6 marksNature, Scope and Methods of Financial Accounting

CAPE Accounting Unit 1 · 2019 · Paper 2 · Question 1(d)(ii)

Explain how revenues are reported on the income statements under BOTH the cash basis of accounting and the accrual basis of accounting and give ONE example of EACH.

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1(a)Prepare the journal entries to record the transactions.[10 marks]
1(b)Outline FOUR basic rights that are associated with the ownership of a share of common stock.[8 marks]
1(c)(i)In the books of Crabtree Corporation, prepare the journal entries to account for this investment.[6 marks]
1(c)(ii)In the books of Crabtree Corporation, calculate the closing balance of the investment in Passion Ltd on the books of Crabtree Corporation.[2 marks]
1(d)(i)List THREE reasonable assurances that should be provided by internal accounting controls.[3 marks]

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