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National Open University Exam Past Question – AEC 306 OCTOBER/NOVEMBER 2014 EXAMINATION

NATIONAL OPEN UNIVERSITY OF NIGERIA AEC 306 Farm Records and Accounting

14-16 AHMADU BELLO WAY, VICTORIA ISLAND LAGOS SCHOOL OF EDUCATION

OCTOBER/NOVEMBER 2014 EXAMINATION

 

Course Title: Farm Records and Accounting

Course Code: AEC 306

Credit Unit: 2

Total Score: 70 Marks

Time Allowed: 2 Hours

Instruction: Answer section A and any other 3 questions in section B SECTION A: (Compulsory 25 marks)

The following information is in respect of the business affairs of Olaoluwa and Sons

Enterprises for the year ended 31st March, prepare the Balance sheet as at 31st March, 19 x

4.

  1. Stock on 31st March, 19 x 4 was N38,500
  2. Provide depreciation on plant and machinery which has a life span of 12 years and a residual value of N4, 000.

iii.      Provide depreciation on motor vehicle at the rate of 20% on the net book value. iv.      The organization sub-let the building on 30th June, 19 x 3 and the rent received

covered 30th June 19 x 3 to 1st October, 19 x 4.

  1. Loan from S. Johnson was received on 1st January, 19 x 3 at 15 percent per annum and only N4,500 have been paid as interest throughout the period.
  2. 20% P.a deposit on NN Bank Limited was made on 31st May, 19 x 3.

vii.      Maintain provision for doubtful debts on debtors as 5 percent and adjust the provision for discounts allowable on debtors to 1 percent.

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viii.      Create a provision for discount received on creditors at ½ percent.

  1. Provide for interest on capital account as 1 percent.
  2. x. The following expenses are under-paid: Telephone N4,000 and salaries and wages

N11,500.

  1. x Salaries and wages paid include N3, 500 for direct wages. xii.      Distribution and selling expenses was over-paid by N1,500

 

SECTION B (15 MARKS EACH)

 

 

1. (a) Why is trial balance essential in accounting entries? =5 Marks
  (b) How would you ensure that trial balances are accurate? =5 Marks
  (c)  State the four procedures for extracting the trial balance? =5 Marks
  1. (a)What are the common errors that would result in an unbalanced trial balance =5 Marks

 

(b)Briefly discuss the five (5) limitations of the trial balance                                       =10 Marks

 

  1. 3. (a) Elucidate what consist of the blueprint of a complete system of farm accounting that should

give the farmer much information.                                                                               = 6 Marks

(b)Using the straight line method, calculate the depreciation charge per annum on a machine at the end

 

costing N250,000 having a lifespan of six years with a break –off value of N9,000 of  its useful life.                                                                                                   =10 Marks

 

 

  1. 4. How would the financial controller of a multinational commercial dairy farm maintain

 

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the accounting entry where there is separate provision for bad debts account and where there is no separate provision for bad debts?                                                     =15 Marks

  1. (a) List four groups of software available to Farm record keepers.                         =4 Marks

keepers

 

(b) Give one example each of the mentioned software available to Farm record =12 Marks

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