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1 markAccounting Concepts and the Accounting Cycle

CSEC Principles of Accounts · January 2011 · Paper 2 · Question 7(a)(iv)

Mrs Chin Lee made five accounting decisions when preparing her accounts at December 31, 2010.

Using a phrase or sentence, state the accounting concept NOT being followed: Mrs Chin Lee paid insurance on her house amounting to $7 500 and recorded it as a business expense.

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  1. 7(a)(i)Using a phrase or sentence, state the accounting concept NOT being followed: At the end of the year, Mrs Chin Lee owes…[1 mark]
  2. 7(a)(ii)Using a phrase or sentence, state the accounting concept NOT being followed: Mr Harris, a long-standing customer, promised to make a purchase of…[1 mark]
  3. 7(a)(iii)Using a phrase or sentence, state the accounting concept NOT being followed: Mrs Chin Lee uses the straight line method of depreciation on a yearly basis and…[1 mark]
  4. 7(a)(v)Using a phrase or sentence, state the accounting concept NOT being followed: Mrs Chin Lee changes her stock valuation method every year.[1 mark]
  5. 7(b)Mrs Chin Lee recorded net profit of…[5 marks]
  6. 7(c)List THREE external users and TWO internal users of accounting information and state ONE need of EACH user.[10 marks]

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