Qualification > Commerce
help in accounting paper 3 plz
Monica:
hahahaha!! oh my god 7ood!! see its not sherif its MONICA BAS ANA i changed my name to sherry....lol!!
Nanavel:
There is something i dont understand in Trading and profit and loss account of year O/N/2006 >> the First Question ...
It is about the Depriciation of the Equipment we have to use to the reducing balance method but why we reduced it for 3 years ..
5000 x 10% = 500
5000 - 500 = 4500
4500 x 10% = 450
4500 - 450 = 4050
4050 x 10% = 405 >>> why did they chose this number ?
Question : http://www.freeexampapers.us/IGCSE/Accounting/CIE/2006%20Nov/0452_w06_qp_3.pdf
Markscheme : http://www.freeexampapers.us/IGCSE/Accounting/CIE/2006%20Nov/0452_w06_ms_3.pdf
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Can someone please teach me the Role of Provision of doubtfull debts in the profit and loss account as well as Balance sheet . What do we do when doubtfull is given ?? and how does it works with Bad debts ??
Thankyouuuuu
saiki:
1. about the depreciation- it says in trial balance that until now 950 has been charged alredi... so u do (5000-950)*10% = 405
2. provision for doubtful debts is just a mere book entry- no cash transaction takes place- if in the year is 100 n at the end u decide to change it to 150 due to increased bad debts- in pnl u expense 50 (if it deccreases to 90 from 100, then u revenue 10 in pnl). its just as if ur keeping that amount aside. in balance sheet, u reduce the debtors amount by the provision of doubtful debts. (if its 150 provision, n debtors is 10000, then u do = debtors 10000-provision for doubt 150 = net debtors 9850...
3. bad debts is when u have a transaction. money value changes. if u incur bad debts, it means u lost that money the debtor owed u. so that amount goes in pnl as expense n close the bad debt a/c for that period (make it 0 n transfer everythin to pnl) n nothing happens in balance sheet.
hope u understand
Nanavel:
Thankyou very much ... I really got it now .. (+rep ) for you ..
you are awesome !
but what about Bad debts recovered ?? I know that we have to add it to the GrossProfit in Trading accouting but does it has another use .. like in balance sheet or reducing it from anything else ???
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In the Year O/N/06 .. Page 10 - question 3 - part c :
why they didnt use the Additional information ??? why did then even keep it ??
Question : http://www.freeexampapers.us/IGCSE/Accounting/CIE/2006%20Nov/0452_w06_qp_3.pdf
Markscheme : http://www.freeexampapers.us/IGCSE/Accounting/CIE/2006%20Nov/0452_w06_ms_3.pdf
saiki:
bad debt recovered- whenever u add somefin in bad debt recovered, the double entry is to add in debtors a/c also... it just opposite of bad debts a/c... bad debt= reduce gp, bad debt recov= increase gp... nothing in balance sheet...
n about the additional info 2, its just to trick u... if they asked for income n expenditur a/c, then u use it... since its recipt n payment u dont... because RnP is similar to cash bk where u dont take into a/c accruals n prepayments, in InE is similar to PnL where u do take them into a/c...
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