Question

1. Ms. Sara is appointed as the accountant of ABC LLC Muscat. She is responsible for all the accounting process of the company. The company deals with manufacturing of plastic products in Oman and distributing across GCC countries. The company has a turn over of 2.3 Million rial last year. You are required to identify the basic accounting activities that Ms. Sara must do to prepare financial statements. (1 Mark)

Answer 1

Basic accounting activities that Ms Sara must do to prepare the financial statements:-

1. Identification of economic events- These are those events that effect either, assets. liabilities or owner's capital.

2. Recording the economic event:- All economics events need to be journalized.

3. Consolidation of data:- All the events are consolidated on the basis of assets, liabilities, revenues, expenditures, and then shown accordingly in income statements, balance sheet, statement of retained earnings, and cash flow statement.

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