Q & A for FA2 Kit 2017
Hello All, below is Question and answer for FA2 Kit 2017: Question solution from Kit FA2 BPP 2017
Continue reading CHAPTER 9 BANK RECONCILIATION
I. PURPOSE OF BANK RECONCILIATION The purpose of a bank reconciliation is to ensure that the ledger account balance and the bank statement balance agree ( subject to timing difference). There will be two types of reconciling items: -Items that appear on the bank statement but have not yet been entered into the day books -Items that have been entered
Continue reading CHAPTER 8 CLOSING INVENTORY
I. VALUATION OF INVENTORY Inventory may include any of: -Finished goods -Work in progress -Material The prudence concept requires that profit are not anticipated, but losses are accounted for as soon as they are known. For this reason, IAS2 Inventories states that inventory is valued in the statement of financial position at the lower of cost and net realisable value
Continue reading CHAPTER 7 PARTNERHSIP ACCOUNTS
I. PARTNERSHIPS-BASIC PRINCIPLES Definition: a partnership is two or more individuals jointly carrying on business with a view to making profit. A, partnership agreement, which need not necessarily be in written form, will govern the relationships between the partners. Important matters to be covered include: -Capital to be introduced by partners -How profits are shared between partners -Drawings by partners
Continue reading Chapter 6 Provisions and Liabilities
I. Provision A provision is a liability of uncertain timing or amount. Uncertainty is what distinguishes a provision from another type of liability ( such as a trade payable or an accrued expense). If a business has a trade payable or a bank overdraft, its management know that there is a liability. Management also knows the amount that the business
Continue reading CHAPTER 5 PREPARATION OF FINANCIAL STATEMENT
I. COST OF GOODS SOLD Cost of goods sold (Dr)= beginning inventory (Dr)+ purchase(Dr) – ending inventory(Cr) Entry for cost of goods sold accounts: Purchase account Dr. Purchase account……………………………………………………..….xx Cr. AP/cash at bank account……………………………………………….xx Opening inventory account: Dr. opening inventory account/cost of good sold ( in income statement)………..xx Cr. Inventory account ( in BS )………………………………………..……xx Closing inventory Dr. Inventory account
Continue reading CHAPTER 4 PURCHASE LEDGER RECONCILIATION AND SALES LEDGER RECONCILIATION
I. THE NATURE OF PURCHASE AND SALES LEDGER CONTROL ACCOUNTS The balance on the control account should equal the sum of the individual balances on the relevant personal ledgers. An important method of checking errors is to reconcile the balances on the purchase ledger control account and the sales ledger control account to the total of the individual balances in
Continue reading CHAPTER 3 NON-CURRENT ASSET
I. IAS 16 PROPERTY, PLANT AND EQUIPMENT IAS 16 property, plant and equipment provide the rules relating to accounting for non-current assets, including depreciation. Definition depreciation is measure of the cost of the economic benefits of the tangible non-current asset that have been consumed during the period. This consumption may arise because of any of the following factors. Use-i.e. Plant
Continue reading CHAPTER 2 INTRODUCTION TO FINAL ACCOUNTS
The income statement is a financial statement that shows the financial performance of a business for an accounting period. ……………………… Download CHAPTER 2 introduction to final account
Continue reading CHAPTER 1 RECORDING TRANSACTION
Accounting: Accounting records a business’s transactions to produce financial statements such as income statement (IS) and statement of financial position (SFP). Accounting Equation: Asset = Capital + Liabilities Or Capital = Asset – liabilities Assets: An asset is a resource controlled by the entity as a result of past events and from which economic benefits are expected to flow to
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