Question

The recognition criteria: a determine when an element should be recorded in the income statement or balance sheet- b. determine how an asset or liability is valued in the financial statements c. provide definitions of the elements of financial reporting d. determine the criteria for the data recorded on an accountant's driver's licence + Fawlty Towers (FT) has a 30 June balance date. + FT is a member of Minor Luxury Lodges (MLL), an association of luxury accommodation providers. The MLL subscription for FT is $24.000 per annum, and the subscription period runs from 1 April until 31 March each year. On 1 April 2019, FT pays its MLL subscription for the year ending 31 March 2020. + Which of the following statements is correct? + a. FT will record a liability of $6,000 in its 30 June 2019 financial statements- b. FT will record a prepayment of $18,000 in its 30 June 2019 financial statements- c. FT will record a prepayment of $6,000 in its 30 June 2019 financial statements d. FT will record an expense of $18,000 in its 30 June 2019 financial statements- + Which ONE of the following statements is not true? a. Sole traders are not permitted to take on employees. b. Sole traders are personally liable for the debts and liabilities of the entire business operation. + c. Sole traders owns all the assets of the business and is entitled to all of the profits that the business generates. d. Sole traders are not separated legal entities. + e. All of the above statements about sole traders are correct +

Answer 1

1. To de termine when an element should be records in the income statement or balance sheet.

2.FT will record prepayment of 18000 in its June 2019 financial statements

3. Sole traders are not permitted to take on employees.