Account obj
1DDBABBBDDB,
11BAACCDDBBD
21BDCDCBCBCD
31CDDBBBDCDB
41ACBABAAACD
1.Control account used to record the balances on a number of subsidiary accounts and to provide a cross-check on them.
uses of control account
1. Check on the accuracy
2. Location of errors
3. For internal check
4. More Simply and Quickly
C.Limitations of accounting ratio
(1) Ratios are based on accounting figures given in the financial statements. However, accounting figures are themselves subject to deficiencies, approximations, diversity in practice or even manipulation to some extent. Therefore, ratios are not very helpful in drawing reliable conclusions.
2) Ratios have inherent problem of comparability. Companies otherwise similar may employ different accounting methods, which can cause problems in comparing certain key relationships. For example, inventory turnover can be different for a company using FIFO than for the other company using LIFO method of inventory valuation.
3) Accounting ratios are not totally dependable and they must be used after giving due weight- age to general economic conditions, industry situation, position of firms within the industry, mode of operations, size of firm, diversity of product which can make the business enterprises completely dissimilar and thus affect the computation of accounting ratios.
3a. The accrual concept in accounting means that expenses and revenues are recorded in the period they occur, whether or not cash is involved.
3b. The business entity concept states that the transactions associated with a business must be separately recorded from those of its owners or other businesses. Doing so requires the use of separate accounting records for the organization that completely exclude the assets and liabilities of any other entity or the owner.
3c. Dual Aspect Concept, also known as Duality Principle, is a fundamental convention of accounting that necessitates the recognition of all aspects of an accounting transaction.
3d. PERIODICITY CONCEPT is the concept that each accounting period has an economic activity associated with it, and that the activity can be measured, accounted for, and reported upon.
3e. The going concern principle is the assumption that an entity will remain in business for the foreseeable future. Conversely, this means the entity will not be forced to halt operations and liquidate its assets in the near term at what may be very low fire-sale prices.
2a working capital: is the amount of a company's current assets minus the amount of its current liabilities . For example, if a company's balance sheet dated June 30 reports total current assets of N323,000 and total current liabilities of N310,000 the company's working capital on June 30 was N13,000. If another company has total current assets of N210,000 and total current liabilities of N60,000 its working capital is N150,000.
b)
Capital employed; is the total amount of capital used for the acquisition of profits. It is the value of all the assets employed in a business and can be calculated by adding fixed assets to working capital or subtracting current liabilities from total assets. By employing capital, you make an investment.
c) fixed asset: is an asset that is not consumed or sold during the normal course of business, such as land, buildings, equipment, machinery, vehicles, leasehold improvements, and other such items.
Fixed assets enable their owner to carry on its operations. In accounting, fixed does not necessarily mean immovable; any asset expected to last, or be in use for, more than one year is considered a fixed asset. On a balance sheet, these assets are shown at their book value (purchase price less depreciation).
d) Current assets are balance sheet accounts that represent the value of all assets that can reasonably expect to be converted into cash within one year. Current assets include cash and cash equivalents , accounts receivable, inventory, marketable securities, prepaid expenses and other liquid assets that can be readily converted to cash.
e)Rate of Stock turnover is a financial efficiency ratio that helps answer a questions like "have we got too much money tied up in inventory"? An increasing stock turnover figure or one which is much larger than the "average" for an industry may indicate poor inventory management.
4a)
A company is a legal entity made up of an association of persons, be they natural, legal, or a mixture of both, for carrying on a commercial or industrial enterprise.
4bi) An ordinary share represents equity ownership in a company proportionally with all other ordinary shareholders, according to their percentage ownership in the company. All other shares of a company's stock are, by
definition , preferred shares
4b(ii)Preference shares, more commonly referred to as preferred stock, are shares of a company's stock with dividends that are paid out to shareholders before common stock dividends are issued. If the company enters bankruptcy, the shareholders with preferred stock are entitled to be paid from company assets first.
4b(iii) A debenture is a type of debt instrument that is not secured by physical assets or collateral.
Debentures are backed only by the general creditworthiness and reputation of the issuer. Both corporations and governments frequently issue this type of bond to secure capital.
4b(iv) The authorised capital of a company (sometimes referred to as the authorised share capital, registered capital or nominal
capital, particularly in the United States) is the maximum amount of share capital that the company is authorised by its constitutional documents to issue (allocate) to shareholders.
5a)
JOURNAL
TBULATE
dr - cr
NGN cr
(i)
suspense 19,000 -
purchase - 19,000
___________________ _______________
ii)
returns inwards 8,000
suspense 8,000
___________________ _______________
iii)
suspense - 19,600
cashbook - 19,000
___________________ _______________
iv)
suspense(49,000Χ2) 98,000
cashbook- 98,000
___________________ _______________
v)
repairs of plant 11,000 -
plant and machinery - 11,000
___________________ _______________
vi)
customer 158,950
sales 158,950
___________________ _______________
vii)
suppliers(25,500Χ2) - 51,000
suspense 51,000
___________________ _______________
5b)
TABULATE
suspense account
NGN
purchase 19,000
cash book 19,600
cash book 98,000
= 136,600
NGN
returns in 8,000
supplier 51,000
c/f 77,600
= 136,600
==================================
Home
Forum
Search
Calendar
Gallery
Arcade
Members
Login
Register
Post-UTME
NOTICE: You are currently viewing this website as a Guest and are restricted from viewing some vital information. For more permissions on 
