A

The agreement of the trial balance totals is an indication that all transactions have been properly

recorded in the books of accounts. Do you agree with this statement?

Required:

Outline 4 reasons to justify your response. (8 marks)

B

ABC Ltd started business on 1/1/14, and its financial year ends on 31st December each year.

The following information was extracted from the companys asset register.

DATE TRANSACTION AMOUNT (GHS)

2016 January, 1 Purchased one motor van 58,500

2016 September, 1 Purchased two motor vans 78,000 each

2018 March, 1 Purchased one motor van 45,200

2018 May, 2 Sold the motor van purchased

in January,2016

18,240

2019 April 1 Purchased three motor vans 62,000 each

Additional Information

The companys policy is to depreciate Motor vehicles at a rate of 20% per annum on cost.

You are required to prepare:

i) The Motor vehicles account (2016-2019)

ii) Provision for depreciation account (2016-2019)

iii) Disposal account for 2018

iv) Statement of profit or loss extract for 2018 and 2019

v) Statement of financial position extract for 2018 and 2019