unit 3-chapter 1 introduction

8/3/2019 Unit 3-Chapter 1 Introduction

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VCE Accounting Unit 31. Pre double-entry

VCE Accounting Unit 3Chapter 1

Pre double-entry

Excluding GST

Concepts and skills:

Balance SheetAssets and equitiesStakeholders

Stock cardsTransactions evidenced by documents

Cash journalsUnclassified Cash Flow Statement

Income StatementReporting periodRevenue and expensesNet profit

Gross profitDrawings

Liability

Accounting equationReview of the elements

Agreed value

Stock for advertising purposes

Instructional videos:

Basic concepts (1 & 2): assets,

Balance Sheet, equities, ownersequity, capital, liabilities, accountingequation.

Documents (simple)Stock card (simple)

Revenue (1 & 2)

Expenses (1, 2 &3)Simple Cash Flow Statement

Income Statement (simple)

Reporting period (simple)Drawings

Stock for advertising useAgreed value (simple)

Podcasts:

Assets

EquitiesLiabilities

RevenueExpenses


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Clean Cut Mowers. UnclassifiedCash Flow Statement for July 2018.

Cash Receipts $ $

Sales

Cash Payments

Stock purchases

Office expenses

Change in cash+ Cash at start 40000

= Cash at end

Cash Receipts Journal (CRJ)CFS X

IS exp. rev. X XBS calc. X X calc. calc.

Date Details Doc. BankCost ofSales

Sales SundryLoan Capital

31/7 Totals

Cash Payments Journal (CPJ)CFS

IS exp. X X exp. X exp. exp. ?

BS calc. X calc. X calc. X X ?

Date Details Doc. BankInternet

Exps.Drawings Loan Interest Stock Cleaning

OfficeExps.

Sundry

31/7 Totals

July transactions The following transactions, evidenced bydocuments, occurred during July 2018.

Bank of Melton

Date: 7/7/18

To: Just Mowers

For: 3 Mowers at $2000

each.

This cheque $6000Cheque number 56

Clean Cut Mowers

Clean Cut MowersReceipt # 43

Date: 8/7/18

From:Cash Customers

For:Sale of 2 mowers

at $4000 each.

$: $8000.00

Thank you

Bank of MeltonDate: 17/7/18

To: OfficeWorks

For: Office expenses.

(Stationery etc.)


Clean Cut Mowers


Date: 28/7/18

From:Cash Customers

For: Sale of 3 mowersat $4000 each.

$: $12000.00

Thank you

Cheque #56 is for thecash purchase of moretrading stock.

Receipt #43 is for thecash sale of trading stock.Cost of sales = $4000.

Cheque #57 is for thecash payment of officeexpenses.

Receipt #44 is for thecash sale of trading stock.Cost of sales = $6000.

Cash Journals

ReportsClean Cut Mowers.

Income Statement for July 2018.

Revenue $

Sales

Less Cost of Goods Sold

Cost of sales

Gross profit

Less other expenses

Office expenses

Net profit

Clean Cut Mowers. Balance Sheet at 31/7/18

Assets $ Equities $

Bank Owners equity

Stock control Capital, BobOffice assets Add net profit

Premises

Total assets Total equities

Profit is revenue earned less expenses incurred overthe reporting period (July) and this data is reported inthe Income Statement. The revenue activity for this

business is sales. Expenses are incurred to earn revenue.In July, the expenses are cost of sales and officeexpenses. Revenue and expense data is sourced fromthe cash journals and/or the Cash Flow Statement.

The Cash Flow Statement reports cash receipts andcash payments over the reporting period and showsthe cash balance at the end of the reporting period.The cash flow data is sourced from the cash journals.

Net profit belongs to the owner so itis added to Capital in the new Balanceat the end of the reporting period.

The data for the Balance Sheet at the end of thereporting period comes from the originalBalance but takes into account any changes toassets, (such as Bank and Stock) and equities.

Total the cashjournals at the

end of July.

