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Qualitative characteristics of accounting information are important as the basis of financial statements preparation of a business. Discuss the importance of these qualitative characteristics and explain how each of the characteristic is useful in interpretation of the financial statements.

BBAW2103 Financial Accounting Assignment 1 and 2 Answers (Open University Malaysia)

PURPOSE

The purpose of this assignment is to enhance learners’ understanding on qualitative characteristic of accounting information and enhance learners’ skills to prepare the journal entry, trial balance and financial statements.

REQUIREMENT

You are required to answer Assignment 1 and Assignment 2.  You have to submit both assignments ONCE only in a single file.

ASSIGNMENT 1: (CLO 1)

Qualitative characteristics of accounting information are important as the basis of financial statements preparation of a business. Discuss the importance of these qualitative characteristics and explain how each of the characteristic is useful in interpretation of the financial statements.

(10 marks)

[Total: 10 marks]

ASSIGNMENT 2:(CLO 2)

Answer all the questions and show your detailed workings clearly and systematically.

Question 1:

Hashem started a business that offers legal services on 1 December 2019. The following are transactions occurred during the month of December2019:

1. Hashem brought in RM50,000 cash and office equipments worth RM12,000 into the business.
2. Bought a car for his own use worth RM112,000 by paying cash (company’s money) of RM12,000 and signing a note payable for the balance.
3. Provided legal services to a client worth RM7,000 and received cash of RM3,000 from the client.
4. Purchased office supplies worth RM2,000 cash.
5. Paid RM700 cash for advertising expenses for the months of December2019.
6. Sent a bill totaling RM5,000 to a client for the legal service provided and yet to receive payment.
7. Received RM3,000 cash as an agreement to start work as a legal advisor for a company starting February 2020.
8. Paid RM3,600 cash for employees’ salary.
9. Paid RM2,400 cash for December office rental.
10. As at 31 December 2019, the office supplies used is RM400.

Based on the above information, you are required to:

1.    Show the effects of all the above transactions in the accounting equation.

(11.5)

2.   Prepare the journal entries to record all transactions.

(11.5)

[Total : 23 marks]

Question 2:

Kembara Enterprise has operated since 1 January 2016. The following are the accounts’ balance of Kembara Enterprise as at 31 December 2019:

Additional information:

1. Furniture and fittings are depreciated at a rate of 10 percent annually using straight line method.
2. The balance of office supplies on hand at the end of the year is RM2,500.
3. Rentals for the current year amounting to RM2,200 are not yet paid.
4. Employees’ salary for December 2019 of RM3,300 is not yet paid.
5. Utility bill for December 2019 of RM350 has been received but is not yet paid.
6. The prepaid advertising include RM300 for January 2020 advertisement.
7. Expired insurance for the year 2019 is RM1,200.
8. The accrued interest on the long term loan until 31 December 2019 is RM900.

Based on the above information, you are required to:

a).   Prepare an adjusted Trial Balance as at 31 December 2019.

(12.5)

b).   Prepare an Income Statement for the year ended 31 December 2019.

(6)

c).   Prepare a Balance Sheet as at 31 December 2019.

(8.5)

[Total : 27 marks]

TASK QUESTION

Purposes

The purpose of this task is to enhance the understanding of the students ‘ qualitative characteristics of accounting information and to enhance the skills of the students to prepare the journal notes, balance of interviews and financial statements.

Needs

You are required to answer the 1 and duty 2 tasks.  You need to send both Duatugasan in ONE file only.

Task 1 :(CLO 1)

Qualitative features of accounting information are essential as the basis for the preparation of the financial statements of a business. Discuss the importance of such qualitative features and explain how each feature is useful in the interpretation of the financial statements.

(10)

[Amount: 10 Marks]

TASK 2: (CLO 2) 

Answer all questions and show your detailed work clearly and systematically.

Question 1:

Hashem started a business offering legal services on 1 Disember 2019. The following are transactions – transactions involved during the Disember 2019 month:

1. Hashem brings in RM50, 000 cash and office equipment amounting to RM12, 000 in business
2. Purchase a car for its own use of RM112, 000 by paying cash (company money) of RM12, 000 and signed for the remaining note for the remainder.
3. To provide legal services to a customer costing RM7, 000 and received cash amounting to RM3, 000 therefrom.
4. Purchase of office supplies worth RM2, 000 in cash.
5. Pay cash RM700 for advertising expenses for the Disember 2019 month.
6. Send a bill of RM5, 000 to a customer for a legal service provided but not receiving payment.
7. Received RM3, 000 cash as a sign of consent to commence work as a legal advisor for a company starting February 2020.
8. Pay RM3, 600 cash for employee salaries.
9. Paid RM2, 400 cash for December office rental
10. As at 31 December 2019, the office supply used was worth RM400.

Based on the above information, you are required to:

a).   Show the effect of all above transactions in accounting equations.

(11.5)

b).   Set up a journal note to record all transactions.

(11.5)

[Amount: 23 marks]

Question 2:

Kembara Enterprise was operating since 1 January 2016. Below are the balance of travel Enterprise accounts as at 31 December 2019:

Additional Information:

1. Equipment and fittings are depreciated at a rate of 10 per cent per annum using the straight line method.
2. The remaining office supplies at hand at the end of the year was RM2, 500.
3. Rental for the current year amounted to RM2, 200 is yet to be paid.
4. Employee salary for December 2019 amounting to RM3, 300 has not been paid.
5. The utility bill for December 2019 amounted to RM350 was accepted but remained unpaid.
6. Prepaid advertising includes RM300 for advertising in January 2020.
7. Insurance has expired for the year 2019 is RM1, 200.
8. The interest of long term loans accrued up to 31 December 2019 was RM900.

Based on the above information, you are required to:

a).  Set up the adjusted interview balance as at 31 December 2019.

(12.5)

b).  Prepare income statement for the year ended 31 December 2019.

(6)

c).  Set up balance sheet as at 31 December 2019.

(8.5)

 [Amount: 27 marks]

Reference ID: #getanswers2001062