1. You began a business - Gulf Co, LLC as a wholesaler of woolen goods. The following events have occurred, Analyze the transactions using accounting equation:

[8 M]

• On November 1, 2020, you invested AED140,000 to start business in the name of Gulf Co. LLC
• On November 5, 2020, Gulf Co LLC borrowsAED150,000/- from bank
• On November 5, 2020, Gulf Co LLC paid AED75,000/- for the purchase of land.
• On November 7, 2020, Gulf Co LLC paid AED175,000/- for the purchase of building.
• On November 8, 2020, Gulf Co LLC purchased office furniture for

AED 30000/-

• On November 9, 2020, Gulf Co LLC sold Woolen goods worth AED 8820/-on 15 days credit.
• On November 18, 2020, Gulf Co LLC received cash of AED7,620/- for sales made on November 15
• On November 30, 2020, Gulf Co LLC paid the following expenses during the month: wages, AED 1,800/- utilities, AED 200/- Telephone AED 1000/- and web maintenance charges 1600/-.

(Hint: refer slides in class notes Topic 2 relating to Analysis of Transactions using Accounting equation)

1. Write Answer to each of the following question. (your answer has to be Either Debit or Credit) [2 M]

1. What is the bookkeeping entry for an increase in an Asset?
2. What is the bookkeeping entry for a decrease in a Liability?
3. What is the bookkeeping entry for an increase in Expenses?
4. What is the bookkeeping entry for an increase in Revenue?

(You can refer to Rules for Debit and Credit in the lecture notes / Text book)

2. How do Relevance and Faithful Representation ensure Quality of the Financial Statements?