Receipts are recorded inthe Cash Receipts Journaland cheques in the Cash

Payments Journal.

FromBalanceSheet.

Fromstockcards


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Summary of the accounting process so far:

Start ofreporting

period

Businesstransactions

are evidencedby documents.

Transactions arerecorded in the stockcards and journals:

Cash Receipts JournalCash Payments Journal

End ofreporting

period

Prepare AccountingReports:

Cash Flow StatementIncome Statement

Balance Sheet

Input stage Processing stageRecording

Output stageReporting

Reports for August

Clean Cut Mowers. Unclassified CashFlow Statement for August 2018.

Cash Receipts $ $

Sales

Cash Payments

Stock purchasesInternet expenses

Change in cash

+ Cash at start

= Cash at end

Clean Cut Mowers. IncomeStatement for August 2018.

Revenue $

Sales


Cost of sales

Gross profitLess other expenses

Internet expenses

Net profit

The reports must contain relevant information forstakeholders such as the name of the business,the name of the report and the relevant date ordates. The Cash Flow Statement and IncomeStatement must clearly indicate the reporting

period, in this case, August 2018.

Revenue can be defined as any transactionthat leads to an increase in owners equity(excluding capital contribution). The mostcommon example of revenue is sales.

Expenses can be defined as any transactionthat leads to a decrease in owners equity

(excluding drawings). Common examples ofexpenses are cost of sales, office expenses,internet expenses, wages, rent, cleaning,advertising, interest on loans, etc. You willbecome skilled at identifying expenses.

If revenue is greater than expenses for thereporting period, a profit has been generated.If revenue is less than expenses for the

reporting period, a loss has been incurred.

Clean Cut Mowers. Balance Sheet at 31/8/18Assets $ Equities $

Bank Owners equity

Stock control Capital, Bob

Office assets Add net profit

Premises


The stock valuemust match thefinal balance ofthe stock card.

Get the Bank

value from theCash FlowStatement.

Get the

profit valuefrom theIncomeStatement.

from?

Gross profit is the difference between sales and the costof goods soldthe profit made on the purchase and saleof stock only. Net profit is the difference between gross

profit and other expensesthe final profit after allexpenses have been deducted from sales.

Unit 3, Outcome 1, focuses on recording not reporting!


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Assets $ Equities $

Bank 76600 Owners equity

Stock control 8000 Capital, Bob 199600

Office assets 25000

Premises 90000

Total assets 199600 Total equities 199600

Balance Sheet

STOCK CARD: Ride-on mower

2018 IN OUT BALANCE

Date Details QTY. COST VALUE QTY. COST VALUE QTY. COST VALUE

1/9 Balance 4 2000 8000

Stock card

September transactions The following transactions, evidenced bydocuments, occurred during September 2018.Bank of Melton

Date: 3/9/18

To: Just Mowers


each.

This cheque $14000

Cheque number 60

Clean Cut Mowers


Date: 12/9/18

From:Cash Customers

For:Sale of 4 mowersat $4000 each.

$: $16000.00

Thank you


To: OfficeWorks

For: Office expenses

This cheque $700

Cheque number 61

Clean Cut MowersClean Cut Mowers

Receipt # 49Date: 23/9/18

From:Cash Customers


$: $12000.00

Thank you


IS exp. rev. X X

BS calc. X X calc. calc.


Sales SundryABCLoan

Capital

30/9 Totals





Exps.Drawings Loan Interest Stock Cleaning

OfficeExps.

Sundry

30/9 Totals

Journals for September


end of Sept.


Date: 15/9/18

From:ABC Finance Co.

For: Loan.

$: $10000.00

Thank youBank of Melton

Date: 21/9/18To: Rez Design

For: Advertising

This cheque $1400

Cheque number 62

Clean Cut Mowers


To: Cash

For: Drawings

This cheque $2000

Cheque number 63

Clean Cut Mowers


Date: 30/9/18

From:Cash Customers


$: $8000.00

Thank you

The design of thejournals depends on theinformation needs of the

businessthis can varyfrom business to business.


