Accounting assignment question

QUESTION ONE: LO I(d, e, h) & LO 2(a) Total 21.5 MARKS

  • .1 The Accounting Cycle
  • .1 Draw a simple diagram of the accounting cycle (0.5 mark) and briefly discuss any four stages of the accounting cycle (0.5 mark for each correctly discussed stage; 4 x

0.5 = 2 marks). LO I(d) 2.5 marks

  • The New Zealand Framework

1 .2.1 Con Fitzgerald is a sole trader. He is sorting out his accounting records for the first month of operations. He lacks accounting knowledge so he asked for your help. Con wants to know more about accounting elements.

Required:

  • Provide definition of the Asset; give an example of an asset and explain why this is the asset. In your explanation refer to the points mentioned in the asset definition. [1 mark]
  • Give one example when an asset is not recognized in the Balance Sheet. Provide a reason why it is not recognized. [1 mark]
  • Provide definition of the Liability; give an example of a liability and explain whv this is the liability. In your explanation refer to the points mentioned in the liability definition. [1 mark]
  • Give an example when a liability is not recognized in the Balance Sheet. Provide a reason why it is not recognized. [1 mark]

1.2.2 Discuss the two qualitative characteristics of financial statements e.g. understandability (1 mark) and reliability (1 mark) and explain how these apply in the preparation of financial statements. [2 marks]

1.2.3 Explain what going concern assumption is and what changes must be implemented in financial reports if an entity is not a going concern. [1 mark]