Neco GCE 2019 F-Acct Essay
(2a)
-Similarities-
(i)they are both offered by the seller to the purchaser.
(ii)they both reduce the final amount that needs to be paid.
-Differences-
(i)Trade discount is given on the catalogue price of the goods while the cash discount is given on the invoice price.
(ii)Trade discount is granted with the aim of increasing the sales in bulk quantity, whereas Cash discount is granted to facilitate a quick payment.
(2bi)
real account; That is the general ledger account that does not close at the end of the accounting year. In other words, the balances in the real accounts are carried over to become the beginning balances of the next accounting period.
-Examples of real accounts are:
(i)Cash.
(ii)Accounts receivable.
(iii)Fixed assets.
(2bii)
Personal Account; These accounts are related to individuals, firms, companies, In other words is an account for use by an individual for that person's own needs. It is a relative term to differentiate them from those accounts for business or corporate use.
-Examples Of personal accounts are;
(i)debtors
(ii)creditors
(iii)banks
(2c)
nominal accounts It also the general ledger accounts that are closed at the end of each accounting year. In other words it is as a result, the nominal accounts are also referred to as temporary accounts. The closing process also means that each nominal account will start the next accounting year with a zero balance.
-Examples Of nominal accounts are;
(i)purchase account
(ii)sales account
(iii)salary A/C
(2c)
(i)Bank statement.
(ii)Cash register tape.
(iii)Credit card receipt.
(iv)Lockbox check images.
(v)Packing slip.
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