The following information applies to questions 2to 3.(Check your ans. with your group members for these questions)!!Black and Partners has listed the following amounts in its statement of financial position (balance sheet)Cash $10,000Buildings$75,000Trade payables (creditors)$25,000Taxes payable within one year$15,000Trade receivables (debtors)$55,000Plant and equipment$30,000Inventory (Stock)$60,000What is the amount of total current assets?(a) $125,000(b) $150,000(c) $180,000(d) $255,000What is the amount of total non-current (fixed) assets?(a) $75,000(b) $105,000(c) $130,000(d) $190,000 A business has Capital of $830 000, Net Loss of $150,000 and Assets valuing $1,000,000. What is the value of the Liabilities using the accounting equation? $2,180,000$1,880,000$ 580,000 [1,000,000 = 830,000-150,000 + L]$ 220,000$ 370,000 If the owner of a business takes goods from inventory for his personal use, which of the following accounting concepts would be relevant to how this transaction is accounted for? PrudenceCapital maintenance conceptAccrual’s conceptBusiness entity concept What does the word “obligation” describe? LiabilitiesAssetsCash flowRevenue What do the words “resources owned and controlled by an entity” describe? LiabilitiesAssetsCash flowRevenue Miss Muffet is a sole trader and had assets of $659,100 and liabilities of $398,840 on 1 September 2012. During the year ended 31 August 2013 she paid $7,500 capital into the business and she paid herself wages of $500 per month. At 31 August 2013, Miss Muffet had assets of $660,130 and liabilities of $469,770. What is Miss Muffet’s profit/loss for the year ended 31 August 2013? $71,400 Loss$71,400 Profit$76,900 Loss$76,900 Profit A transaction that is posted as Dr. Drawings and Cr. Cash would mean That: owner returned goods to supplier owner sold good to the firm owner takes goods for personal use owner gave goods away the owner takes cash for personal use Which item will you not find on a Statement of financial position (Balance Sheet) rent expenses Capital Prepaid rent Assets Accrues expenses The entry to record the completion of a service for which payment has not been received is a debit to: Revenue from Services and a credit to Accounts Payable. Accounts Receivable and a credit to Revenue from Services. Revenue from Services and a credit to Unearned Revenue. Cash and a credit to Revenue from Services. none of the above; no entry is made until the cash has been received. Which of the following is not one of the three forms of businesses: sole proprietor ship Limited liability company Partnership Citizens Association: Which of the following is a satisfactory statement of the relationship between opening capital and ending equity? Net Income - Owners’ Equity =Assets Revenue + Expenses = Profit Expenses + Net Income = Revenue Opening equity + Net Income + Drawings +Capital injection = ending equity Opening equity + net income – net loss +additional investment by owner – drawings = Closing equity

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The following information applies to questions 2to 3.

(Check your ans. with your group members for these questions)!!

Black and Partners has listed the following amounts in its statement of financial position (balance sheet)

Cash	$10,000
Buildings	$75,000
Trade payables (creditors)	$25,000
Taxes payable within one year	$15,000
Trade receivables (debtors)	$55,000
Plant and equipment	$30,000
Inventory (Stock)	$60,000

What is the amount of total current assets?

(a) $125,000

(b) $150,000

(d) $255,000

What is the amount of total non-current (fixed) assets?

(a) $75,000

(b) $105,000

(d) $190,000

A business has Capital of $830 000, Net Loss of $150,000 and Assets valuing $1,000,000. What is the value of the Liabilities using the accounting equation?

$2,180,000
$1,880,000
$ 580,000 [1,000,000 = 830,000-150,000 + L]
$ 220,000
$ 370,000

If the owner of a business takes goods from inventory for his personal use, which of the following accounting concepts would be relevant to how this transaction is accounted for?

Prudence
Capital maintenance concept
Accrual’s concept
Business entity concept

What does the word “obligation” describe?

Liabilities
Assets
Cash flow
Revenue

What do the words “resources owned and controlled by an entity” describe?

Liabilities
Assets
Cash flow
Revenue

Miss Muffet is a sole trader and had assets of $659,100 and liabilities of $398,840 on 1 September 2012. During the year ended 31 August 2013 she paid $7,500 capital into the business and she paid herself wages of $500 per month. At 31 August 2013, Miss Muffet had assets of $660,130 and liabilities of $469,770.

What is Miss Muffet’s profit/loss for the year ended 31 August 2013?

$71,400 Loss
$71,400 Profit
$76,900 Loss
$76,900 Profit

A transaction that is posted as Dr. Drawings and Cr. Cash would mean

That:

owner returned goods to supplier
owner sold good to the firm
owner takes goods for personal use
owner gave goods away
the owner takes cash for personal use

Which item will you not find on a Statement of financial position (Balance Sheet)
rent expenses
Capital
Prepaid rent
Assets
Accrues expenses

The entry to record the completion of a service for which payment has not been received is a debit to:
Revenue from Services and a credit to Accounts Payable.
Accounts Receivable and a credit to Revenue from Services.
Revenue from Services and a credit to Unearned Revenue.
Cash and a credit to Revenue from Services.
none of the above; no entry is made until the cash has been received.

Which of the following is not one of the three forms of businesses:

sole proprietor ship
Limited liability company
Partnership
Citizens Association

Which of the following is a satisfactory statement of the relationship between opening capital and ending equity?

Net Income - Owners’ Equity =Assets
Revenue + Expenses = Profit
Expenses + Net Income = Revenue
Opening equity + Net Income + Drawings +Capital injection = ending equity
Opening equity + net income – net loss +additional investment by owner – drawings = Closing equity

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