NATIONAL OPEN UNIVERSITY OF NIGERIA
14/16 AHMADU BELLO WAY, VICTORIA ISLAND, LAGOS
SCHOOL OF MANAGEMENT SCIENCES
MARCH, 2014 EXAMINATION
Course Code: BHM 757 Credit Unit: 3
Course Title: PRINCIPLES OF ACCOUNTING
Time Allowed: 2 ½ Hrs
Instructions: 1. Attempt question number one (1) and any other (3) questions.
2. Question number 1 carries 25 marks, while the other questions carry
15 marks each.
3. Present all your points in coherent and orderly manner.
1. Global manufacturing company produces plastic materials. The information below gives analysis of the costs incurred in the production of the month ended 31st October, 1994.
₦
Stock as at 1st October 1994
Raw materials 2400
Work in progress 800
Raw materials purchase 11600
Production wages 2000
Carriages inward on raw materials 400
Royalty 1100
Other manufacturing expenses 300
Factory rent & rates 600
Factory power 240
Stock as at 31/10/94
Raw materials 1800
Work in progress 560
Additional information:
(i) The company hired plant at a cost of N1000
(ii) The existing machinery valued NI2000 is to be depreciated at 10% per annum.
You are required to prepare the manufacturing account of the company as at 31st October 1994. 25marks
2. Explain the following concept
(a) Consignment
(b) Joint Venture
(c) Partnership 15marks
3. (a)
What is prime cost?
(b) What are the differences between direct and indirect cost? 15marks
4. Explain these important terms in Consignment Account
(a) Pro forma Invoice
(b) Account Sales
(c) Commission
(d) Expenses
(e) Advance 15marks
5. (a) What is a bill of exchange? 5marks
(b) What are the distinctions between bill of exchange and promissory note? 10marks
6. (a) State whether each of the following statement is true or false.
i. Bill of exchange is drawn only when money is lent by money lender.
ii. Negotiable Instruments can be easily transferred to the third party.
iii In case of a public holiday the due date falls on the next working day.
iv Bill of exchange is an unconditional promise to pay.
V For a bill drawn on April 1 for two months, the due date falls on June
vi Acceptance is necessary in case of a promissory note. 5marks
(b) Define these terms
i) Drawer
ii) Drawee
iii) Payee 5marks
(c ) On January 1, Laxman draws on Ben a bill for three months for N500
payable to Paul. Itis duly accepted by Ben and sent to Laxman. States
the names of the drawer, drawee andthe payee. 5marks
You can get the exam summary answers for this course from 08039407882
Check anoda sample below
