Africa Traders is a business that sells furniture and equipment items to its customers. Africa Traders bought equipment for an amount of R25 000 from SA Dealers, which was financed through a bank overdraft from RAND Bank. Equipment was bought solely for the purpose of being used by Africa Traders. What will be the effect on the accounting equation? Select one: a. LIABILITIES = ASSETS - EQUITY Current: - R25 000 Non-current: - R25 000 R0 b. LIABILITIES = ASSETS - EQUITY R0 Non-current: + R25 000 - R25 000 c. LIABILITIES = ASSETS - EQUITY R0 Non-current: + R25 000 Current: - R25 000 R0 d. LIABILITIES = ASSETS - EQUITY Current: + R25 000 Non-current: + R25 000 R0

Africa Traders is a business that sells furniture and equipment items to its customers. Africa Traders bought equipment for an amount of R25 000 from SA Dealers, which was financed through a bank overdraft from RAND Bank. Equipment was bought solely for the purpose of being used by Africa Traders. What will be the effect on the accounting equation? Select one: a. LIABILITIES = ASSETS - EQUITY Current: - R25 000 Non-current: - R25 000 R0 b. LIABILITIES = ASSETS - EQUITY R0 Non-current: + R25 000 - R25 000 c. LIABILITIES = ASSETS - EQUITY R0 Non-current: + R25 000 Current: - R25 000 R0 d. LIABILITIES = ASSETS - EQUITY Current: + R25 000 Non-current: + R25 000 R0

