Questions and Answers of Frank Woods Business Accounting

You are to open the books of F. Polk, a trader, via the journal to record the assets and liabilities, and are then to record the dialy transactions for the month of May. A trial balance is to be
Why do we have day books? Why don't we just enter every transaction directly into the appropriate ledger accounts?
Where is the other side of the double entry for all these expense postings to the ledgers recorded?
The following is a summary of the petty cash transactions of Jockfield Ltd for May 2016:You are required to:(a) Rule up a suitable petty cash book with analysis columns for expenditure on cleaning,
(a) Why do some businesses keep a petty cash book as well as a cash book?(b) Kathryn Rochford keeps her petty cash book on the imprest system, the imprest being £25. For the month of April 2017 her
Rule up a petty cash book with analysis columns for office expenses, motor expenses, cleaning expenses and casual labour. The cash float is £450 and the amount spent is reimbursed on 30
Fine Teas operates its petty cash account on the imprest system. It is maintained at a figure of £140, with the balance being restored to that amount on the first day of each month. At 30 April 2016
Can you think of any circumstances where this may not be the case?
Apart from not having to keep VAT records, what advantages might there be for a business that does not register for VAT?
Why do you think it is rare for input VAT (i.e. VAT on purchases) to be greater than output VAT (i.e. VAT on sales)? When might this be most likely to occur?
On 1 March 2017, J. Blane Ltd, 7 Down Road, Middlefield, sold the following goods on credit to T. Roy & Son, Ballano Golf Club, Ringlee, Yorkshire:Order No. B/162 4 sets 'Silver Tiger' golf dubs at
On 1 March 2017, A. Duff, Middle Road, Paisley, sold the following goods on credit to R. Wilson, 24 Peter Street, Loughborough, Order No. 943:All goods are subject to VAT at 10 per cent.(a) Prepare
The following sales have been made by W. Steel Ltd during the month of March 2016. All the figures are shown net after deducting trade discount, but before adding VAT at the rate of 10 per cent.You
The credit sales and purchases for the month of December 2017 in respect of G. Bain & Co were: Net, after trade 48 ptdiscount VAT 10% 2017 Dec 28 Sales to B. Volts 1 Sales to H. Impey Ltd 4
Louise Baldwin commenced business as a wholesaler on 1 March 2016.Her sales on credit during March 2016 were:March 9 Neville's Electrical 4 computer monitors list price £180 each, less 20% trade
Think for a moment about a computerised accounting system - that is, one where all the entries are made on computer and the books are electronic documents. Can you think of any reason why the folio
Why is the total amount received for each sale not inserted in each of the department columns?
List as many things as you can that could be analysed in a separate column in a columnar day book that would enable an organisation to do something far more easily than when a 'normal' day book is
Spend one minute listing as many advantages as you can for not using books of original entry for purchases, sales and returns transactions. Then spend another minute listing as many disadvantages as
Enter up a columnar purchases day book with columns for the various expenses for J. Still for the month from the following information on credit items.2016 January f 1 Bought goods from H. Graham
Enter up the relevant accounts in the purchases and general ledgers from the columnar purchases day book you completed for Review Question 20.2.Data From Review Question 20.2 20.2 Enter up a
A Enter up a columnar purchases day book with columns for the various expenses for F. Graham for the month from the following information on credit items. 2016 June Bought goods from J. Syme 4 Bought
Enter up the relevant accounts in the purchases and general ledgers from the columnar purchases day book you completed for Review Question 20.4A.Data From Review Question 20.4A 20.4A Enter up a
Write down what you think would be good definitions for the term 'wage' and the term 'salary'.
What other deductions might be made from gross pay by an employer?
Can you think of any examples where these extremely high bonuses have been paid?
Why do you think this development occurred?
P. Topp is employed at a rate of £12 per hour. During the week to 18 May 2016 he worked his basic week of 40 hours. According to the requisite tables the income tax due on his wages was £46, and
F. Moore has a basic working week of 40 hours, paid at the rate of £10 per hour. For hours worked in excess of this he is paid 11/2 times basic rate. In the week to 12 March 2016 he worked 46 hours.
G. Clark has a job as a car salesman. He is paid a basic salary of £1,200 per month, plus commission of 2 per cent on the value of his car sales. During the month of April 2016 he sells £240,000
T. Penketh is an accountant with a salary of £2,000 per month plus bonus, which for May 2016 was £400. He pays superannuation contributions of 5 per cent of gross pay, and these are allowed as
R. Kennedy is a security van driver. He has a wage of £200 per week, plus danger money of £2 per hour extra spent in transporting gold bullion. During the week ended 15 June 2016 he spends 20 hours
What do you think these potential problems, or issues, might be?
