question 1 Avia Ltd is a retail business which has a financial year end 31 December. On 30 November 2020, the accountant recorded the following journal entry and it was posted to the ledger: Debit Credit Inventory ( SFP) 20 000 Marathon Ltd ( SFP) 20 000 The amount of N$ 20 000 represents of the purchases of merchandise Marathon Ltd, a supplier of sugar products to retail business. Required: a) Identify the element, as per the Conceptual Framework Financial Reporting which was debited in the above journal entry. b)Explain the element you have chosen in (a). c) Identify the element, as per the Conceptual Framework Financial Reporting, which was credited in the above journal entry.
question 1
Avia Ltd is a retail business which has a financial year end 31 December. On 30 November 2020, the accountant recorded the following
Debit Credit
Inventory ( SFP) 20 000
Marathon Ltd ( SFP) 20 000
The amount of N$ 20 000 represents of the purchases of merchandise Marathon Ltd, a supplier of sugar products to retail business.
Required:
a) Identify the element, as per the Conceptual Framework Financial Reporting which was debited in the above journal entry.
b)Explain the element you have chosen in (a).
c) Identify the element, as per the Conceptual Framework Financial Reporting, which was credited in the above journal entry.
d) Explain the element you have chosen in (c).
nb:Your explanation/motivation should only refer to the definition criteria of this element in accordance with the Conceptual Framework of Financial Reporting.
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