QUESTION Kasabrunu Enterprise is a business operating in the second-hand clothing in Kwaduso, Mr. Bruni the owner of Kasarunu Enterprise (KE) employed Mr. Ojidomi a BSc. Accounting graduate as the Accountant. Business is booming and kE is expected to be in operation for a long time. Mr. Odjidomi has been with the business for 5 years and has assured Mr. Bruri that profits declared will not be deceptive since the same method will be continuously used for the accounting treatment of similar items until Mr. Bruni decides to change from dealing in second hand clothing to the purchase and sale of spare parts which they discussed. As part of the policy adopted by the business, the Accountant records only transactions that can be valued in monetary terms in the books of account and produces financial information at regular period for the perual of Mr. Bruni. On reaching home, Sefakor Ojidomi, the daughter of Mr. Ojidomi who is pursuing an accounting programme in Owusuwus College of Accountancy asked his father to guide her with an assignment Sikadanka, the Chairman and CEO of Defenders Lad recently confronted the Chief Accountant of the company over the way and manner the financial statements were presented for the 2019 financial year. The following points are summaries of the CEO's reservations about the financial statements: a. He argued that the values of the company's assets be shown at current market values since these values will provide a better view of the company's value. The Chief Accountant is still insisting that the assets should be stated at original cost. b. He expressed shock when the financial statements did not show a value for the company's efficient stall. He argued that the company's beautiful and handsome sales personnel are valuable assets used to attract customers and therefore insisted that this power of attraction should be recognised in the books of accounts and reflected on the face of the financial statement He was worried when a potential sale of millions of Ghana cedis to a certain buyer from whom purchase orders have been received have not been recognized in the books of accounts as sales. The Chief Accountant argued that these potential customers have only been sent proforma invoices and so are not obliged to pay the company d. The CEO recently bought a saloon car for his son out of company funds. The Chief Accountant recorded this on a current account for the CEO. This resulted in an intense argument. The CEO threatened to dismiss the Chief Accountant should he refuse to recognize the purchase of the saloon car as a transaction of the company The CEO insisted that the value of expired inventory should be maintained in the books of accounts and not written off Sefakor presented the assignment and scored a 100% for the time On the 27 of March, 2019, Mr. Ogboro, the purchasing officer of KE prepared documents to purchase ce credit 1,500 bales of second-hand clothing from Osimeyo and brothers (OB.) O.B delivered the goods to KE 4 (four) days after the order was placed with all appropriate documents. KE only deals in male second-hand clothing but included in the goods delivered were 15 bales of ladies second-hand clothing which Mr. Ogbore retumed to OB as it did not meet the description provided. Customers purchased the goods either on credit or outright payment with cash or cheque. Documents showing evidence of payment were given to these customers. All customers who purchased on credit paid through their bankers by transfers made directly to the bank accounts of KE. KE is later advised accordingly by her bankers Mr. Odjidomi prepares bank reconciliation statements quarterly. He made a request on the 15 of March 2019 for a bank statement from Obidibi commercial bank. Upon receipt of the bank statement, he compared the balance with that of the Cash book and it did not agree. The Accountant's friend, Oyeni Bawabuwat, an accounts officer at Oshikishiki Enterprise requested for reasons for the disagreement. He confessed his inability to grasp these reasons during his studies. After an in-depth explanation, Mr. Odjidomi, the Accountant asked his friend to assist him prepare a bank reconciliation statement as he had to urgently attend an important meeting The Accountant provided his friend with the information below. customers. All customers who purchased on credit paid through their bankers by transfers made directly to the bank accounts of KE. KE is later advised accordingly by her bankers. Mr. Odjidomi prepares bank reconciliation statements quarterly. He made a request on the 15 of March 2019 for a bank statement from Obidibi commercial bank. Upon receipt of the bank statement, he compared the balance with that of the Cash book and it did not agree. The Accountant's friend, Oyeni Bawabuwat, accounts officer at Oshikishiki Enterprise requested for reasons for the disagreement. He confessed his inability to grasp these reasons during his studies. After an in-depth explanation, Mr Odidomi, the Accountant asked his friend to assist him prepare a bank reconciliation statement as he had to urgently attend an important meeting The Accountant provided his friend with the information below The cash book, bank column of Kasabrunu Enterprise showed a credit balance of GHS578,000 