Scenario
You are looking for an internship as a prestigious accounting firm. Although this is only an internship, the firm only want to hire the best candidates and they have asked that you answer a series of questions on the application form. The successful candidates will then proceed to a test held in classroom conditions.
Task 1 of 2: Application Form (AC1.1, 1.2, 1.3. 2.1, 2.2, 2.3 and 2.4)
Instructions
What is Accounting?
Explain and give examples for the following term
-“Assets”
-“Liabilities”
-“Revenue”
-“Expenses”
– “Net income”
What is the difference between a “Sole Trader”, a “partnership” and a “Private Limited Company”?
Explain the difference between M0 and M4 in the context of money measurement Why does the Bank of England increase or decrease interest rate? Describe two effects of inflation on a business.
Task 2 of 2: Trial Balance Assessment (AC3.1, 3.2, 3.3, 3.4, 3.5 and 3.6)
Instructions
After successfully completing the first stage of recruitment, you are now required to answer questions and submit to the recruitment team of the company.
Delivery
All the questions should be answered and assessed which can be a basis for you being hired in the prestigious accounting firm.
Submission
Trial Balance Assessment (Task 2)
You are a temporary bookkeeper hired by Repair-Phone Ltd for the busy season. Your job is to journalize transactions that occur. The service operation is run by James Smith who started the business with £2500 in cash. He has given you the following transactions:
Purchase of 25 phone screens with cash, £750. All of this supply will be sold this month.
Purchase of computer equipment on account from Computer Supply for £1000.
Sales of 20 phone screens £2000.
Payment of wages in cash, £500.
Purchase of phone cases in cash from Case Supply, £800
Sell of phone cases, £1600
Payment on account to Computer Supply for £100.
Required:
Prepare the necessary journal entries showing the debit and credit entries. In addition, provide a brief explanation of each entry.
Use the following account names: Cash; Equipment; Accounts Payable (Computer Supply Co.); phone screen Sales; Wage Expense; Phone Screens Expense, Phone Cases expense, phone case sales, damaged goods
Prepare a trial balance
note that one of the phone screen broke during a repair and needs to be written off
£30 and your will need to adjust the trial balance accordingly
Prepare an income statement
Prepare a balance sheet
Answer the following questions
Which is more profitable, the sale of phone cases or the sales of repaired screen?
Is this a profitable business? What would you recommend to James Smith
