1. **Stating the problem:** We are asked to explain accounting terms and principles, identify reasons for cheque dishonour, and perform ledger and trial balance preparation for SON OF MAN's business transactions. 2. **a) Explain the term Trial Balance:** A Trial Balance is a statement that lists all ledger account balances at a particular date. It is used to verify that total debits equal total credits, ensuring the books are balanced. 3. **b) Highlight TWO characteristics of accounting principles:** - **Consistency:** Accounting methods should be applied consistently from period to period. - **Relevance:** Information provided should be useful for decision-making. 4. **c) Highlight FOUR reasons that may cause a cheque to be dishonoured by a bank:** - Insufficient funds in the drawer's account. - Signature on the cheque does not match the bank's records. - Post-dated cheque presented before the date. - Stale cheque (presented after expiry period). 5. **d) SON OF MAN ledger accounts and trial balance:** **Step 1: Opening balances** Assets and liabilities are balanced at 18,000,000 FCFA. **Step 2: Record transactions in ledger accounts:** - Purchase goods 4,000,000 by cheque: Debit Purchases, Credit Bank - Purchase delivery van 3,000,000 by cheque: Debit Motor Vehicle, Credit Bank - Purchase goods on credit 2,800,000: Debit Purchases, Credit Payables - Sales goods 8,500,000 by cheque: Debit Bank, Credit Sales - Return goods to supplier 245,000: Debit Payables, Credit Purchases Returns - Paid salaries 1,500,000 by bank: Debit Salaries Expense, Credit Bank - Sales goods 6,500,000 on credit: Debit Receivables, Credit Sales - Payment to supplier 1,200,000 by cheque: Debit Payables, Credit Bank - Payment of rent 200,000 by cheque: Debit Rent Expense, Credit Bank - Drawings 250,000 by owner: Debit Drawings, Credit Bank - Repayment of bank loan 800,000 by bank: Debit Bank Loan, Credit Bank - Paid insurance 150,000 by cheque: Debit Insurance Expense, Credit Bank **Step 3: Calculate ledger balances (simplified):** - Bank account: Opening 7,000,000 Transactions: -4,000,000 -3,000,000 +8,500,000 -1,500,000 -1,200,000 -200,000 -250,000 -800,000 -150,000 Bank closing = 7,000,000 -4,000,000 -3,000,000 +8,500,000 -1,500,000 -1,200,000 -200,000 -250,000 -800,000 -150,000 = 1,400,000 - Motor Vehicle: Opening 2,000,000 +3,000,000 = 5,000,000 - Purchases: 4,000,000 + 2,800,000 - 245,000 = 6,555,000 - Payables: Opening 2,500,000 + 2,800,000 - 245,000 - 1,200,000 = 3,855,000 - Receivables: Opening 1,000,000 + 6,500,000 = 7,500,000 - Capital: 11,500,000 - Bank Loan: 4,000,000 - 800,000 = 3,200,000 - Sales: 8,500,000 + 6,500,000 = 15,000,000 - Expenses: Salaries 1,500,000 + Rent 200,000 + Insurance 150,000 = 1,850,000 - Drawings: 250,000 **Step 4: Prepare Six-column trial balance:** | Account | Debit (FCFA) | Credit (FCFA) | |------------------|--------------|---------------| | Building | 8,000,000 | | | Motor Vehicle | 5,000,000 | | | Receivables | 7,500,000 | | | Bank | 1,400,000 | | | Purchases | 6,555,000 | | | Salaries Expense | 1,500,000 | | | Rent Expense | 200,000 | | | Insurance Expense| 150,000 | | | Drawings | 250,000 | | | Capital | | 11,500,000 | | Bank Loan | | 3,200,000 | | Payables | | 3,855,000 | | Sales | | 15,000,000 | | Purchases Returns| | 245,000 | | **Totals** | 30,555,000 | 30,555,000 | The trial balance totals match, confirming ledger accuracy. **Final answer:** Trial Balance is balanced with total debits and credits of 30,555,000 FCFA.