Exam (elaborations)
Accounting 1A Semester Test 1 2023 MEMO
- Course
- Institution
Solutions for Semester Test 1 2023
[Show more]
Seller
Follow
faithntuli
Content preview
FACULTY/COLLEGE College of Business and EconomicsSCHOOL School of Accounting
CAMPUSES APK and SWC
MODULE NAME Accounting 1A
MODULE CODE ACC01A1
SEMESTER First Semester
ASSESSMENT Assessment Opportunity 1
OPPORTUNITY, YEAR 2023
SUGGESTED SOLUTION
1
, QUESTION 1 SUGGESTED SOLUTION
PART A
a) Ice-cream machine is an asset (1)
Definition Application
An asset is a presenta economic resource (1) The ice-cream machine is a present economic
resource as Maqnum has a present legal right
of ownership (1) that has the potential to
produce economic benefits as Maqnum can
use the machine to produce ice-cream for sale
to the customers. (1)
controlled by the entity (1) Maqnum controls the economic resource
(machine) since it has the present ability to
direct the use of the machine (1) and obtain
the economic benefits that may flow from it (1).
Maqnum has the present ability to direct the
use of the machine as it has the legal right to
deploy the machine (1) in its activities of
making ice-cream for sale to customers (1).
as a result of past events. (1) The past events are the payment for the ice-
cream machine by Maqnum, and deliveryb of
the machine by Ola Ltd (1).
Note to markers:
aIt must state present economic resource for the student to earn the mark.
bDelivery of the machine is important and if this is not stated the student is not awarded a
mark.
b)
(i) Going concern
Financial statements are prepared under the assumption that the entity is a going concern
and will continue to operate in the foreseeable future (1).
It has no intention or need to liquidate or scale down operations (1).
(ii) Accrual basis of accounting
Transactions or events are to be recorded and reported in the financial period to which
they relate (1).
Transactions or events are not necessarily recorded in the period in which the asset is
received or paid (1).
Total 15 marks
2
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller faithntuli. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $3.41. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
60904 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now