Accounting Answers

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4. Amal Automotive Company experienced the following accounting events during 2019. Received S60,000 cash from the issue of common stock. Performed services for $35,000 cash. Purchase land for $16,000 cash. Borrowed $1,000 cash from the Bank. Paid $24,000 cash for salary expenses. Sold land for $19,000 cash. Paid $20,000 cash on the loan from state bank. Paid $12,800 cash for salary expense. Paid a cash dividend of $15,000 to the stockholders Required: a. Pass general journal entries and post the entries, to T-accounts and determine the ending balance in each account. b. Prepare a statement of cash flows. Assume Amal Automotive had a beginning cash balance of $10,000.

Identify the line item that does not appear on a Statement of Financial Position.


Select one:

a. Accounts Receivable

b. Cash and Cash Equivalent

c. Accounts Payable

d. Sales.

Which of the following transactions would have no impact on owners' equity?


Select one:

a. Net loss.

b. Investments of cash by shareholders.

c. Dividends to shareholders.

d. Purchase of land from the proceeds of a bank loan.

Identify the statement that correctly describes the dual aspect convention of accounting.

Select one:

a. At least two accounts will be involved in recording a transaction.

b. Only two ledger accounts will be needed to record any transaction

c. If a transaction requires two debit entries, two credit entries must also be made

d. Transactions are recorded in both a book of prime entry and the general ledger

Mr B. Smith (the owner of Cooper Traders) made a capital contribution of R100 000 in his business.


Identify the correct journal entry to record this transaction.


Select one:

a. Debit Cash account R100 000

Credit Investments account R100 000


b. Credit Cash account R100 000

Debit Investment in business account R100 000


c. Credit Cash account R100 000

Debit Owner's account R100 000


d. Debit Cash account R100 000

Credit Capital account R100 000

When my company issues a cheque for insurance does the bank account debit or credit

Use the information provided below, for Snow Plumbing Services, which uses the

periodic inventory system, to answer question 7:

R

Inventory (1 July 20.7)……………………….................................. 150 000

Cash purchases……………………………………………………....

Credit purchases……………………………………………………...

Purchases returns…………………………………………………....

15 000

6 000

2 000

Freight inwards………………………………………………………..

Freight outwards………………………………………………………

Settlement discount received………………………………………..

Settlement discount granted…………………………………………

1 200

1 800

1 700

2 500

Inventory (31 July 20.8)……………………. 120 000

Additional information:

The owner of Snow Plumbing Services donated taps and basins to the value of R1 000 to the

local crèche on 16 June 20.7. No entries regarding this transaction was made in the accounting

records of Snow Plumbing Services, yet.

34

ASSIGNMENT 01 (continued)

7. The cost of sales is …

R

(1) 47 500

(2) 17 300

(3) 10 300

(4) 19 000

(5) 18 000

What is the purpose of charging depreciation?

Select one:

a. To ensure that funds are available for the eventual replacement of the non-current asset.

b. To reduce the cost of a non-current asset in the statement of financial position.

c. To comply with the prudence concept.

d. To allocate the cost of a non-current asset over the accounting periods expected to benefit from its use.

Receipt and payments book.granny Sithole has a prepaid box for electricity,she paid R850 to upload electricity