Q1.The accounting standards are set by specific Organizations depends on the country location and regulations. You are asked to answer the following questions :

a.       What are the developing US Financial Accounting Standards Organizations with each organization responsibilities? Please write one paragraph.  (1.5 marks)

b.      What are the processes of setting a new accounting standard in the USA? Please write one paragraph.  (1.5 marks)

Q2. Prepare general journal entries on December 31 to record the following unrelated year-end adjustments.   (6 marks)
a. Estimated depreciation on office equipment for the year, SAR 2,000
b. The Prepaid Insurance account has a SAR 2,500 debit balance before adjustment. An examination of insurance policies shows SAR 350 of insurance expired
c. The Prepaid Insurance account has a SAR 1,400 debit balance before adjustment. An examination of insurance policies shows SAR 400 of unexpired insurance
d. The company has three office employees who each earn SAR200 per day for a five-day workweek that ends on Friday. The employees were paid on Friday, December 26 and have worked full days on Monday, Tuesday and Wednesday, December 29, 30 and 31
e. On November 1, the company received 6 months' rent in advance from a tenant whose rent is SAR 600 per month. The SAR 3,600 was credited to the Unearned Rent account
f. The company collects rent monthly from its tenants. One tenant whose rent is SAR 650 per month has not paid his rent for December
 

Q3. The following trial balance was taken from the books of Fisk Corporation on December 31, 2010.

            Account                                                                                        Debit                 Credit     

Cash                                                                                                       $  12,000

Accounts Receivable                                                                                 40,000

Note Receivable                                                                                           7,000

Allowance for Doubtful Accounts                                                                                    $   1,800

Merchandise Inventory                                                                              44,000

Prepaid Insurance                                                                                        4,800

Furniture and Equipment                                                                         125,000

Accumulated Depreciation–F. & E.                                                                                     15,000

Accounts Payable                                                                                                                 10,800

Share Capital–Ordinary                                                                                                        44,000

Retained Earnings                                                                                                                 55,000

Sales                                                                                                         280,000               

Cost of Goods Sold                                                                                 111,000

Salaries Expense                                                                                        50,000

Rent Expense                                                                                             12,800                             

         Totals                                                                                            $406,600            $406,600

At year end, the following items have not yet been recorded.

 a.    Insurance expired during the year, $2,000.

 b.    Estimated bad debts, 1% of gross sales.

 c.    Depreciation on furniture and equipment, 10% per year.

 d.   Interest at 6% is receivable on the note for one full year.

*e.   Rent paid in advance at December 31, $5,400 (originally charged to expense).

 f.    Accrued salaries at December 31, $5,800.

Instructions

(a)  Prepare the necessary adjusting entries. (3 marks)

(b)  Prepare the necessary closing entries. (3 marks )

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