Accounting Questions from the 2009 Mid-Year

[taylor tay bags]

These are just some of the questions i wasn't 100% confident with, like some opinions on what you wrote and what i possibly did wrong.

1.2.2 Prepare the creditors schedule.

I'm pretty sure there was only 2 creditors, in calculating the subsidiary ledger we could take away that value from the creditors control balance to get the remaining Balance for the other creditor right?

1.4 State how bell computing should use the may statement of account. identify one qualitative characteristic to support your argument

I said this contains comparability as you can compare the balance from our creditors and their balance, this contains and in built double checking mechanism and holds comparability.

1.5.2 Prepare the Equities section of the Balance Sheet

Firstly i said, Oh ya this is owners equity, then i rubbed it all out and put current liabilities non current liabilities and owners equity and totaled them for equities.  

1.5.3 Show how the Wages Expense account would appear in the General Ledger after the adjusting entries have been made

This was a difficult one as we were given the ending balance already (in the post-Trial Balance) (i think it was about 63,500) therefore i put accrued wages on the DR side at 1800 then i took the 1800 away from the 63,500 and knew that was a cash payment out of bank so put bank as cross reference on the Debit side and ended up having the 63,500 as a Profit/Loss summary CREDIT entry.

Looked like this

DR                                          CR
1800 Accrued Wages                  63,500 Profit and Loss summary
61,700 Bank
63,500                                    63,500      

1.7 A credit sale that occurred in June has not been recorded State the effect of this omission on the profit and loss statement      

Revenues:
Credit Sales: Understated
Net profit: overstated
Expenses:
Cost of sales Expense: understated  

1.8 The owner stated 'I am not sure I want to make a profit this year!! Despite the loss the owner still had a bank increase of 5,000                      

Really couldn't work this one out as we couldn't include capital contributions or loans, i said that a massive influx of debtors paying back may have occurred which doesn't effect profit and loss but effects cash flow. (operating)

2.1 Jon had a computer in a previous business the original cost was 30,000, then was revalued at 15,000 at an agreed market value

I recorded the asset at 15,000 i wasn't thinking, I'm probably wrong

I said the qualitative characteristic was Relevance because it related to decision making.

Far out, just thinking about how stupid my response to this question is

2.4 Correct this entry 'Payment of electrical bill $250 and 25 gst was incorrectly recorded as wages

I debited 25 GST clearing, 250 Electricity and CR Wages 275

2.4.3 State and justify the accounting principle that requires the business to record stock taken by the owner for his personal use  

since it said 'personal use' i said Entity and defined and linked that principle.




Anyone that answers all of them gets a cookie, don't think you have to answer all of them, just give an opinion or tell me what you wrote for 1 or 2 of them if you like.

Thanks.

[Flaming_Arrow]

2.4 Correct this entry 'Payment of electrical bill $250 and 25 gst was incorrectly recorded as wages

Debit Electricity 250
Debit GST Clearing 25
Credit Wages 275

[nbalakers24]

1.2.2 Prepare the creditors schedule.

i think it equaled 7700 from memory

1.4 State how bell computing should use the may statement of account. identify one qualitative characteristic to support your argument

i said reliability - source document, free from bias, checking mechanism. reports more reliable

1.8 The owner stated 'I am not sure I want to make a profit this year!! Despite the loss the owner still had a bank increase of 5,000     

i said depreciation

not sure if its all right

[Flaming_Arrow]

1.4 State how bell computing should use the may statement of account. identify one qualitative characteristic to support your argument

reliability -Compare their records the statement and idenfity any errors


1.8 The owner stated 'I am not sure I want to make a profit this year!! Despite the loss the owner still had a bank

Receipts from debtors could of been higher than credit sales meaning it would have a greater effect on cash flows than credit sales does on net profit

[taylor tay bags]

Discount is an expense and is recorded in 'less other expenses' on the profit and loss statement and it also decreases cash outflow because money paid from creditors decreases.
(sorry thought you meant discount from creditors)

[Flaming_Arrow]

Depreciation is an expense and is recorded in 'less other expenses' on the profit and loss statement and it also decreases cash outflow because money received from debtors decreases.

what?

[taylor tay bags]

my bad, thought he meant discount expense

[taylor tay bags]

Flaming, so you you wrote for question about making bank balance increase with a loss did you write the debtor received?

[Flaming_Arrow]

Flaming, so you you wrote for question about making bank balance increase with a loss did you write the debtor received?

yer receipts from debtors could have been higher than credit sales

[nbalakers24]

oh shit, did the question require to give a example that affects cash and profit?

i jsut said something about depreciation on equipment

[phanphy]

1.2.2 Prepare the creditors schedule.

i think it equaled 7700 from memory

1.4 State how bell computing should use the may statement of account. identify one qualitative characteristic to support your argument

i said reliability - source document, free from bias, checking mechanism. reports more reliable

1.8 The owner stated 'I am not sure I want to make a profit this year!! Despite the loss the owner still had a bank increase of 5,000     

i said depreciation

not sure if its all right

Yeah got the same as you (Y)

[nbalakers24]

2.1 Jon had a computer in a previous business the original cost was 30,000, then was revalued at 15,000 at an agreed market value

i said relevance as well, there was a similar question in checkpoins

i said something about it is more useful for decison making stuff like that

[Flaming_Arrow]

2.1 Jon had a computer in a previous business the original cost was 30,000, then was revalued at 15,000 at an agreed market value

i said relevance as well, there was a similar question in checkpoins

i said something about it is more useful for decison making stuff like that

yep it was relevance, since it was revalued by his accountant, that is the most recent and therefore the most relevent figure.

[taylor tay bags]

Flaming, what do you rkn about this question?

1.5.3 Show how the Wages Expense account would appear in the General Ledger after the adjusting entries have been made

This was a difficult one as we were given the ending balance already (in the post-Trial Balance) (i think it was about 63,200) therefore i put accrued wages on the DR side at 1800 then i took the 1800 away from the 63,200 and knew that was a cash payment out of bank so put bank as cross reference on the Debit side and ended up having the 63,200 as a Profit/Loss summary CREDIT entry.

Looked like this

DR                                          CR
1800 Accrued Wages                  63,200 Profit and Loss summary
61,400 Bank
63,200                                    63,200      

[nbalakers24]

thats what i had

edit: it was 63200-1800 for wages and yeah i think thats what i had