while the bank statement for the period showed a debit balance of GHc338,000 on 31 March 2019. A thorough investigation revealed the following: Cheques drawn amounting to GHS195,0000 had not been presented to the bank for payment A cash deposit into the bank of GHS97,800 was recorded as GHS79,800 in the cash Bank charges of GHS10,900 and standing order payment of GHS12.100 relating to telephone bills entered on the bank statement had not been recorded in the cash book. A cheque of GHS245,000 drawn by the firm had been charged by the bank in error to another customer's account A dividend of GHS15.000 paid directly to the bank had not been entered in the cash A cheque for GHS20,000 paid into bank had been dishonoured and shown as such by the bank but no entry of the dishonour had been made in the cash book vii The following cheques and cash deposits entered in the cash book and paid to the bank have not been credited by the bank cash deposits GHS76,500, cheques receipts. Maame Dakona GH454,500, Ntckuma Ananse GHS34,000 vii. A cheque drawn for GHS32.000 had been entered in the cash book in the error GHS23,000 A chaque for GHS 16,000 drawn by another customer of the same name had been charged to the firm's bank account in error Atter adjusting the cash book balanceOyeni Bawabawat prepared the bank reconciliation statement. After waiting for 3 hours, he was informed that Mr. Odjidomi will be in the meeting for 6 hours. Oyeni then left for his office Required: A ) Identify and explain two (2) accounting policies adopted by Kasarunu Enterprise (Imark) ) State the accounting concept in each of the CEO's reservation in Sefakor's assignment. Explain your reason for choosing the concept. NB: Present your answer in a tabular form as illustrated below Concept Principle Definition Explanation Reason (5 marks) B. Identify and explain the use of three (3) source documents in the transaction to purchase and sell 1,500 bales of second-hand clothing (4.5 marks) customers. All customers who purchased on credit paid through their bankers by transfers made directly to the bank accounts of KE. KE is later advised accordingly by her bankers. Mr. Odjidomi prepares bank reconciliation statements quarterly. He made a request on the 150 of March 2019 for a bank statement from Obidibi commercial bank. Upon receipt of the bank statement, he compared the balance with that of the Cash book and it did not agree. The Accountant's friend, Oyeni Bawabawat, an accounts officer at Oshikishiki Enterprise requested for reasons for the disagreement. He confessed his inability to grasp these reasons during his studies. After an in-depth explanation, Mr. Odjidomi, the Accountant asked his friend to assist him prepare a bank reconciliation statement as he had to urgently attend an important mesting The Accountant provided his friend with the information below The cash book, bank column of Kasabrunu Enterprise showed a credit balance of GHS578,000 while the bank statement for the period showed a debit balance of GHc338,000 on 31" March 2019. A thorough investigation revealed the following Cheques drawn amounting to GHS 195,0000 had not been presented to the bank for payment A cash deposit into the bank of GHS97,800 was recorded as GHS 79.800 in the cash hook Bank charges of GHS 10,900 and standing order payment of GHS12.100 relating to telephone bills entered on the bank statement had not been recorded in the cash book A cheque of GHS245,000 drawn by the firm had been charged by the bank in error to another customer's account A dividend of GHS15,000 paid directly to the bank had not been entered in the cash A cheque for GHS20,000 paid into bank had been dishonoured and shown as such by the bank but no entry of the dishonour had been made in the cash book The following cheques and cash deposits entered in the cash book and paid to the bank have not been credited by the bank: cash deposits GHS76,500 cheques receipts: Maame Dakona GHe54.500, Nickuma Ananse GHS34,000 vil. A cheque drawn for GHS32.000 had been entered in the cash book in the error GHS23,000 A cheque for GHS 16,000 drawn by another customer of the same name had been charged to the firm's bank account in error After adjusting the cash book balance, Oyeni Bawabawat prepared the bank reconciliation statement. After waiting for 3 hours, he was informed that Mr. Odjidomi will be in the meeting for 6 hours. Oyeni then left for his office. Required: A D) Identify and explain two (2) accounting policies adopted by Kasabrunu Enterprise (Imark) I) Sute the accounting concept in each of the CEO's reservation in Sefakor's assignment. Explain your reason for choosing the concept NB: Present your answer in a tabular form as illustrated below Concept Principle Definition Explanation Reason (5 marks) B. Identify and explain the use of three (3) source documents in the transaction to purchase and sell 1,500 bales of second-hand clothing (4.5 marks) C. i) State and explain six (6) reasons Mr. Odjidomi will give to his friend for the disagreement in the cash book and bank statement balances. (3 marks) i) Imagine you are Oyeni Bawabuwat. Show the appropriate adjustments to be made in the cash book (4.5 marks) in) Prepare a Bank Reconciliation Statement for Mr. Odjidomi. (2 marks) (Total 20 