Accounting Questions

Question 1 – Classify account types

Assets Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Liabilities	Owner’s Equity	Revenue	Expenses Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper
Cash at Bank	Loan from bank	Drawings by owner	Sales of inventory	Electricity
Machinery	Accounts payable		Commission received	Rent paid on factory
Shelving and storage racks				Packaging and postage
Accounts receivable				Interest paid on bank loan
Inventory				Mobile phone monthly plan
Fork lifts				Legal fees
Computer equipment
Office furniture
Shares in public companies

1. Owner of the business:
2. Weston is the owner of the business.
3. Owner’s investment:
4. Weston, owner of the business has invested $ 15,000 in the business.
5. Owed by customers:

Customers are owed $ 1700 to business.

1. Owned by suppliers:

Business owed $ 800 to suppliers.

1. Inventories:

Inventories are the raw material; finished goods and work in process products which are analyzed as a portion of the assets of a business and these products are ready or would be ready by the business for sale. In the given case, inventory of the company could be the ceramic tiles which are ready to be sold.

1. Secured loan:

Secured loan is the loan which is protected by an asset or some sort of security. Basically, security loans are the best way to obtain a great amount of money.  Usually, security loans offer lower rates. In the given case, secured loan of the company is $ 2000.

Date	Account affected	Debit	Credit
23-Mar	Bank A/c  (Assets +)	$        600
	Service revenue a/c (Revenue +)		$          600
	(Services have been delivered.)
25-Mar	Cash A/c (Assets +)	$        200
	Commission received (Revenue +)		$          200
	(Commission amount received.)
28-Mar	Builder a/c (Assets+)	$        350
	Services revenue a/c (Revenue +)		$          350
	(Repairs have been done at building site)
29-Mar	Wages A/c (Expenses +)	$        700
	Cash  (Assets -)		$          700
	(Wages paid.)
30-Mar	Bank a/c (Assets +)	$     1,150
	Accounts receivables (Assets -)		$       1,150
	(Client paid the amount.)
31-Mar	Loan payment a/c (Liability -)	$        800
	Bank a/c (assets -)		$          800
	(Monthly loan instalment paid.)

According to Accounting Professional and Ethical Standards Board, five areas of ethics which must be followed by the accountants are as follows:

• Integrity
• Objectivity
• Confidentiality
• Professional competence and due care
• Professional behaviour

An accountant is required to follow all the above ethical conduct in professional and ethical manner.

Integrity:

Integrity is a significant ethical element in accounting profession. Integrity ethical conduct explains that an accountant should be honest and straightforward in his task and must have strong moral principles towards the work (Warren and Jones, 2018). Accountants are required to be restricted themselves from advantages or personal gain by using the confidential information. For instance, an accountant should always hide the confidential information of the company from any outsider and must not share it with anyone outside the business.

Objectivity:

Objectivity is an ethical value in accounting profession. An accountant should always remain free from any kind of conflicts of interest and any other questionable relationship at the time of providing accounting services. Objectivity explains that the accountant should not be bias, conflict or undue influence to override business judgements or professionals (Neu, Everett and Rahaman, 2015). For instance, an accountant should prepare the financial statement without involving into any kind of conflicts.

Confidentiality:

An accountant should respect the confidentiality of the information which is required as an outcome of business relationship and professionals, and, therefore, accountant should not disclose the information about the business to third parties without special and proper authority unless any legal or professional duty to disclose is there (Ho, Li, Tam and Zhang, 2015). For instance, ABC limited has offered accountant of XYZ limited to $ 1 million to disclose the financial information of the company, but the accountant should not disclose due to confidentiality element.

Professional competence and due care:

An accountant should have proper knowledge and skill which is required to make sure that employer or the client receives competent professional services that is based on legislations, current development and techniques to maintain the professional standards (Ferrell and Fraedrich, 2015). For instance, an accountant is required to have enough knowledge about the new changes into accounting standards and practices so that he could offer the best services.

Professional Behaviour:

An accountant should comply with the regulations and laws to avoid any tactic and action which could discredit the professional behaviour. Accountant should spate his personal and professional life so that the better services could be provided by him (Smith, 2017). For instance, an accountant is working with ABC limited and the owner of the company is his friend but the accountant should not involve the friendship in professional relationship.

Date	Accounts affected	Debit	Credit
a)     1 March	Cash at Bank	500
	Rent Revenue		500
	(Rent revenue has been received by the firm.)
b)     2 March	Stationery	700
	Cash at Bank		700
	(Stationery has been purchased.)
c)     3 March	Office furniture	2 000
	Accounts Payable		2 000
	(Office furniture has been purchased on credit.)

References:

Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson Education.

Ho, S.S., Li, A.Y., Tam, K. and Zhang, F., 2015. CEO gender, ethical leadership, and accounting conservatism. Journal of Business Ethics, 127(2), pp.351-370.

Neu, D., Everett, J. and Rahaman, A.S., 2015. Preventing corruption within government procurement: Constructing the disciplined and ethical subject. Critical Perspectives on Accounting, 28, pp.49-61.

Smith, M., 2017. Research methods in accounting. Sage.

Warren, C.S. and Jones, J., 2018. Corporate financial accounting. Cengage Learning.