1 Introduction

Question 1

What are these? Acc depreciation, acc ammoritisation, allowance for impairment of AR acc

Answer 1

Contra-asset

Question 2

Assets:

Answer 2

Cash, acc/notes/trade receivables, PPE (Plant, Property, Equipment), goodwill, supplies, land, prepaid assets (insurance, land) (asset before it turns to expense), accumulated depreciation, marketable securities, right-of-use assets, deferred contract acquisition costs, staff loans, customer relationships, deposits and prepayments (deposits cant tell if A/L on its own)

Question 3

What are these? PPE, goodwill, available-for-sale financial assets other intangible assets, investments in associates

Answer 3

Non-current Assets

Question 4

Liabilities:

Answer 4

Bank loan, acc/notes payable, salary payable, lease liabilities, deferred revenue, accrued expenses, unearned revenue (not revenue), deposits (depends if A/L), customers’ deposits, collections on behalf of third parties

Question 5

Equity:

Answer 5

Share capital, capital stock (common & preferred stocks), retained earnings, other reserves, cost of revenue, stock-based compensation expense, gain

*Treasury share is Contra-Equity (Dr instead of Cr)

Question 6

Income Statement:

Answer 6

Income: Service revenue, gain from sale

Other comprehensive income: Gains on property revaluation, share of gain/loss, income tax relating to items that will not be reclassified

*Sales return: Contra-Revenue

Expense: Salary expense, rent expenses, utilities expense, depreciation expense, cost of goods sold, employee expenses, finance costs, impairment losses

Question 7

Assets = ?
Equity = ?
Ending Retained Earnings = ?
Net Income = ?

Answer 7

Assets = Liabilities + Equity

Equity = Share Capital + Retained Earnings

Ending Retained Earnings = Beg Retained Earnings + Net Income - Dividends (not an expense)

Net Income = Income - Expenses