Venus Pte Ltd operates a consultancy business. The following balance was from the books of the business on 1 February 2020: During the year ended 31 January 2021, $250 000 was received for consultancy fees by cheque. The business earned $350 000 consultancy fees for financial year. REQUIRED (a) Explain the term 'Consultancy fees received in advance'. (b) Prepare the journal entries to record consultancy fees for the year ended 31 January 2021. (c) $ Consultancy fees received in advance 45 000 State the effect on each of the following if adjustment on consultancy fee was not made for the year ended 31 January 2021. Date (1) Profit for the year ended 31 January 2021 (ii) Current assets as at 31 January 2021. Venus Pte Ltd provided the following information on its rental expenses account for the year ended 31 January 2021. 2020 Feb 1 Apr 25 2021 Jan 31 31 Particulars d(i) Cash at bank d(ii) Income summary Rental expense account Debit ($) 22 000 Credit ($) 1 600 2 400 18 000 Balance ($) 1 600 Cr 20 400 Dr 18 000Dr REQUIRED (d) State the names of the accounts of (d)(i) and (d)(ii) above. (a) Explain, using an accounting theory, for the need to make an adjustment for (d)(ii) for the year ended 31 January 2021.

Venus Pte Ltd operates a consultancy business. The following balance was from the books of the business on 1 February 2020: During the year ended 31 January 2021, $250 000 was received for consultancy fees by cheque. The business earned $350 000 consultancy fees for financial year. REQUIRED (a) Explain the term 'Consultancy fees received in advance'. (b) Prepare the journal entries to record consultancy fees for the year ended 31 January 2021. (c) $ Consultancy fees received in advance 45 000 State the effect on each of the following if adjustment on consultancy fee was not made for the year ended 31 January 2021. Date (1) Profit for the year ended 31 January 2021 (ii) Current assets as at 31 January 2021. Venus Pte Ltd provided the following information on its rental expenses account for the year ended 31 January 2021. 2020 Feb 1 Apr 25 2021 Jan 31 31 Particulars d(i) Cash at bank d(ii) Income summary Rental expense account Debit ($) 22 000 Credit ($) 1 600 2 400 18 000 Balance ($) 1 600 Cr 20 400 Dr 18 000Dr REQUIRED (d) State the names of the accounts of (d)(i) and (d)(ii) above. (a) Explain, using an accounting theory, for the need to make an adjustment for (d)(ii) for the year ended 31 January 2021.

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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