Assignment Question(s): (Marks15)
Q1. On your own words, outline the accounting principles and assumptions and explain each one. (Marks5)
Q2. What is the accounting cycle? Explain every step starting from analyzing transactions to preparing post-closing trial balance. (Marks5)
Q3. Based on the following trial balance for ABC Co, prepare an income statement, statement of retained earnings and a balance sheet. The company made no additional investments in the company during the year. (Marks5)
| ABC Co.
Trial Balance December 31 |
||
| Cash | SR 6,500 | |
| Accounts receivable | 475 | |
| Supplies | 2,500 | |
| Equipment | 17,000 | |
| Accounts payable | SR 745 | |
| Common stock | 10,000 | |
| Retained earnings | 11,155 | |
| Dividends | 36,000 | |
| Revenue earned | 72,000 | |
| Supplies expense | 3,425 | |
| Rent expense | 6,000 | |
| Wages expense | 22,000 | |
| Totals | SR93,900 | SR93,900 |
What is the accounting cycle? Explain every step starting from analyzing transactions to preparing post-closing trial balance.
