Accounting Questions and Answers

If the gross profit is ₦5,000, then the net profit is calculated below;
The item that will appear in the profit and loss account are;
Bad debt written off ₦350, Discount allowed ₦500 and Discount received ₦1,000

$\begin{array}{c|c} \text{Gross Profit} & 5000 & \\ \hline \text{Discount Received} & 1000 & 6000 \\ \hline \text{Expenses} & & \\ \hline \text{Bad debt.} & 350 & \\ \hline \text{Discout Allowed} & 500 & 850 \\ \hline \text{Net profit} & & 5,150 \end{array}$

Net profit is the profit made after all the expenses incurred are deducted from the gross profit
₦5150 is the net profit calculated i.e bad debt 350 &nplus; discount allowed 500 &nplus; net profit 5,150 less gross profit 5,000 + discount received 1,000

Uncredited cheque: This have to be deducted when starting balance as per cash book

Purchases control account it is also called total creditor control account 
I,II & IV : some of the items that appear on the credit side of purchases ledger are cash refund to supplier, dishonored cheque by banks and credit purchases

Profit and loss account: the depreciation of the office machine is considered as part of administrative expense which must be charged against the profit of the company