Question 2

(a) Briefly discuss the following accounting concepts that are used in the preparation of financial statements:

(1) Historical Cost Concept[5 marks]

(2) Monetary Concept[5 marks]

(b) Name any 3 users of financial statements and their informational needs.[9 marks]

(c) The following transactions relate to Belle Services.

1. Ms. Belle, owner of Belle Services, invested $170,000 cash in his new design services business.

2. The business paid the first month's rent of $10,700.

3. The business purchased equipment by paying $102,000 cash and executing a note payable for $14,500.

4. The business purchased supplies for $10,850 cash.

5. The business received $130,000 of the account for the completed services.

Required:What is the balance in Cash for Belle Services?[6 marks]

(Note: You are not required to develop a ledger account)

[Total 25 marks]