1. What is the difference between revenues and earnings? Describe and show as a sample.

2. What is the difference between expenses and payments?Describe and show as a sample.
3. What is the difference between revenues and receipts? Describe and show as a sample.
4. What is the statement of financial position?
5. What is the difference between the cash basis and the accrual basis of accounting?
6. What is the difference between adjusting entries and correcting entries?
7. What is a journal entry? (structure, items and etc.)
8. Describe and discuss the comparison of financial statements using debt ratio
9. Describe and discuss the comparison of financial statements using current ratio
10. Discuss and describe the preparation of income statement
11. Describe the preparation and analysis of income statement using margin ratios
12. Describe and discuss the calculation of COS(COGS), and inventory analysis
13. What is a general ledger account?(structure, items and etc.)
14. What is the double entry system?
15. What is historical cost?(the implmentation and show samples)
16. Describe the double entry system, T-accounts and their use in business purposes.
17. Describe the accounting, accounting process, its nature and basic accounting equation
18. Describe the revenue recognition principle(the implmentation and show samples)
19. Write on time period assumption (the implmentation and show samples)
20. Write about matching principle (the implmentation and show samples)
21. Describe and discuss assets, liabilities and equity, their structure, types and etc.
22. (1) May 1 Owner invested $20,000 in the company.
(2) May 3 Borrowed $10,000 from a bank.
(3) May 6 Purchased $15,000 equipment in cash.
(4) May 8 Purchased $9,000 merchandise (900 units) on credit.
(5) May 15 Sold 500 units of merchandise at the price of $11,000.
Customer paid $8,000 in cash at the time of sale.
(6) May 25 Paid $2,500 salaries.
(7) May 26 Paid $1,500 rent.
Prepare T-account transactions and balance sheet.
23. (1) May 1 Owner invested $40,000 in the company.
(2) May 3 Borrowed $20,000 from a bank.
(3) May 6 Purchased $15,000 equipment in cash.
(4) May 8 Purchased $9,000 merchandise (900 units) on credit.
(5) May 15 Sold 500 units of merchandise at the price of $11,000.
Customer paid $8,000 in cash at the time of sale.
(6) May 25 Paid $2,500 salaries.
(7) May 26 Paid $1,500 rent.
(8) May 27 Paid $100 utilities
Prepare T-account transactions and balance sheet.
24. (1) May 1 Owner invested $40,000 in the company.
(2) May 3 Borrowed $20,000 from a bank.
(3) May 6 Purchased $15,000 equipment in cash.
(4) May 8 Purchased $10,000 merchandise on credit.
(5) May 15 Sold $6500 of merchandise at the price of $11,000.
Customer paid $8,000 in cash at the time of sale.
(6) May 25 Paid $2,500 salaries.
(7) May 26 Paid $1,500 rent.
(8) May 27 Paid $100 utilities
Prepare T-account transactions and balance sheet.
25. (1) May 1 Owner invested $50,000 in the company.
(2) May 3 Borrowed $20,000 from a bank.
(3) May 6 Purchased $1,000 equipment on credit.
(4) May 8 Purchased $10,000 merchandise in cash.
(5) May 15 Sold $7500 of merchandise at the price of $11,000.
Customer paid $8,000 in cash at the time of sale.
(6) May 25 Paid $2,500 salaries.
(7) May 26 Paid $1,500 rent.
(8) May 27 Paid $100 utilities
Prepare T-account transactions and balance sheet.
26.What document summarizes the effects of all the entity’s transactions and adjustments throughout the period?
Describe each item on it and write about relevant items.
27. What is the last major step in the accounting cycle? Describe each item on it and write about relevant items.
28. Which accounts do not get closed out? Describe each item on it and write about relevant items.
29. How the companies evaluate themselves? Which financial measures or ratios basically do they use? Write about
them.
30. Data for the unadjusted trial balance of Mexican Riviera Tanning Salon at March 31,
2012, follow.
Cash 13,000 Service revenue 89,900
Equipment 66,500 Salary expense 42,200
Accumulate depreciation 18,500 Depreciation expense
Accounts payable 3,200 Supplies expense
Supplies 1,400 Neeland, drawing
Neeland, capital 11,500

Adjusting data for March 2012 are:

Accrued service revenue, $2,600.
Supplies used in operations, $400.
Accrued salary expense, $1,700.
Depreciation expense, $4,100.
Les Neeland, the owner, has received an offer to sell the company. He needs to know
the net income for the month covered by these data.
a. Prepare the worksheet for Mexican Riviera Tanning Salon.
b. How much was the net income/net loss for March?
C. Prepare balance sheet.

