On March 1, 2019, James's bond established zcd Reality. Bond completed the following transactions during the month of March:

a. Opened a business bank account with a deposit of 30,000 from personal funds.

b. Purchased supplies (pens, file folders, papers, etc.) on account, 2,650.

c. Paid creditor on account, 1,500.

d. Earned sales commissions, receiving cash, 36,750.

e. Paid rent on office and equipment for the month, 5,200.

f. Withdrew cash for personal use, 8,000.

g. Paid automobile expenses (including rental charge) for month, 2,500, and miscellaneous expenses, 1,200.

h. Paid office salaries, 9,250.

i. Determined that the cost of supplies on hand was 900; therefore, the cost of supplies used was 1,750.

Indicate the effect of each transaction.

Part 2

4 a) Explain the Accruals (or Matching) Concept in relation to the financial accounts and statements of a business.

b) A business information report has been obtained on Lucrative Prospects Ltd, a new sales lead. Your Sales Manager is naturally keen that credit terms can be agreed as soon as possible, and is very interested to learn what the data in the report means and how it helps with the account opening decision.

b) Explain the usefulness of each of the following ratios in reviewing the performance of a business:

i) Current Ratio

ii) Acid Test Ratio

iii) Receivables Collection Period

iv) Payables Settlement Period

v) Inventory Turnover Rate

c) The following data has been extracted from the business information report for Lucrative Prospects Ltd. Analyse the changes for each between 2015 and 2016, showing the potential impact upon Lucrative Prospects Ltd in general and making reference to its management of its working capital in particular.

Question 3

I. Mention what does financial statement of the company includes?

II. Explain what is working capital

III. Explain what is ledger?

IV. Mention the types of ledger?

V. Explain what is GAAP?

VI. With an example Explain what is double-entry accounting?

VII. Explain what does the standard journal entry includes?

VIII. Explain what is liabilities and what all does include in current liabilities?

IX. Mention in simple terms what is the difference between Asset, equity, and liabilities?.