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FIFO and average cost are the two most common cost flow assumptions made in costing inventories. The amounts assigned to the same inventory items on hand may be different under each cost flow assumption. If a company has no beginning inventory, explain the difference in ending inventory values under the FIFO and average cost bases when the price of inventory items purchased during the period have been (1) increasing, (2) decreasing, and (3) remained constant.
A work sheet is an optional working tool used by accountants to facilitate the preparation of financial statements. Consider the steps followed in preparing a work sheet. How does the use of a work sheet assist the accountant? Could financial statements be prepared without a work sheet? Evaluate how the process would differ. Consider factors such as timeliness, accuracy, and efficiency in your evaluation.
In reviewing the accounts of Marylee Co. at the end of the year, you discover that adjusting entries have not been made.
Write a memo to Mary Lee Virgil, the owner of Marylee Co., that explains the following: the nature and purpose of adjusting entries, why adjusting entries are needed, and how her financial statements could be affected by the lack of adjustments. Give specific examples that are related to the various types of adjusting entries.
Indicate by choosing the correct option whether the following statement is true or false:
Entries in the sundry accounts column in the cash payments journal are posted individually to the general ledger.
True
False
A debtor, Mr A Naidoo, owed Peter Stores R4 000 on 1 May 20.20. On 15 May Mr A Naidoo decides to settle his account at Peter Stores, by paying his account in full. Wilton Stores gives him 10% discount.
Which of the following correctly represents the above transaction (Ignore any VAT implications)?
A. Credit the trade receivables control account with R4 000 and debit the settlement discount granted account with R400 and debit the bank account with R3 600.
B. Credit trade receivables control account with R3 600 and debit bank account with R3 600 and debit the settlement discount granted account with R400.
C. Credit the trade receivables control account with R4 000 and debit the settlement discount granted account with R4 000.
D. Debit the trade receivables control account with R4 000 and credit the settlement discount granted account with R4 000.
E. Debit the trade receivables control account with R3 600 and credit the settlement discount granted account with R3 600.
Nomzi Traders sold furniture to a customer for R1 610 cash, the mark up on cost is 20%. Assuming Nomzi Traders uses a perpetual inventory system, is a registered VAT vendor and the VAT rate is 15%. (Round your answer off to the nearest Rand.)
What will the cost of sales be for this transaction?
- A. R1 190
- B. R1 400
- C. R1 167
- D. R1 342
- E. R1 369
What will the journal entry be if an entity buys inventory on credit when the periodic inventory system is in use (Ignore any VAT implications)?
- A. Debit inventory account and credit bank account.
- B. Debit purchases account and credit trade payables control account.
- C. Debit inventory account and credit trade payables control account.
- D. Debit trade payables control account and credit purchases account.
- E. Debit purchases account and credit bank account.
(a) Explain when interest is charged by NSFAS on study loans.
(b) State three expenses that are covered by NSFAS funding.
(c) State the cut-off date for applications for NSFAS funding in 2021 for the 2022 academic year.
(d) Give the full web-address used in your research on NSFAS funding.
Mention and explain the five fundamental principles that an accountancy professional should comply with under all circumstances.
Mention the name of the ethical orientation that you regard most appropriate for the ACCOUNTANCY PROFESSION