31. The trial balance of Telegraphic Link at November 30, follows:

Cash 4,000
Accounts receivable 3,200
Prepaid rent 1,900
Supplies 3,000
Equipment 34,800
Accumulated depreciation 1,600
Accounts payable 5,400
Salary payable 0
Thomas, capital 35,700
Thomas, drawing 2,100
Service revenue 8,600
Depreciation expense 0
Salary expense 1,700
Rent expense 0
Utilities expense 600
Supplies expense 0

Additional information at November 30, 2012:

Accrued service revenue, $600.
Depreciation, $300.
Accrued salary expense, $800.
Prepaid rent expired, $500.
Supplies used, $100
a) Complete Telegraphic Link’s worksheet for the month ended November 30, 2012.
b) How much was net income for November?
C) Prepare balance sheet

32. What are merchandising operations. Describe them and provide some examples.
33. Describe and write about The Operating Cycle of a Merchandising Business, provide samples.
34. Describe and write about perpetual inventory system, provide samples.
35. Describe and write about periodic inventory system, provide samples.
36. Describe and write about the accounting process for the perpetual inventory system, and provide samples.
37. Describe and write about the accounting process for the periodic inventory system, and provide samples.
38. Describe and write about the accounting process for purchase discounts, and provide samples.
39. Describe and write about the accounting process for purchase returns and allowances, and provide samples.
40. Describe and write about the accounting process for sales returns and allowances, and provide samples.
41. Describe and write about the accounting process for sales discounts, and provide samples
42. Describe and write about accounting ratios and their types.
43. Describe and write about adjusting process for the inventory based on physical count
44. Describe and write about closing process for the inventory based on physical count
45. Describe and write about Income Statement and it’s preparation.
46. Write about gross profit margin, it’s calculation methods and what it’s effects on.
47. Write about the inventory turnover, it’s calculations and what it’s effects on.
48. The company was established with authorized capital 300 000$, of which 200 000$ were in cash, 60 000$ was in
Building, 40 000$ was in equipment. The company has employees with salary 15 000$. During the week the
company acquired a car for company needs, by the price 20 000$ and paid in cash the full amount. Then it obtained
office supplies from Intellect LLC by the price 2000$, but paid 20% in cash. In order to get familiar to the publicity,
the company arranged several interviews with one of the channels, and for this cause preliminary rented a room
(which included snack and service) in PLAZA, and paid in advance in cash the amount 8000$ for the whole month.
The company was supplied with goods from Craft LLC by the price 100 000$, plus freight-in charges in the amount
of 3000$. During the check, there were found out that some goods are damaged, and some are provided incorrectly
against the invoice. The damaged goods amounting to 6000$ were returned to Craft LLC, and despite of fact that
there was incorrectness in provision of some goods, the company considered them still eligible for sale, but claimed
allowance for them in the amount of 4000$. Craft LLC agrees and states that if our company makes the payment for
the goods in 15 days, it will get an additional 10% discount on the price. Our company makes the payment during
the discounting period. During the month company makes sales amounting to 220 000$ to Barnes LLC and send
them invoice. During the transportation some of the goods were damaged and Barnes LLC returned to us 6000$
worth of damaged goods that costed 2500$, and paid in cash just 110 000$. Ending inventory at the end of
the month was 15 000$. The utility expenses were 500$, commissions to staff were 10 000$. Al the expenses were
paid out. Prepare relevant transactions, Balance and Income statement.
49. Describe and write about FIFO method and it’s calculation, provide samples.
50. Describe and write about LIFO and Average costing methods and their calculation, provide samples.

51. Define internal control and it’s features

52. List and describe the components of internal control and control procedures
53. Explain control procedures unique to e-commerce
54. Demonstrate the use of a bank account as a control device
55. Identify ethical dilemmas in an internal control situation
56. Describe and write about bank reconcilation process
57. Describe and write about cash account reconciliation process
58. Describe and write how the company can measure the cost of a plant asset
59. Describe and write about capital expenditures
60. Describe and write about the 3 main factors measuring the depreciation
61. Describe and write about the depreciation methods (straight-line and reducing balance)
62. Describe and write about the disposing of plant assets
63. Write about contingent liabilities
64. Describe and write about the payroll and payroll accounting
65. Day 1. Established a company with authorized capital – 550000 AZN. Day.2 Rented an office with
monthly fee – 4000 AZN.Day 3. Hired employees: Executive manager-1700 AZN, 3 mid chain managers –
each 1100 AZN, 7 sales specialists – each 700 AZN, one warehouseman – 1100 AZN. Day 5. Obtained a
warehouse for keeping goods – 15000 AZN. Day 8. Purchased 1000 units of microprocessors by the price
70 AZN per unit.Day 10. Obtained a small truck for transportation needs – 9000 AZN.Day 12. Purchased
additionally 800 units of microprocessors by the price 100 AZN per unit and 1200 video graphic adapters
by the price 150 AZN per unit. Day 16. By the decision of procurement and sales departments additionally
purchased 1200 units of microprocessors by the price 90 AZN per unit and 800 video graphic adapters by
the price 120 AZN. Day 20. The company realized 2000 units of microprocessors and 1500 units of video
graphic adapters with 65% trade surcharge. Day 24. The company received bill for utilities – 1200 AZN.
Day 30. The company paid for all expenses including sales tax (4%). For purchase/selling operations use
FIFO method. The terms of the problem: To prepare appropriate Profit and Loss Statement regarding
above mentioned operations.To prepare appropriate Cash Flow Statement regarding above mentioned
operations.To prepare appropriate Balance Sheet Statement regarding above mentioned operations.
66. Given the data for the 1st month of NovKo ltd.:

