Questions and Answers of Frank Woods Business Accounting

For the following transactions write up the purchases day book and post the details to the relevant accounts in the ledgers. 2012 March 2 J Austen March 6 P Chang March 9 L Martins March 18 L Martins
Enter the following transactions into the appropriate day books and post the entries into the correct accounts. 2010 April 1 Goods sold on credit to E Ram for 125 April 6 Goods sold on credit to B
Enter the following transactions into the appropriate day books and post the entries into the correct accounts. 2016 June 2 Goods sold on credit to J Lahr for 76 June 5 Purchased goods on credit from
Enter the following transactions to the sales and returns inwards day books where relevant.Post the transactions to the personal accounts and show the relevant accounts affected in the general
Enter the following transactions to the purchases and returns outwards day books where relevant.Post the transactions to the personal accounts and show the relevant accounts affected in the general
Enter the following transactions to the relevant day books, post each transaction to the personal accounts and transfer the monthly totals to the accounts in the general ledger. 2013 July 1 Credit
Enter the following transactions to the relevant day books, post each transaction to the personal accounts and transfer the monthly totals to the accounts in the general ledger. 2015 May 1 Goods
Show the journal entries necessary to record the following items (narratives are not required).(a) Bought van on credit for £800 from P Gray(b) The owner withdraws goods from the business worth £75
Show the journal entries necessary to record the following items (narratives are not required).(a) Motor van sold on credit to K Hodgson for £355(b) A debt owing to us by T Fairhurst of £27 is
Show the journal entries necessary to record the following items (narratives are not required).(a) A debt owing to us by R Marshall for £60 is partly written off as bad, with a cash payment of 25p
From the following day book extracts, construct a VAT account for the month of July 2007. Net figures (before addition of VAT) for July 2007 Sales for month Purchases for month Returns inwards for
From the following day book extracts, construct a VAT account for the month of October 2008. Net figures (before addition of VAT) for October 2008 Sales for month Purchases for month Returns inwards
From the following day book extracts, construct a VAT account for the month of March 2003Additional information:(i) VAT owing as at 1 March 2003 was £26.(ii) VAT paid on 9 March 2003 was £145. Net
Consider the following account:(i) What does the balance on May 1 represent?(ii) Calculate the balance for June 1.(iii) Where will the balance for June 1 appear in the final accounts? 2003 May 31 May
Bradleigh Payne’s books show the following information for February 2005:● VAT on sales for the month was £867.54.● VAT on returns inwards was £12.54.● VAT on purchases for the month was
From the following day book extracts, construct a VAT account for the month of May 2019.Additional information:Cash sales inclusive of VAT for May totalled £484.10. Net figures (before addition of
From the following day book extracts, construct a VAT account for the month of June 2007.Additional information:(i) Cash sales inclusive of VAT for June totalled £985.(ii) Fixed assets were
From the following day book extracts, construct a VAT account for the month of March 2005.Additional information:(i) VAT owing as at 1 March 2005 was £320.(ii) Cash sales inclusive of VAT for March
From the following day book extracts, construct a VAT account for the month of April 2006.Additional information:(i) VAT owing as at 1 April 2006 was £220.73.(ii) Cash sales inclusive of VAT for
The following extracts are taken from the day books of David Conlon for the three months ended 30 June 2004.Additional information:(i) As at 1 April 2004 there was a debit balance in the VAT account
From the following transactions, construct the sales, purchases and both returns day books for the month of May 2001. Transfer the totals for the month to the VAT account. 2001 May 1 Bought goods on
For the following sales transactions calculate the following:(i) Sales invoice totals with VAT at 17.5%(ii) Amount due if the cash discount is taken.(a) Sales of £1,500 with a cash discount of 5%(b)
Calculate the VAT on each of the following transactions:(a) Cash sales inclusive of VAT totalling £274.95(b) Net sales totalling £1,345.00(c) Petty cash expenses inclusive of VAT totalling £38.75.
