Q1. a. Globalization demands a single set of high-quality international accounting standards. Explain at least 5 elements that demands a single set of high-quality international accounting standards. (Mark 1)
Name the two major organizations that sets standards and explain the due processes of setting a new accounting standard? write one paragraph. (Mark 1)
Q2. An adjusting journal entry is typically made just prior to issuing a company’s financial statements. What do you understand by adjusting entries? Give examples (Marks 2)
Q3. Presented below is information related to CHO Co. for the month of January 2018.
| Cost of Goods Sold | 202,000 | Salary expense | 61,000 |
| Freight-out | 7,000 | Sales discount | 8,000 |
| Insurance expense | 12,000 | Sales returns and allowances | 13,000 |
| Rent expense | 20,000 | Sales | 340,000 |
| Dividends | 1,000 |
Instructions: Prepare the closing entries. (Marks 4)
Q4. The retained earnings statement of XYZ Corporation on 31st December 2021 had the following balances:
| Balance, January 1 | SAR 165,000 | |
| Net income | 35,000 | |
| Dividends | (20,000) | |
| Balance, December 31 | $ 180,000 |
However, before issuing the report for the year ended December 31, 2021, it discover a SAR 20,000 error undervalued inventory that overstated the net income to be higher in 2020 and overvalued depreciation amount of $5,000 which understated net income in 2020. How would this discovery have an impact on the reporting of the Statement of Retained Earnings for 2021? ? (Marks 3)
Q5. a. Presented below is the adjusted trial balance of Abdullah Corporation at December 31, 2020.
Accounts Payable 10,000
Wages Payable 500
Unearned Service Revenue 2,000
Bonds Payable, due 2017 9,000
Share Capital – Ordinary 10,000
Share premium 2000
Retained Earnings 20,000
Net loss 2500
Required: Prepare a classified section on Equity and Liabilities. (Marks 3)
What are the requirements of IFRS for a complete set of financial statements be presented annually? (Mark 1)