Is it always going to be the case that employees experience greater satisfaction from working in a computerized environment?
If there is not full integration of an AIS, what examples can you think of where data may need to be entered more than once and maintained in two or more different records simultaneously? What
When computers were first used in this way, many decision-makers were far from pleased. Why?
Why do you think that accountants frequently write their own spreadsheet programs rather than having them written by an IT specialist?
Why is it so important to fully integrate a computerised accounting system?
Not very long ago, only the largest businesses used computers to handle their accounting data. Why do you think the situation is so different now?
What do you think? Is there an even greater need for accounting knowledge among those that record the transactions in a computerised accounting system? Why?/Why not?
What do you think may cause a business to lose some data that is in its management information system?
What has happened in recent years to make the use of passwords more important than ever?
Why do you think a business might want to treat an item of expenditure as capital rather than as revenue?
Why do you think a business might want to treat an item of expenditure as capital rather than as revenue?
A builder was engaged to tackle some work on your premises, the total bill being for £3,000. If one-third of this was for repair work and two-thirds for improvements, where should the two parts be
Can you think of an example where an item may have been treated wrongly as revenue expenditure and charged in the trading account when it should have been treated as capital expenditure?
Can you think of an example where an item may have been treated wrongly as revenue expenditure and charged in the trading account when it should have been treated as capital expenditure?
Enter the following items in the appropriate debtors' accounts (i.e. your customers' accounts) only; do not write up other accounts. Then balance-off each of these personal accounts at the end of the
Enter the following in the appropriate creditors' accounts (i.e. your suppliers' accounts) only.Do not write up the other accounts. Then balance-off each of these personal accounts at the end of the
Redraft each of the accounts given in your answer to Review Question 5.1 in three-column style.2016May1 Sales on time to B. Flyn £810; F. Lane £1,100; T. Fey £413.4 Sales on time to F. Start
Redraft each of the accounts given in your answer to Review Question 5.2 in three-column style.2016June1 Purchases on time from J. Wilson £240; P. Todd £390; J. Fry £1,620.3 Purchases on time from
Enter the following in the personal accounts (i.e. the creditor and debtor accounts) only. Do not write up the other accounts. Balance-off each personal account at the end of the month. After
Enter the following transactions in personal accounts only. Bring down the balances at the end of the month. After completing this, state which of the balances represent debtors and which represent
Redraft each of the accounts given in your answer to Review Question 5.6A in three-column Style.Data From Question 5.6AEnter the following transactions in personal accounts only. Bring down the
What is the double entry for each of the following transactions: (a) Purchase of a new van for 9,000 which was paid in full by cheque Dr Cr (b) Goods which cost 40 taken out by the owner for her
Do you remember the alternate form of the accounting equation you were shown in Chapter 1? What does it tell you has happened when it does not balance?
What advantages are there in preparing a trial balance when you are about to prepare a statement of profit or loss and statement of financial position?
If a trial balance fails to agree, what steps would you take in order to find the cause of the difference?
Which of the following is a liability?(A) Machinery (B) Accounts payable for goods (C) Motor vehicles (D) Cash at bank
Which of the following statements is correct? Assets (A) We paid a creditor by cheque - Bank (B) A debtor paid us 90 in cash + Cash Effect upon Liabilities - Accounts payable + Accounts receivable
Which of the following are correct? (i) Bought office furniture for cash (ii) A debtor, P. Sangster, pays us by cheque (iii) Introduced capital by cheque (iv) Paid a creditor, B. Lee, by cash (A)
Which of the following are incorrect? (i) (ii) Sold van for cash Returned some of Office Equipment to Suppliers Ltd (iii) Repaid part of loan from C. Charles by cheque (iv) Bought machinery on time
Which of the following best describes the meaning of 'Purchases'?(A) Items bought (B) Goods bought on time (C) Goods bought for resale (D) Goods paid for
Which of the following should not be called 'Sales'?(A) Office fixtures sold (B) Goods sold on time (C) Goods sold for cash (D) Sale of item previously included in 'Purchases'
Which of the following are correct? (i) Received commission by cheque (i) Paid rates by cash (iii) Paid motor expenses by cheque (iv) Received refund of insurance by cheque Account to be debited
What is the balance on the following account on 31 May 2017?(A) A credit balance of £395 (B) A debit balance of £380 (C) A debit balance of £395 (D) There is a nil balance on the account C. De
What would have been the balance on the account of C. De Freitas in MC17 on 19 May 2017?(A) A debit balance of £265 (B) A credit balance of £95 (C) A credit balance of £445 (D) A credit balance of
You are to enter up the necessary accounts for the month of October from the following information relating to a small printing firm. Then balance-off the accounts and extract a trial balance as at
Enter the following transactions of an antiques shop in the accounts and extract a trial balance as at 31 March 2017.2017 March 1 Started in business with £8,000 in the bank.2 Bought goods on time
Record the following details relating to a carpet retailer for the month of November 2017 and extract a trial balance as at 30 November 2017.2017 Nov 1 Started in business with £15,000 in the
Record the following transactions for the month of January of a small finishing retailer, balance-off all the accounts, and then extract a trial balance as at 31 January 2016.2016 Jan 1 Started in
On 1 October 2016, the owner of the USS Enterprise, Mr Kirk, decides that he will boldly go and keep his records on a double entry system. His assets and liabilities at that date were:Kirk's
What does this tell you about the costs and revenues that are included in the calculation of gross profit?
