FINANCIAL ACC 101

ANSWERS TO PREVIOUSLY ASKED QUESTIONS ON PREVIOUSLY TREATED TOPICS

HAPPY NEW MONTH Everyone, Welcome to the month of May-a month of Success, Breakthrough, Answered Prayers, Fulfilled Wishes, Joy, Love, Peace and all other good things for you and everyone around you in the Mighty name of Jesus- Amen.

You are Blessed and highly Lifted, this month shall see signs and wonders being a reality in every facet of your life. God is right beside you and he is saying to you this morning that all will be well, all secret tears would be wiped away and turned into laughter for you in this blessed month. therefore CONGRATULATIONS!!!!!!

LOLZ, Now we had some questions last week and this is the last post on this questions series until later, after this we would explore more topics and open more branches and types of account to us. Well Today we are basically answering the questions asked last week, hope you tried them and excelled at them. well if you found some tricky, no need to worry cos the answers are here today. So pls Enjoy!!!!

ANSWERS:

1. D- Discount Allowed (WAEC 2009, NO 38).

2. D- Discount, Cash and Bank (WAEC 2009, NO 15).

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COMMERCE 101

WAREHOUSING

Hey Everyone, Happy New Week. This week shall bring Good News for everyone of us in Jesus name- Amen. Today we are in a New Topic entirely, so let's get started.

Warehousing is the act of storing goods produced or bought in a place until they are needed. It ensures that there is a regular and steady supply of goods. In Other Words, It's just a place set aside for loading already produced goods to make room for more production and also where they can be stored until demand is made by customers.

TYPES OF WAREHOUSE:

a. BONDED WAREHOUSE- is a place, where goods whose custom duties have not been paid are stored until the duties are settled. It is usually located around the sea port. This is especially for goods that are being imported and exported.

b. STATE WAREHOUSE- is a place, where contraband and illegal goods seized by the Customs Authority are kept, until they are destroyed.

c. WHOLESALE WAREHOUSE- is a place, where a Wholesaler stores all the goods

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ECONS 101

SMALL & LARGE FIRMS

Hey Everyone, Lovely New Week even though its ended but um its beautiful today isn't it. FRIDAY!!!. LOLZ- Its very self-explanatory.... Okay let's work a lil before we throw our books to the other side *winks*.

A Firm is defined as an independently administered businesses unit which is capable of carrying out production, construction or distribution activities. It forms an industry with other firms performing or producing complementary goods and services. Firms may be small or large depending on capital outlay and the level of production.

CHARACTERISTICS OF SMALL & LARGE FIRMS:

Characteristics	Small Firms	Large Firms
1. Capital Requirement	Require Small Capital Outlay.	Require Large Capital Outlay.
2. Type of Industry	They are mainly involved in primary production, agriculture and some direct services.	They are mainly involved in secondary and tertiary production.
3.  Nature of Market	They require small market due to output of goods.	They require a large market because of their high output of goods.
4. Employment	They usually employ few workers.	They usually employ large number of workers.
5. Techniques of Production	They employ simple techniques as most of the operations are manual.	They employ heavy techniques, with machinery and equipment.
6. Economies of Scale	They cannot take advantage of economies of scale.	They can easily benefit from internal and external economies of scale.
7. Nature of Product	They have no special or standard design for their product.	Their product is subject to standardisation.
8. Research and Publicity	They may lack the resources to carry out research and publicity.	They usually embark on extensive research and publicity to enhance their efficiency.

ECONOMIES OF SCALE/ SCALE OF PRODUCTION

Economies of Scale can be defined as the growth of a firm as a result of the expansion of the volume of productive capacity resulting in the increase in output and a decrease in its caot of production per

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FINANCIAL ACC 101

QUESTIONS ON PREVIOUSLY TREATED TOPICS

Hey Everyone, Happy New Week. Today is a beautiful day and God is indeed Good... How are you today, hope your week is going perfectly well. Am so glad to know that God's Faithfulness is evident in your life, to God alone be all the Glory. Amen.

So Let's get start to the Point...

