NECO 2024 Bookkeeping Obj & Essay Answers

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*BOOK KEEPING*
01-10: DB##EBDCDD
11-20: AACDCBABCA
21-30: BEEABEECCC
31-40: CDDBAEDBDB
41-50: EBBCDCBABB
51-60: ADEBBBDCDA
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2024 NECO BOOK KEEPING ESSAYS

(1a)
(PICK ANY FIVE)
(i) Ensures accuracy: Control accounts help ensure the accuracy of financial records by reconciling individual ledger accounts with the general ledger.
(ii) Detect errors: Control accounts can help in detecting errors and discrepancies in the accounting records, such as missing transactions or incorrect postings.
(iii) Simplifies reconciliation: By summarizing individual ledger account balances, control accounts simplify the reconciliation process and make it easier to identify discrepancies.
(iv) Enhances internal control: Control accounts provide a mechanism for internal control by monitoring and verifying ledger account balances against the general ledger.
(v) Supports decision-making: Control accounts provide management with an overview of financial transactions, helping them make informed decisions based on accurate and up-to-date information.
(vi) Facilitates audit process: Control accounts assist auditors in verifying the accuracy and completeness of financial records during audits.

(1b)
(PICK ANY FIVE)
(i) Total sales: The total amount of sales made during a specific period.
(ii) Sales returns: The value of products returned by customers.
(iii) Cash sales: The amount of sales paid for in cash.
(iv) Credit sales: The value of sales made on credit.
(v) Discounts allowed: Any discounts given to customers on sales invoices.
(vi) Bad debts: The amount of sales that are unlikely to be collected from customers.

(1c)
(i) Assets
(ii) Liabilities
(iii) Equity
(iv) Current assets
(v) Non-current assets
(vi) Current liabilities
(vii) Non-current liabilities
(viii) Share capital
(ix) Retained earnings
(x) Net assets

(2)
(i) Ledger: A ledger is a book or electronic system used to record and summarize financial transactions of a business. It contains separate accounts for each asset, liability, equity, revenue, and expense. The ledger serves as the foundation of the accounting system by providing a detailed record of all financial activities in one central location.

(ii) Depreciation: Depreciation is the systematic allocation of the cost of a tangible asset over its useful life. It represents the reduction in value of an asset due to wear and tear, obsolescence, or other factors. Depreciation expense is recorded on the income statement to reflect the decrease in the asset’s value over time and to allocate its cost to the periods in which it provides benefits.

(iii) Source document: A source document is a paper or electronic record that provides evidence of a financial transaction. Examples of source documents include invoices, receipts, purchase orders, bank statements, and contracts. Source documents support the entry of transactions into the accounting system and serve as a basis for recording and verifying the accuracy of financial data.

(iv) Invoice: An invoice is a document issued by a seller to a buyer that itemizes the products or services sold, the quantity, the price, and the terms of sale. It serves as a request for payment and provides a record of the transaction for both parties. In accounting, invoices are used to track sales, accounts receivable, and revenue recognition.

(v) Discount: A discount is a reduction in the price of a product or service offered by a seller to a buyer. Discounts can be in the form of trade discounts, cash discounts, or quantity discounts. Trade discounts are discounts given to resellers based on the volume or frequency of purchases, while cash discounts are offered for early payment of invoices. Discounts impact the selling price, revenue, and profitability of a business.

(3a)
(PICK ANY FIVE)
(i) Receipts and Payments account records actual cash transactions, whereas Income and Expenditure account records both cash and non-cash transactions.
(ii) Receipts and Payments account is used to show cash receipts and payments over a specific period, while Income and Expenditure account is used to determine the surplus or deficit for a specified period.
(iii) Receipts and Payments account is presented in the form of a summary of cash transactions, while Income and Expenditure account presents a summary of revenue and expenses.
(iv) Receipts and Payments account recognizes transactions at the time of actual cash receipt or payment, whereas Income and Expenditure account recognizes revenue and expenses on an accrual basis.
(v) Receipts and Payments account does not include non-cash items such as depreciation, while Income and Expenditure account includes such items.
(vi) Receipts and Payments account is usually prepared on a monthly basis, while Income and Expenditure account is prepared annually.
(vii) Receipts and Payments account does not include a statement of affairs, while Income and Expenditure account may include one to show the financial position.

(3b)
(PICK ANY FIVE)
(i) Adjusting Entries
(ii) Correction of Errors
(iii) Opening Entries
(iv) Transfer Entries
(v) Special Transactions
(vi) Non-routine Transactions
(vii) Adjustments for Financial Reporting

(4a)
Accounting convention refers to the basic underlying principles and rules that guide the preparation and presentation of financial statements. These conventions provide a framework for accounting practices and help in ensuring consistency and comparability in financial reporting. They are not legally binding but are widely accepted and followed by businesses for fair presentation of financial information.

(4b)
(PICK ANY FOUR)
(i) Sales
(ii) Opening Stock
(iii) Purchases
(iv) Closing Stock
(v) Direct Expenses
(vi) Gross Profit

(4c)
(PICK ANY FIVE)
(i) The imprest system helps in controlling and monitoring expenses by setting a limit on the amount of cash available for petty expenses.
(ii) It ensures efficient management of cash by maintaining a fixed amount in the imprest account for day-to-day expenses.
(iii) Employees can easily claim reimbursement for petty expenses without the need for detailed accounting procedures
(iv) By limiting the amount of cash available and requiring proper documentation for expenses, the imprest system helps in reducing the risk of fraud.
(v) It helps in budgeting and forecasting expenses by providing a clear record of petty cash outflows.
(vi) The imprest system saves time as it streamlines the process of handling small transactions and reimbursements, allowing employees to focus on more important tasks.