IIIYou have been asked to prepare the final accounts for
W Smith, a sole trader, for the year ended 31 December
2013. W Smith has forwarded to you all books of prime
entry and ledgers, and in addition has given you the
following information:
1) Mr Smith had taken £2,000 out of the business bank
account to take his wife on holiday.
ii) Up to last year the machinery and vehicle used in
the business had been depreciated using the reducing
balance method. W Smith thinks that they should now
be depreciated using the straight-line method.
iii) Mr Smith is confident, given his order book that
the business will continue to operate in its present
form for many years.
iv) Mr Smith had purchased ten staplers, four flip
charts and four packets of whiteboard markers which
will be used in the business for the next couple of
years.
V)
Mr Smith informs you that he has just found an
unopened electricity bill for £900 which was for the
quarter October to December 2013
Required
In each case, identify and then explain the main
accounting concepts being highlighted and indicate
how each should be treated in the final accounts.

Answers

Answer 1

Answer:

Answer:

W Smith, a sole trader

Identification and Explanation of Highlighted Accounting Concepts and Treatment in the Final Accounts:

1. Economic Entity: The business (economic entity) is separate from the individual (W. Smith). Accounts are kept to ensure this separation of ownership from the business. This withdrawal is treated as Drawings, a reduction of capital (owner's equity) in the balance Sheet.

2. Consistency concept: This concept requires that an accounting estimate or principle is consistently applied. However, if there is a change in an accounting estimate, the effect of the change needs to be disclosed in the final accounts.

3. Going concern concept: A business is assumed to continue indefinitely in life. Therefore, assets and liabilities are stated at their cost or fair values. Where there is a contrary view, this must be disclosed and accounts be kept to reflect the revised view. Then, assets and liabilities will reflect market or disposal values.

4. Materiality concept: This concept requires that values in accounts be material. Though, materiality is a matter of judgement, a threshold can be established based on the value of the individual item to the value of the business. Will its disclosure or not affect decisions of a knowledgeable investor or analyst, is a consideration under the materiality concept. The office stationery can be expensed in the income statement if the amount involved is not material, even though, they will continue to be used in the business for more than a year. This somehow contradicts the concept of the matching principle.

5. Accrual Concept: The concept states that "Revenue is recognized when earned, and expenses are recognized when assets are consumed," and not when cash is received or paid. This unpaid electricity bill for £900 must be accrued in the income statement as an expense and treated as a liability in the balance sheet in line with the accrual concept.

Explanation:

These are the basic accounting concepts:

1. Accruals concept

2. Conservatism concept

3. Consistency concept

4. Economic entity concept

5. Going concern concept

6. Matching concept

7. Materiality concept

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The Fed buys $20,000 of government securities. The desired reserve ratio is 5 percent and the currency drain is zero. What will be the change in the quantity of money?

Answers

Answer:

The answer is $400,000

Explanation:

Quantity theory of money states that the quantity of money is directly proportional total spending in an economy.

Change in quantity of money = new deposits (which can also be new security) ÷ reserve requirements

The new security is $20,000

reserve requirements is 5 percent

Change in quantity of money is:

$20,000 / 0.05

=$400,000

James owns a home in lake tahoe, nevada, that he rented for $4,600 for 40 days during the summer. he lived there for a total of 120 days, and the rest of the year the house was vacant. the expenses for the home included $6,000 in mortgage interest, $900 in property taxes, $1,300 in maintenance and utilities, and $2,500 in depreciation. what is his net income or loss from the rental of his home (without considering the passive loss limitation)? use the irs method for allocation of expenses. $0. $1,925 net income. $4,600 net income. $6,100 net loss.

Answers

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Retail managers can use ________ to determine which inventory items require the most attention. a. EOQ modeling

b. CPS scheduling

c. Breakeven analysis

d. ABC analysis

Answers

Answer: (D) ABC analysis

Explanation:

ABC analysis is one of the type of inventory method that are basically divided into the three main categories that is A,B and the C categorization.

The main advantage of this type of analysis is that it is categorized on the quantity and the values basis and this analysis is basically keeps the cost in the business under the control. It is also known as the inventory management and the ABC analysis contributed in the overall profit in an organization.

According to the question, the retail manager basically using the ABC analysis for determining the inventory items in the system.

Therefore, Option (D) is correct.

Park Co. is considering an investment that requires immediate payment of $27,215 and provides expected cash inflows of $8,400 annually for four years. Assume Park Co. requires a 8% return on its investments. 1-a. What is the net present value of this investment

Answers

Answer:

the net present value is $606.64

Explanation:

The computation of the net present value is shown below:

But before that the present value of annual cash inflows is to be determined i.e.

Present value = annual cash flows × PVIFA(8%,4years)

= $8,400 × 3.3121

= $27,821.64

Now

Net present value = Present value of cash flows - initial investment

= $27,821.64 - $27,215

= $606.64

Hence, the net present value is $606.64

Which mathematical sentence most accurately expresses the information inthe problem below?
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Answers

The mathematical sentence that can represent most accurately the calculation that Crystal wants to perform is;

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Rounded up to 5 boxes.

What is an Equation?

An equation is the mathematical sentence that represents the calculation that needs to be performed, the equation completely explains the problem and then gradually it is solved step by step.

In the case Crystal wanted to set 121 discs in boxes with a capacity of 25 discs, so simply 121 discs are divided by the number of discs a box can hold, which results in the number of boxes needed which is Five.

Learn more about Equation at brainly.com/question/27392049

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Answers

The correct answer of the given question above would be INDOMITABLE. A person who is confident, focused and highly determined is best described as indomitable. An indomitable person is one who is not easily defeated. This could also mean as someone who is strong, brave and determined.

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