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Accounting Equation

This document contains an exam for a Fundamentals of Accounting course. It asks students to: 1) State and explain the accounting equation in 3 lines or less. 2) Analyze the effects of 13 transactions on the accounting equation for Amando Limited. 3) Identify the transaction that led to each change in Endpoint Limited's statement of financial position over a month based on the summarized statement provided. 4) Do the same analysis for changes in Happy Limited's statement of financial position over a month based on another summarized statement provided. 5) State the effect of 11 transactions on the accounting equation for Peace Enterprise for the month of July.

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255 views3 pages

Accounting Equation

This document contains an exam for a Fundamentals of Accounting course. It asks students to: 1) State and explain the accounting equation in 3 lines or less. 2) Analyze the effects of 13 transactions on the accounting equation for Amando Limited. 3) Identify the transaction that led to each change in Endpoint Limited's statement of financial position over a month based on the summarized statement provided. 4) Do the same analysis for changes in Happy Limited's statement of financial position over a month based on another summarized statement provided. 5) State the effect of 11 transactions on the accounting equation for Peace Enterprise for the month of July.

Uploaded by

Audrey Kwao
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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UNIVERSITY OF GHANA BUSINESS SCHOOL

DEPARTMENT OF ACCOUNTING

UGBS205: Fundamentals of Accounting


1ST SEMESTER 2020/2021 ACADEMIC YEAR

1. State the accounting equation and explain the component (not more than 3 lines)

2. The transactions below relate to Amando Limited for the month of August 2018. What
are the effects of the transactions on the accounting equation?
(i) The owner of Amando Limited started business with cash of GH¢20,000.
(ii) Cash of GH¢10,000 was deposited into the business’ bank account
(iii) Purchase of motor vehicle worth GH¢5,000
(iv) Bought goods on credit from Ningo Enterprise worth GH¢2,000
(v) Sold goods for cash GH¢750
(vi) Sold goods worth GH¢820 on credit to Abban for GH¢1,000
(vii) Paid rent with cheque GH¢250
(viii) Secured a loan of GH¢5,000 from CBG
(ix) Paid Ningo with cheque GH¢1,200
(x) The owner withdrew goods worth GH¢250 for his wife.
(xi) Received a cheque of GH¢950 from Abban in settlement of his debt.
(xii) Paid for repairs of motor vehicle with cash GH¢100.
(xiii) Paid Ningo with cash GH¢760 in full settlement of the amount owed them.

3. Below is the summarized statement of financial position of Endpoint Limited for the
month of August. Following the changes over the period, state clearly, the transaction that
led to the change in the financial statement at each point in time.

ASSETS A B C D E F
Premises 12,000 12,000 12,000 12,000 10,000 10,000 10,000
Plant and Machinery 5,000 5,000 5,000 6,000 6,000 6,000 6,000
Inventory 750 1,200 700 700 700 700 700
Receivables 500 500 1,100 1,100 1,100 350 350
Cash and Bank 1,850 1,850 1,850 1,850 3,750 4,500 3,700
Total Assets 20,100 20,550 20,650 21,650 21,550 21,550 20,750
EQUITY AND
LIABILITIES

1
Equity 15,000 15,000 15,100 15,100 15,000 15,000 15,000
Liabilities
Loan 4,500 4,500 4,500 5,500 5,500 5,500 5,500
Payables 600 1,050 1,050 1,050 1,050 1,050 250
Total Equity and
20,100 20,550 20,650 21,650 21,550 21,550 20,750
Liabilities

4. In the month of July, HappyLimited produced a summarized statemen of financial


position as at the end of the month showing the changes over the period.
For each change, state clearly the exact transaction that led to such an effect on the
statement of financial position.

ASSETS 1 2 3 4 5 6 7
Premises 5,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000
Motor Vehicle 2,000 3,000 3,000 3,000 3,000 3,000 3,000 2,800
Inventory 550 550 2,250 1,500 1,500 650 650 650
Receivables 1,200 1,200 1,200 1,200 1,200 2,150 950 950
Cash and Bank 2,450 2,450 2,450 3,250 1,000 1,000 2,200 2,200
Total Assets 11,20 13,20 14,90 12,70 12,80 12,80
14,950 12,600
0 0 0 0 0 0
EQUITY
AND
LIABILITIE
S
Equity 7,500 9,500 9,500 9,550 9,550 9,650 9,650 9,450
Liabilities
Loan 2,750 2,750 2,750 2,750 1,750 1,750 1,750 1,750
Payables 950 950 2,650 2,650 1,400 1,400 1,400 1,400
Total Equity 11,20 13,20 14,90 12,70 12,80 12,80
14,950 12,600
and Liabilities 0 0 0 0 0 0

5. Below are some transactions relating to Peace Enterprise for the month of July. For each
transaction, state clearly, the effect on the accounting equation.
(i) Started business with cash at bank of GH¢5,000, premises worth GH¢4,500, and
machinery worth GH¢3,200
(ii) Bought a van on credit GH¢10,700.
(iii) Repaid by cash a loan owed to Cal Bank Ltd GH¢10,000.
(iv) Bought goods for GH¢1,400 with cheque.
(v) The owner puts a further GH¢4,000 cash into the business.
(vi) A debtor returns GH¢150 goods to the business.
(vii) Bought goods on credit GH¢760.
(viii) The owner took out GH¢200 cash for his personal use

2
(ix) Paid a creditor GH¢1,150 by cheque.
(x) Sold goods worth GH¢850 for GH¢950.
(xi) Received an interest of GH¢35 on the business’ bank account.

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