Explain the primary goal of maintaining a cash book. Use a case study company of your own choice to demonstrate how such a goal (Your arguments must only relate to the main goal of a cash book) can be attained. Provide examples as approperiate Clearly explain how a cash book can be integrated in the extraction/development of the Trial Balance.Are trade discounts included in the cash book? If not or if yes, explain why Are credit transactions included in the cash book? If not or if yes, explain whyLedgers help to organize accounting information into categories normally known as ‘’classes’’. With examples explain the nature and differences between revenue and capital ledgers Using two revenue and capital ledgers, explain how you will treat them in the trial balance.Explain the treatment of the proprietor’s additional contribution to an already existing business. In addition, explain the underlying accounting principle you will apply in answering this question.Thames Cotton Mills Ltd. take a periodic inventory of their stock at the end of each month. The physical inventory taken on 30th June shows a balance of 1,000 litres of chemicals at hand @ €2.28 per litre. [20 marks] The following transactions took place during July: July 1: 14,000 litres @ €2.30 per litre July 7: 10,000 litres @ €2.32 per litre July 8: issued 6,000 litres July 9: 14,000 litres @ €2.30 per litre July 20: Issued 7,000 litres July 25: 5,000 litres @ €2.35 per litre. You are required to compute the inventory value on July 31, using each of the following methods: First in First out Last in First out; and Average cost method How are the three inventory methods you have used in answering question (a) to (c) above differ from each other? Comment using the answers you generated for each of these three methods, how such answers impact on the gross profit Explain three (3) most important reasons why inventory valuation must be conducted Based on the theory learned in this course, explain whether inventory is valued at cost or at selling price. Reflect your answer on the income statement prepared at the end of each accounting period By using the concepts learned in inventory valuation chapter, explain the underlying accounting principle relating to inventory valuation.

The answer is stated below: Note: Answering the first question as there are multiple…

Answered: Explain the primary goal of maintaining…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Explain the primary goal of maintaining a cash book. Use a case study company of your own choice to demonstrate how such a goal (Your arguments must only relate to the main goal of a cash book) can be attained. Provide examples as approperiate
Clearly explain how a cash book can be integrated in the extraction/development of the Trial Balance.
Are trade discounts included in the cash book? If not or if yes, explain why
Are credit transactions included in the cash book? If not or if yes, explain why
Ledgers help to organize accounting information into categories normally known as ‘’classes’’. With examples explain the nature and differences between revenue and capital ledgers
Using two revenue and capital ledgers, explain how you will treat them in the trial balance.
Explain the treatment of the proprietor’s additional contribution to an already existing business. In addition, explain the underlying accounting principle you will apply in answering this question.
Thames Cotton Mills Ltd. take a periodic inventory of their stock at the end of each month. The physical inventory taken on 30th June shows a balance of 1,000 litres of chemicals at hand @ €2.28 per litre. [20 marks]

The following transactions took place during July:

July 1: 14,000 litres @ €2.30 per litre

July 7: 10,000 litres @ €2.32 per litre

July 8: issued 6,000 litres

July 9: 14,000 litres @ €2.30 per litre

July 20: Issued 7,000 litres

July 25: 5,000 litres @ €2.35 per litre.

You are required to compute the inventory value on July 31, using each of the following methods:
1. First in First out
2. Last in First out; and
3. Average cost method
4. How are the three inventory methods you have used in answering question (a) to (c) above differ from each other? Comment using the answers you generated for each of these three methods, how such answers impact on the gross profit
5. Explain three (3) most important reasons why inventory valuation must be conducted
6. Based on the theory learned in this course, explain whether inventory is valued at cost or at selling price. Reflect your answer on the income statement prepared at the end of each accounting period
7. By using the concepts learned in inventory valuation chapter, explain the underlying accounting principle relating to inventory valuation.

Definition Definition Difference in value of a country's net exports and net imports for goods and services in a given period. A positive balance of trade is called a surplus and coincides with more net cash inflows into a country; a negative balance of trade deficit is a deficit and results in net cash outflows. A balance of trade surplus or deficit doesn't necessarily indicate a positive or negative situation for a country.

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