CHOOSE A TRADING/MANUFACTURING COMPANY LISTED ON ANY STOCK MARKET. WITH RESPECT TO YOUR CHOSEN COMPANY, ANSWER THE FOLLOWING QUESTIONS.

Question 1 

(a) Explain the purpose and usefulness of the financial statements prepared by the company.

(b) Identify the rule/principles applied by the company in preparation of financial statements. Also give reason for applying such rules/principles. 

(c) Being one of the integral components of financial statements, balance sheet shows the overall financial position of the company. Therefore, examining total assets and total liabilities for 2015, 2016 and 2017, comment on the financial position of the selected company. 

Question 2 

(a) Calculate account receivable turnover ratio for the company and also comment on the collection policy of the company for 2015, 2016 and 2017. (4 Marks)

(b) Bank reconciliation is considered as a basic element of cash control. Specifically with respect to the selected company, identify the items that cause the cash balance per bank and the cash balance per book to differ. 

Question 3 (a)

(a)

Inventory can be in the form of raw material, work-in-progress and finished goods. Which of these type/types of inventory/inventories is/are held by your selected company? and Why? Explain. 

(b)

Calculate the inventory turnover ratio for 2015, 2016 and 2017 and comment on the inventory management. 

(c)

Which of the following inventory management system is applied by the company? and Why? Discuss. 

Periodic Inventory Management System 

Perpetual Inventory Management System

(d)

Which of the following inventory valuation method is applied by the company? and Why? Appraise. 

Last in First Out Method (LIFO) 

First in First Out Method (FIFO)

Average Methods
 

Answer rating: 100% (QA)

1 a The purpose and usefulness of the financial statements prepared by the company is to provide a comprehensive summary of its financial health These statements provide information about the companys ... View the full answer