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Accounting equation at 30/9/18:

ASSETS EQUITIES

$ $

=

ASSETS

$ =EQUITIES

LIABILITIES$

OWNERS EQUITY$

Reports for SeptemberClean Cut Mowers. Unclassified CashFlow Statement for September 2018.

Cash Receipts $ $

Cash Payments

Change in cash

+ Cash at start

= Cash at end

Clean Cut Mowers. IncomeStatement for September 2018.

Revenue $ $


Gross profitLess other expenses

Net profit


Assets $ Equities $

Bank LiabilitiesStock control ABC Finance Co. 10000

Office assets Owners equity

Premises Capital, Bob

Add net profit

Less drawings


The stock valuemust match thefinal balance ofthe stock card.

Get the Bankvalue from theCash FlowStatement.

During September, the business borrowed $10000 cash from

ACE Finance Co. The $10000 has to be repaid and so it is aliability for the business. Liabilities are present obligationsof the business that will lead to a future outflow of economicbenefits to external entities (businesses or individuals). TheABC Finance Co. has an interest or ownership in assets of thebusiness, hence liabilities are also equities.

Cheque #63 was for drawings. Drawings is when the owner takes assets out of thebusiness for private use. Drawings is usually cash but it can be any asset. Drawings willbe reported in the Balance sheet as a negative owners equity item as it works toreduce the owners interest or ownership in the businesss assets.

Accounting equation

The Balance Sheet is an expression of the accounting equation, that is:

Assets = Equities orAssets = Liabilities + Owners Equity orOwners Equity = Assets Liabilities.


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ASSETS LIABILITIES OWNERS EQUITY= +

Identify how the following transactions will impact on the accountingequation. Treat each transaction separately. Non cumulative.


To: Just Mowers

For: 7 Mowers at $2000each.


Clean Cut Mowers


Date: 12/9/19

From:Cash Customers


$: $16000.00

Thank you

Bank of Melton

Date: 19/9/18

To: OfficeWorks

For: Office expenses

This cheque $700

Cheque number 61

Clean Cut Mowers


Date: 15/9/19

From:ABC Finance Co.

For: Loan.

$: $10000.00

Thank you


Difficult transaction. Cash sale of stock.The total cost of sales = $8000 (4 x $2000).



Cash purchase of stock.

Loan of $10000 cash.

Cash expenses of $700.

ImportantOn the two exams, avoid all

abbreviations such as arrows :

the examiners do not like them!


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Date: 23/9/19

From:Cash Customers


$: $12000.00

Thank you

Bank of Melton

Date: 21/9/18

To: Rez Design

For: Advertising

This cheque $1400

Cheque number 62

Clean Cut Mowers

Bank of Melton

Date: 25/9/18

To: Cash

For: Drawings

This cheque $2000

Cheque number 63

Clean Cut Mowers


Date: 30/9/19

From: Cash Customers


$: $8000.00

Thank you





Cash expenses of $1400.


Cash drawings $2000.


ImportantYou can use pencil in class and

on all assessment tasksincluding the two exams!


10/2110


General Journal (GJ)

Date Details $

MEMO #1:29/10/18The owner, Bob, contributed his personal

computer to the business (office assets). $1000.


Assets $ Equities $

Bank 104500 Liabilities

Stock control 4000 ABC Finance Co. 10000

Office assets 25000 Owners equity

Premises 90000 Capital, Bob 213500


Balance Sheet

STOCK CARD: Ride-on mower

2018 IN OUT BALANCE


1/10 Balance 2 2000 4000

Stock card

October transactions The following transactions, evidenced bydocuments, occurred during October 2018.Bank of MeltonDate: 4/10/18

To: Just Mowers


each.

This cheque $18000

Cheque number 64

Clean Cut Mowers


Date: 15/10/18

From:Cash Customers

For:Sale of 5 mowers

at $4000 each.

