accounting basic questions

Question

1. Why should a sole trader record all the financial information about her business?

A. because she is required to do so by law
B. because she can use them to prepare final accouts

2. What is the purpose of providing for depreciation on fixed assets

A. to show the real value of the assets
B. to match the cost of the assets to the period benefiting from their use

pls explain

Answer 1

1. Why should a sole trader record all the financial information about her business?

B. because she can use them to prepare final accouts
因為做會計，即紀錄所以entry (sales, purchase, bank, cash...)
都是為咗做financial accoiunt(即balance sheet/ profit & loss...)

不是為法律(a)

2. What is the purpose of providing for depreciation on fixed assets
計depreciation的目的
a. 去show佢個真實value
b. 計返公司有幾多錢賺(用咗這個asset)

因為一個fixed asset
無論是stranght line / Reducing balance method
都會有depreciation

因為用咗件asset，所以有折舊
所以件asset已經冇原本買回來咁高

所有要計depreciation