ACCT1501 Practice Exam Questions & Solutions

QUESTION 1

(10 marks)

2015S2

Accounts Receivable

Rupert Ltd maintains subsidiary ledgers for debtors and creditors. At 31 May 2014, the debtors control account has a debit balance of $50,120 and the creditors control account has a credit balance of $30,670. An extract of totals from the special journals for the month of June 2014 is as follows:
$
Credit sales
86,500
Cash sales
6,100
Credit purchases
93,200
Cash received from debtors
67,800
Cash paid to creditors
55,890
Cash purchases
4,300
Discount received from
7,500
creditors
Discount allowed to debtors
3,500
Complete the debtors control accounts as they would appear in the general ledger.
2 MARKS PER ENTRY IN EACH CONTROL ACCOUNT (NO HALF MARKS)

Opening balance
(Balance b/d)
Sales
Closing balance
(Balance c/d)

Debtors control
$
50,120
86,500
65,320

1

Cash
Discount
expense

$
67,800
3,500

ACCT1501 Practice Exam Questions & Solutions

2015S2

This is also acceptable.

Opening balance
(Balance b/d)
Sales

Opening balance
(Balance b/d)

Debtors control
$
50,120
86,500
136,620
65,320

2

Cash
Discount expense
Closing balance
(Balance c/d)

$
67,800
3,500
65,320
136,620

ACCT1501 Practice Exam Questions & Solutions

2015S2

QUESTION 2 (12 Marks) Financial Reporting Principles, Accounting Standards and Auditing, & Sustainability Reporting
Provide short answers to the following:
1. Auditors are required to maintain independence from their audit client. Why such independence is crucial? Why achieving and maintaining independence is difficult? (4 marks)

Auditors need to maintain their independence from client to ensure that they can make unbiased and objective audit judgment. In this way, auditors can perform the audit with sufficient professional scepticism. (1