Answer the questions below

QUESTION 1 Assets are as important as is their ability to generate income. Define a current asset, and a fixed asset. In a Balance sheet what is the order in which assets are recorded.

QUESTION 2 A company takes a long term loan of $5000 for 5 years. $1000 of this loan is to be paid in the current financial year. What is the best way of recording this liability in your balance sheet

QUESTION 3 Complete the equation Assets = ______________ ? When preparing the balance sheet of a company at the end of the year, do we have to take into consideration the Net Income the company earned during the year. Do we have to take into consideration any Equity entries such as Dividends paid and Retained Earnings. Explain why ?

QUESTION 4 A company is considering to take a loan. They will have to repay their loan and pay interest on the loan as well. On Oct 1st a loan is approved with a bank for $10,000 at an interest rate of 10% per annum. On December 31st the company recognises that 3/12 * 10% * 10,000 is owed to the bank.

The bank recognises a liability for interest payable and immediately afterwards settles the liability in cash. Can you record all relevant journal entries?

QUESTION 5 Supplies are considered to be an asset. Supplies expense is an expense.

On May 1st a company purchases 5 ink cartridges for $1000. Each cartridge is for $200, and pays in cash.

On June 1st one cartridge is completely used up for $200.

Record the journal entries for May 1st and June 1st.