Accounting help!!!!!!!!!!!

[moon]

 can u plz help me in questions no. 6,11, 16,22,23,24,30,32,33,39 Nov.06 ppr1
Thanx in advance. I appreciate ur help.

[elemis]

Question  6

Start off with the initial capital of $23000.

Add the amount that has been invested to give a total of $25500

Minus the amount paid by the business for building work on Omar's Personal house (this is considered drawings).

Hence, a grand total of $24000.

Answer = B

Question 11

Answer is B. This is because Trade Discounts are NEVER  shown in the books of accounts. Cash Discounts are NEVER deducted until the customer pays on time and can hence avail the discount,

Question  16

Marie is Yvonne's DEBTOR ! Thus, Marie owes money to Yvonne. At the beginning of the period she owes $482

She  buys $260 worth of goods from Yvonne hence increasing the amount owing. Thus, 482 + 260 = 742.

However, Marie pays some money to Yvonne. Hence, 742 - 137 = $605 

[elemis]

Question  22

Read the question carefully : Which item on a bank statement would cause the balance to be more than the balance in the
cash book?

Basically, they are saying what would cause the bank to show more money in the account than the owners cash book ? The answer is Bank Interest which has been credited - this would increase the bank balance.

Question  23

Initially she pays $5000 for electricity, but it is said she owes $200 for electricity bills from LAST YEAR. As this $200 DOES NOT pertain to the CURRENT accounting period we subtract it from the $5000 to give $4800.

However, at the end of the CURRENT year she has $600 accrued. As per prudence we must add this to the total amount paid.

hence, 4800 +600 = 5400

Question  24

Basically, the question is saying rent has been PREPAID. Normally, we would deduct the amount prepaid from expenses and add it to current assets.

However, this hasnt been done. Thus, Expenses are HIGHER than what they should be THUS Net profit is LOWER.

Also CURRENT ASSETS are lower than what they should be. Answer = D

[elemis]

Question  30

You should know that stock is valued at the lower of cost or net realizable value. That is, use the lower value ALWAYS.

hence, for the X selling price is lower than Cost so we use this value.

For the Y you might think AHA ! Cost is lower so we use that value. THATS WRONG !!!!

Look carefully. Selling price minus Selling Expenses = Net Realisable value.

Hence, 25 -6 = 19 which is lower than Cost.

Finally, we add up the selected values (19 + 20 = 39)

Question  32

This is something you should memorise. Answer is B

Question  33

We basically subtract all the expenses shown and minus them from $95000 EXCEPT the salary paid to Sarah since this appears in the Profit and Loss Appropriation Account and is not shown in calculation of Net Profit.

Question 39

There was no change in the total sales or the gross profit percentage, so Options A and B could be eliminated.

If the net profit percentage has fallen, the expenses must have increased, so Option C could be eliminated.

Answer = D

[moon]

Can u please explain me question 22 again along with 20??I would be so grateful if u cleared my doubts in these questions and THANK U VERY MUCH for ur wonderful explanation.u have done a great job and once again thank u.............

[elemis]

Question 20

The journal shows the entries that were made to CORRECT the wrong entry. Now debtors are normally DEBITED when we SELL them goods.   

Notice we have credited Jane's account. The ONLY reason we would do that is if we wanted to REDUCE the amount she OWES to the business.

Why would we do that ?

The reason for REDUCING Jane's amount owing is because we recorded that we had sold goods to her when ACTUALLY we DID NOT !!!!

We actually sold goods to John. So we debit his account to INCREASE the amount he owes (remember no entry has been made in his account yet) and we CREDIT Jane to eliminate the amount we recorded her as owing.

Answer = D

[elemis]

What didnt you understand in 22 ?

[moon]

in Q22 how did u know that bank interested will cause the balance in the bank statement to be higher than that in the cash book??
 thanx 4 ur reply.

[elemis]

Bank interest will cause a rise in the cash at bank.

All the other options would DECREASE cash at bank.

[moon]

thank u very much 4 ur help

[moon]

plz Ari can u help me in these questions??

Q1. Which error affects the blancing of a trial balance?

A) a purchase invoice, $2000 completely omitted from the books.

B) a sale on credit, $500, entered in the sales journal as $550

C) purchase of a machine, $5000, entered in purchases account

D) the purchases journal undercast by $100.


Q2. Farad's financial year ends on 31 December.

     on 31 December 2007 his account included:

                                                                      $
     equipment at cost                                     18 000
     provision for depreciation of equipment           7 000

on 1 January 2008 Farad purchased equipment for $ 12 000.

Equipment is depreciated at 25% per annum using the straight line method.

What would be the provision for depreciation of equipment on 31 December 2008?

A) $5750                        B) $7500                   C) $ 12 750                   D) $14 500


Q3) A business values its stock at $35 600
      This includes $2500 for goods which can be only sold for $800.
      At which value should stock be recorded in the final accounts?

A) $33 100                      B) $33 900                 C) $34 800                   D) $ 35 600 

thanx a lot I appreciate ur help.