Questions and Answers of Frank Woods Business Accounting

Which fundamental accounting concept is what is being described in the previous paragraph an example of?
Do you agree with this view that the prudence concept results in accountants producing financial statements that understate profits and gains and therefore present a value for capital that is lower
What do you think the accountant should do about these possibilities when applying the realisation concept?
Why else do you think we have more than one ledger?
Why bother with books of original entry? Why don't we just enter transactions straight into the ledgers?
Reconcile this observation with the standardisation of the presentation of financial accounting information as contained in accounting standards and the Companies Acts.
Why do you think they only offered a limited service at that time?
How many different forms of plastic cards do you think there are? Think about this for a minute and then list as many forms of plastic card as you can.
Why do you think the decision to close the UK Cheque Clearing System was reversed?
Why does the card issuer not charge a higher fee than the merchant acquirer?
Why do you think some businesses still prefer to use cheques?
Why do you think an overdraft is cheaper than a bank loan?
Why do you think only one account is posted to from the cash book rather than two, which is what happens with postings from the other day books (i.e. the other books of original entry)?
What other advantage can you think of for using a folio column?
Why do you think it is accounting custom only to enter the word 'Discount' in the personal accounts?
Why do you think we would want to look at the accounts receivable in the accounting books as often as once a month?
Why do you think we would want to draw these two extra lines onto the handwritten account?
What piece of useful information that is available from these three items is not directly shown by this equation?
What else would affect capital?
Without looking back, write down the commonly used form of the accounting equation.
Why do you think the £7,000 value for account payable is shown in brackets?
Which of the items in the following list are liabilities and which of them are assets? (a) Loan to A. Sangster (b) We are owed by a customer (c) Equipment (d) Bank overdraft (e) Inventory of goods
Classify the following items into liabilities and assets: (a) Computers (b) Buildings (c) Accounts payable for inventory (d) Inventory (e) Accounts receivable (f) Cash in bank (g) Bank overdraft (h)
Basil Yamey is setting up a new business. Before selling anything, he bought a van for £9,000; a transportable market stall for £1,800; a computer for £280; and an inventory of goods for
Draw up G. Stoner's statement of financial position from the following information as at 31 December 2015: Capital 44,400 Accounts receivable 1,600 Car 16,600 Accounts payable 1,800 Equipment 15,800
Draw up D. Male's statement of financial position as at 30 June 2016 from the following items: Capital 16,300 Equipment 6,800 Accounts payable 8,200 Inventory 7,200 Accounts receivable 6,300 Cash at
F. Lane has the following items in his statement of financial position on 30 April 2016: Capital£63,400; Accounts payable £14,800; Fixtures £19,200; Car £6,150; Inventory £4,200; Accounts
J. Hill has the following assets and liabilities on 30 November 2016: Accounts payable £2,800;Equipment £6,200; Car £7,300; Inventory £8,100; Accounts receivable £4,050; Cash at bank £9,100;
What do you think likely names might be for other forms of bookkeeping?
What do you think we call this form of account?
Why do you think debit always equals credit?
Describe the two entries in Exhibit 2.2 using 'debit' and 'credit'; and give an example of a transaction that fits this description.Data From Exhibit 2.2 Exhibit 2.2 Item exchanged account Form of
If you now enter these items in T-accounts of the new business, what do you think the Form of settlement will be for each one?
What do you think the balance on the capital account will be once you have entered each of these 13 items into the correct accounts?
What is the entry to the capital account when it has decreased? Is it a debit or a credit?
What does the fact that capital is credited for each of these items tell you about the debits?
Look carefully at the wording of the debit entry for items 11 and 12. What is being debited, the amount due, or the people who owe the business these amounts?
What do you think we call someone who's account has a credit balance?
Return to the solution to Activity 2.11 and confirm that the total of all the debit balances is the same as the total of all the credit balances. Why is this?
What are the double entries if you repay a loan by paying the creditor in cash?
What are the two axioms that tell you which account to debit and which account to credit?
Write up the asset and liability and capital accounts to record the following transactions in the records of D. Mair:2017 July 1 Started business with £ 24,000 in the bank.2 Bought office furniture
You are required to open the asset and liability and capital accounts and record the following transactions for June 2017 in the records of P. Bernard:2017 June 1 Started business with £17,500 in
Write up the asset, capital and liability accounts in the books of D. Gough to record the following transactions:2016 June 1 Started business with £16,000 in the bank.2 Bought van paying by cheque
Let's think about the double entry implications if all sales were at cost price. Fill in the blanks in the following:As we did in Chapter 1, it would be possible to have an inventory account with
How does adding the units to the entry in the account result in more useful information?