Twelve tube alloys are sold to Moir Ltd for £40 each. A trade discount of 20% is allowed on the order and a cash discount of 5% is offered. However, Moir Ltd returns four of these. Calculate the
Twenty-five Stembolts are sold for £8 each. A trade discount of 25% is offered on the sale. A discount of 2.5% is allowed for prompt payment. Calculate the value of the invoice for the total
Chris Cureton’s books show the following information for January 2005:Cash sales were £413.50 including VAT at 17.5%.VAT on purchases for the month was £1,898.66.Equipment purchased on 15 January
Classify the following expenses either as capital expenditure or revenue expenditure:(a) Electricity bill for year(b) Costs of new heating system(c) Installation costs of new heating system(d)
In a fast food outlet divide the following costs according to whether they are capital expenditure or revenue expenditure:(a) Purchase of deep fat fryer(b) Painting logo outside new premises(c)
For the following items, decide in each case whether they are a capital or revenue receipt:(a) Sales of sofas by furniture retailer(b) Sale of cash till by a car retailer(c) Loan taken out by sports
For a commercial farm, classify the following expenditure into either capital or revenue:(a) Delivery costs of pesticide(b) Insurance of tractors(c) Installation costs of new machinery for milking
Craig Watson is the ITC manager for a large company. He is responsible for installing a new computer suite. The following costs are associated with this installation. He is unsure whether to classify
The following costs are associated with running a business van which is now five years old.Classify the costs into either capital or revenue expenditure.(a) Customising the interior of the van for
Ashley Vincent runs an amusement arcade. The following costs arise out of his operations.Classify these costs into either capital or revenue expenditure:(a) Ground rent for arcade premises(b) Power
Classify each of the following into capital or revenue expenditure:(a) New machinery(b) Repairs to machinery(c) Carriage inwards on goods for resale(d) Installation cost of new machinery(e) Carriage
From the following information calculate the capital cost of the new factory: Purchase price of land Construction charges of factory Insurance for plant & equipment Installation costs of plant &
For the following data, calculate the amounts to be included for both capital and revenue expenditure: Buying new machine Delivery costs of machine Power costs for machine for financial year
The following costs relate to the purchase and modernisation of new premises. Calculate the amounts to be included in capital and revenue expenditure. New premises purchased Repainting of premises
The following costs are associated with the purchase of a new food counter for a delicatessen.Calculate the amounts to be included in capital and revenue expenditure. Purchase of new food counter
The following costs relate to the installation of a new heating boiler in a factory. Calculate the amounts to be included in capital and revenue expenditure. Installation and purchase price of new
Keris Emery intends to buy a second-hand car for business use. The car is listed in the local newspaper as costing £2,999 but Keris has been able to negotiate a price of £2,500. However, there are
The following costs relate to the running of a sports shop that specialises in selling golf clubs.Classify these into either capital or revenue expenditure and provide a total for each category.
Classify the following into expenditure or receipt and whether they are of a capital or revenue nature:(a) Sales of mushy peas by a fish and chip shop(b) Purchase of potato chipping machine by fish
A local community sports club is run as a not-for-profit organisation. Classify the following amounts as either capital expenditure, revenue expenditure, capital income or revenue income, and provide
If an item of expenditure is mistakenly classified as capital rather than revenue expenditure, explain the effect of this error on the reported net profit of the business.
Petra Gadd has produced an income statement for her first year of business. However, she has made errors in classifying some of her expenditure.The gross profit includes income from the sale of a
The following trading account relates to the business of Chappell Ltd.However, the following issues were later discovered:1 A motor vehicle used within the business was sold and the £725 revenue
If accounting standards are not legal requirements, why would a business bother complying with these standards?
Why would a business still use UK GAAP instead of adopting international standards?
What is meant by the term ‘understandability’ with respect to the characteristics of financial statements?
State four user groups as stipulated by the characteristic of ‘understandabilty’.
What would be the effect on reported profits of a business of not applying the accruals concept?
