TASK

Instructions – PLEASE READ THEM CAREFULLY

• The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented; marks may be reduced for poor presentation. This includes filling your information on the cover page.
• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
• All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).
• Submissions without this cover page will NOT be accepted.

Assignment Question(s):                                                 (Marks15)

Q1. Provide a good illustration of how businesses should adhere to accounting principles and assumptions, as discussed on slide 16 of Chapter 1.   (5marks)

Use this example as a guide for your answer.

According to the cost accounting principle, if a firm purchases land for SR400,000 but an outside appraiser values it at SR600,000, the land should still be recorded in the books at SR400,000.

Q2. Provide an example of each title here and then record the journal entries. Following the first given answer.                         (5marks)

1-Providing consulting services receiving cash.

Given answer:

ABC company provides consulting services and receives 1,000 cash.

Journal entry:

Dr.Cash. 1,000

Cr.Consulting Revenue. 1,000

2-Investment by an owner.

3-Purchasing equipment for cash.

4-Purchasing supplies on credit.

5-Borrowing money from a bank.

6-Paying investors their shares of dividends.

Q3. On 31/12/2020, the following balances appeared in the trial balance of Al Ghanim Company                                                                             (5marks)

 

Al Ghanim Co. Partial Trial Balance December 31
Prepaid insurance	1,500
Supplies	1,000
Unearned service revenue		1,500
Equipment	50,000

 

Additional information:

1. An insurance policy examination showed SR1,000 of expired insurance
2. An inventory count showed SR200 of unused shop supplies still available
3. Depreciation expense on shop equipment, SR10,000
4. SR800 of the Unearned service account balance was earned by year-end.

 

Required :

1. Make the necessary adjusting entries.
2. Show the impact of these adjustments on the income statement and the balance sheet statement.