If assets are all possessions, what are the double entries for assets? Accounts To record Entry in the account an increase Assets a decrease
You are to write up the following in the books:2016 July 1 Started in business with £3,800 cash.3 Bought goods for cash £480.7 Bought goods on time £1,200 from J. Gill.10 Sold goods for cash
Enter the following transactions in the appropriate accounts:2016 Aug 1 Started in business with £7,400 cash.2 Paid £7,000 of the opening cash into the bank.4 Bought goods on time £410 from J.
Enter the following transactions in the accounts of L. Linda:2017 July 1 Started in business with £20,000 in the bank.2 D. Rupert lent us £5,000 in cash.3 Bought goods on time from B. Brown
Enter the following transactions in the accounts:2016 May 1 Started in business with £18,000 in the bank.2 Bought goods on time from B. Hind £1,455.3 Bought goods on time from G. Smart £472.5
In each of these two examples, a different explanation was given for the terms 'revenue' and 'costs'. What is the difference between the two explanations given for 'revenue'? What is the difference
Identify which of the accounts listed in the table above are expense accounts and which ones are revenue accounts.
When you pay an expense using cash, which account do you debit? The expense account or the cash account?
You can use the accounting equation to confirm this. Write down the accounting equation and see if you can work out what happens to it if (a) a business spends £30 in cash hiring a van for a day and
If they increase, which of the following items are debited and which are credited: expenses, revenue, assets, liabilities, capital, profits, and losses?
Enter the following transactions, completing the double entry in the books for the month of August 2017:2017 August 1 Started in business with £31,000 in the bank and £4,000 in cash.2 Purchased
Write up the following transactions in the books of J. Dunn:2017 May 1 Started in business with cash £30,000.2 Bought goods on time from T. Lamb £700.3 Paid rent by cash £1,740.4 Paid £25,000 of
The following cash book was completed for the month of October 2019:However, it came to light shortly after completion that the following items had been omitted from the cash book:Bring the cash book
The following cash book was completed for the month of January 2010:However, it came to light shortly after completion that the following items have been omitted from the cash book:Bring the cash
The following cash book was completed for the month of March 2012:However, it came to light shortly after completion that the following items have been omitted from the cash book:Bring the cash book
The following cash book was completed for the month of August 2013:However, it came to light shortly after completion that the following items have been omitted from the cash book:Bring the cash book
The following are extracts from the cash book and the bank statement of P Jones:(a) Write up the cash book up to date and state the new balance as on 31 October 2011.(b) Draw up a bank reconciliation
The bank columns in the cash book for November 2004 and the bank statement for that month for S Shaw are:(a) Write up the cash book up to date and state the new balance as on 30 November 2004.(b)
The balance in the cash book and on the bank statement did not agree in the accounts of R Green for the month of June 2014.From the above data:(a) Update the cash book (b) Produce a bank
The balance in the cash book and on the bank statement did not agree in the accounts of R Alvefors for the month of July 2016.From the above data:(a) Update the cash book (b) Produce a bank
On 30 November 2017, L Venison’s cash book had been brought up to date and showed a debit balance of £76. However, the balance on the bank statement still disagreed with the balance on the cash
N Luck has just updated his cash book which now has a balance of £208.96 (Dr). However, this still disagrees with the balance on the bank statement at the end of May 2014. Based on the information
On 31 January 2013 T Tripp’s bank statement showed an overdrawn balance of £111.However, the cash book contained two items that were not on the bank statement. There were unpresented cheques
Complete the bank reconciliation again for question 13.5 but miss out the stage of updating the cash book and include all relevant items in the statement.Question 13.5The following are extracts from
Complete the bank reconciliation again for question 13.6 but miss out the stage of updating the cash book and include all relevant items in the statement.Question 13.6The bank columns in the cash
Complete the bank reconciliation again for question 13.7 but miss out the stage of updating the cash book and include all relevant items in the statement.Question 13.7The balance in the cash book and
Starting with the balance as on the bank statement complete the bank reconciliation again for question 13.8 but miss out the stage of updating the cash book and include all relevant items in the
Classify the following costs by stating whether they will belong in the prime cost or indirect manufacturing costs section of the manufacturing account, or in the statement of comprehensive
