Month: September 2008

Append below the audit steps on Other Debtors-Telephone & other deposits/sundry deposits:- Other Debtors- Telephone And Other Deposits   Obtain a schedule of Other Debtors for Telephone & Other Deposits: Confirm that the amount is the same as previous year ( check with audit working paper) For new deposits, examine correspondence or supporting documents like … Read more

Append below the audit steps on Other Debtors-Prepayments/Prepaid expenses:-   Other Debtors-Prepayments  Obtain a schedule of Other Debtors for Prepayments Or Prepaid Expense: Test with available documentation Check computation to ensure proper matching of cost into the relevant period ( matching concept) Compare with previous year and obtain explanations of material variations  

Append below the audit steps on Other Debtors-Bills Receivable:   Other Debtors-Bills Receivable Obtain a schedule of Bills Receivable: Check with bills book Where due date has occurred since the balance sheet date, confirm that bill was duly pd Check the casts of the schedule Inspect bills held at the year end Obtain certificate from agents where … Read more

Append below a summary of articles on business accounting ratio analysis:   BUSINESS RATIO ANALYSIS Ratio analysis-Frequently Asked Questions Table/Summary Of Financial Accounting Ratio Analysis What Is Capital Employed Undercapitalization or overtrading and its tell tale/signs/symptoms Overcapitalization and its tell tales/signs/symptoms Proprietary Ratio PROFITABILITY Ratio Return On Assets Net Profit Margin or Net Profit % … Read more

Earlier article dealt with the features and difference between marginal costing and absorption costing method. This article seeks to provide the readers with further understanding between these two costing methodologies by showing an illustration using a Reconciliation Statement. Company A manufacture and sell a new product. The following information is given: Selling price $9.00 per … Read more

Append below the answer for Accounting Test Question COE No.2 on Correction Of Errors/Suspense Account: ANSWER To Accounting Question No. COE 2 On Correction of Errors (a) Journal entries to correct errors ( without narrations)     Debit($) Credit($) 1 Discount Received 76     Discount Allowed 76     Suspense   152     … Read more

Append below an accounting test question No COE No. 2 on Correction of Errors/Suspense account: Accounting Question Test COE No.2 On Correction Of Errors/Suspense Account Question: When the trial balance of XYZ Ltd as at 30/9/08 was prepared, a difference was found. A Suspense Account was created in order to achieve the balance: Examination of … Read more

Append below the answer to Accounting Test No CO 2 on Control Accounts: ANSWER To Accounting Question No. CO 2 On Control Accounts (a) Purchases & Sales Ledger Control Accounts:   Purchases Ledger Control Account   Debit($)   Credit($) 2008   2008   July 1 Balance b/d 186 July 1 Balance b/d 17,960 July 31 … Read more

Another example of accounting question on Control Accounts: Accounting Question Test CO No.2 On Control Accounts Question: Jim keeps control accounts for his Purchases and Sales Ledgers. He extracted the following balances from her books of accounts for the month of July 2008:         1st July Purchase Ledger balance Dr $186   … Read more