1、 How much profit did she earn?Case Three:A company begins trading on 1 January 20X5 and sells goods worth $100,000 during the year to 31 December. At 31 December there are accounts receivable outstanding of $150,000. Of these, the company is now doubtful whether $6,000 will ever be paid.Question Thr
2、ee:Sales revenue should be recognised when goods and services have been supplied; costs are incurred when goods and services have been received.Which accounting concept governs the above?A. The prudence conceptB. The materiality conceptC. The accruals conceptQuestion four:Which accounting concept re
3、quires that foreseen losses should be anticipated and taken into account immediately?A. The consistency conceptB. The accruals conceptC. The prudence conceptD. The going concern conceptLecture Two:XY Co bought a machine five years ago for $15,000. It is now worn out and needs replacing. An identical
4、 machine can be purchased for $20,000.XY Cos machine from the Case One can be restored to working order at a cost of $5,000. It can then be sold for $10,000. What is NRV?Suppose XY Co buy the new machine for $20,000. It is estimated that the new machine will generate profits of $4,000 per year for i
5、ts useful life of 8 years. What is its economic value?Answer: $32,000Excises（11.05.05）:1. Which one of the following statements is true of the historical cost convention?A. It fails to take account of changing price levels over timeB. It records only past transactionsC. It values all assets at their
6、 cost to the business, without any adjustment for deprecationD. It has been replaced in accounting records by a system of current cost accounting.2. Which one of the following is the main aim of accounting?A. To maintain ledger accounts for every asset and liabilityB. To provide information to users
7、 of such informationC. To produce trial balanceD. To record every financial transaction individually.3. Which accounting concept or convention which, in times of rising prices, tends to understate asset values and overstate profits?A. The materiality conceptB. The prudence conceptC. The realisation
8、conceptD. The historical cost convention4. Which accounting concept which requires assets to be valued at their net book value, rather than their break up value?A. The going concern concept5. Which accounting concept should be considered if the owner of a business takes goods from inventory for his
9、own personal use?B. The capitalisation conceptC. The money measurement conceptD. The separate entity concept6. Assets are usually valued under which basis?A. Replacement costB. Historical costC. NRV7. In times of rising prices, what effect does the use of the historical cost concept have on a compan
10、ys asset values and profit?A. Asset values and profit both understatedB. Asset values and profit both overstatedC. Asset value understated and profit overstatedD. Asset values overstated and profit understated8. Listed below are some comments on accounting concepts.1. In achieving a balance between
11、relevance and reliability, the most important consideration is satisfying as far as possible the economic decision making needs of users.2. Materiality means that only items having a physical existence may be recognised as assets.3. The substance over form convention means that the legal form of a t
12、ransaction must always be shown in financial statements, even if this differs from the commercial effect.Which, if any, of these comments is correct, according to IASBs Framework for the Preparation and Presentation of Financial Statements?A. 1 onlyB. 2 onlyC. 3 onlyD. None of them9. Which of the fo
13、llowing most closely describes the meaning of prudence, as the term is defined in the IASBs Framework for the Preparation and Presentation of Financial Statements?A. Ensuring that accounting records and financial statements are free from material error.B. The use of a degree of caution in making est
14、imates required under conditions of uncertainty.C. Understating assets and gains and overstating liabilities and losses.D. Ensuring the financial statements comply with all accounting standards and legal requirements.10. Which of the following statements about accounting concepts are correct?1. The
15、money measurement concept is that only items capable of being measured in monetary terms can be recognised in financial statements.2. The prudence concept means that understating of assets and overstating of liabilities is desirable in preparing financial statements.3. The historical cost concept is
16、 that assets are initially recognised at their transaction cost.4. The substance over form convention is that, whenever legally possible, the economic substance of a transaction should be reflected in financial statements rather than simply its legal form.A. 1, 2 and 3B. 1, 2, and 4C. 1,3, and 4D. 2
17、, 3, and 411. Listed below are some characteristics of financial information:1. Neutrality2. Prudence3. Completeness4. TimelinessWhich of these characteristics contribute to reliability, according to the IASBs Framework for the Preparation and Presentation of Financial Statements?A. 1, 2, and 3 only
18、B. 1, 2, and 4 onlyC. 1, 3, and 4 onlyD. 2, 3, and 4 only12. Which, if any, of the following statements about accounting concepts and the characteristics of financial information are correct?1. The concept of substance over form means that the legal form of a transaction must be reflected in financi
19、al statements, regardless of the economic substance.2. The historical cost concept means that only items capable of being measured in monetary terms can be recognised in financial statements.3. It may sometimes be necessary to exclude information that is relevant and reliable from financial statemen
20、ts because it is too difficult for some users to understand.A. 1 and 2 onlyB. 2 and 3 onlyC. 1 and 3 onlyD. None of these statements are correctLecture Three:Example One:Company B bought some goods from Company A for $40; when Company A send out the invoice to Company B, it was printed with $80 on,
21、what is Company A to do? A寄$40 Credit note给BExample Two:At the beginning of 1 September, Robin Plenty had $900 in the bank.During 1 September 20X7, Robin Plenty had the following receipts and payments.（a） Cash sale: receipt of $80（b） Payment from credit customer Hay $400 less discount allowed $20（c）
22、 Payment from credit customer Been $720（d） Payment from credit customer Seed $150 less discount allowed $10（e） Cheque received for cash to provide a short term loan from Len Dinger $1,800（f） Second cash sale: receipt of $150（g） Cash received for sale of machine $200（h） Payment to supplier Kew $120（i
23、） Payment to supplier Hare $310 Example Three:DEF operates an imprest system for petty cash. During February 2009, the following petty cash transactions took place.$ 2.2. X9 Stamps 12.00 3.2. X9 Milk 25.00 8.2.X9 Taxi fare 15.00 17.2.X9 5.00 18.2.X9 Received from staff for photocopying 8.00 28.2.X9
24、Stationery 7.50 The amount remaining in petty cash at the end of the month was $93.50. What is the imprest amount? $93.5+（12+25+15+5+7.5）-8=150Example:State which books of prime entry the following transactions would be entered into.（a） Your business pays A Brown （a supplier） $450.00.（b） You send D
25、Smith （a customer） an invoice for $650.（c） Your accounts manager asks you for $12 urgently in order to buy some envelopes.（d） You receive an invoice from A Brown for $300.（e） You pay D Smith $500.（f） F Jones （a customer） returns goods to the value of $250.（g） You return goods to J Green to the value
26、 of $504.（h） F Jones pays you $500. Question One:Which one of the following is not a book of prime entry.A. Sales invoiceB. Purchase day bookC. Sales day bookQuestion Two:Which of the following is a source document for petty cash.A. Purchase invoiceB. Sales invoiceC. Receipt and claim formWhat is th
27、e purchase returns day book used to record?A. Suppliers invoicesB. Customers invoicesC. Details of goods returned to suppliersD. Details of goods returned by customersQuestions Four:Petty cash is controlled under an imprest system. The imprest amount is $100. During a period, payments totalling $53 have been made. How much needs to be reimbursed at the end of the period to restore petty cash to the imprest amount?A. $100B. $53C. $47D. $50 Question Five:All petty cash claims
