T3 Cat

20. A significant difference between the statement of pecuniary fleck (balance sheet) of a sole trader and that of a federation is that a partnerships statement of financial position (balance sheet) includes the partners current accounts.
Required:
Explain what entries are made to a partners current account and what a terminal credit balance would represent.[2 marks]

Answer:
Items include:
* Drawings
* Interest on drawings
* Salary
* Share of profit
A closing credit balance represents a partners accumulated share of retained profits.

21. The last(a) account of sole trader showed total expenditure in excess of income, resulting in a loss for the year.
Required:
concisely explain how this loss would affect the sole traders peachy account.[2 marks]

Answer:
A loss for an accounting achievement is debited to the capital account and reduces the amount of the owners capital in the business.

22. A friend of yours has recently opened a childrens clothes shop and is setting her selling prices. She says she does non understand the difference between the terms mark-up and margin.
Required:
presently explain how mark-up differs from margin.[2 marks]

Answer:
Mark up involves adding a luck to cost to derive a selling price.




The margin is the race of gross profit to sales, i.e. gross profit divided by sales.

23. If a company decided it needed a china coffee set to use to entertain potential customers, and it took a suitable one from the stock in the warehouse, how would you record this in the view ass of the company?[2 marks]

Answer:
Dr. Office expenses a/c
Cr. Purchases a/c

24. charm out the annual depreciation charge for five years, for a non-current asset costing $15,000, to be depreciated at a valuate of 25% using the reducing balance method.[4 marks]

Answer:
superior cost| Depreciation charge ($)| Cost/Net book value ($)|
Year 1| 15,000 X 25%...If you hope to get a full essay, order it on our website: Orderessay



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