Which concepts are being ignored in each of the following scenarios?(a) Inventory is valued at selling price given that the business has never failed to sell its inventory.(b) A sole trader decides
In each case state which concept or concepts are relevant to the situation given.(a) Subtracting an amount paid for insurance because it belongs to the next year(b) Maintain the same percentage rate
Alec Powell runs a small shop selling sports equipment. He has run this business as a sole trader for a number of years and has built up a small niche market by offering a specialist service for
Ollie Varadi recently valued his end-of-year stock at £10,000. The following items have not been included in his stock valuation.(a) Calculate the total value of Varadi’s stock.(b) Name one
Which accounting standards deal with the following issues?(a) Depreciation of non-current assets(b) How goods bought for resale should be treated in the financial statements(c) How to adjust the
The following transactions took place during the financial year ended 31 December 2010. In each case construct the ledger account.(a) Advertising paid during 2010 totalled £712 but as at 31 December
The following transactions took place during the financial year ended 31 December 2012. In each case construct the appropriate ledger account.(a) Cheques cashed by the firm for commission received
The following information relates to the accounts of A Vincent, who finished her first year of business as at 31 March 2013:(a) An insurance charge of £930 was incurred although only £725 was paid
The following trial balance was extracted from the books of J Churchard at the close of business on 31 July 2005.Additional information:1 Inventory 31 July 2005 £7,230 2 Office expenses owing at 31
The following trial balance was extracted from the accounts of B Wright as at 31 December 2014. From this, construct a statement of comprehensive income for the year ended 31 December 2014 and a
The following trial balance was extracted from the accounts of C Wattison as at 31 December 2013. From this, construct a statement of comprehensive income for the year ended 31 December 2013 and a
The following trial balance has been extracted from the ledger of M Krause:Additional information as at 31 December 2012:1 Inventory in trade was valued at £16,740.2 Power costs accrued were £235.3
Construct the ledger accounts for S Yates based on the following data:(a) Heating and lighting owing as at 1 Jan 2016 £32. Amounts paid during 2016 £453. Heating and lighting owing as at 31
Construct the relevant ledger accounts for T Ritzema from the following information for the year ended 31 December 2017.(a) Commission received during 2017 £750. Amount owing to the business as at 1
The following details relate to the heating costs for the year ended 31 December 2015:(i) Gas bill unpaid as at 1 Jan 2015 £45(ii) Electricity prepaid as at 1 Jan 2015 £12(iii) Gas paid by standing
The following details relate to the rent received for the year ended 31 December 2016. The business lets two properties (A and B) to two other businesses.(i) Rent received in advance as at 1 Jan 2016
The following data relates to the accounts of L Katz for the year ended 31 December 2013.Calculate the amounts to be deducted from the year’s gross profit. Amounts paid Rent Insurance Wages
The following data relates to the accounts of M Lyne for the year ended 31 December 2015.Calculate the amounts to be deducted from or added to the year’s gross profit. Amounts paid and received
The financial year of G Norfolk ended on 31 December 2003. From the following information, ascertain the amounts to be included in the statement of comprehensive income for the year ended 31 December
The financial year of Liz King ended on 31 December 2011. From the following information, ascertain the amounts to be included in the statement of comprehensive income for the year ended 31 December
From the following trial balance of A Westwood, you are asked to draw up a statement of comprehensive income for the year ended 30 June 2003.Additional information:1 Inventory as at 30 June 2003 was
The following trial balance has been extracted from the ledger of I Mellor.Additional information as at 31 March 2011:(i) Inventory in trade was valued at £8,760.(ii) Electricity is accrued by
The following trial balance of N Dorritt was extracted as at 31 March 2018.Additional information as at 31 March 2018:(i) Inventory in trade was valued at £13,490.(ii) Accruals were as follows:(a)
The following trial balance was extracted from the books of R Booth at the close of business on 31 December 2009.Additional information:1 Inventory at 31 December 2009 £19,122 2 Salaries accrued at
