2021 N Level POA Answers 7086 paper 1
ai) Integrity. Being straightforward and honest in all professional and business relationships
aii) Objectivity. Not letting bias, conflict of interest or undue influence of others to override professional judgment
(b) To serve as an objective and verifiable evidence of a business transaction.
(c)
| Source document | Type of transaction | |
| (i) | Receipt | Cash purchase or cash sale |
| (ii) | Debit note | Correct an undercharge of a credit sale or purchase |
| (iii) | Invoice | Credit purchase or credit sale |
| (iv) | Credit Note | Return of credit sale or credit purchase |
| (v) | Payment Voucher | Record of payments |
(d) Income Summary.
(e)
• safeguard assets of the business
• ensure business transactions are recorded objectively and on a timely basis
• ensure that the business complies with laws and regulation
a)
Trade payable : Ting
| Date | Particulars | Dr ($)- | Cr ($)+ | Balance |
| 2021 | ||||
| Jun 1 | Balance b/d | 4820 Cr | ||
| 2 | Inventory (purchases) | 2160 | ||
| 6 | Inventory (returns) | 180 | ||
| 30 | Cash at bank | 3000 | 3800 Cr | |
| Jul 1 | Bal b/d | 3800 Cr |
b) Trade discount is given by the seller to the buyer of goods to encourage bulk purchase.
ci)
Dr Trade payable
Cr Discount Received
(ii)
Dr Discount allowed
Cr Trade receivable
a)
| Method of depreciation | Workings | Depreciation expense for the year ended | |
| 31 August 2020 | 31 August 2021 | ||
| Straight-lineUseful life 5 yearsScrap value $2500 | ($40000-$2500)/5 = $7500 | $7,500 | $7,500 |
| Reducing-balanceof 20% per annum | Yr 1: $40,000×20%=$8000 Yr 2: ($40,000-$8000)x20% = $6400 | $8,000 | $6,400 |
b) Reducing balance method
c)
Jerome
Extract of Statement of Financial Position as at 31 August 2021
| Cost | Accumulated Depreciation | Net Book Value | |
| Non-current Assets | $ | $ | $ |
| Motor vehicles | 40,000 | 14,400 | 25,600 |
| Only trading business | Both trading business and service business | |
| Calculates cost of sales | ✔ | |
| Calculates profit for the year | ✔ | |
| May have other income | ✔ | |
| Always holds inventory | ✔ |
b)
| General Journal | |||
| 2021 | Dr ($) | Cr ($) | |
| Cash at bank | 20000 | ||
| Capital | 20000 | ||
| Office equipment | 500 | ||
| Capital | 500 | ||
| Drawings | 20 | ||
| Inventory | 20 |
