Transaction1:
The owners of the camp now wish to take out insurance. He presently have a number of quotes, the cheapest being $2000. This is in the form of an invoice from "Insure Your Camp Pty Ltd".
Transaction 2:
"The Rock" donated some old equipment (which was said to be worth $4000) to the local charity.
Transaction 3:The father of a child attending "The Rock" is a doctor. It allows the child to attend camp in return for the father's serving part-time in the camp sick bay for 1 week. The standard fee is $1000. The doctor's salary for the part time work would be $1000.
Transaction 1: The owners have recorded $2000 as a debit to Insurance and a credit to "Insure Your Camp Pty Ltd" Explain whether or not this is correct, and why.
Transaction 2:
Explain how (or if) the camp should account for this situation and why.
Transaction 3:
Explain how (or if) Camp Ormond should account for this arrangement and why
Answers:
oh man, this is hard... don't rely on these, i am going on old info, and I am aussie, so maybe my education may have been bery different to yours.
transaction 1: i think that debit and credit need to be switched around, because you are adding to your insurance, not taking away.
transaction 2: yes, they should account for this, and it would probably be easiest to put it as a drawing of goods by the manager as i don't think you can balance that, but if you don't have a goods (or equipment) journal, you may need to create one or create a journal for the charity.
transaction 3: yes, this should be taken into account as it is still funds going in and out, and your journal may not work out if this isnt included. I forget how to do this one sorry!
once again, i did this about a year ago, and it was almost a crash course, so I am not sure if these are right!
hope I have helped you out a bit!
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