Reference no: EM132285575
Learning outcomes
1. Record income and receipts from credit customer, purchases, expenditures and payments to supplier.
2. Differentiate between accrual and cash basis accounting.
CASE STUDY
Mr. Mohammed formed Bausher Enterprises on October 1, 2018. During the month, the following financial transactions occurred:
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2018 October
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1
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Mohammed invested OR 200,000 in the new business.
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6
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Bausher Enterprise provided services to Xerox on account for OR 40,000
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8
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Acquired supplies from the producers for OR 120,000. ( Supplies are charged to expenses immediately ).
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10
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Services provided for cash OR 25,000
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12
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Paid Communication expense for OR 10,000
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16
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Purchased material on account for OR 20,000.
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21
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Paid to Al Khimji OR 2,000 cash for utility expenses.
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23
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Paid OR 8,000 cash for the material purchased on November 16
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24
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Received OR 30, 000 in cash from Xerox for services provided on November 6.
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31
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Withdrew OR 3,000 for personal use
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Requirements: Now that you have reviewed the case study above, respond to the following requirements on your own.
Q1. Record each of the above transactions in a general journal. Explanations may be omitted. Use the following account titles to journalize the above transactions:
a. Cash
b. Accounts Payable
c. Accounts Receivable
d. Insurance Expense
e. Utility Expense
f. Capital
g. Service Fee income
h. Material
i. Withdrawals
j. Office Equipment
Q2. Prepare the end-of-month report to account for the incomes and expenses of Baushar Enterprises under Cash basis accounting.
Q3. Prepare the end-of-month report to account for the incomes and expenses of Baushar Enterprises under Accrual basis accounting.
Q4. What are the main differences between cash and accrual accounting? The student may identify and discuss giving example for both cash basis and accrual basis of accounting.
Instructions for completing the assignment:
1. The assignment must have a cover page indicating the module title, name of student, name of faculty and date of submission.
2. The assignment should have a table of contents, answers to the requirements and appropriate references, if necessary. Use Harvard style of referencing.
3. The assignment should be done in Word, font size 12, font style Times New Roman, text color black, colors can be used ONLY in appendices; main body of the report should be black and white.