Accounting may simply be described as the process of communicating financial information about a business entity. There are several organisational stakeholders that are interested in the financial information of an entity. You are required to:

a. Identify any five (5) users of financial information about a business enterprise and discuss their information needs.

b. Describe the following items which constitute some of the main contents of a Statement of Financial Position (Balance Sheet) of an organisation, giving appropriate examples:

i) Trade Receivables/Debtors

ii) Inventory/Stock

iii) Non-current Assets

iv) Current Liabilities

v) Current Assets

v) Shareholders Fund/ Owners Equity

Question 2

You are evaluating the balance sheet for Goodmans Bees Corporation. Find the extracts of the companys Trial Balance for the year ended 31st December, 2018 presented in the table below.

Cash and marketable securities

400,000

Accounts Receivables

1,200,000

Inventory

2,100,000

Accrued Wages and taxes

500,000

Accounts Payable

800,000

Notes Payable

600,000

Sales

11,200,000

Based on 365 days in a financial year, you are required to compute and briefly explain each of the following ratios for Goodman's Bees Corporation for the year 2018:

a) Quick Ratio

b) Current Ratio

c) Cash Ratio

d) Stock Turnover Ratio

e) Debtors Turnover Ratio

f) Average Debtors Collection Period