During October 2019, Cleo organised a new business, Cleo’s Cafe. After each October transaction, Cleo prepared a balance sheet, as shown below.

Required

(a) Describe the nature of each of the four transactions that took place during October.

(b) Comment on the type of financial information conveyed in a balance sheet.

(c) Write a retort to the statement that ‘a balance sheet should be prepared only once a year’.

Transcribed Image Text:

(1) (2) ASSETS Cash at bank ASSETS Cash at bank Tables and chairs $175000 $ 46000 129 000 $175 000 CLEO'S CAFE Balance Sheet as at 4 October 2019 EQUITY Cleo, Capital CLEO'S CAFE Balance Sheet as at 13 October 2019 EQUITY Cleo, Capital $175 000 $175 000 $175 000