QUESTIONS:

1. Which of the Following is Found in a Sales Ledger Account?

a- Credit Purchases

b- Bill Payable

c- Discount Received

d- Discount Allowed (WAEC 2009, NO 38).

2. A Three Column Cash Book contains columns for?

a- Cash, Assets and Liabilities

b- Bank, Cash and Assets

c- Cash, Bank and Returns

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COMMERCE 101

TYPES OF WHOLESALERS

Hey Everyone, How is your week so far. The Month of April is beautiful isn't it? LOLZ, Yes it is. Well may you experience all the Goodness of God for this month in Jesus name- Amen.

Today we are continuing where we stopped last week with the above mentioned topic, so let's get started.

Wholesalers can be classified into two broad categories namely:

1. MERCHANT WHOLESALERS- They buy and resell goods on their own account, taking title of the products they handle and conveying the title directly to those they deal with.

FUNCTIONS OF MERCHANT WHOLESALERS:

a. They undertake the storage of Goods.

b. They provide Delivery Services.

c. They arrange credit loans.

d. They provide Promotional Services.

TYPES OF MERCHANT WHOLESALERS:

a. SPECIALIST WHOLESALERS- They are wholesalers who restrict their services to a particular trade and area of their specialization.

b. CASH AND CARRY WHOLESALERS- They are wholesalers that don't offer Credit Facilities nor Delivery Services to their Customers. They expect their Retailers to pick their Orders, Pay Cash and Carry their Purchases.

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ECONS 101

RELATIONSHIP BTW PRODUCTION POSSIBILITY CURVE & OPPORTUNITY COST

Hi Everyone, Happy New Week to you all. It's another opportunity to learn and grow and generally become better at what we already know or what we have an idea of. So let's get started...

We are continuing from where we stopped last time.

Interpretation/ Points to Note from the Graph:

  Points A to F on the graph indicate efficient use of resources.

  At Points O  & P (Outside the curve), production is not feasible. Production at these points are not feasible due to the limited resources and technology.

  At points K & L (Inside the curve), production is feasible. It represents where resources are not efficiently utilised.

 The downward slope of the PPC indicates that there is an opportunity cost of producing more of one type of commodity and less of the other due to limited resources and technical know-how.

RELATIONSHIP BTW PRODUCTION POSSIBILITY CURVE & OPPORTUNITY COST

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FINANCIAL ACC 101

QUESTIONS ON PREVIOUSLY TREATED TOPICS

Hey Everyone, Happy New Week. We are on a Series and our aim is to treat National Exam Questions on the Topics we have treated here, in other to further be perfect if possible in those topics. So Let's Go!!!

QUESTION:

Koffi is a dealer in general merchandise. The following are his transactions for the month of June 2002.

June 1: Sold goods to Mensah N20, 000 less 10% Trade Discount.

June 4: Purchased from Kwesi the following:

200 Iron rods at N20 each

100 Fillers at N30 each

Invoice subject to 10% Trade Discount.

June 6: Purchased from Asante Ltd, 10 bottles of gin at N30 each.

June 7: Returned 60 Iron rods purchased on 4th June, to Kwesi.

June 9: Sold the following to Kojo:

300 Bags of Cement at N15 each, less  15% Trade Discount

150 Tins of Target at N10 per tin.

June 18: Kojo returned 10bags of cement bought on the 9th of June.

June 20: Sold to Jones: 80 Iron rods at N50 each, 10Bags of Cement at N16 each, 250 Fillers at N35

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COMMERCE 101

WHOLESALE TRADE

Hey Everyone, Hows this New Monday Morning to you, isn't is beautiful and full of promises and answered prayers. LOLZ, Yes it is. Well Let's get straight to out topic for today.

WHOLESALING is a business activity which involves buying of goods in bulk from the Producer and selling in small quantities to the Retailers as well as other merchants. Wholesaling is included in the Channel of Distribution.

FUNCTIONS OF THE WHOLESALER TO THE PRODUCER:

a. The Wholesaler purchases Goods in Large Quantity From the Producer.

b. He makes Space Available for further Production by Buying and Clearing the goods from the Producer's Warehouse.

c. In a Situation where the Producer doesn't have a Warehouse, He offers to have the Manufactured Goods moved to his own warehouse to enable more Production by the Manufacturer/Producer.

d. He keeps the Producer informed of the Market Situation from information he gathered from the Retailers, Consumers and Middlemen.

e. He pays the Producer promptly for his Goods in order not to slow down further Production.

