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

Appropriation account is the account into which the net profit found in the profit and loss account of the partner will be carried down to and will be shared according to their sharing ratio