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MBA Remedial
Financial Accounting
Exercise 3.1:
h. The costs of the goods and services used up in the process of generating
revenue “Expenses”
Exercise 3.4
a. Not revenue, as the amount has been put in by shareholders and not earned
by the business through its own operations.
b. Not revenue, as the amount is received for services rendered in April and not
May.
d. Interest is revenue as it has been received on the business money lying with
the bank.
e. It is revenue as the services are provided in the month of May, even though
the payment will be made not before 25th June.
Exercise 3.11:
a) Not an expense for March as the photocopier will be depreciated thru its
workable life.
c) It is an expense as the amount was paid as salary for the services of the
employ for the month of March.
Usama Asaad
MBA Remedial
Financial Accounting
Cash $ 1,145
Accounts Recievable $ 200
Office Supplies $ 100
Mowing Equipment $ 2,000
Account Payable $ 100
Note Payable $ 1,600
Capital Stock $ 1,500
Retained Earnings $ -
Mowing Revenue $ 350
Salary Expenses $ 80
Fuel Expenses $ 25
$ 3,550 $ 3,550
“Retained Earning” is zero as the company has only started business during the
month of July.
HEARTLAND CONSTRUCTION
General Journal
Feb 1-28
Transac Owner's
tion Assets = Liabilities + Equity
$ $ $
1-Feb 500,000 - 500,000
$ $ $
10-Feb 300,000 240,000 -
$
(60,000)
$ $ $
16-Feb 12,000 - -
$
(12,000)
$ $ $
18-Feb 9,000 8,000 -
$
(1,000)
$ $ $
22-Feb 3,000 - -
$
(3,000)
$ $ $
23-Feb 36 - -
$
(36)
$ $
27-Feb (4,000) (4,000)
$ $ $
28-Feb 36 - -
$
(36)