Reference no: EM132928147

Question - Stella owns a boutique. The following transactions relates to her business for the month of October 2019 October 1. Started a business with $100000 in a bank and $30000 cash

1. Paid rent by cheque $4000

2. Purchased goods on credit from W. Joe $6000 and G. Tom $5000

3. Stella return some goods worth $420 to G. Tom

4. Cash sales of $3000

5. Paid W. Joe #5700 by cheque less # 300 cash discount

6. Purchased furniture from Bora furniture's on credit $ 7000

7. Sold goods on credit to S. jane $2000; P. Rosa $3500

8. Obtained a bank loan $ 50000

9. S. Jane returned goods worth 200

10. S. Jane paid her account in cash less 2% cash discount

11. P. Rosa paid $. 3000 by cheque

12. Paid G. tom $35000 cash

Required -

1. Post the above transaction in the relevant ledger accounts and balance them off as the date of transactions. Trial balance as at 26th October 2015.

2. Describe the process of accounting for business transactions

3. Identify six qualitative characteristics of accounting information and describe how each enhances usefulness of financial information.

4. Explain the following accounting assumption.

i. Accrual

ii. Going concern

5. Distinguish between Cash basis of accounting and accrual basis of accounting.

6. What is consistency term as used in accounting.

7. What is materiality as used in accounting.

8. Explain five benefits of customized accounting software.

9. Highlight six application of accounting software packages.

10. Explain the challenges that companies using the accounting software face.