Calculate the gross profit or gross loss of each of the following businesses: Cost of goods purchased Sales ABCDE 9,820 10,676 7,530 14,307 C 10,500 19,370 D 9,580 9,350 8,760 17,200 Gross
Using the answer to Activity 7.2, complete the following table:Data From Activity 7.2 ABCDE Net profit/(Net loss) Other revenues Expenses f 2,622 4,280 2,800 500 2,500 1,780 3,260 2,440
Bertram Quigley opened a pet shop on 1 January 2016. He invested £10,000 in the business. The following information was obtained from his accounting records at the end of the year: Purchases of
From the following trial balance of I. Lamb, extracted after one year's trading, prepare a statement of profit or loss for the year ending 31 October 2016. A statement of financial position is not
From the following trial balance of F. Dover drawn-up on conclusion of his first year in business, draw up a statement of profit or loss for the year ending 31 May 2017. A statement of financial
Extract a statement of profit or loss for the year ending 30 June 2016 for G. Graham. The trial balance as at 30 June 2016 after his first year of trading was as follows:Inventory at 30 June 2016 was
Why have the accounts entered into the statement of profit or loss been removed from the trial balance?
Why do you think it is that the statement of financial position is not part of the double entry system?
Return to Review Question 7.1 and prepare a statement of financial position as at 31 October 2016.Data From Review Question 7.1 7.1 From the following trial balance of I. Lamb, extracted after one
Return to Review Question 7.2 and prepare a statement of financial position as at 30 June 2016.Data From Review Question 7.2 7.2 From the following trial balance of G. Foot after his first year's
A Return to Review Question 7.3A and prepare a statement of financial position as at 31 May 2017.Data From Review Question 7.3A 7.3A From the following trial balance of F. Dover drawn-up on
A Return to Review Question 7.4A and prepare a statement of financial position as at 30 June 2016.Data From Review Question 7.4A 7.4A Extract a statement of profit or loss for the year ending 30 June
T. Smith started in business on 1 August 2016, with £60,000 capital in cash. During the first year he kept very few records of her transactions. The assets and liabilities of the business at 30 July
The following information relates to A. Trader's business:During the year, Trader had sold private investments for £4,000 which he paid into the business bank account, and he had drawn out £200
Why do you think organisations bother with the two returns accounts? Why don't they just debit sales returned to the sales account and credit purchases returned to the purchases account?
What costs do you think a trader may incur that would need to be added to the cost of the goods in the trading account?
From the following information, draw up the trading account section of the statement of profit or loss of C. Dale for the year ending 31 January 2016, which was his first year in business: Carriage
The following information is available for the year ending 31 December 2017. Draw up the trading account section of the statement of profit or loss of J. White for that year. Inventory: 31 December
From the following trial balance of G. Still, draw up a statement of profit or loss for the year ending 30 September 2017, and a statement of financial position as at that date. Dr Cr Inventory: 1
The following trial balance was extracted from the books of F. Sorley on 30 April 2017. From it, and the note about inventory, prepare his statement of profit or loss for the year ending 30 April
The following is the trial balance of T. Owen as at 31 March 2016. Draw up a set of financial statements for the year ended 31 March 2016. Dr Cr Inventory: 1 April 2015 52,800 Sales 276,400
F. Brown drew up the following trial balance as at 30 September 2015. You are to draft the statement of profit or loss for the year ending 30 September 2015 and a statement of financial position as
Ms Porter's business position at 1 July was as follows:Inventory at 31 July was £6,200Required:(a) Open ledger accounts (including capital) at 1 July (b) Record all transactions (c) Prepare a trial
From the following trial balance of T angle, extracted after one year of operations, prepare a statement of profit or loss for the year ending 30 April 2016, together with a statement of financial
This doesn't sound very ideal for anyone, does it? What benefits do you think there may be that outweigh these disadvantages of one set of financial statements for all?
What benefits do you think there are if all entities adopt the same set of accounting standards?
What do you think the benefits were of a change to this new reduced set of accounting standards?

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