Accounting Answers

SFP Question # 4

Assets= 300% of total liabilities

Liabilities= 50% of Owner's Equity

Owner's Equity= 80% of total Assets

Difference between Owner's Equity and Liabilities = 2,000,000 pesos

How much is the total liabilities?

SFP Question 3

Liabilities= 0

Assets= 350,000 pesos

Owner's Equity = ?

SFP Question 2

Liabilities = 40% of total Assets

Current Assets= 1,900,000 pesos

Noncurrent Assets= 500,000 pesos

How much is the value of Owner's Equity?

SFP Question 1

Current Assets= 880,000 pesos

Noncurrent Assets= 1,200,000 pesos

If the business entity only gets resources from equity financing, how much is the total value of Owner's Equity?

1.     On January 3, 2003, Ale Hab, an ex-manager of the CBE Bole Branch, established his own consultancy business. He named his business "AH Consultancy Services". The objective of the business is to render financial consultancy services to clients on a fee basis. Below are business activities occurred during the first month of operation of the firm (3 to 31 of January, 2003). 

Text: 

In such countries the effect of phone ownership on GDP growth is much stronger than in the developed world, because the ability to make calls is being offered for the first time, rather than as an alternative to existing landlines. As a result, mobile phone operators have emerged in Africa, India and other parts of Asia that are larger and more flexible than Western companies, and which have grown by catering for poorer customers, being therefore well-placed to expand downmarket. In addition Chinese phone makers have successfully challenged the established Western companies in terms of quality as well as innovation. A further trend is the provision of services via the mobile network which offer access to information about topics such as healthcare or agriculture.

(b) Quotation 

Directions: Introduce a quotation to show the key point, referring to the source. Write your answer below. 

Why retained earnings account has zero balance in the trial balance?

2. Discuss the current accounting standards or principles applicable in Ethiopia as a base for

financial statement preparation and presentation.

3. Explain the underlying prescriptions of IFRS

4. Describe five types of business transactions with external parties and another five types of

business transactions from internal sources of a selected form of business company at your

nearby (please indicate the form of company you selected on the answer sheet) and explain

how they are journalized and then reported in the financial statements.

5. Discuss the accounting process as a cycle with a given period by explaining each of the

steps and by giving practical examples.

Africa Traders is not a registered VAT vendor and buys and sells furniture. Africa Traders sold a dining room table for R3 400. The mark-up percentage on cost is 25%

A. Write T if the statement is correct or F if the statement is incorrect.

1. The equity is also called the residual value or interest of the owner from the business.

2. Contributions of owner to the business are in the form of cash only.

3. The capital account of the business also includes the result of operations.

4. The unearned revenue is considered an income of the business that can be included in the SCE.

5. The expenses of the business are deductions to the business capital.

6. The SCE is dated as of the period ended.

7. The withdrawal account is included in all forms of business organization.

8. A corporation may be formed by a single person.

9. Fhe number of capital accounts of partners depend on the number of its owners.

10. The owner in a sole proprietorship js usually he manager of the business.