FUNCTIONS OF THE WHOLESALER TO THE RETAILER:

a. He advises the Retailer on the Goods to buy and the ones not to buy.

b. He offers Credit facilities that is , allowing the Retailer take goods on Credit from him to pay later.

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ECONS 101

FACTORS OF PRODUCTION CONTD

Hello Everyone, Happy Friday. Thank God It's FRIDAY!!!!!.... LOLZ, Yes the last working day of the week and then rest rest rest!!!... There's time for HARD WORK and also time for REST... Pls Make Sure you Balance the Two Very Essential. Straight to the Point of the Day

CAPITAL CONSUMPTION refers to the using up of existing capital stock and not replacing worn-out capital goods used in production. When fixed assets like Buildings, Machinery or Motor Vehicle are used continuously, they undergo wear and tear, hence such assets depreciate in value. It is this wear and tear of these capital goods which reduces their value which is referred to in Economics as CONSUMPTION or DEPRECIATION.

During the period of Capital Consumption, enough savings are not made to maintain and replace depreciating capital goods or assets. If a Country finds it difficult to maintain its stock of capital, either by making provision for depreciation or her inability to replace worn-out capital or asset, such a country is said to be living on capital or consuming capital and this affects the standard of living of the people negatively.

ENTREPRENEUR

An Entrepreneur can be defined as the factor of production that co-ordinates and organises other factors of production( Land, Labour and Capital) in order to produce goods and services. The

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FINANCIAL ACC 101

QUESTIONS ON PREVIOUSLY TREATED TOPICS

Hey Everyone, How is this week so far. We are continuing this series we started last week, reviewing all the topics we have treated by answering questions linked to the Topics we have treated. This will help us further understand these topics and if possible be guru's at them. So Pls Enjoy...

QUESTION 2:                  

The following Transactions were extracted from the book of Mercy Land Trading Company as at 31st January 2005. All payments were made by cheque and all receipts were paid to the bank. The Company maintains a float of N 21, 000.

2nd Jan  Cash at Eagle Bank                         20, 000

2nd Jan  Petty Cash in Hand                          1, 400

3rd Jan  Drew Cheque for Petty Cash          19, 600

5th Jan  Received from Anthony, Cheque in Settlement of his debt N32, 600 less 1% discount

6th Jan  Settled Tunde's Account of N 25, 900 less 10% discount

7th Jan  Sold for cash 20MTN Cards at N750 per card

8th Jan  Transferred to current account from deposit account     70, 000

10th Jan  Paid Olu                                            4, 800

16th Jan   Paid Cheque for Motor repairs   8, 000

17th Jan   Paid Ade                                          3, 800

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COMMERCE 101

MODERN TRENDS IN RETAILING

Hey Everyone, Hope the week is going well? It Is Well with You in Jesus Name- Amen. Today we are continuing from where we stopped last week. It's the First week of April by the way, how cool is that?

New Trends have been introduced in Retailing Business because of the dynamic nature of commercial activities. In order to enhance and facilitate Business Activities, New Ideas and Techniques have been introduced and they include:

a. Branding

b. Self Service

c. After Service

d. Vending Machine

e. Pre-Packaging

f. Personal Selling.

BRANDING

It is a Name, Design or Symbol and even sometimes a Colour Pattern that differentiates a particular product from the rest in the market. It is a Product's Unique Selling Point, that extra thing it has to

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ECONS 101

FACTORS OF PRODUCTION CONTD

Hi Everyone, How Beautiful is today? Magnificent isn't it, well I think so too. Just being alive is such a pleasure and a privilege that sometimes, I think of some great people who have died and I am filled with awe that God picked me to live till today. God is Good.

Last time we started this series and today hopefully we will either finish or draw closer to the close of this particular topic so let's take this ride together.

