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15 marksRecording Financial Information

CAPE Accounting Unit 1 · 2011 · Paper 2 · Question 1(a)

During their review of James Sargeant Company's accounts for the year to March 31, 2009, external auditors identified unrecorded adjusting entries: (i) rent expense includes 5 550 for the six months to April 30, 2009; (ii) unpaid electricity invoice of 1 785 for 3 months to March 31, 2009; (iii) fixed assets cost 138 900, accumulated depreciation at April 01, 2008 was 45 500, depreciation at 18% reducing balance; (iv) inventory costing 2 645 can be sold for 4 000 after spending 2 250 to refurbish; (v) accounts receivable of 20 000, existing credit allowance for doubtful accounts of $1 000, estimated 8% uncollectible.

Prepare the journal entries to record EACH of the given situations (i) to (v).

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Other parts of this question

  1. 1(b)(i)Explain THREE purposes of accounting standards in the commercial activity of a country.[3 marks]
  2. 1(b)(ii)Identify TWO groups of persons who are represented on the International Accounting Standards Board and give ONE reason for EACH group to show why it needs…[4 marks]
  3. 1(b)(iii)Define EACH of the following accounting concepts: Relevance, Reliability, Comparability, Consistency.[8 marks]
  4. 1(c)Outline FIVE ways in which accounting information in an Electronic Data Processing (EDP) environment can be controlled.[5 marks]

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