Holiday Assignment for POA Sec 3 students

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Derick Lawson
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1 Holiday Assignment for POA Sec 3 students Marker s Comment Instructions Answer ALL questions on this paper. Omission of essential working will result in loss of marks, Use ledger paper as per necessary. This paper may constitute up to 10% of CA2 marks. 1. The personal assets of the owner of a company will not appear on the company's balance sheet because of which principle/guideline? 2. Which principle/guideline requires a company's balance sheet to report its land at the amount the company paid to acquire the land, even if the land could be sold today at a significantly higher amount? 3. Which principle/guideline justifies a company violating an accounting principle because the amounts are immaterial? 4. Which principle/guideline is associated with the assumption that the company will continue on long enough to carry out its objectives and commitments? 5. When the accountant has to choose between two acceptable alternatives, the accountant should select the alternative that will report less profit, less asset amount, or a greater liability amount. This is based upon which principle/guideline? Match the following answers to questions 1-5 Accounting entity Concept Historical Cost Concept Materiality Concept Prudence Concept Going Concern Concept 6. According to Angie (a Secondary 3 Principles of Accounts student), the role of accounting is to enable the owner(s) of a business entity to find out if they have been profitable for the accounting year. Do you agree? Give reasons for your answer.

2 7. Crossword Puzzle Double Entry Down 1. The left-hand side of an asset account records in assets. 2. Victor assumes this role when he buys goods on credit from a supplier. 3 Merchandise bought for resale are recorded into this account. 4 This is one of the operating expenses of a business. 5 These items have the effect of reducing the amount owing to the supplier. Across 8. Damaged goods that are returned by customers are called Returns. 9. What type of entry system is used for recording accounting information? 10. An increase in liability is recorded on which side of a creditor s account? 11. This is one of the accounts that will be involved whenever a cash sale is transacted. 12. This represents the amount taken by the proprietor for personal use.

3 8 Using the accounting equation, determine the owner s equity for the business of Luting Cash in hand 400 Debtors 1700 Bank Overdraft 2200 Equipment 13,000 Premises 30,000 Amount due to suppliers 5600 Loan from Abel State the source documents for the following transactions (a) Paid $1,000 cheque for the purchase of office chairs (b) Owner withdrew goods for personal use (c) Bought machinery $12,000 on credit (d) Payment of taxi claims of $12 by office clerk (e) Being undercharged by supplier of goods 10. The following transactions are taken from the books of Donna Trading Feb 1 Donna started business by contributing $60,000 from her savings. Feb 2 Feb 5 Feb 8 Feb 16 Feb 17 Took a loan of $100,000 from Easi Finance. Took goods of $480 for personal use. Paid domestic maid levy of $240 by cheque. Donna sold her private motor car for $25,000 and deposited the proceeds to the business s bank account. Paid 5% loan interest by cheque. Write the journal entries and post the entries into the T-Accounts Balance the Accounts at the end of the month

4 11. Lucy s books contained the following balances on 31 May $ Sales 65,000 Purchases 32,000 Return Inwards 6,400 Return Outwards 3,500 Debtors 24,000 Creditors 8,500 Stock 620 Premises 68,580 Furniture & Fittings 8,400 Loan from Longlife Finance 50,000 Cash at Bank 10,000 Capital? On 1 June 2012, the following transactions took place. (a) Sold goods costing $140 for $200 on credit (b) Owner brought in personal computer of $3,500 for office use (c) Paid creditors in full after receiving 10% cash discount (d) Bought two new delivery vans for $40,000 each. Paying $10,000 by cheque and the rest in five monthly instalments Prepare a Trial Balance for 1 June 2012 after adjusting the ledger balances for the above transactions. Show your calculations next to each trial balance item.

5 12. Expanded Accounting Equation Instruction: Complete the table showing the effects of transaction using the expanded accounting equation. The first transaction is done for you. Effects of transaction Transaction Assets Capital Revenue Expenses Drawings Liabilities 1. Owner brought in $20,000 + $20,000 + $20,000 cash as capital 2. Purchased goods $3,000 for cash 3. Sold all the goods for cash, $3, Purchased $5,000 goods on credit from Yu Wholesaler 5. Owner withdrew cash for own use, $ Paid cash $800 for rent of premises 7. Paid cash $1,000 for worker s wages 8. Sold goods on credit $6,500 to Wong Brothers 9. Paid cash $3,000 to supplier for amount owing 10. Received cash $1,000 from Wong Brothers Subtotal Accounting equation Note: Purchases are treated as expenses

ACCOUNTING. From the following information provided by the proprietor of the business, Jeremy, you are required to prepare:

ACCOUNTING. From the following information provided by the proprietor of the business, Jeremy, you are required to prepare: Question 1 From the following information provided by the proprietor of the business, Jeremy, you are required to prepare: a. Trading and Profit and Loss Account for the year ended 31 December 20x1 (13