QUESTION 3 (4 marks)

Melbourne Property Management Pty Ltd had several major business transactions and events during the year ended 30 June 2022.

An extract is given below:

Transaction 1:

Joanne Whiteman, the owner of Melbourne Property Management Pty Ltd, in an attempt to make the profit of her business looks better for the year ended 30^th June 2022, did not record an interest payment of $14,500 incurred that was not due to be paid until 31 July 2022.

Transaction 2:

In December 2021, Joanne Whiteman, the owner of Melbourne Property Management Pty Ltd paid $6,500 for a family holiday using the business cheques account. This transaction was treated as a business expense, with Joanne arguing, It is my business and my money. Joanne recorded it as a decrease in cash and an increase in other expenses.

REQUIRED:

For each of the above situation:

1. Identify if any accounting concept or principle has been violated. If so, briefly explain the relevant concept or principle. (Word limit: 50 words for less)
2. Record the correct journal entry that Melbourne Property Management Pty Ltd Pty Ltd should have done if you believe they have violated any accounting concept or principle. (Narrations not required).

(4 marks)

Answer

Transaction 1:

Accounts	Debit ($)	Credit ($)

Transaction 2:

Accounts	Debit ($)	Credit ($)