Neco 2022 Financial Accounting Question 2

Practice essay / theory question 2 from the 2022 Neco Financial Accounting examination. This question covers Double Entry .

Neco 2022 Financial Accounting Essay / Theory
Topic: Double Entry
Question 2 NECO • 2022 • FINANCIAL_ACCOUNTING • essay

A small trading business recorded the following transactions during the month of June: 1. Purchased inventory costing ₦120,000 on credit from Supplier A. 2. Sold goods that cost ₦70,000 for cash at a selling price of ₦150,000. 3. Paid rent for the month amounting to ₦20,000 cash. 4. Received a bank loan of ₦100,000 cash. 5. Paid cash of ₦50,000 to Supplier A towards the inventory purchase. Using the information above, answer the following:

Question Parts

( a )
Prepare the journal entries for each of the five transactions.
( b )
Post the journal entries to T‑accounts for Cash, Inventory, Accounts Payable, Sales Revenue, Cost of Goods Sold, Rent Expense and Loan Payable. Show the closing balance of each account.
( c )
Prepare a trial balance as at 30 June using the balances obtained in part (b).
( d )
Calculate (i) gross profit and (ii) net profit for the month.

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About This Question

This is Neco 2022 Financial Accounting Question 2. It is one of the essay questions from the 2022 Neco Financial Accounting examination.

The question covers Double Entry .

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