Finance and Accounting
The overall aim of this module is to introduce students to basic Financial and Management Accounting principles and techniques.
You are an employee of EON & brothers, which is a sole trading company. Due to some previous challenges, the proprietor of the company has given you an opportunity to train a team of employees in the finance and accounting section. He requires your assistance in delivering few training sessions covering Transaction recording and some basic principles of accounting. As a result, he has asked you to write a report to him covering the various training areas of accounting to be covered as follows:
1. An overview of the accounting and double entry system covering the following points:
a. Some transaction of EON and brothers are listed as follows:
i.The owner starts the business with 5,000 paid into a business bank account on 1 June 2015.
ii.The business buys furniture for 400 on credit from Pearl Ltd on 2 June 2015. iii. The business buys a computer with a cheque for 600 on 3 June 2015.
iv.The business borrows 5,000 on loan from a bank on 4 June 2015. The money is paid into the business bank account.
v.The business pays Pearl Ltd 200 by cheque on 5 June 2015
Required: Using Double Entry Book Keeping Model:
a)Write the journal entries with explanation (10 marks)
b)Make the T-Accounts for each transaction (10 Marks)
b. The following Trial Balance was extracted from the books of EON & brothers.
Trial Balance as at 30th June 2015.
Repairs to building22,896
Freehold land and buildings270,000
Balance at bank14,580
Furniture and fittings39,420
Wages and salaries232,362
Rate and insurance6,696
Provision for doubtful debts
a.Stock in trade at 30/06/2015, 237,600,000
b.Wages and salaries outstanding at 30/06/2015, 9,720,000
c.Rates and insurance paid in advance at 30/06/2015, 1,620,000
d.The provision for doubtful debts is to be increased to 4,860,000
e.During the accounting year ended 30/06/2015, EON withdrew goods valued at 16,200,000 for his consumption. He ordered the accounts clerk not to record the transaction in the books of account.
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