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1a) General journal is the accounting version of our
personal journals. It doesn't record everything that
happens to the business, of course, but it does record
every financial transaction that takes place (sometimes
alone, sometimes as a group of similar transactions). Like
our personal journal entries, it notes the date, the
accounts involved, and the amounts of money, as well as
providing a brief description of what happened.

2ai.)Discount Allowed
Bills receivable
Bad debts
Return inwards
2aii).Discount Received
Bills Payable
Cash to suppliers
Return outwards

2b) Error of original entry
2. Error of omission
3. Error of commission
4. Error of principle
5. Compensating errors
6. Complete reversal of entry

4a) Depreciation is the measure of the wearing out, consumption or other loss of value of a fixed asset whether arising from use, effluxion of time or obsolescence through technology and market changes

I. Physical deterioration
ii. Obsolescence
iii. The time factor
iv. Economic factor
v. Inadequacy

i. Straight line: This allows an equal amount to be charged as depreciation for each year of expected use of the asset. The basic formulae is
Cost- Estimated residual value/ number of years of expected use.
Advantage: it is simple to calculate
ii. It is time oriented

i. Assumption of equal or constant revenue per year is unrealistic
ii. Might lead to a misleading picture of the financial statement

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Posted By Examlord On 10:12 Tue, 19 Apr 2016

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