Question 1: The following is a summary of the transactions that took place in ADEEB Ltd during October 2020: October 1st ADEEB started a new business with 50,000 cash. October 3rd bought equipment at a cost of 15,000 on credit from LMS Ltd. October 4th paid 5,000 monthly rent. October 6th bought inventory using 12,000 cash. October 9th sold stock of 14,000 for cash, and sold goods of 6,000 on credit to TRK Ltd. October 12th collected the 6,000 cash from TRK Ltd. October 14th paid 3,000 monthly insurance. October 16th ADEEB took 500 cash from the business to buy a gift for his son on his birthday. October 28th paid 1,000 monthly bills. October 29th paid 15,000 to LMS Ltd. Required a) Record the above transactions in a set of journal entries. (20 marks) b) Open ledger accounts for Cash, Insurance, and Sales, and calculate their final balances at the end of the period. (10 marks) c) Discuss Five types of common errors appearing in the trial balance. You must use relevant academic literature in your answer. (10 marks) (Total 40 marks) Question 2 a) Discuss the following accounting concepts: going-concern, conservatism, and the matching concept, giving examples of how they may be applied in the financial reports.

You must use relevant academic literature in your answer.	(10 marks)
b) Discuss three differences between the Income Statement and the Balance Sheet (statement of financial position). You must use relevant academic literature in your
answer.	(10 marks)

c) ADB Ltd has the following trial balance as at 31st December 2020
Sales	150,000
Motor Vehicles	90,000
Accumulated Depreciation for Motor Vehicles	45,000
Opening Stock (as of 1st Jan. 2020)	15,000
Salaries expense	20,000
Accounts Receivables	75,000
Fees received	45,000
Cash	40,000
Purchases	50,000
Notes Payables	40,000
Rent Expenses	10,000
Utilities Expense	25,000
Machines	60,000
Accumulated Depreciation for Machines	30,000
Share Capital	75,000
385,000	385,000

The following information is also available: -

(1) Closing stock at the 31st December 2020 is 10,000

(2) Included in Utilities expense costs of 12,000 which are paid for the year ended on 30th June 2021.

(3) Late rent of 10,000 is due and has not been paid or included in the rent expense yet. (4) Depreciation follows straight line method 20% for Motor Vehicles and 10% for Machines.

Required Showing full workings, you are required to: -

Prepare an Income Statement and a Balance Sheet for ADB Ltd as at 31st December 2020.

(40 marks)

(Total of 60 marks)