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 32P

See similar textbooks

Similar questions

The owner of Total Care Trading received the amount loaned personally from a bank amounting to P1,500,000 and invested P400,000 of it into the business. How much is the increase in the total assets of the business? (show ur solution/explanation)
You are financial adviser to a retailing company, Us Ltd. You obtain the accounts of its main competitor operating in the same market. Them Lbt, and extract the comparison shown below: Balance sheets as at 31 March 20x0 Us Ltd Them Ltd kOOO K000 K000 K000 K000 K000 Non-current assets Land and buildings 381 286 Fixtures and fittings 342 218 Vehicles 62 59 785 563 Current assets Inventory 96 122 Trade debtors 166 124 Cash…
You are financial adviser to a retailing company, Us Ltd. You obtain the accounts of its main competitor operating in the same market. Them Lbt, and extract the comparison shown below: Balance sheets as at 31 March 20x0 Us Ltd Them Ltd kOOO K000 K000 K000 K000 K000 Non-current assets Land and buildings 381 286 Fixtures and fittings 342 218 Vehicles 62 59 785 563 Current assets Inventory 96 122 Trade debtors 166 124 Cash…
Entity A enters into the following transactions. You are required to show the impact of the transactions below on the accounting equation.1. In an attempt to assist the business, the owner of Entity A deposited R100 000 into the entity’s bank account. A quarter of the amount is payable to the owner and the rest is not.2. A client of Entity A who currently owes the company R23 000, purchased bricks to the value of R45 000 and paid R35 000 to reduce his outstanding balance. Entity A purchased the bricks for R18 000.3. Entity A purchased 1 000 bags of cement from K Ltd on credit. K Ltd normally sells a bag for R45. Entity A received a 10% discount for the 1 000 bags.4. Entity A returned 150 bags of cement, as they were defective. On the same day, the outstanding balance was settled through an online payment. This transaction did not affect the discount offered to Entity A.
Listed below are the current Accounting Assumptions and Principles Economic Entity Assumption Monetary Unit Assumption Historical Cost Principle Going Concern Assumption Revenue Recognition Principle Full Disclosure Principle Time Period Assumption Matching Principle Required: For the following situations, identify whether the situation represents a violation or a correct application of GAAP, and which assumption/principle is applicable. d. Moss Corporation closes the books each month and prepares monthly financial statements. Violation: (Yes/No) Applicable Assumption/Principle: e. Carroll Corporation, a US company, purchased a machine from Germany for 10,000 Euros and recorded the machine on their books at $12,000 US Violation: (Yes/No) Applicable…
Listed below are the current Accounting Assumptions and Principles Economic Entity Assumption Monetary Unit Assumption Historical Cost Principle Going Concern Assumption Revenue Recognition Principle Full Disclosure Principle Time Period Assumption Matching Principle Required: For the following situations, identify whether the situation represents a violation or a correct application of GAAP, and which assumption/principle is applicable. d. Moss Corporation closes the books each month and prepares monthly financial statements. Violation: (Yes/No) Applicable Assumption/Principle: e. Carroll Corporation, a US company, purchased a machine from Germany for 10,000 Euros and recorded the machine on their books at $12,000 US Violation: (Yes/No)…
The company bought goods worth RO. 15000. For cash RO. 8000 and the balance on credit. Which of the following is the correct presentation on the accounting equation? Select one: a. Assets = Liabilities + Owners' Equity +15000 (stock of goods) -8000 (cash) = 7000 (payables ) + 0 b. Assets = Liabilities + Owners' Equity -8000 (cash) = +15000 (stock of goods) + -7000 (payables ) c. Assets = Liabilities + Owners' Equity +15000 (Stock of goods) = +7000 (Payables) + +8000 (Cash ) d. Assets = Liabilities + Owners' Equity +15000 (stock of goods) -8000 (cash) = 0 + 7000 (payables )
Africa Traders, on 28 February 2020, received a cash amount of R1 560 from Mr. A South, a trade receivable whose account was previously written off as irrecoverable by Africa Traders as Mr. A South was previously declared insolvent. Africa Traders is not a registered VAT vendor. What will the effect be of the above transaction in the accounting equation of Africa Traders? Select one: a. ACCOUNT DEBITED ACCOUNT CREDITED EQUITY = ASSETS - LIABILITIES Bank Credit loss recovered - R1 560 - R1 560 R0 b. ACCOUNT DEBITED ACCOUNT CREDITED EQUITY = ASSETS - LIABILITIES Bank Trade receivables R0 + R1 560 - R1 560 R0 c. ACCOUNT DEBITED ACCOUNT CREDITED EQUITY = ASSETS - LIABILITIES Bank Credit loss recovered + R1 560 + R1 560 R0 d. ACCOUNT DEBITED ACCOUNT CREDITED EQUITY = ASSETS - LIABILITIES Credit loss recovered Bank + R1 560 - R1 560 R0
Global Entity is a retailer situated in Windhoek that sells various products. For the month of March 2022, the water and electricity account due to the local municipality was recorded to amount to N$8 000. Included in the N$8 000 was Mr G, the owner’s personal water and electricity of N$2 000. Show the effect of the transaction on the Accounting Equation. Use the equation: A= OE + L a. Asset; -6 000 = Equity; -6 000 + Liability; nil b. Asset; -6 000 = Equity; -8 000 + Liability; +2 000 c. Asset; nil = Equity; -6 000 + Liability; +6 000 Asset; -2 000 = Equity; -2 000 + Liability; nil d. Asset; nil = Equity; -6 000 + Liability; +6 000 e. Asset; nil = Equity; -8 000 + Liability; +8 000
Mr. Steve Persian hired Elizabeth to prepare the Statement of Financial Position of his business. To prepare the statement, Elizabeth identified the following assets and liabilities of Mr. Persian: a. Cash deposited in YKY Bank amounting to P100, 000 b. He has uncollected sales from customers amounting to P50, 000 c. The total amount of merchandise left inside the warehouse is P35, 000 d. Steve paid in advance the rent amounting to P15, 000 for one year. e. The machineries and equipment amounted to P150, 000 f. He bought the materials from his suppliers amounting to P30, 000 and promised to pay the said amount one month after the end of the year. g. He paid the contributions of his employees such as SSS, Philhealth and Pag ibig amounting to P6, 500 h. Outstanding balance to Meralco is amounting to P3, 500 i. He acquired a 2 year loan from YKY Bank amounting to P45, 000.
Show the effect of the following transactions in the accounting equation. For example: No. Account DR Account CR A = OE + L 1. Furniture Capital + 20 000 + 20 000 0 The owner deposited R 60 000 into business current account as his contribution. Sold goods on credit to F Malila for R 7000 (Cost price R4 500). Business obtained a loan of R30 000 from FCB Bank, the money was transferred to the business current account. Bought stationery on credit, R300. Owner withdrew R400 for personal use.
1. A business has the following items in it: - Land 2 000 000 - Machinery 40 000 - Cash 20 000 - Owner's equity 1 000 000 - Debt? What is the value of debt and how is it calculated A) 1 060 000 b) 3 060 000 C) 840 000 D) 1 010 000 (please show how you got the answer) 2. A business has the following items in it: - Land 500 000 - Machinery 40 000 - Cash 60 000 - Loan? - Owner's equity 250 000 What is the value of the loan? A) 350 000 B) 850 000 C) 1 000 000 D) 1 030 000 3. A business has the following items in it: - Owner's equity: 1 200 000 - Total liabilities 2 800 000 Assets? What is the value of assets in this business? a) 300 000 b) 400 000 c) 1 600 000 d) 4 000 000 e) none of the above 4. A business has the following in it: - Land 750 000 - Machinery 40 000 - Cash 10 000 - Owner's equity 450 000 - Loan 250 000 - Creditors? What is the value of the creditors? A) 100 000 B) 7 00 000 C) 900 000 D) 1500 000