$: $20000.00

Thank you

Bank of Melton

Date: 25/10/18

To: OfficeWorks

For: Power expenses.

This cheque $500

Cheque number 65

Clean Cut Mowers


IS exp. rev. X X



Sales Loan Capital Sundry

31/10 Totals





Exps.Drawings

ABCLoan

Intereston loan

Stock CleaningOfficeExps.

Sundry

31/10 Totals

Journals for October


end of Oct.

MEMO #2:

31/10/18The owner, Bob, took 1 unit of stock home forhis private use. $2000. Drawings of stock.


To: ABC Finance Co.

For: Repayment of

loan including $70interest.

This cheque $770

Cheque number 66

Clean Cut Mowers

Of course most businessesuse electronic systems notthese ol fashioned manual

systems!


11/2111


ASSETS EQUITIES

$ $

=

ASSETS$ =

EQUITIESLIABILITIES

$OWNERS EQUITY$

Reports for OctoberClean Cut Mowers. Unclassified Cash

Flow Statement for October 2018.

Cash Receipts $ $

Cash Payments

Change in cash

+ Cash at start

= Cash at end

Clean Cut Mowers. IncomeStatement for October 2018.

Revenue $ $


Gross profit

Less other expenses

Net profit


Assets $ Equities $

Bank Liabilities

Stock control ABC Finance Co.

Office assets Owners equity

Premises Capital, BobAdd net profit

Less drawings


Calculation space (if required)

Accounting equation @ 31/10/18

Identify how the following 2 transactions will impact on the accountingequation. Treat each transaction separately. Non cumulative.


MEMO #1:29/10/18The owner, Bob, contributed his personal

computer to the business (office assets). $1000.

MEMO #2:31/10/18

The owner, Bob, took 1 unit of stock home forhis private use. $2000. Drawings of stock.


Can you think

of two separateplaces to find

the cost of sales

data?

Eventually you will be able to identifythe impact of any transaction on the

accounting equation.


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A L OE R EQuick Review9. Transactions are evidenced by

A. Cash Flow Statement.B. Income Statement.C. Documents.D. Journals.

10. An item will usually get its own column in thejournals if

A. It has a high dollar value.B. It is a frequent transaction.C. It is an infrequent transaction.D. There is enough room.

11. The report that provides stakeholders with detailedinformation about the businesses cash resources

A. Balance sheetB. Cash receipts journal.C. Cash flow statement.D. Income statement.

12. Owners equity can change due to

A. Revenue.B. Expenses.C. Drawings.D. All of the above.

13. If drawings exceeds profit for a reporting period,owners equity will

A. Increase.B. Decrease.

C. No impact.D. Impact cannot be determined from this data.

14. The owners equity section of the Balance Sheetcan report

A. Capital plus revenue less drawings.B. Assets plus profit less drawings.C. Capital plus profit less drawings.D. Assets less loss less drawings.

15. The most likely sequence for a simple accountingprocess is

A. Documents, journals & stock-cards, reports.B. Journals & stock-cards, documents, reports.C. Reports, documents, journals & stock-cards.D. Documents, reports, journals & stock-cards.

16. Information in the accounting reports is said to bemore reliable if

A. The Income Statement reports a profit.B. The reports are supported by documentary

evidence.C. The reports are prepared frequently.D. The Balance Sheet balances.

17. The accounting equation shows

A. Liabilities equals assets plus owners equity.B. Assets equal liabilities plus owners equity.C. Owners equity less liabilities equals assets.D. Assets plus liabilities equals owners equity.

1. Which one of the following is the best description ofan asset?

A. Present obligations of the business that will lead to afuture outflow of economic benefits.

B. Resources under the control of the business which

will provide future economic benefits.C. Causes an increase in owners equity.D. Causes a decrease in owners equity.

