Question: I understood historical cost accounting but what is fair value accounting. How useful or how is fair value accounting been justified and are there any limitations when accounting experts use such accounting basis? Answer: (a) What is fair value accounting:- Fair value accounting is a financial measurement methodology permitted by accounting standards which … Read more
Question: Explain what is stock reorder level, what is it for and the formula to compute this stock reorder level. Also explain what is Maximum, Minimum and Safety Stock level Suggested Answer: Stock Reorder Level, Purpose & Formula: Stock reorder level indicates to the stock controller when it is necessary to reorder certain raw materials … Read more
Question: I was asked by management to use moving average method to do the cash collection forecast. Can you tell me: (a) What is moving average (b) How is it use and applied and who commonly uses it. Suggested Answer: (a) What is Moving Average: A moving average is an average that is being revised … Read more
Question:I just joined a small company where it is in the midst of acquiring a computerized accounting system. May I know:- (a) What are the usual features that are available in such system (b) Advantages of a computerized accounting system (c ) Give examples of some management reports which are automatically generated. Answer:(a) Some of … Read more
The following test questions( no answers) relates to Management, Organization Behavioral or Business Management:- COMMUNICATION Communicating information to internal users is an important part of accountant’s duty. Required: (a) Explain the importance of good communication (10 marks) (b) List five possible barriers to effective communication (5 marks) (c) How might the barriers identified in … Read more
Extracted from www.topuniversties.com the listing of 2009 World ranking of universities and re-sorted to compare with previous years 2008 and 2007. 2009 Rank 2008 Rank 2007 Rank Name of University Country 1 1 1 Harvard University US 2 3 2 University of Cambridge UK 3 2 2 Yale University US 4 7 9 UCL (University … Read more
Explain what is a dishonored cheque and how it is being treated in the books of account? Suggested Answer: Dishonored Cheque is a cheque which is presented for payment and the drawer has insufficient fund in his or her account to cover the cheque which will then be returned to the payee marked “ refer … Read more
Explain the terms: discount allowed and discount received. In accounting, how are they treated in the books of account? Suggested Answer: Discount allowed are given to the CUSTOMERS of a company so as to induce them who are owing money to settle in a time specified by the company. It is treated as an expense … Read more
Earlier article describe the difference between the Articles Of Association and Memorandum Of Articles. Below briefly describe in some commonly used-terms in both private and public limited company namely:-company’s annual general meeting, annual report and accounts and annual return: Annual General Meeting ( abbreviation AGM) Held only by limited company ( not in sole proprietorship … Read more
What do we mean by Distributable Profits of a Company? Suggested Answer: Distributable profits are the profits of a LIMITED company that are available for distribution to the shareholders as dividends. These are revenue reserves including the profit and loss account and the general reserves.