Accounting Test Question COE No 1 On Correction Of Errors Question: Mr. A extracted a Trial Balance at 31 st December 2005 and found that it did not balance. He posted the difference to a Suspense Account. Later he found the following errors which accounted for the difference: The total of $365 for Discount Allowed … Read more
Stock Loss is simply the discrepancy/difference between actual physical stock value compared to book value of stock. Also see article on adjustments or reconciliation of discrepancies of physical stock take versus book figures. Stock loss is normally incurred when stock is lost in a fire or stolen/pilferage. Accounting Treatment of Stock Loss: Computation of Stock … Read more
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. Therefore … Read more
Extracted from the www: imanet.org are some guidelines pertaining to ethical dilemmas. These standards are in the areas of competence, confidentiality, integrity and objectivity for those practitioners of management accounting and financial management By understanding the below guidelines, it is hoped that readers who aspire to be future accounting practitioners know that they have heavy … Read more
1.The primary purpose of the balance sheet is to a.report the financial position of the reporting entity at a particular point in time b.measure the net income of a business up to a particular point in time c.determine cash flow for the period d.report the difference between cash inflows and cash … Read more
Understand what is Cost/Volume/Profit Analysis and Breakeven Analysis Cost-volume-profit (CVP) analysis studies the effects on future profit of changes in fixed costs, variable costs, volume, sales mix and selling price. Remember what is Break-even (B/E) analysis 1. In fact Break-even (B/E) analysis is one application of CVP. B/E analysis is useful for profit planning sales … Read more
Answer to Accounting Test Question SP No 1 on Suspense Account Begin by opening the suspense account. Which side? More debit is needed to balance the trial balance, so debit the suspense account with $56,717. Then deal with the errors in order: Sales returns should have been debited to the sales returns account and they … Read more
Accounting Test Question SP No. 1 Company ABC’s bookkeeping system is not computerised, and at 31 st December 2005. William , the bookkeeper was unable to balance the accounts. The trial balance totals were as follows: Debit $ 2,024,100 Credit $ 2,080,817 Nevertheless, William proceeded to prepare draft financial statements, inserting the difference as a … Read more
Any change in capital structure will be influenced by any one or a combination of the following transactions, events or results: introduction of capital; drawings; and/or trading profits or losses. By using the accounting equation, and given the values of opening and closing capital together with drawings and the amounts of any capital introductions, the … Read more
Understand What Is Incomplete Records: Incomplete records – is the term used for any system of bookkeeping which does not use full double entry. Generally applies to small business whether incorporated as Sole Proprietorship or Partnership. For them, generally a simple cash book to record receipts and payments may be enough instead of the proper … Read more