2. Which one of the following is the best description ofa liability?

A. Present obligations of the business that will lead to afuture outflow of economic benefits.

B. Resources under the control of the business whichwill provide future economic benefits.

C. Causes an increase in owners equity.D. Causes a decrease in owners equity.

3. Which one of the following is the best description of

owners equity?

A. Future obligations of the business.B. Resources under the control of the business which

will provide future economic benefits.C. Liabilities less assets.D. Assets less liabilities.

4. Revenue could be defined as ..


will provide future economic benefits.C. Transactions that cause an increase in owners equity

excluding capital contributions.D. Transactions that cause a decrease in owners equity

excluding drawings.

5. Expenses could be defined as


will provide future economic benefits.C. Transactions that cause an increase in owners equity

excluding capital contributions.D. Transactions that cause a decrease in owners equity

excluding drawings.

6. The reporting period is best described as

A. Period of time over which assets are determined.B. Period of time over which profit is determined.C. Period of time over which liabilities are determined.D. 1/7/XX to 30/6/XX

7. Equities are best described as

A. Assets and liabilities.B. Assets less liabilities.C. Liabilities and owners equity.D. Assets less owners equity.

8. In a Balance Sheet, the following balance

A. Assets and liabilities.B. Assets and equities.C. Assets and revenues.D. Equities and liabilities.

PS: the currentVCE exams do

not includemultiple-choice

questions.

17


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The accounting equation is Assets (A)= Liabilities (L) + Owners Equity (OE) which represents therelationships in the Balance Sheet. Alternative ways to express the accounting equation are:OE = A L and A L = OE.

Example 1: Excludes revenue, expenses and GST.


Transaction 1: owner contributed $100000 cash to start business.

= +

2: owner contributed personal stock to business worth $6000.

= +

3: owner contributed personal vehicle to business worth $20000.

= +

4: bought computer for $4000 cash.

= +

5: bought office desk for $2000 cash.

= +

6: borrowed $8000 from ANZ Bank.

= +

7: paid ANZ Bank $500 to reduce loan.

= +

8: paid $5000 cash for stock.

= +

9: owner took $1000 cash for private use (Drawings).

= +

10: borrowed additional $3000 from ANZ.

= +

Accounting Equation again

Treat each transaction separately.


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Example 2: Includes revenue and expenses but excludes GST. Cumulative exercise.

ASSETS$100000

LIABILITIES$20000

OWNERS EQUITY

$80000= +

Transaction 1: owner contributed $6000 cash to business.

= +

Transaction 2: Sold stock for $3000 cash (cost of stock $1500).

= +

Transaction 3: Sold stock for $2000 cash (cost of stock $1000).

= +

Transaction 4: Paid wages expense $1000.

= +

Transaction 5: Paid advertising expense $800.

= +

Transaction 6: Bought stock for cash $6000.

= +

Transaction 7: Paid rent expense $2000.

= +

Transaction 8: Cash sales of stock $7000. Cost of sales $3500.

= +

Transaction 9: Cash drawings by owner for private use, $800.

= +

Transaction 10: Paid wages $1000.

= +

Transaction 11: Cash sales of stock $8000, cost of sales $4000.

= +


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The elements are: assets (A), liabilities (L), owners equity (OE), revenue (R) and expenses (E).You need to understand these terms eventually!You could use this sheet to assist you! Why not do this in pairs?Resources?Find the AASB Glossary to help you complete this page.

Just Computers. Balance Sheet at 31/7/21

ASSETS $ EQUITIES $

Bank 24700 LIABILIITIES

Fixtures & Fittings 2000 Loan, ANZ 10000

Stock of Computer Systems 9600 OWNERS EQUITY

Office Equipment 3700 Capital, Jennifer 30000

Total Assets 40000 Total Equities 40000

Assets Liabilities Owners Equity

Find the AASB definitions of the following:

The Elements again

Just Computers,Income Statement for August 2022

Revenue $ $

Sales 29000Less Cost of Goods SoldCost of sales 8700

Gross Profit 20300Less other ExpensesAdvertising 3700Wages 12400 16100Net Profit 4200

Revenue Expenses

Find the AASB definitions of the following:

A L OE R E

www.aasb.gov.au

A L OE R E


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Agreed valueWhich value should the business use to value the vehicle?$40000 or $30000? The original cost of $40000 is notrelevant to the business since it was paid by the owner as aprivate individual: the business entity did not pay $40000.Even though the $30000 is an estimate, and thus lacksreliability, it is a more relevant valuation for the

stakeholders. (Note that the use of experts does,however, help to improve the reliability of the estimate).