CAPITAL

Capital may be defined as man-made assets used in production. In other words, It refers to Man-made wealth or goods used to produce other goods and services. It may also be defined as the stock of previous wealth invested in order to produce future wealth.

Capital when properly combined with other factors, produces goods and services. Examples of Capital include Physical Cash, Cutlass, Machines, Buildings, Motor Vehicles and other equipment used in the production of goods and services. The Reward for Capital is INTEREST.

Characteristics/Features of Capital:

* Capital is man-made before it can be used in further production of goods and services.

* Capital is durable assets that can be used for production.

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FINANCIAL ACC 101

MORE QUESTIONS ON PREVIOUSLY TREATED TOPICS

Hey Everyone, Happy New Week even though the week has been far spent. Hope this week has and month has been beautiful for you. Remember you deserve the best of God and it is yours if only you believe and profess it. Well below is a Question. Enjoy!!!

QUESTION 1:

Dan Jumbo started business on 1/1/94 with the following:

Building                                                  100, 000

Stock of Goods                                       40, 000

Motor Van                                              50, 000

Cash                                                        10, 000

During the Month, he undertook the following transactions:

5th Jan     Sold goods for Cash                                                                                         5, 000

10th Jan   Sold goods on Credit                                                                                      20, 000

12th Jan  Bought goods on Credit                                                                                 10, 000

15th Jan   Cash Sales Banked                                                                                         15, 000

18th Jan    Paid cash for Office Stationery                                                                    2, 000

20th Jan    Received Cash from Debtors for goods                                                      5, 000

22nd Jan    Paid cash for Office Expenses                                                                      1, 000

23rd Jan    Paid Salaries by cheque                                                                                 4, 000

24th Jan    Sold goods for Cash                                                                                       7, 000

25th Jan    Sold goods on Credit                                                                                      5, 000

26th Jan     Bought goods on Credit                                                                                3, 000

27th Jan     Bought goods for Cash                                                                                  2, 500

28th Jan     Withdrew Money from Bank for Owner's Use                                         1, 500

29th Jan    Office Cash Banked                                                                                      5, 000

31st Jan    Paid Electricity by Cheque                                                                           1, 500

You are required to Record the above transactions in the appropriate books of original entry.

ANSWER:

DR

DATE	PARTICULARS	F	CASH	BANK
1ST JAN	Capital		10, 000
5TH JAN	Sales		5, 000
15TH JAN	Sales			15, 000
20TH JAN	Sales		5, 000
24TH JAN	Sales		7, 000
29TH JAN	Cash	C		5, 000
			27, 000	20, 000
	Balance b/d		16, 500	13, 000

CR

DATE	PARTICULARS	F	CASH	BANK
18TH JAN	Office Stationery		2, 000
22ND JAN	Office Expenses		1, 000
23RD JAN	Salaries			4, 000
27TH JAN	Purchases		2, 500
28TH JAN	Drawings			1, 500
29TH JAN	Bank	C	5, 000
31ST JAN	Electricity			1, 500
	Balance c/d		16, 500	13, 000
			27, 000	20, 000

JOURNAL PROPER

JOURNAL PROPER
DATE	PARTICULARS	DR	CR
1ST JAN	Building	100, 000
	Stock	40, 000
	Motor Van	50, 000
	Cash	10, 000
	To Capital A/C		200, 000

SALES DAY BOOK
DATE	PARTICULARS	F	AMOUNT
10TH JAN	Debtors		20, 000
26TH JAN	Debtors		5, 000
31ST JAN	Sales A/C	Cr	25, 000

PURCHASES DAY BOOK
DATE	PARTICULARS	F	AMOUNT
12TH JAN	Creditors		10, 000
26TH JAN	Creditors		3, 000
31ST JAN	Purchases A/C	Dr	13, 000

NOTE: THE QUESTION IN THIS POST IS CREDITED TO WEST AFRICA EXAM COUNCIL 1996 PAPER. THE ANSWER IS ALSO CREDITED TO WAEC. THANKS

This brings us to the end of today's session. Hope this was very helpful to you, leave a comment of what you think of this tutorial and of your questions below. Have a Blessed Day and Remember You are Amazing. God Bless.

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