27 TUTORIAL QUESTIONS ON SUN-ACC 201-FINANCIAL ACCOUNTING 1

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 🇳🇬 PATRIOT ODUNARO BABATUNDE JIMOH 

27 TUTORIAL QUESTIONS on

SUN-acc 201-FINANCIAL ACCOUNTING 1

(CONTACT PATRIOT FOR SOLUTIONS ON 08038454008)

 

TOPIC 1: IASB FRAMEWORK FOR THE PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS.

1. Explain the objective of financial statements according to the IASB Conceptual Framework.

2. Differentiate between relevance and faithful representation as qualitative characteristics of financial information.
3.  List and briefly explain the elements of financial statements as defined in the IASB Framework.

4. (a) What is the difference between capital maintenance in financial terms and capital maintenance in physical terms? Provide examples

5. The following balances were extracted from Olowolagba Nigeria Limited as at 31 December 2025:

Item	Amount (₦)
Cash	300,000
Inventory	500,000
Accounts receivable	200,000
Accounts payable	150,000
Bank loan (long-term)	400,000
Share capital	450,000
Retained earnings	200,000

Required:
(a) Prepare a statement of financial position as per IAS 1.
(b) Identify the elements of financial statements in the statement prepared.

 

TOPIC 2: INTRODUCTION TO IFRS 15 – REVENUE AND IAS 1.

6. Explain the main objective of IFRS 15 – Revenue from Contracts with Customers.

7. Differentiate between revenue recognition over time and revenue recognition at a point in time under IFRS 15.
8. List and briefly explain the minimum components of financial statements as required by IAS 1.
9. State three key qualitative characteristics of financial information under IASB conceptual framework and provide examples.

10. The following balances were extracted from Sogbae Nigeria Limited as at 31 December 2025:

Item	Amount (₦)
Cash	250,000
Accounts Receivable	150,000
Inventory	400,000
Accounts Payable	100,000
Bank Loan	300,000
Share Capital	300,000
Retained Earnings	100,000

Required:
(a) Prepare a statement of financial position as per IAS 1.
(b) Identify the elements of financial statements represented.

 

TOPIC 3 & 4: PRESENTATION OF FINANCIAL STATEMENTS AND ACCOUNTING FOR INVENTORIES (IAS 2).

11.  Classify the following into Current or Non-current:

Item	Amount
Bank loan (repayable in 3 years)	₦2,000,000
Trade payables	₦850,000
Inventory	₦600,000
Motor vehicles	₦4,200,000
Prepaid rent (9 months)	₦300,000

12.  Explain the cost formulas allowed under IAS 2. Why is LIFO prohibited?

13. Define inventory and list three types of inventory recognized under IAS 2.

14.  Explain the terms “going concern” and “accrual basis” and their significance in IAS 1.

15. State and explain five components of financial statements as required by IAS 1.

16. Explain four qualitative characteristics of financial statements.

17. Given the following information from Feyikogbon Nigeria Limited:

Cost of inventory = ₦250,000
Selling price = ₦260,000
Selling expenses = ₦25,000
Cost of completion = ₦10,000

Required:
Determine value of inventory.

18. Given the following information about Ninalowo Nigeria Limited as at 31st December, 2024:

	N
Ordinary Share Capital	20,000,000
Sales	15,000,000
Cost of sales	8,500,000
Administrative expenses	1,200,000
Distribution expenses	500,000
Finance cost	300,000
Tax expense	700,000
Trade Payables	6,200,000
Trade Receivables	1,500,000
Inventory	2,500,000
Bank	3,500,000
Cash	500,000
Plant and Machinery	15,000,000
Motor Van	7,000,000

Requied:

a.       Prepare a Statement of Profit or Loss for the year.

b.      Prepare a Statement of Financial Position as at that date

 

TOPIC 5: INTRODUCTION TO IAS 8 – ACCOUNTING POLICIES, IAS 16 – PROPERTY, PLANT AND EQUIPMENT, IAS 20 – GOVERNMENT GRANTS AND IAS 23 – BORROWING COSTS.

19.  Irekari Limited received a government grant of ₦200,000 to purchase machinery costing ₦1,000,000 on 1 January 2025. The machinery has a useful life of 5 years and no residual value.

Required:
(a) Calculate the annual depreciation using the asset approach.
(b) Show the journal entry for grant recognition.

20.  Define government grants according to IAS 20 and state two methods of presenting them in financial statements.
21. (a) Explain the treatment of borrowing costs under IAS 23.
22.  State the criteria for a qualifying asset.

23.  List and explain the recognition criteria for Property, Plant, and Equipment under IAS 16.

24. A machine was purchased on 1 January 2023 for ₦1,500,000. It has a residual value of ₦150,000 and a useful life of 5 years. On 1 January 2025, the useful life was revised to 4 years remaining.

Required:
(a) Calculate the annual depreciation for 2023–2024.
(b) Calculate the revised annual depreciation for 2025 onward.

25. Explain the objective of IAS 8 and differentiate between a change in accounting policy and a change in accounting estimate.

26. Itura construction company borrowed ₦500,000 on 1 January 2025 to finance a building under construction. Interest for the year amounted to ₦40,000. The building will be completed on 31 December 2025.

Required:
(a) Determine the amount to capitalize as part of the building cost.
(b) Show the journal entry for capitalization.

27. Ajimatanraeje Nigeria Limited discovered in 2025 that an expense of ₦50,000 related to 2024 was omitted in prior year financial statements.

Required:
(a) Explain how this prior period error should be corrected according to IAS 8.
(b) Show the adjusting journal entry.

 

 🇳🇬 PATRIOT ODUNARO BABATUNDE JIMOH MAY ALLAH BLESS YOU ABUNDANTLY ALLAHUMO UNFAYAKUN AMIN!