2016S1 PracExamQuestions Answers - ACCT1501 Practice Exam...

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Chapter 13 / Exercise 13-6
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ACCT1501 Practice Exam Questions & Solutions 2016S1 1 QUESTION 1 Control Accounts (8 marks) 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 and creditors control accounts as they would appear in the general ledger. 0.5 MARKS PER ENTRY IN EACH CONTROL ACCOUNT Debtors control $ $ Opening balance (Balance b/d) 50,120 Cash 67,800 Sales 86,500 Discount expense 3,500 Closing balance (Balance c/d) 65,320 Opening balance (Balance b/d) 136,620 65,320 136,620 Creditors control $ $ Cash 55,890 Opening balance (Balance b/d) 30,670 Discount revenue 7,500 Inventory 93,200 Closing balance (Balance c/d) 60,480 123,870 Opening balance (Balance b/d) 123,870 60,480
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Chapter 13 / Exercise 13-6
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ACCT1501 Practice Exam Questions & Solutions 2016S1 2 This is also acceptable. Debtors control $ $ Opening balance 50,120 Cash 67,800 Sales 86,500 Discount expense 3,500 Closing balance 65,320 Creditors control $ $ Cash 55,890 Opening balance 30,670 Discount revenue 7,500 Inventory 93,200 Closing balance 60,480
ACCT1501 Practice Exam Questions & Solutions 2016S1 QUESTION 2 Financial Reporting Principles, Accounting Standards and Auditing (7 Marks) Provide short answers to the following: 1. You are analysing the financial statements of two companies, ABC Ltd and XYZ Ltd. Both sets of financial statements have been audited by external auditors. The external auditor for ABC Ltd issued an unmodified opinion on ABC's financial statements whereas the external auditor for XYZ Ltd issued an adverse opinion on XYZ's financial statements. Which set of financial statements is more reliable and why? (3 marks) Unmodified opinion (or Unqualified opinion) is the opinion that auditors issue when they believe that the financial statements give a true and fair view, that they are in accordance with the provisions of the Corporation Act 2001, applicable accounting standards (GAAP) and other professional mandatory reporting requirements. (1 mark) ° Note: If students do not provide full answer as outlined, they can still receive mark: o If students mention that unmodified opinion (or unqualified opinion) is the opinion that auditors issue when the they believe that the financial statement give a true and fair view (0.5 mark) o If students mention that unmodified opinion (or unqualified opinion) is the opinion that auditors issue when they believe that the financial statement give a true and fair view and that they are in accordance with GAAP or accounting standards (1 mark) An adverse opinion is issued when the auditors believe that the financial statements do not provide a true and fair view and that they are not in accordance with GAAP. (1 mark) ° Note: If the students do not provide full answer as outlined, they can still receive mark: o If students mention that an adverse opinion is issued when the
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