IAS 2 INVENTORY (F3) LEARNING OBJECTIVE I.INVENTORY IN THE FINANCIAL STATEMENTS II.YEAR-END INVNETORY ADJUSTMENTS III.TYPES OF INVENTORY IV.IAS 2 INVENTORIES V.METHODS OF CALCULATING THE COST OF INVENTORY I. INVENTORY IN THE FINANCIAL STATEMENTS $ $ Revenue x Opening Inventory X Purchases X Less: Closing Inventory (x) Cost of Sales/cost of goods sold (x) Gross Profit x At the beginning of
Continue reading HOW TO PREPARE PRACTICAL FINANCIAL STATEMENTS To prepare practical financial statements, accountant should understand the following issues: Make chart of account- what kind of business that company runs. Material or immaterial types of transactions or events in company. Accounting policy for company Which transaction use accrual or cash basis In practice, financial statement formats, chart of account for financial statements
Continue reading Financial Statement Format and Accounting Policy In practice, financial statement format, chart of account for financial statements and accounting policy are different from companies to other companies. Cost of service for Service Company may not be identified for accounting purpose because it may be difficult and spend time to separate between cost of service and operating expense. Let practice with
Continue reading PRACTICAL ERROR ANALYSIS FOR FINANCIAL STATEMENTS In practice, draft financial statements are submitted by subordinates to their managers, these draft financial statements may be checked the following steps to identify errors or sometime fraud: Comparative figures from previous periods Unusual change in amount New type of accounts Relevant ratios analysis Analytical procedures etc. Let practice with the following example: Top
Continue reading Accounting Documents : Purposes of issuing practical accounting documents Accounting Documents Purposes a. Quotation A formal statement of promise (submitted usually in response to a request for quotation) by potential supplier to supply the goods or services required by a buyer, at specified prices, and within a specified period. A quotation may also contain terms of sale and payment,
Continue reading In finance, the net present value (NPV) or net present worth (NPW) is a measurement of the profitability of an undertaking that is calculated by subtracting the present values (PV) of cash outflows (including initial cost) from the present values of cash inflows over a period of time. Incoming and outgoing cash flows can also be described as benefit and
Continue reading Financial management refers to the efficient and effective management of money (funds) in such a manner as to accomplish the objectives of the organization. It is the specialized function directly associated with the top management. The significance of this function is not seen in the ‘Line’ but also in the capacity of ‘Staff’ in overall of a company. It has
Continue reading IAS 10 Events after the Reporting Period: ABC’s statement of profit or loss showed a profit before tax of $2 million. After the end of the reporting period and before the financial statements were authorized for issue, the following events took place. A customer who owed $100,000 at the year end went bankrupt owing a total of $150,000. Inventory valued
Continue reading IAS 20 ACCOUNTING FOR GOVERNMENT GRANTS AND DISCLOSURE OF GOVERNMENT ASSISTANCE : Question: A company receives a 20% grant towards the cost of a new item of machinery, which cost $100,000. The machinery has an expected life of four years and a nil residual value. The expected profits of the company before accounting for depreciation on the new machine or
Continue reading IAS 11 Construction Construct Question: Answer : Note: – Gross amount due from customers is asset. – work certified given of $230,000 or 290,000 x 79.31%=$230,000 Source: BPP
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