Archive about 'Revision Notes'


Tweet Append below a brief revision note on manufacturing account Key areas to note on the topic of Manufacturing Account: 1.0 Manufacturing accounts are prepared for internal management purpose only. This report helps management to distinguish between the costs and profitability associated with the manufacturing operations and those associated with trading ( shown in the […]

Revision Notes –Consignment, Containers & Royalty Accounts

Tweet CONSIGNMENT ACCOUNTS Del credere commission is an additional commission paid to cover the consignor against bad debts Goods-in-transit : are often included as part of Consignment stock Returns from consignee: should be adjusted by CREDIT to Consignment Account and DEBIT to Goods Sent on Consignment Account Goods invoiced at higher prices than cost accounted […]

Table/Summary/Snapshot Of Accounting Concepts/Convention

Tweet TABLE/SUMMARY/SNAPSHOT OF ACCOUNTING CONCEPTS/CONVENTION Accounting Period Concept Also known as Time Period where business operation can be divided into specific period of time such as a month, a quarter or a year(accounting period) Final accounts are prepared at the end of the accounting period ie one year. Internal accounts can be prepared monthly, quarterly […]

Revision Notes On Activity-based costing(ABC)

Tweet Salient points On Activity-based costing(ABC) 1.0 Activity-based costing(ABC) was developed/designed during the 1980s to avoid the shortcoming of absorption costing and marginal costing. 1.1 Shortcoming of Absorption costing –produce misleading product costs 1.2 Shortcoming of Marginal costing-does not attempt to connect general overhead costs to products. Also produce misleading product costs 2.0 CIMA defines […]

Revision Notes on Bank Reconciliation Statement

Tweet Salient points On Bank Reconciliation Statement 1.0 Understand the objective of Bank Reconciliation Statement which is simply to reconcile the bank balance of the Cash Book with the balance in the Bank Statement 2.0  Remember that in the Bank Statement which has the records of the firm. Normally the firm is a creditor to […]

Revision Notes On Correction Of Errors

Tweet Salient points: Know how to explain the different type of errors which do not affect the agreement of trial balance: Error of Omission – when a transaction is completely omitted from the books Error of Commission-when an entry has been posted to the correct side of the Ledger but to the wrong account Error […]

Revision Notes On Limited Companies

Tweet Salient points: Understand the various classes of share capital in a limited company: Authorised, registered or nominal capital is the maximum amount of capital a company is allowed to raise from the public by the issue of share Issued capital is that part of the authorized capital that is offered to the public for […]

Revision Notes On Short-term decision making

Tweet (1)  Costs for decision-making should be separated into their fixed and variable components (2)  Fixed costs should not be averaged or absorbed when preparing information for decision-making  (3)  Marginal costing statements are useful for decision-making; absorption costing statements are not.  (4)  When a resource is scarce, it should be used in the way which produces the HIGHEST CONTRIBUTION […]

Revision Notes On Cost Behaviour

Tweet Costs can be classified in several different ways The total of the direct costs is known as PRIME COSTS The indirect costs of a business are also known as OVERHEADS Cost that vary with the level of economic activity are known as VARIABLE COSTS Cost that do NOT change with the level of economic […]

Revision Notes: Depreciation Of Fixed Assets

Tweet Revision Notes on Depreciation Of Fixed Assets   Salient points: 1.  Understand WHAT is depreciation & REASONS for depreciation: Depreciation is the permanent and continuing diminution in the quality, quantity or value of an asset. Simply, depreciation is the loss of value due to fixed assets being consumed in order to earn a profit. […]