assap guide on this question

3. a) Describe the role and purpose of an internal auditor for a business. (4 marks) b) Neha has drafted the ledger accounts and financial statements at year end for her promotions and marketing business and is pleased that Gross Profit is E74,500 and Net Profit is $14,500. However, on checking the details more closely, she identifies the following: A. Rent from a client of E3,500 for the short-term use of an unwanted outbuilding for storage has been credited to the Land and Buildings account. B. The cost of a colour photocopier for the business, $13,500 including installation costs, has been debited to the Purchases account. C. A bill for E650 for repairing some office equipment has been debited to the Vehicle Expenses account. D. The price of a motor vehicle for business use, namely $7,500, has been debited to the Vehicle Expenses account. E. Carriage in of E80 has been entered to the Postage and Delivery account. F. E18,000 from the sale of the outbuilding has been credited to the Sales Revenue account. TASK for part b) i) Briefly explain the accounting concern in each of the six situations A to F given above. (6 marks) ii) Ignoring depreciation and other adjustments, and starting with Neha's draft gross and net profit figures, briefly show the effect upon profit of correcting each issue and then give the revised Gross Profit and Net Profit figures after amendments have been made. (6 marks) c) Explain the significance of a 'true and fair view' in relation to the accounts and financial statements of a company or other incorporated business. (4 marks)2. a) The double-entry ledger is conveniently divided so that accounts with similar characteristics are placed together. Identify each of the recognised ledger divisions and describe, with an example, the account types that each division contains. (4 marks) b) ABC Dealing is a business owned and run by Alan B Crick. Whilst the following events took place in the first few days of this month, ledger accounts have not yet been written up and that will become your task here. 01-Jun The business bank account is in funds by E1,500 and there is E2,000 cash in the business's office safe. Open accounts as relevant and simply show these as existing balances brought forward. 01-Jun Bought new inventory on credit from N Joshi and received an invoice for E1,800 inclusive of VAT. 01-Jun Sold goods to Joan's Phones on credit and sent an invoice for E3,500 plus VAT. 01-Jun Alan B Crick puts E2,500 into the business bank account and puts E2,500 into the office safe. This is all new money to his business. 02-Jun Purchased goods for resale in cash from MTC Wholesale and their cash invoice/receipt was $2,000 goods, plus VAT. 03-Jun Sold more goods for E2,700 including VAT and all customers paid by cheque. 05-Jun Goods returned by Joan's Phones and ABC issued a credit note for E250 plus VAT. 06-Jun Alan purchased a second-hand van solely for use within ABC Dealing from D Trotter in cash for E1,200 including VAT. TASK for part b) Opening ledger accounts as necessary and following recognised bookkeeping and accounting principles, correctly record each of the transactions stated above (12 marks) c) Explain the principles and characteristics of Value Added Tax from a business accounting perspective. (4 marks) Total 20 marks1. a) Explain how a suspense account can be used as part of the book-keeping error correction process. (4 marks) b) The following are extracted balances from Harbhajan's business accounts along with other information relating to the business's year end on 30 April 2017. For some reason, the figure for Capital at the beginning of the year has not been supplied, although you have been given the year end net profit figure: E Capital as at 1 May 2016 unknown Machinery at cost 100,000 Sales Revenue 59,000 Motor Vehicles at cost 50,000 Purchases 25,000 Trade Receivables 13,500 Trade Payables 12,500 Accumulated [provision for] depreciation: Machinery 10,000 HM Revenue and Customs: VAT (owing) 7,750 Net Profit as at 30 April 2017 7,105 Accumulated [provision for] depreciation: Motor Vehicles 5,000 Water and Utilities 4,500 Inventory as at 1 May 2016 3,500 Wages and Salaries 3,500 Rent 3,000 Bank (in funds) 1,800 Purchases Returns 1,355 Business Rates 1,250 Bad Debts written off 1,150 Sales Returns 1,250 Discounts Allowed 950 Cash in Hand 760 Drawings 750 Discounts Received 550 The Rent figure includes $600 relating to May, June and July 2017. The Machinery still has to be depreciated at year end by 10% straight line. There was unpaid Wages and Salaries at year end 30 April 2017 of E800. Stocktake at year end 30 April 2017 valued Inventory at 25,000. Motor Vehicles need year end depreciation (diminishing [reducing] balance at 10%). June 2017 7B/PQP/7 Continued TASK for part b) Use the information given about Harbhajan's business as appropriate to prepare a Statement of Financial Position for its year end, including the missing figure for Capital. (12 marks) C) Explain the problems from a working capital perspective for a business which has i) too many orders and il) too few orders. (4 marks) Total 20