Accounting Fundamentals

Accounting Fundamentals

Table of Contents
Question 1........................................................................................................................................3
a...................................................................................................................................................3
b...................................................................................................................................................3
c. .................................................................................................................................................4
Question 2........................................................................................................................................6
Presenting an analysis with regard to an importance of the final report to the users..................6
Question 3........................................................................................................................................8
d) Journal Entries........................................................................................................................8
e) Updated Trial Balance............................................................................................................9
f) Financial Statements as on 31 December 2017.....................................................................10
Question 4 .....................................................................................................................................11
Comparing and contrasting liquidity and profitability .............................................................11
REFERENCES..............................................................................................................................14

Question 1
a.
Journal
Sr. no. Particulars Debit Credit
2
Depreciation on
motor vehicle A/c
Dr. 11670
To Accumulated
depreciation a/c 11670
Depreciation on
equipment A/c Dr. 900
To Accumulated
depreciation a/c 900
3
Telephone
expense A/c Dr 180
To outstanding
telephone bill A/c 180
4
Prepaid Insurance
A/c Dr. 840
To Insurance A/c 840
5
Income tax
expense A/c Dr. 1500
To income tax
payable A/c 1500
Total 15090 15090

b.
Trial balance at
31st December
2019
Particulars Debit Credit
Accounts payable 25680
Accounts receivable 30700
Carriage inwards 1840
Computer equipment at cost 4500
Carriage outwards 3280
Drawings 26000
Electricity 2480
Loan interest 300
Provision for doubtful debts 450
Insurance 2520
Motor vehicle at cost 53900
Capital 48000
Opening inventory 13200
Accumulated depreciation- Motor vehicle 26670
Accumulated depreciation- computer equipment 3540
Petty cash 50
Bank overdraft 2880
Wages 67440
Purchases 126800