Question

sample-Testbank Survey of According.th-Edition by Carl-Warren-TS Mailings Review View Add-ins Acrobat .doc - Microsoft Word sert Page Layout References Purple Blue Turquoise Green Olive Yellow Red Pink Save Preferences Step 4. Click the colour to create your Template De Chapter 2: Basic Accounting Concepts 84. Year 2 Year 1 Sales $170,000 $130,000 Cost of sales 135.000 105,000 Gross profit $ 35.000 $ 25.000 Using the above information, calculate the percentage increase or decrease in cost of sales from Year 1 to Year 2? a. Increase of 2.1% b. Decrease of 1.4% c. Increase of 1.4% d. Decrease of 2.1% ANSWER: b 85. What are the basic elements of a financial accounting system?

Answer 1

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Answer 84
	Year 2	Year 1	Note
Sales	170,000.00	130,000.00	A
Cost of sales	135,000.00	105,000.00	B
Cost of sales % to Sales	79.41%	80.77%	C=B/A
% decrease by	1.36%		This is Cost of sales % to Sales of Year 2 less Cost of sales % to Sales Year 1.
So Answer is option B.
Answer 85
There are 3 basic elements of Financial Accounting- Assets, Liabilities and Capital.
Assets are the resources owned and controlled by the entity to avail future economic benefits.
Liabilities are economic obligations or amounts payable by the business.
Capital is what left to the owners after liabilities are settled. It is also called net assets or equity.