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What are the key principles and calculations in accounting, including bank reconciliation, cost of goods sold, business entity principle, and GST calculation?

Accounting

ScanSolve AI Answer

Answer

C

Step-by-step solution

3 steps

Part 18

An account holder compiles a reconciliation statement to identify and explain differences between the bank statement balance and the cash book balance, with the ultimate goal of determining the true cash account balance.
The correct option is C.
C) bank account balance

Part 19

The formula for calculating the cost of goods sold (COGS) is: Beginning Stock + Purchases - Ending Stock.
The correct option is C.
C) stock at start + purchases - stock at end

Part 20

The Business Entity Principle states that a business is treated as a separate entity from its owner(s). Therefore, personal expenses of the owner, such as a wife's hospital bill, cannot be recorded as business expenses.
The correct option is D.
D) Business entity

Part 21· 3 steps

  1. Identify the total amount and the GST rate.

    Total receipt (inclusive of GST) = K 330.00
    GST rate = 10%

  2. Let the service income be SS.

    The total receipt is the service income plus the GST.

    Total receipt=S+(S×GST rate)\text{Total receipt} = S + (S \times \text{GST rate}) K 330.00=S+(S×0.10)\text{K 330.00} = S + (S \times 0.10) K 330.00=S(1+0.10)\text{K 330.00} = S (1 + 0.10) K 330.00=1.10S\text{K 330.00} = 1.10 S

  3. Solve for SS.

    S=K 330.001.10S = \frac{\text{K 330.00}}{1.10} S=K 300.00S = \text{K 300.00}

    The service income is K 300.00.
    The correct option is B.
    B) K 300.00

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