OUbs008: BAKER has been in Business as a Retailer The following Balances were Extracted from his Books on 31 December 2019: Accounting Fundamentals Assignment, OUM, Mauritius
|University||OPEN UNIVERSITY of MAURITIUS (UOM)|
|Subject||OUbs008: Accounting Fundamentals|
Answer all questions
BAKER has been in business as a retailer. The following balances were extracted from his books on 31 December 2019.
|Capital 1 July 2019||7,000|
|Inventory, 1 July 2019||2,644|
|Carriage of Purchases||590|
|Bad Debts are written off||896|
|Rent and Rates||1,000|
|Cash in Hand||63|
|Cash at Bank||841(cr)|
- The closing inventory was valued at Rs2,089
- Baker has withdrawn cash for his personal use, taking Rs100 from sales every month and this has not been taken into account.
- Withdrawal of goods worth Rs175 for owner”s use has not been recorded
- Of the Rs 452 for insurance, Rs 68 was the insurance premium for Baker”s own private residence
- An amount of Rs37 was owing for lighting
- Prepared the income statement for the half-year ending 31 December 2019
- The Statement of Financial Position as of 31 December 2019
- Explain with examples the importance of Bank Reconciliation and how a proper Bank Reconciliation can help Management in Decision Making.
(d) Financial accounting rest upon a number of accounting concepts. Briefly explain five of these concepts.