Blue
Give two Revenue Accounts
Sales ; Fees Received
List 4 Other Income accounts
Dividends received; Rent income; Interest on fixed deposit; Gain on sale of asset; Commission Received
List two Finance Cost items
Interest on loan; Interest on overdraft
What is the purpose of an Income Statement
To show all Income and Expense accounts so that the PROFIT / LOSS can be calculated.
What is the Purpose of a Statement of Financial Position?
To show all Assets, Liabilities and Equity of the business. It shows how stable the business is.
List 5 Current Assets
Bank; Inventory; Supplies on hand; Accounts Receivable; Prepayment; Accrued Income; GST receivable; Petty Cash
List 3 Current Liabilities
Accounts Payable; Accrued expenses; Income in advance; GST Payable; Bank Overdraft
What is the term for Total Assets - Total Liabilities?
Net Assets
What is the meaning of Carrying amount?
Cost - Accumulated depreciation
Give the journal entry to Increase Doubtful Debts
dr Doubtful Debts cr Allowance for doubtful debts
Define diminishing value method of depreciation
Based on (Cost - Accumulated depreciation) x %
Define Units of use method for depreciation
(Cost - residual) / Lifetime units x Units used this year
Give the journal entry for Shop rent paid in advance, $450 excl GST
Dr Prepayment 450
Cr Shop Rent 450
Give the journal entry for: Shop wages owing on balance day, $600
Dr Shop Wages 600
Cr Accrued Expenses 600
Give the journal entry for Advertising paid but not yet used in this year, $230 excl GST
Dr Prepayment 230
Cr Advertising 230
Calculate the depreciation on buildings 5% p.a. straight line.
Trial balance: Buildings $80 000
$4 000
Calculate the depreciation amount: On vehicles 20% p.a. diminishing balance.
Trial balance: Vehicles $56 000 / Accumulated Depreciation $10 200
$9 160
Calculate the depreciation amount: Depreciation on vehicles is charged at 50 cents/km. This year the vans were driven 6 500 km.
$3 250
Give the journal entry for dividends owing $135.
Dr Accrued Income 135
Cr Dividends 135
Give the journal entry: Invoice on hand for electricity $138 including GST.
Dr Electricity 120 , Dr GST 18
Cr Accounts Payable 138
Give the journal entry: Bad debts to be written off total $184
Dr Bad Debts 160 , dr GST 24
Cr Accounts Payable $184
Interest on loan is owing on balance day. Prepare the journal entry.
Trial balance: Loan (10%) $56 000 and Interest on loan $3 500.
Dr Interest on loan. 2 100
Cr Accrued Expense 2 100
Calculate allowance for doubtful debts: 2% of Accounts Receivable. Make the journal entry.
Trial balance: AR 5 684 / Additional bad debts written off $184. Allowance for doubtful debts $90
Dr Doubtful debts 20
Cr Allowance for Doubtful debts 20
How do we calculate the Equity in the Statement of Financial Position?
Opening capital
Plus profit / Less loss
Less drawings
What is the meaning of a disposal?
Sale of a fixed asset.