Required: i. Prepare the Statement of Profit or Loss and the Statement of Financial Position as at 31 December 2021. ii. Under the accrual basis accounting, adjustments for accruals and prepayments need to be considered. Explain the term accrued expenses.

Required: i. Prepare the Statement of Profit or Loss and the Statement of Financial Position as at 31 December 2021. ii. Under the accrual basis accounting, adjustments for accruals and prepayments need to be considered. Explain the term accrued expenses.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Under which basis of accounting are revenues and expenses reported in the income statement in the…

A: Accrual Accounting - Under Accrual Basis of accounting revenue is recorded only if earned and…

Q: Which of the following is NOT considered an accrued expense account? Interest Expense Rent Expense…

A: The correct answer is Option (C) Depreciation expense because the depreciation is an adjusting entry…

Q: 1) On the Statement of Retained Earnings where does the Beg Balance of RE come from?2) Also…

A: Part-1.The beginning balance of Retained earnings are available in the Trial balance. As the…

Q: A debit balance in the Retained Earnings accounts is reported as a (an) a. asset b.…

A: Retained Earnings refers to amount of Profit set aside by the company during the year. it is known…

Q: What accounts go on the income statement? How are income statements completed?

A: Income statement is a part of the financial statement which is prepared by an organization. Income…

Q: Discuss the importance of accrual accounting and its impact on matching revenues and expenses in the…

A: Regardless of when the underlying cash flows take place, accrual accounting is an accounting…

Q: What are the accounts that appear on the revenue statement? What is the procedure for completing…

A: The revenue statement and procedure for completing income statements:

Q: Under accrual basis of accounting, revenue is recognized when ______________ and expenses are…

A: Accrual basis of Accounting recognises when transactions take place. Under accrual basis accounting…

Q: Accrued revenues are: a. received and recorded as liabilities before they are earned. b. incurred…

A: In accounting, accrued revenues refer to the recognition of income by the business that has not yet…

Q: Indicate how prior period adjustments should be reported on the financial statements presented only…

A: Prior Period Adjustments Prior period adjustments refer to the error that is caused due to any…

Q: Which account is least likely to appear in an adjustingjournal entry?a. Cashb. Interest Receivablec.…

A: Adjusting entries: Adjusting entries are those entries which are recorded at the end of the year,…

Q: For Journal entries 1 through 12, Indicate the explanation that most closely describes it. You can…

A: Journal entry means the book of prime entry where the transaction is recorded for the first time and…

Q: Is there a certain order in listing the expense accounts of an income statement?

A: Yes, as per international financial reporting standards the income statement is to be prepared in…

Q: Rent paid in advance can be categorized as a. Deferred expense (Prepaid expense) b. Accrued revenue…

A: Rent paid in advance is a prepaid expense which means this expense hasn't been accrued yet.

Q: In which of the following types of accounts are increases recorded by credits? Question 8 options:…

Q: Which of the following correctly describes how accounts payable will appear on the financial…

A: Accounts Payable: Accounts Payable are the short-term liabilities that an entity owes to its…

Question

The following matters are to be taken into account:
1. No record was made by Shahnaz on cash withdrawals amounting to RM500 for personal use.
2. Annual depreciation for freehold land and buildings, fixtures and fittings are RM12,520 and RM17,000 respectively. The annual
depreciation for motor van is RM15,000.
3. Alima Boutique issued a debit note amounting of RM2,300 to a supplier. No record has been made in the business book of
accounts.
4. Utility expenses were paid in advance at the amount of RM250.
5. The salaries for the month of November and December 2021 amounting to RM10,500 was paid in January 2022.
6. The business has received RM900 of commission in advanced.
7. Inventory at the end of the year was valued at RM85,570.
Required:
Prepare the Statement of Profit or Loss and the Statement of Financial Position as at 31 December 2021.
i.
i.
Under the accrual basis accounting, adjustments for accruals and prepayments need to be considered. Explain the term accrued
expenses.

Shahnaz opened a boutique, Alima Boutique outlet on 1 January 2021 located in Damansara Utama. The outlet sells exclusive types of
veils and 'jubah'. The following is the trial balance of Alima Boutique:
Alima Boutique
Trial Balance as at 31 December 2021
Debit (RM)
Credit (RM)
Capital
230,000
Freehold land and buildings
125,200
Fixtures and fittings
85,000
Motor van
75,000
Purchases
300,600
Sales
450,000
5,500
65,400
4,500
Sales return
Salaries
Utility expenses
Telephone expenses
Advertising and promotion
3,500
7,000
5,200
Carriage inwards
Carriage outwards
5,500
Commission received
1,900
122,000
Accounts receivable
Accounts payable
95,000
110,000
Loan from IID Bank
15,000
65,000
2,500
Cash in hand
Cash at bank
Drawings
886 900
886 90
lasi dL Ddlik
Drawings
2,500
886,900
886,900

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting Policies, Changes in Accounting Estimates and Errors

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Which accounting principle requires that expenses be matched with revenues? a) Revenue Recognition Principle b) Matching Principle c) Historical Cost Principle d) Full Disclosure Principle
Explain Accrual Accounting as it relates to revenue and expenses.
How are gain contigencies reported in the financial statements? a. a contingent account receivable b. an accrued revenue c. a deferred revenue d. not at all
Ww.227.
The adjusting entry to record the accrual of income tax expense includes a: O A. credit to Income Tax Expense. B. debit to Income Tax Payable. C. credit to Accounts Payable. D. credit to Income Tax Payable.
Match the statements below with the accounting assumption, characteristic, or principle to which the statement relates. Assumptions/characteristics/principles may be used once, more than once, or not at all. Recorded when the performance obligation is satisfied. a. Revenue recognition principle V The reason for recording accruals and deferrals in adjusting entries. b. Matching principle Valuing assets at amounts originally paid for them. C. Historical cost principle Entity assumed to have a long life d. Going concern assumption Description of significant accounting policies and unusual events. e. Full disclosure principle v Information has predictive and confirmatory value. T. Relevance characteristic 8. Consistency characteristic
Which of the given series have the same normal balances in the Accounting Equitation? Select one: a. Assets & Expenses b. Assets & Liabilities c. Revenue & Owner's Drawings d. Liabilities & Expenses