MEMO #66:3/6/22Owner contributed a personal vehicle to

the business which had originally costher $40000 on 1/6/19. After consulting

some valuation experts, the agreedvalue is $30000.

Ace Traders. Balance Sheet extract at 3/6/22

ASSETS $ EQUITIES $

Vehicle 30000


Date Details $

3/6/22 Contribution of vehicle at agreed value, memo #66 30000

Explain how memo #66 impacts on the accounting equation of Ace Traders.

Assets: _______________________________________________________________________________

Liabilities: _____________________________________________________________________________

Owners equity: _________________________________________________________________________

Stock for advertising purposesSometimes a business will take some of its stock to use for

promotional or advertising purposes. It might be that thebusiness is attending a Trade Expo or other function and wantsto display its stock. Perhaps the business has a travelling salesperson who takes stock to show to potential customers.

MEMO #22:1/11/32Took 5 iPads for advertisingpurposes.

STOCK CARD: iPads

2032 IN OUT BALANCE


1/11 Balance 20 300 6000Memo 22 5 300 1500 15 300 4500


Date Details $

1/11/32 Stock for advertising purposes, 5 iPads, memo #22 1500

Hi Tech Traders. IncomeStatement extract for November 2032.

$ $Less other expenses

Advertising 1500

Net profit

The stock used for advertising will be

reported as an expense in the IncomeStatement. This is an example of a noncash expense. Another example of annon cash expense is cost of sales.


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18/2118


Just TVs. Balance Sheet at 1/7/28

Assets $ Equities $

Stock control 50000 Liabilities

Bank 12000 Bank of Kew loan 7000

Office assets 20000 Owners equity

Capital, Emmy 75000


The following transactions occurred during July 2028:

5/7, purchased 10 TVs at $1000 each, total $10000, cheque #124.9/7, sold 15 TVs at $3000 each, total $45000, (cost of sales $15000), receipt #432.10/7, took 2 TVs for business expo, memo #55, total of $2000.13/7, owner contributed her vehicle (asset) which had an original cost of $60000 when bought in 2025 andnow has an agreed value of $28000, memo #56.

14/7, paid office expenses, $3200, cheque #125.16/7, drawings of cash $6000, cheque #126.20/7 paid $1200, including $200 interest, to Bank of Kew, internet transfer #IT89.22/7, sold 5 TVs at $3000 each, total $15000, (cost of sales $5000), receipt 433.28/7, purchased 6 TVs at $1000 each, total $6000, cheque #126.


Date Details $


IS exp. rev. X X



SalesKewLoan

Capital Sundry

31/7 Totals

Cash Payments Journal (CPJ)

CFS IS exp. X X exp. X exp. exp. ?



Exps.Drawings

KewLoan

Intereston loan

Stock CleaningOfficeExps.

Sundry

31/7 Totals

Records for July

STOCK CARD: TVs

2028 IN OUT BALANCE


1/7 Balance 50 1000 50000

Total cashjournals at the

end of the month.

System review


19/2119


Reports for JulyJust TVs. Unclassified Cash Flow

Statement for July 2028.

Cash Receipts $ $

Cash Payments

Change in cash

+ Cash at start

= Cash at end

Just TVs.Income Statement for July 2028.

Revenue $ $


Gross profit

Less other expenses

Net profit

Just TVs. Balance Sheet at 31/7/28Assets $ Equities $

Liabilities

Owners equity



Show the impact of memo #55 on the accounting equation:


Show the impact of memo #56 on the accounting equation:

Assume that it is now discovered that wages of $2000 was not recorded in July 2028.

