 4 ONLY)
(i) Net profit/loss
(ii) Expenses
(iii) Revenue
(iv) Gross profit
(v) Operating

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(4)
Sales ledger control account

TABULATE PLS
=DR=
Bal b/f 5900
Credit sales 75,200
Bal c/d 940
Total 82,040

=CR=
Bal b/f 780
Discount allowed 336
Returned inward 414
Cheque from debtors 44,300
Bal c/d 36210
Total 82,040

Sales ledger control account: Bal b/d 940
Purchase Ledger Control Account
TABULATE PLS
=DR=
Bal b/f 434
Discount received 1,366
Return outward 350
Cheque drawn for creditors 31,000
Bal c/d 2,624
Total 35,774
=CR=
Bal b/f 3,694
Credit purchase 31,600
Bal c/d 980
Total 35,774
Purchase Ledger Control Account: Bal b/d 480

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