Accounting Balance Sheet

Topics: Balance sheet, Inventory, Generally Accepted Accounting Principles Pages: 6 (2093 words) Published: March 12, 2013
Question 2.4 Where would you put in a Balance Sheet of a business enterprise? (if you put it in at all): a) the house of the owner, where the office of the business works, b) the office building, owned by the business enterprise, c) the office rented by the business enterprise, d) a building, owned by the business enterprise, rented out to an other company, e) a digging machine at a mining company, f) a digging machine at a machine tool producer company, g) a loan the business got from private person, h) a loan the business gave to a private person, i) the amount of capital the owners of the business enterprise invested, j) the amount of capital the business enterprise invested into an other company, k) an employee of the business enterprise, l) a robot purchased by the business enterprise, m) the fee the business enterprise paid for electronic consumer data bank, n) the fee the business enterprise paid to a marketing agency for a service. Solution a) not in B/S (Fixed Asset, if the whole house is for the business, not for private use at all) b) Assets > Fixed Assets > Real Estates c) not in B/S d) Assets > Fixed Assets > Real Estates e) Assets > Fixed Assets > Machinery f) Assets > Current Assets > Stocks > Finished Goods g) Liabilities > Loans (interest bearing) (it is either LT or ST). h) Assets > Debtors (it can be either LT – Non current or ST – Current) i) Capital > Capital injection j) Assets > Investments (it is normally Non current. Rarely it is conceivable to be current) k) not in B/S l) Assets > Fixed Assets > Machinery m) not in B/S normally (it is in P/L) (theoretically it is possible to be Assets > Fixed Assets > Intangibles, not yet in practice) n) not in B/S (it is in P/L )

Question 2.6 Where would you put in a Balance Sheet? (more than one answer is possible): a) a car, b) the balance of a bank account (overdraft is possible), c) a loan you got from your bank, d) the balance of account at the Tax Authority, e) the amount of an invoice, f) a software. Solution a) Asset > Fixed Asset or Asset > Current Asset > Stocks b) Asset > Current Asset > Cash at Bank or in case of overdraft: Liabilities > Current Liabilities > Loans c) Liabilities > Current Liabilities > ST Loans (if ST) or Liabilities > LT Liabilities > LT Loans (if LT) d) Assets > Current Assets > Debtors, if the Authority owes the business, or Liabilities > Current Liabilities > Tax payables (Creditors – non interest bearing) if the business owes to the Authority e) Assets > Current Assets > Trade Debtors, if the invoice was issued by our business to a customer Liabilities>Current Liabilities>Trade Creditors, if the invoice was issued by a supplier to our business f) Assets > Fixed Assets > Intangibles normally (though it may go together with Computers, too)

Question 2.9 Indicate which of the following transactions relate to Clive’s business as a newsagent and which are his personal transactions: a) £50 win on premium bonds owned by Clive. b) £100 paid for the following advertisement on a hoarding at the local football ground: ‘Clive’s for all the up to date news’. c) Payment to the newspaper wholesaler, £1,260. d) Sale of unsold newspapers to a local fish-and-chip shop. e) Purchase of a new car for family use, although it will be used each morning to collect papers from suppliers. Solution a) personal b) business c) business d) business e) personal

Question 2.10 John decides to start up in business on 1 April 20X2, and pays £4,000 from his private bank account into a newly opened business bank account. On 1 April 20X2 John’s father loans the firm £600 to help with the new venture, and this amount is paid immediately into the business bank account. On 4 April the firm borrows £150 from John’s friend Peter. This amount is kept in the form or ‘ready cash’ to meet small business expenses. Required: Balance sheet for John’s business after the transactions on: a) 1 April b) 2 April c) 4 April Solution a) John’s business, 1 April 20X2 Ł Fixed...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Accounting Project Essay
  • Basic Accounting Assignment Essay
  • Generally Accepted Accounting Principles and Retained Earnings Essay
  • Essay on The Balance Sheet
  • Balance Sheet and Direct Labor Essay
  • Accounting Cheat Sheet Essay
  • Financial Analysis of Balance Sheet Essay
  • Jb Hifi

Become a StudyMode Member

Sign Up - It's Free