A L E
Raw materials: 30000 Trade payables: 20000 Authorized capital: 300000
Production equipment: 4600 Net profit: 15000
Cash in bank: 250000
Computers: 5400
Accounts receivable: 45000
2nd month:
The salaries 25000 (40% relate to admin personnel). Rental expenses – 4000 for production area, 2000 for
the sales area. Utilities – 400 for sales area, 800 for production.
The company paid back 10000 of payables, received back 20% of receivables. The depreciation for
computers is 200 per month, for production equipment – 400 per month. Bought raw materials by the price
60000. During the week 80000 of raw materials were used in production. When the ready made production
was ready, the company incurred packaging expenses -1000, and transportation expenses – 2000 on them.
The good were transported to sales area and sold with 60% mark-up. Tax from sales – 4%. Prepare BS, IS,
CFS
67. Given an unadjusted trial balance for the company below:

The following operations were incurred during the period:

1. Ending inventories is $12,500.
2. Accrued wages and salaries are $700.
3. Prepaid rent is $300.
4. Bank loan interest of 10% per annum is outstanding.
5. Allowance for receivables will be made as 2%.
6. Depreciation will be charged at 2 % of cost on premises, and at 10 %of cost on plant.
Required to prepare adjusted trial balance and reflect relevant journal entries of incurred operations.

68. Given a trial balance for the company below. On its base calculate current ratio (1 point)
Assume that above trial balance is an unadjusted and incurred the following operations.
Expired insurance, $3,060. Inventory of unused delivery supplies, $1,430. Inventory of unused office supplies,
$186. Estimated depreciation on the building, $14,400. Estimated depreciation on the trucks, $15,450.
Estimated depreciation on the office equipment, $2,700. The company credits the lockbox fees of customers
who pay in advance to the Unearned Lockbox Fees account. Of the amount credited to this account during the
year, $5,630 had been earned by August 31. Lockbox fees earned but unrecorded and uncollected at the end of
the accounting period, $816. Accrued but unpaid truck drivers’ wages at the end of the year, $1,920
Prepare adjusted trial balance and Income statement.

69. Limitations of internal control – costs and benefits

70. Describe and write about lump-sump purchase of assets.
71. Describe and write about the 2 main controls over payroll.
72. Below is given information on inflow and outflow of inventory on March:
Date Unit Unit cost ($) Total cost ($)
2 Mar 100 (i)* 10 1000
8 Mar 50 (o)*
14 Mar 200 (i) 11 2200
16 Mar 220 (o)
18 Mar 50 (i) 12 600
26 Mar 100 (i) 13 1300
30 Mar 40 (o)
Note*: (i) means inflow(purchase), (o)-outflow(sales)
On the base of the above information calculate the COGS using the LIFO, FIFO, AVCO methods

73. You have the following info

The following adjustments have not yet been made in the books:
(i) Motor vehicles are depreciated over 4 years on the straight-line basis. On 31 March 2009, a motor vehicle that
had cost $20,000 on 1 July 2006 was disposed of for $8,000. It is the company’s policy to charge a full year’s
depreciation in the year of purchase, and hence none in the year of disposal. No entries have been made for the
disposal.
(ii) Fixtures are depreciated on the straight-line basis over 10 years, on an actual time basis
(i.e. from the date of acquisition). On 1 October 2008, fixtures were purchased for $40,000, which have not been
entered in the books.
(iii) Office equipment is depreciated at 20 % per annum on the reducing-balance basis.
(iv) On 30 June 2009, it was decided to write off a bad debt of $80,000 and to make an allowance for receivables of
3% of the remaining receivables.
(v) The insurance figure above covers the period 1 July 2008 to 30 September 2009.
(vi) Sales representatives are paid commission, which amounts to 5 per cent of the previous month’s sales. The
commission is due for payment on the 15th of the following month. During June 2009, sales amounted to $120,000.
Requirement:
A) Prepare income statement for the year ended 30 June 2009
B) Prepare journal entries and adjusted trial balance
74. Compare FIFO,LIFO, AVCO methods, which one is more beneficial by the point of view for tax purposes
and revenue purposes.
75.

Above is given trial balance for the 30 March 2007

During 31 March 2007, the business made the following transactions.
(a) Bought materials for $1,000, half for cash and half on credit
(b) Made $1,040 sales, $800 of which was for credit
(c) Paid wages to shop assistants of $260 in cash
(d) Sales were 45,000$, 50% of them in cash
(e) trade payables decreased by 30%
(f) bought fixtures and furniture in credit amounting 23,120$

Requirement:
A) Prepare income statement for the year ended 31 march 2007
B) Prepare balance sheet for the year ended 31 march 2007