The following is a summary of the transactions that took place in ADEEB Ltd during October 2020:
- • October 1st ADEEB started a new business with £50,000 cash.
- • October 3rd bought equipment at a cost of £15,000 on credit from LMS Ltd.
- • October 4th paid £5,000 monthly rent.
- • October 6th bought inventory using £12,000 cash.
- • October 9th sold stock of £14,000 for cash, and sold goods of £6,000 on credit to TRK Ltd.
- • October 12th collected the £6,000 cash from TRK Ltd.
- • October 14th paid £3,000 monthly insurance.
- • October 16th ADEEB took £500 cash from the business to buy a gift for his son on his birthday.
- • October 28th paid £1,000 monthly bills.
- • October 29th paid £15,000 to LMS Ltd.
a) Record the above transactions in a set of journal entries. (20 marks)
b) Open ledger accounts for Cash, Insurance, and Sales, and calculate their final balances at the end of the period. (10 marks)
c) Discuss Five types of common errors appearing in the trial balance. You must use relevant academic literature in your answer. (10 marks)
- a) Discuss the following accounting concepts: going-concern, conservatism, and the matching concept, giving examples of how they may be applied in the financial reports. You must use relevant academic literature in your answer. (10 marks)
- b) Discuss three differences between the Income Statement and the Balance Sheet (statement of financial position). You must use relevant academic literature in your answer. (10 marks
- c) ADB Ltd has the following trial balance as at 31st December 2020
Check the attached file for all the questions and requirements.
The answer should be well formatted and neat.
References on the last page.