_{Question 3}

As the auditor of a business you discover the following items during your review of the financial statements and books of account.

Required:

Indicate the effect on the statement of financial position and/or the income statement (profit and loss account) of the adjustments needed to account for these items.

(i) No depreciation has yet been calculated for motor vehicles that cost RM20,000. The business writes off motor vehicles on a straight-line basis over 4 years.

(ii) A customer owing RM5,000 at the year-end has been remaining to be outstanding for 9

months.

(iii) Motor vehicle insurance for a whole year in advance - RM1,200 - had been paid 3 months

before the year-end.

(iv) Wages amounting to RM2,500 for the final week of the year had not been paid or accounted

for by the end of the accounting year.

(v) A debtor owing RM2,000 at the year-end has been confirmed pass away and written off .