Explain how this error would impact on:

1. The Cash Flow Statement for July:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

2. The Income Statement for July:________________________________________________________________________________________

________________________________________________________________________________________________________________________________________________________________________________

3. The Balance Sheet at 31/7/28:________________________________________________________________________________________________________________________________________________________________________________

________________________________________________________________________________________


20/2120


VCE Accounting Unit 3: Nano Exam 1. Marks = 34. Time = 34 minutes.

Stephanie owns and manages BusinessWorks trading in business equipment on a cash basis only.

On 3/7/27 the business took 2 printers from stock so that the salesperson could demonstrate them forpotential customers. Total value of stock = $1200.

1.1 What documentation would be used to record this transaction?

1 mark________________________________________________________________________________________

1.2 List two accounting records that would be used to record this transaction.2 marks

Record 1: __________________________________________Record 2: __________________________________________

1.3 Show the impact of this transaction on the accounting equation by completing this following table:2 marks

Cash Receipts Journal (CRJ)Date2027

Details Doc. BankCost ofSales

Sales Loan Capital Sundry

30/11 Totals 4500 15000 1000 5000

Asset Liability Owners equity

Increase $________Decrease $_______

No change


No change


No change

1.4 Which document (Doc. #99) was probably used on 3/9? Give evidence to support your answer.1 mark

________________________________________________________________________________________

________________________________________________________________________________________

1.5 Identify which journal would be used to record Doc. #99.1 mark

________________________________________________________________________________________

1.6 List 3 separate types of transactions that may be recorded in the OUT column of the stock card.3 marks

Transaction 1: ___________________________________________________________Transaction 2: ___________________________________________________________Transaction 3: ___________________________________________________________

1.7 Stock is an asset. Provide a definition of an asset.3 marks

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

STOCK CARD: Leather Chairs

2027 IN OUT BALANCE


1/9 Balance 11 1000 11000

3/9 Doc. #99 17 1000 17000

1.8 Calculate and record the total Bank value for November 2027 in the above journal.1 mark

1.9 Indicate the impact of Loan $1000 on the following accounting equation:

2 marks

Assets Liabilities Owners Equity


21/21

1.10 How could you check or verify the accuracy of the cost of sales value of $4500?2 marks

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

1.11 The cost of sales $4500 is an expense: explain why.3 marks

________________________________________________________________________________________

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

A B C

ReportsJournals and stock cards

Transactions

Journals and stock cardsReports

Transactions

TransactionsJournals and stock cards

Reports

1.12 Which of the above, A or B or C, best represents the order in a simple accounting system?1 mark

________________________________________________________________________________________

1.13 Give 3 examples of Reports.3 marks

Report 1: ___________________________________________________________Report 2: ___________________________________________________________Report 3: ___________________________________________________________

The following transactions occurred during December 2028:Cash sales $3000 (cost of sales $900), paid wages $500, cash sales $4000 (cost of sales $1200), drawings of$1000, received ANZ loan $5000, paid advertising $900, purchased new computer $2500.

1.14 Calculate the net profit or loss for December. Show workings.3 marks

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

STOCK CARD: Leather Brief Case

2028 IN OUT BALANCE


1/6 Balance 40 200 8000

5/6 Rec. #75 7 200 1400 33 200 6600

10/6 Memo #13 1 200 200 32 200 6400

18/6 Rec. #76 10 200 2000 22 200 440028/6 Chq. #90 20 200 4000 42 200 8400

1.15 Work out the cost of sales for June 2028.2 marks

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Date Journal?5/6

10/6

18/6

28/6

1.16 Complete the following table to identify therelevant journal for each transaction.

2 marks

1.17 The last value in the stock card is $8400.Indicate how the manager would use this value atthe end of June.

2 marks

____________________________________________________________________________________________________________________________________________________________________