2108AFE Topic 2 Assessable Practical Work and Reflection
2108AFE Financial Accounting
Assessable Practical Work and Reflection
Topic 2 – The Adjusting and Closing Process
Question 1
Journalise any necessary adjusting entries for ABC Accounting in the General Journal at 30th June XXXXXXXXXXExplanations/Na
ations are NOT required.
1. On the first of April paid rent in advance for 12 months, $15,000.
2. Received $4,000 Fees in Advance on 1st March 2018. At the 30th 25% of the work has been completed.
3. Employee Salaries owed for Monday to Wednesday of a five-day working week; the weekly payroll is $12,500.
4. Depreciation for one month on Office Equipment costing $5,000 with a salvage value of zero and a useful life of 10 years.
5. Interest expense accrued $1,300.
Journal
DATE
ACCOUNTS AND EXPLANATIONS
POST.REF.
DEBIT
CREDIT
June
30
Question 2
Explain why accrual accounting provides more complete information than cash basis accounting.
Question 3
Spanners Accounting Practice reported the following account balances (all these accounts have normal balances) at 30 November 2017:
Sales and Marketing expense
$ 2,100
Cash
$1,100
Other assets
XXXXXXXXXX
Service Revenue
5,500
Depreciation expense
XXXXXXXXXX
Accounts Payable
XXXXXXXXXX
Non-cu
ent liabilities
XXXXXXXXXX
Accounts Receivable
XXXXXXXXXX
Capital - Spanners
3,500
Drawings -Spanners
XXXXXXXXXX
Required: Journalise Spanner’s closing entries, as needed for these accounts.
Journal
DATE
ACCOUNTS AND EXPLANATIONS
POST.REF.
DEBIT
CREDIT
Nov
30
Question 4
Why are closing entries necessary?
1