marks) QUESTION Kasabrunu Enterprise is a business operating in the second-hand clothing in Kwaduso, Mr. Bruni the owner of Kasarunu Enterprise (KE) employed Mr. Ojidomi a BSc. Accounting graduate as the Accountant. Business is booming and kE is expected to be in operation for a long time. Mr. Odjidomi has been with the business for 5 years and has assured Mr. Bruri that profits declared will not be deceptive since the same method will be continuously used for the accounting treatment of similar items until Mr. Bruni decides to change from dealing in second hand clothing to the purchase and sale of spare parts which they discussed. As part of the policy adopted by the business, the Accountant records only transactions that can be valued in monetary terms in the books of account and produces financial information at regular period for the perual of Mr. Bruni. On reaching home, Sefakor Ojidomi, the daughter of Mr. Ojidomi who is pursuing an accounting programme in Owusuwus College of Accountancy asked his father to guide her with an assignment Sikadanka, the Chairman and CEO of Defenders Lad recently confronted the Chief Accountant of the company over the way and manner the financial statements were presented for the 2019 financial year. The following points are summaries of the CEO's reservations about the financial statements: a. He argued that the values of the company's assets be shown at current market values since these values will provide a better view of the company's value. The Chief Accountant is still insisting that the assets should be stated at original cost. b. He expressed shock when the financial statements did not show a value for the company's efficient stall. He argued that the company's beautiful and handsome sales personnel are valuable assets used to attract customers and therefore insisted that this power of attraction should be recognised in the books of accounts and reflected on the face of the financial statement He was worried when a potential sale of millions of Ghana cedis to a certain buyer from whom purchase orders have been received have not been recognized in the books of accounts as sales. The Chief Accountant argued that these potential customers have only been sent proforma invoices and so are not obliged to pay the company d. The CEO recently bought a saloon car for his son out of company funds. The Chief Accountant recorded this on a current account for the CEO. This resulted in an intense argument. The CEO threatened to dismiss the Chief Accountant should he refuse to recognize the purchase of the saloon car as a transaction of the company The CEO insisted that the value of expired inventory should be maintained in the books of accounts and not written off Sefakor presented the assignment and scored a 100% for the time On the 27 of March, 2019, Mr. Ogboro, the purchasing officer of KE prepared documents to purchase ce credit 1,500 bales of second-hand clothing from Osimeyo and brothers (OB.) O.B delivered the goods to KE 4 (four) days after the order was placed with all appropriate documents. KE only deals in male second-hand clothing but included in the goods delivered were 15 bales of ladies second-hand clothing which Mr. Ogbore retumed to OB as it did not meet the description provided. Customers purchased the goods either on credit or outright payment with cash or cheque. Documents showing evidence of payment were given to these customers. All customers who purchased on credit paid through their bankers by transfers made directly to the bank accounts of KE. KE is later advised accordingly by her bankers Mr. Odjidomi prepares bank reconciliation statements quarterly. He made a request on the 15 of March 2019 for a bank statement from Obidibi commercial bank. Upon receipt of the bank statement, he compared the balance with that of the Cash book and it did not agree. The Accountant's friend, Oyeni Bawabuwat, an accounts officer at Oshikishiki Enterprise requested for reasons for the disagreement. He confessed his inability to grasp these reasons during his studies. After an in-depth explanation, Mr. Odjidomi, the Accountant asked his friend to assist him prepare a bank reconciliation statement as he had to urgently attend an important meeting The Accountant provided his friend with the information below. customers. All customers who purchased on credit paid through their bankers by transfers made directly to the bank accounts of KE. KE is later advised accordingly by her bankers. Mr. Odjidomi prepares bank reconciliation statements quarterly. He made a request on the 15 of March 2019 for a bank statement from Obidibi commercial bank. Upon receipt of the bank statement, he compared the balance with that of the Cash book and it did not agree. The Accountant's friend, Oyeni Bawabuwat, accounts officer at Oshikishiki Enterprise requested for reasons for the disagreement. He confessed his inability to grasp these reasons during his studies. After an in-depth explanation, Mr Odidomi, the Accountant asked his friend to assist him prepare a bank reconciliation statement as he had to urgently attend an important meeting The Accountant provided his friend with the information below The cash book, bank column of Kasabrunu Enterprise showed a credit balance of GHS578,000 