Classify the following costs by stating whether they will belong in the prime cost or indirect manufacturing costs section of the manufacturing account, or in the statement of comprehensive
From the following data calculate the cost of raw materials consumed for the year ended 31 March 2006. Inventory of raw materials as at 1 April 2005 14,323 Inventory of raw materials as at 31 March
From the following data calculate the cost of raw materials consumed. Opening inventory of raw materials Closing inventory of raw materials Purchases of raw materials Carriage inwards Carriage
From the following data calculate the prime cost for the year to 31 May 2008. Inventory of raw materials as at 1 June 2007 Inventory of raw materials as at 31 May 2008 Purchases of raw materials
From the following data calculate the prime cost for the year to 31 December 2009. Inventory of raw materials as at 1 Jan 2009 Inventory of raw materials as at 31 Dec 2009 Purchases of raw materials
From the following data, calculate the value of the prime cost for the year ended 31 December 2007.Additional information:(a) Production wages consisted of both direct and indirect wages. Direct
For Jacoby Ltd, produce a manufacturing account for the year ended 30 June 2009 based on the following data.Additional information:Inventory as at 30 June 2009 was valued as follows: Inventory of raw
For Haynes Ltd, produce a manufacturing account for the year ended 31 March 2011 based on the following data.Additional information:Inventory as at 31 March 2011 was valued as follows: Inventory of
For Barron Ltd, produce a manufacturing account for the year ended 31 October 2014 based on the following data.Additional information:(a) Inventory as at 31 October 2014 was valued as follows:(b)
For Martin Shine, produce a manufacturing account for the year ended 31 December 2016 based on the following data.Additional information:1 Inventory as at 31 December 2016 was valued as follows:2
The following balances were taken from the trial balance of L Goburn as at 31 December 2007.From this data, construct the manufacturing account and statement of comprehensive income for the year
The following balances were taken from the trial balance of S Stockley as at 31 December 2004.From this data, construct the manufacturing account and statement of comprehensive income for the year
The following data was extracted from the books of S Horsfield. Construct the manufacturing account for the year to 31 October 2014.Additional information:1 Inventory as at 31 October 2014 was valued
The following data was extracted from the books of H Thompson. Construct the manufacturing account for the year to 31 December 2010.Additional information:1 Inventory as at 31 December 2010 were
The following data was available for Hyde Ltd:It is company policy to transfer goods from the manufacturing account to the statement of comprehensive income at cost plus 25%.The provision for
The following data was available for Sax Ltd:It is company policy to transfer goods from the manufacturing account to the statement of comprehensive income at cost plus 40%.The provision for
The following data is available for Bellwood Ltd:It is company policy to transfer goods from the manufacturing account to the statement of comprehensive income at cost plus 20%.Produce the ledger
The following balances were taken from the trial balance of G Northfield as at 31 December 2004. From this data, construct the manufacturing account and statement of comprehensive income for the year
The following balances were taken from the trial balance of F Dawood as at 31 December 2005.From this data, construct the manufacturing account and statement of comprehensive income for the year
The following relates to the capital of Nisanci plc:● Authorised share capital: 500,000 £1 ordinary shares● Issued share capital: 350,000 £1 ordinary shares If a dividend of 4.5p per share is
The following relates to the capital of Norfolk Ltd:● Authorised share capital: 400,000 50p ordinary shares● Issued share capital: 250,000 50p ordinary shares If a dividend of 2.5p per share is
The following relates to the capital of Adams Ltd:Issued share capital:● 200,000 £1 ordinary shares● 120,000 4% £1 preference shares If a dividend of 3.5 pence per share is paid in full as well
The issued share capital of Dickenson plc is as follows:● 25p Ordinary shares: £300,000● 8% 50p Preference shares: £100,000 The preference dividend was paid in full and an ordinary dividend of
The following trial balance relates to the trading activities of Billingham Ltd. From this data and the additional information provided you are to construct a set of financial statements.Additional
The following trial balance was extracted for Smithson plc as at 31 December 2017:Additional information:1 Inventory at 31 Dec 2017: £12,123 2 Tax charge for the year: £2,123 3 Depreciation is to
The following trial balance was extracted at the year-end for Hynes plc.Additional information:1 Inventory as at 30 June 2014: £11,901 2 Depreciation is to be provided as follows:Land and buildings:

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