The following balances were taken from the books of Asir on 1 July 2012. Stationery Rapid Office Supplies $ 60 Dr 400 Cr The following transactions took place in the three months ended 30 September 2012: July 30 Paid the balance owing on 1 July 2012 to Rapid Office Supplies by cheque, after deducting 4% cash discount. August 18 Purchased stationery on credit from Rapid Office Supplies, list price $500, and received 10% trade discount. August 20 Purchased stationery for cash, $150. September 3 Returned to Rapid Office Supplies stationery purchased on 18 August, list price $50. Asir prepared his financial statements on 30 September 2012. On that date inventory of stationery was valued at $225. REQUIRED

1. (a)State the meaning of the debit balance on the stationery account on 1 July 2012.[1]
2. (b)Prepare the following ledger accounts. Balance the accounts at 30 September 2012 and show the transfer to the income statement where appropriate. Stationery account Rapid Office Supplies account[9]
3. (c)(i)State the document sent by Rapid Office Supplies to Asir for the: Purchase of stationery on 18 August 2012[1]
4. (c)(ii)Return of stationery on 3 September 2012.[1]
5. (d)On 30 September 2012 Asir extracted a trial balance and prepared his financial statements. State the amount for stationery which would appear in each of the following: Trial balance Income statement Balance sheet $[3]
6. (e)(i)State the section of Asir's balance sheet on 30 September 2012 in which the following balances would appear: Stationery[1]
7. (e)(ii)Rapid Office Supplies[1]
8. (f)(i)Explain why Asir did not transfer all of the stationery purchased in the three month period to the income statement.[2]
9. (f)(ii)Name the accounting concept applied by Asir.[1]