2020 O Level POA Answers Paper 1
Bycalebho
a)
| Date | Particulars | Dr ($) | Cr($) |
| Motor vehicle | 20500 | ||
| Motor vehicle expense | 150 | ||
| Cash at bank | 20650 | ||
| or | Motor vehicle | 20500 | |
| Cash at bank | 20500 | ||
| Motor vehicle expense | 150 | ||
| Cash at bank | 150 | ||
| Discount allowed | 45 | ||
| Cash in hand | 1455 | ||
| Trade receivable-Xavier (1455/97%) | 1500 |
b) The business is assumed to continue indefinitely.
a)
General journal
| Date | Particulars | Dr ($) | Cr($) |
| Trade receivable, Ming | 4950 | ||
| Sales Revenue | 4950 | ||
| Trade receivable J Yin | 625 | ||
| Trade receivable SYin | 625 |
b)
| Increase by 4950 | |
| No effect |
Profit after adjustment = $24,822
(c)
| Error of Principle | Record of transaction made in the wrong account which is of different category/class of the correct account |
| Compensating Errors | Error in computation or recording of a transaction that is offset by an error that is equal and opposite. / Amounts are overstated or understated . Keywords : overstated / understated |
| CompleteReversal Errors | The double entries made were reversed. Or amounts are debited and credited to the wrong nature. |
a)
Statement of financial performance for the year ended 31 August 2020
| $ | $ | |
| Sales revenue | 75180 | |
| Less: sales returns | (2700) | |
| Net sales revenue | 74180 | |
| Less : cost of sales | (45300) | |
| Gross profit | 27180 |
b)
| Internal Stakeholders | Information needed | Reason |
| 1. Owners and managers | Profit and liquidity | Need to make decisions on how to plan, control, monitor and operate the business |
| 2. Employees | Profit and cash | 1)To evaluate their career prospects with the company2) To know if the business has sufficient cash to pay their salaries3) To know if they can get any bonuses |
c) Money Measurement / Monetary theory. Only transactions that can be presented in dollars and cents can be recorded. Reputation, while valuable to a business, cannot be recorded into the books as it is not possible to put a monetary value on them.
