Question

a) List and explain the enhancing qualitative characteristics of financial information under the conceptual framework. b) Outline the significance of the following accounting concepts in the preparation of financial statements. i) Accrual concept (1 mark) ii) Going concern concept (1 mark)

c) ABC Ltd started business on 1/12/15, and its financial year ends on 30th November each year. The following information was extracted from the asset register. GHS • 2015 December 1, bought one equipment costing 97,500 • 2016 May 31, bought one equipment costing 585,000 • 2016 September 1, bought two equipment costing 780,000 each • 2018 March1, bought one equipment costing 390,000 • 2018 May 2, sold the equipment purchased in May 2016 for 182,340 • 2019 February 1, bought three equipment costing 585,000 each

The company’s policy is to depreciate assets at a rate of 20% per annum on a reducing balance basis proportionate to the date of purchase and disposal. All figures must be rounded to nearest whole number.
Required:
Prepare the following accounts:
i) The assets accounts (2016-2019) ii) Provision for depreciation account (2016-2019) iii) Disposal account for 2018 iv) Statement of profit or loss extract for each year from 2018 and 2019 (1 mark) v) Statement of financial position extract for each year from 201 to 2019 (Total 20 marks

Answer 1