Questions and Answers of Financial And Management Accounting

Capital Tours Limited sells weekend tours of London for £200 per person. Last month 1,000 tours were sold and costs were £180,000 (representing a total cost per tour of £180). These costs included
The following extracts are typical of the annual reports of large listed companies. Which of these extracts satisfy the definition of ‘accounting’? What are the user needs that are most closely
Obtain the annual report of a listed company. Each member of the group should choose a different company. Most large companies will provide a copy of the annual report at no charge in response to a
Obtain the annual report of a listed company. From the statement of financial position (balance sheet) list the items shown as assets and liabilities. This will require you to look in detail at the
Explain why each of the following items would not meet either the definition or the recognition criteria of an asset of the business:(a). A letter from the owner of the business, addressed to the
Prepare a statement of financial position (balance sheet) from the following list of assets and liabilities, regarding the ownership interest as the missing item. £ Trade payables (creditors)
Choose one or more characteristics from the following list that you could use to discuss the accounting aspects of each of the statements 1 to 5 and explain your ideas:• Relevance •
Continuing to use the annual reports of a company that you obtained for Chapter 1, look for the evidence in each report of the existence of the directors, the auditors and the various regulatory
Choose one or more accounting principles from the following list that you could use to discuss the accounting aspects of each of the problems 1–5 and explain your ideas.• going concern •
Discuss the extent to which the regulatory bodies explained in this chapter have, or ought to have, a particular concern for the needs of the following groups of users of financial statements:(a).
The following list of transactions relates to the business of Peter Gold, furniture supplier, during the month of April. Analyse each transaction to show the two aspects of the transaction. Date
A listed company is of the view that shareholders might welcome a statement of highlights and supplementary information as a leaflet to be inserted in the annual report. Give advice on the principles
Continuing to use the annual reports of companies which you obtained for Chapters 1 and 4, find the financial statements and the notes to the accounts.1. Compare the financial statements with the
The Biscuit Manufacturing Company commenced business on 1 January Year 1 with capital of £22,000 contributed by the owner. It immediately paid cash for a biscuit machine costing £22,000. It was
Turn to the annual report of a listed company which you have used for activities in previous chapters. Find every item of information about non-current (fixed) assets. (Start with the financial
On 1 January Year 1, Angela’s Employment Agency was formed. The owner contributed £300,000 in cash which was immediately used to purchase a building. It is estimated to have a 20-year life and a
During its first month of operations, a business made purchases and sales as shown in the table below:All sales were made at £2 each. Required Calculate the profit for the month and the stock value
Turn to the annual report of a listed company which you have used for activities in previous chapters. Find every item of information about current assets. (Start with the financial statements and
A company has a stock of goods consisting of four different groups of items. The cost and net realisable value of each group is shown in the table below.Required Calculate the amount to be shown as
It is the policy of Seaton Ltd to make provision for doubtful debts at a rate of 10% per annum on all debtor balances at the end of the year, after deducting any known bad debts at the same date. The
The Souvenir Company purchased, on 1 January Year 1, a machine producing embossed souvenir badges. The machine cost £16,000 and was estimated to have a five-year life with a residual value of
At the end of Year 3 the Bed Company has a statement of financial position (balance sheet) comprising £3,000 receivables (debtors), £8,000 other assets and £11,000 ownership interest, consisting
The Bed Company continues trading during Year 4. The statement of financial position (balance sheet) at the end of Year 4, in its first draft, showed receivables (debtors) as £4,850 and the
On 1 December Year 1 a company paid £2,400 as an insurance premium to give accident cover for the 12 months ahead. The accounting year-end is 31 December. RequiredPrepare an accounting equation
The following file of papers was found in a cupboard of the general office of Green Ltd at the end of the accounting year. Explain how each would be treated in the financial statements and state the
Turn to the annual report of a listed company which you have used for activities in previous chapters. Find every item of information about current liabilities. (Start with the financial statements
Turn to the annual report of a listed company which you have used for activities in previous chapters. Find every item of information about liabilities. (Start with the financial statements and notes
Explain why each of the following is reported as a contingent liability but not recognised as a provision in the statement of financial position (balance sheet).(a). Some leasehold properties which
Explain the effect on the accounting equation of each of the following transactions:(a). At the start of Year 1, Bright Ltd issues 200,000 shares at nominal value 25 pence per share, receiving
Set out below is a summary of the accounting records of Titan Ltd at 31 December Year 1:The summary of the accounting records includes all transactions which have been entered in the ledger accounts
Carry out a ratio analysis of Safe and Sure plc, using the financial statements set out in Appendix I (at the end of this book) and applying the method of analysis set out in section13.6. Making a
The following financial statements relate to Charity plc:Income statement (profit and loss account) for year ended 30 September Year4Required(a). Calculate ratios which measure:(i). Liquidity and the
Carry out a trend analysis on Safe and Sure plc, using the historical summary set out in Appendix I. Write a short report on the key features emerging from the trends.
Turn to the annual report of a listed company which you have used for activities throughout the previous chapters. Split the group to take two different roles: one half of the group should take the
Turn to the annual report of a listed company which you have used for activities in previous chapters. Is this a group? How do you know? Where is the list of subsidiary companies? If you do not have
Divide the group into sections to take on four different roles: a private shareholder in a company; a financial journalist; a finance director of a company; and a broker’s analyst providing an
The directors of Fruit Sales plc produced the following income statement (profit and loss account) for Year 2 and balance sheet at the end of Year 2.Income statement for Year
Turn to the annual report of a listed company which you have used for activities in earlier chapters. Find every item which relates to the ownership interest (including any discussion in the
The following financial statements relate to Hope plc:Income statement (profit and loss account)for the year ended 30 June Year 4£
Consider the following:................................................................................................................................... £mRevenue

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