The following are the transactions occurred in the first month
of his business E&O Consultancy.
January 1. Mr.said introduced RO.45,000 as initial investment
to start his new business
2. Business purchased 10 computers for RO.2,500 from Alain
computers and paid cash RO.800
immediately and balance agreed to pay later
3. Business obtains a loan of RO.15,000 from a bank in
Sohar
5. Business provide audit service to a listed company invoice
has given for OR.1500, but the client
informed that they can pay only next month.
8. Purchase office furniture for RO.1,200 and paid cash
immediately
12. Business provided accounting service to a local customer
and collected cash R0.700
15. Business paid rent for the whole year in advance
RO.950
18. During the month Business earned RO. 1,200 from a customer
for internal audit service,
collected cash RO.700 as advance and the balance the client
agreed to pay later.
20. Firm provide accounting service to a small sole
proprietorship business for credit RO.800
24. Business paid salary to all office staff totaled
RO.1,500
27. Paid the balance full amount to Alain computers for the
purchase of computer
28. Business paid RO.700 as rent to the landlord
31. Business received RO.500 from a customer, who previously
invoiced for the service for
credit.
Situation-1
You are recently joined in Al Omani (SAOG) Company as a junior
account clerk, and the accounts manager has asked you to do the
following tasks.
Note: Al Omani Company is following accrual basis of
accounting.
a) At what date you need to identify and record the above
transaction in the books of accounts, also discuss briefly about
how accrual basis of accounting system is used for recording the
above transaction.
(2.5 marks Word Limit 50-80)
b) Do you think, the credit purchase transaction initially
leads to increase the account payable of the business? Yes/No
comment briefly on your answer. (1 marks Word Limit 20-40)
c) Identify and discuss briefly about the source document, you
need to refer before identifying and recording the above credit
purchase transaction in the books of accounts.
(1.5 marks Word Limit 40-70)
Following information is relevant for Questions 2 -5
Mr.Said Rashid Maqbali has worked almost ten years as an
accountant in a major accounting firm based in Dubai. After gaining
enough experience and knowledge from the company, he has decided to
resign at the end of the year 2018 and start his own accountancy
firm in his home town at Sohar.
The following are the transactions occurred in the first month
of his business E&O Consultancy.
January 1. Mr.said introduced RO.45,000 as initial investment
to start his new business
2. Business purchased 10 computers for RO.2,500 from Alain
computers and paid cash RO.800
immediately and balance agreed to pay later
3. Business obtains a loan of RO.15,000 from a bank in
Sohar
5. Business provide audit service to a listed company invoice
has given for OR.1500, but the client
informed that they can pay only next month.
8. Purchase office furniture for RO.1,200 and paid cash
immediately
12. Business provided accounting service to a local customer
and collected cash R0.700
15. Business paid rent for the whole year in advance
RO.950
18. During the month Business earned RO. 1,200 from a customer
for internal audit service,
collected cash RO.700 as advance and the balance the client
agreed to pay later.
20. Firm provide accounting service to a small sole
proprietorship business for credit RO.800
24. Business paid salary to all office staff totaled
RO.1,500
27. Paid the balance full amount to Alain computers for the
purchase of computer
28. Business paid RO.700 as rent to the landlord
31. Business received RO.500 from a customer, who previously
invoiced for the service for
credit.
Question 2:
You are required to analyze the above transactions and prepare
a table to show the effect of all the
above transactions in the Accounting Equation.
Question 3:
You are required to journalize the above transactions of
E&O Consultancy for the month
January 2020, using an appropriate format.
Question 4:
You are asked to Post all the above transactions of E&O
Consultancy from the journal to respective ledger accounts and find
the balances at January 31, 2020.