Financial Statement Format and Accounting Policy
In practice, financial statement format, chart of account for financial statements and accounting policy are different from companies to other companies.
Cost of service for Service Company may not be identified for accounting purpose because it may be difficult and spend time to separate between cost of service and operating expense.
Let practice with the following questions:
Question 1
Company purchases car (fixed asset) of 20,000 on 23 November 2016.
Required:
You are required to make accounting policy for depreciation time of this transaction
Question 2
Company bought a photocopy machine on 1 December 2016; company is required to pay installment for $300 each month in arrear for 12 months.
Required:
You are required to make accounting policy for recognizing fixed asset for this transaction.
Question 3
AZT is trading company that purchases and sells phones.
Company paid in advance of $20,000 for inventories (phones are 200 units) from a supplier, ACN Company.
Required:
You are required to make accounting policy to classify and present this transaction.
Question 4
TEP IMPORT & EXPORT Co.,Ltd is local company that makes accounting transactions locally and overseas, and company buys and sells two major goods such as cars and computers , but cars are imported from overseas while computers are bought from local market.
Recently charts of account for TEP IMPORT & EXPORT Co.,Ltd seem messy after accounting manager resigned.
Required:
Because you are new accounting manager for this company, you are required to make new charts of account for TEP IMPORT & EXPORT Co.,Ltd.
Question 5
Company has the following fixed assets:
- Computers of 2,500$ ( $500 x 5 units)
- Car of $50,000
- Building of $100,000
Required:
Based on your professional judgment and company policy, you are required to make accounting policy as follows:
- Depreciation method
- Useful life ( if can determine)
- Residual value ( if any)
Question 6
AAA Company Co., Ltd is consulting company that provides the following services to its valued customers:
- Tax service
- Accounting service
- Audit service
- Consulting service
- Other service
Required:
Because it is new company, you are required to make new charts of account and financial statement formats for AAA Company Co., Ltd.
Question 7
AZT is manufacturing company that produces and sells meeting tables.
Company received cash of $50,000 in advance for 400 tables from a customer, MTB Company.
Required:
You are required to make accounting policy to classify and present this transaction.
Question 8
UTM Top One is trading company, and purchase and sell the following stocks:
- Car
- Motorcycle
- Bicycle
Required:
You are required to make accounting policy to make cost valuation methods for these stocks.
Question 9
TTT Company often has approximate electricity expenses of $200 per month, and electricity expense invoice is issued the following month of expenses incurred.
Accountant of TTT Company is not sure whether this transaction should be recognized accrual or cash basis.
Required:
You are accounting manager, so you are required to make this decision.