a.  Explain the accounting effects on income statement and balance sheet if expense is accrued while income (other than sales) is earned and accrued at year end.

b. (i) List the FOUR (4)factors which cause non-current assets to depreciate.

(ii) Based on four factors at part (i),identify ONE (1) factor which will cause each of the following to depreciate:

1.            A gold mine;

2.            A van;

3.            A fifty-year lease (rental contract) on building;

4.            A machinery;

5.            A ship temporarily used to ferry passengers and vehicles across a river before the completion of constructing a new bridge;

6.            A franchise to market new computer software package in a certain country.

(b) Describe the difference of carriage inwards and carriage outwards and their accounting treatments to the ledger

Answer rating: 100% (QA)

a What this means is that the time when the revenue is received or the expense is incurred is completely disregarded This leads into two scenarios pre... View the full answer