A new business which started trading on 1 January 2009 wrote the following debts off as shown below:Construct the bad debts account for the year to 31 December 2009. 15 April 31 May 19 August D Hirst
Goods were sold on credit to L Farthing on 19 October 2008 for £950. On 15 December Farthing was declared bankrupt. A payment of 30 p in the £ was received in full settlement and the remainder was
During the financial year ended 31 March 2011, it was found that S Peck – a debtor – was declared bankrupt. She owed the firm £860, but it was found that a payment of 20 pence in the pound was
From the following data ascertain the size of the provision for doubtful debts for each year, stating the entry needed in the respective year’s statement of comprehensive income. In each case, the
From the following data ascertain the size of the provision for doubtful debts for each year, stating the entry needed in the respective year’s statement of comprehensive income. In each case, the
From the following data ascertain the size of the provision for doubtful debts for each year, stating the entry needed in the respective year’s statement of comprehensive income. In each case the
P Brothers decides to increase his current provision for doubtful debts from £650 to £890 for the financial year ended 30 June 2009. His debtors at the year-end are valued at £13,450.Show the
For the year ended 31 December 2006, L Cornelius decides to create a provision for doubtful debts equal to 5% of debtors at the year-ends. The debtors figure before bad debts were subtracted was
At 31 December 2006, M Fowler decides to reduce his provision from 4% of debtors, which was used for 2005, to 2% of debtors. Debtors were £25,000 as at 31 December 2005 and were exactly 25% lower
A firm’s provision for doubtful debts was set at the following levels for the following years.Show the provision for doubtful debts accounts for the four-year period ending 31 December 2012 –
A firm’s provision for doubtful debts was set at the following levels for the following years:Show the provision for doubtful debts accounts for the four-year period ending 31 December 2007 –
A firm decides to create a provision for doubtful debts equivalent to 4% of debtors at the year-end. The debtors figures for the years ended 31 December are as follows:Show the provision for doubtful
A firm decides to create a provision for doubtful debts equivalent to 6% of debtors at the yearend.The debtors figures for the years ended 31 December are as follows:Show the provision for doubtful
The following balances were extracted from the trial balance as at 31 December 2007: Trade receivables Provision for doubtful debts Dr 8,500 Cr 420
The following balances were extracted from the trial balance as at 31 December 2009:The provision is to be maintained at 3% of debtors.Show the provision for doubtful debts account for the year ended
The following table contains balances extracted from the trial balance at the years ended 31 December:Calculate the effect on each year’s profit from the above data – you can assume that no
The following table contains balances extracted from the trial balance at the year ended 31 December:Calculate the effect on each year’s profit from the above. The provision for doubtful debts
The following table contains balances extracted from the trial balance at the year ended 31 December:Calculate the effect on each year’s profit from the above. The provision for doubtful debts
Data relating to debtors over a four-year period is as follows:Show the provision for doubtful debts account for the years 2003–2006 assuming no provision existed prior to 2003. 2003 2004 2005 2006
The following balances were extracted from the trial balance as at 31 December 2009:The provision is to be maintained at 4% of debtors and the provision for discounts on debtors is to be maintained
A firm buys machinery for business use which costs £50,000 and is expected to last four years with no residual value.Produce a table comparing the depreciation and net book values for each year of
A firm buys a delivery van for business use. The van costs £16,000 and is expected to last five years with an estimated scrap value of £500.Produce a table comparing the depreciation and net book
A firm buys equipment for business use. The equipment costs £2,500 and is expected to last four years with an estimated scrap value of £200.Produce a table comparing the depreciation and net book
A firm buys a truck for business use. The truck costs £14,000 and is expected to last three years with an estimated scrap value of £3,000.Produce a table comparing the depreciation and net book
A firm purchases a delivery van for business use at a cost of £36,000. The van is expected to have a three-year lifespan with no scrap value. Depreciation for the van will be charged by using either

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