ACCT1501 Practice Exam Questions 2015S2 1 QUESTION 1 (10 marks) Accounts Receivable Rupert Ltd maintains subsidiary ledgers for debtors and creditors. At 31 May 2014, the debtors control account has a debit balance of $50,120 and the creditors control account has a credit balance of $30,670. An extract of totals from the special journals for the month of June 2014 is as follows: $ Credit sales 86,500 Cash sales 6,100 Credit purchases 93,200 Cash received from debtors 67,800 Cash paid to creditors 55,890 Cash purchases 4,300 Discount received from creditors 7,500 Discount allowed to debtors 3,500 Complete the debtors control accounts as they would appear in the general ledger.
ACCT1501 Practice Exam Questions 2015S2 2 QUESTION 2 (12 Marks) Financial Reporting Principles, Accounting Standards and Auditing, & Sustainability Reporting Provide short answers to the following: 1.Auditors are required to maintain independence from their audit client. Why such independence is crucial? Why achieving and maintaining independence is difficult? (4 marks) 2.Going concern assumption is one of the key assumptions to financial reports. What is going concern assumption? Why is assumption important in the preparation of financial statements? (4 marks)
ACCT1501 Practice Exam Questions 2015S2 3 3.Describe Scope 1 and Scope 2 emissions and provide an example for each of them. (4 marks)
ACCT1501 Practice Exam Questions 2015S2 4 QUESTION 3 Preparing Financial Statements (23 Marks)The following pre-adjusted trial balance has been prepared for Sydney Company as at 30 June 2014 (for the 12 months beginning on 1 July 2013): DR $ CR $ Bank Overdraft 10,000 Accounts Receivable 200,000 Allowance for Doubtful Debts 1,000 Inventory 100,000 Prepaid Rent 10,000 Property, Plant and Equipment 450,000 Accumulated Depreciation - PPE 200,000 Accounts Payable 60,000 Bank loan 50,000 Contributed Capital 310,000 Retained Profit at 1 July 2013 34,000 Sales revenue 450,000 Cost of Goods Sold 265,000 Interest Expense 5,000 Wages Expenses 80,000 Rent Expense 5,000 1,115,000 1,115,000 The following information is given which may give rise to year end adjustments: •Depreciation on Property, Plant and Equipment is provided for on a straight line basis at 10% per annum, and it is assumed that it will have no salvage value. •The balance in Prepaid Rent relates to the 12 month period from 1 January 2014 to 31 December 2014. •An ageing analysis shows that $4,000 of Accounts Receivable is estimated to be uncollectible. •On 30 June 2014, the directors declared a dividend of $5,000, which the shareholders authorised. The dividend is to be paid on 15 September 2014.