while the bank statement for the period showed a debit balance of GHc338,000 on 31 March 2019. A thorough investigation revealed the following: Cheques drawn amounting to GHS195,0000 had not been presented to the bank for payment A cash deposit into the bank of GHS97,800 was recorded as GHS79,800 in the cash Bank charges of GHS10,900 and standing order payment of GHS12.100 relating to telephone bills entered on the bank statement had not been recorded in the cash book. A cheque of GHS245,000 drawn by the firm had been charged by the bank in error to another customer's account A dividend of GHS15.000 paid directly to the bank had not been entered in the cash A cheque for GHS20,000 paid into bank had been dishonoured and shown as such by the bank but no entry of the dishonour had been made in the cash book vii The following cheques and cash deposits entered in the cash book and paid to the bank have not been credited by the bank cash deposits GHS76,500, cheques receipts. Maame Dakona GH454,500, Ntckuma Ananse GHS34,000 vii. A cheque drawn for GHS32.000 had been entered in the cash book in the error GHS23,000 A chaque for GHS 16,000 drawn by another customer of the same name had been charged to the firm's bank account in error Atter adjusting the cash book balanceOyeni Bawabawat prepared the bank reconciliation statement. After waiting for 3 hours, he was informed that Mr. Odjidomi will be in the meeting for 6 hours. Oyeni then left for his office Required: A ) Identify and explain two (2) accounting policies adopted by Kasarunu Enterprise (Imark) ) State the accounting concept in each of the CEO's reservation in Sefakor's assignment. Explain your reason for choosing the concept. NB: Present your answer in a tabular form as illustrated below Concept Principle Definition Explanation Reason (5 marks) B. Identify and explain the use of three (3) source documents in the transaction to purchase and sell 1,500 bales of second-hand clothing (4.5 marks) customers. All customers who purchased on credit paid through their bankers by transfers made directly to the bank accounts of KE. KE is later advised accordingly by her bankers. Mr. Odjidomi prepares bank reconciliation statements quarterly. He made a request on the 150 of March 2019 for a bank statement from Obidibi commercial bank. Upon receipt of the bank statement, he compared the balance with that of the Cash book and it did not agree. The Accountant's friend, Oyeni Bawabawat, an accounts officer at Oshikishiki Enterprise requested for reasons for the disagreement. He confessed his inability to grasp these reasons during his studies. After an in-depth explanation, Mr. Odjidomi, the Accountant asked his friend to assist him prepare a bank reconciliation statement as he had to urgently attend an important mesting The Accountant provided his friend with the information below The cash book, bank column of Kasabrunu Enterprise showed a credit balance of GHS578,000 while the bank statement for the period showed a debit balance of GHc338,000 on 31" March 2019. A thorough investigation revealed the following Cheques drawn amounting to GHS 195,0000 had not been presented to the bank for payment A cash deposit into the bank of GHS97,800 was recorded as GHS 79.800 in the cash hook Bank charges of GHS 10,900 and standing order payment of GHS12.100 relating to telephone bills entered on the bank statement had not been recorded in the cash book A cheque of GHS245,000 drawn by the firm had been charged by the bank in error to another customer's account A dividend of GHS15,000 paid directly to the bank had not been entered in the cash A cheque for GHS20,000 paid into bank had been dishonoured and shown as such by the bank but no entry of the dishonour had been made in the cash book The following cheques and cash deposits entered in the cash book and paid to the bank have not been credited by the bank: cash deposits GHS76,500 cheques receipts: Maame Dakona GHe54.500, Nickuma Ananse GHS34,000 vil. A cheque drawn for GHS32.000 had been entered in the cash book in the error GHS23,000 A cheque for GHS 16,000 drawn by another customer of the same name had been charged to the firm's bank account in error After adjusting the cash book balance, Oyeni Bawabawat prepared the bank reconciliation statement. After waiting for 3 hours, he was informed that Mr. Odjidomi will be in the meeting for 6 hours. Oyeni then left for his office. Required: A D) Identify and explain two (2) accounting policies adopted by Kasabrunu Enterprise (Imark) I) Sute the accounting concept in each of the CEO's reservation in Sefakor's assignment. Explain your reason for choosing the concept NB: Present your answer in a tabular form as illustrated below Concept Principle Definition Explanation Reason (5 marks) B. Identify and explain the use of three (3) source documents in the transaction to purchase and sell 1,500 bales of second-hand clothing (4.5 marks) C. i) State and explain six (6) reasons Mr. Odjidomi will give to his friend for the disagreement in the cash book and bank statement balances. (3 marks) i) Imagine you are Oyeni Bawabuwat. Show the appropriate adjustments to be made in the cash book (4.5 marks) in) Prepare a Bank Reconciliation Statement for Mr. Odjidomi. (2 marks) (Total 20 marks)