IGCSE/GCSE/O & A Level/IB/University Student Forum
Qualification => Subject Doubts => IGCSE/ GCSE => Commerce => Topic started by: syedz123 on May 19, 2010, 11:53:34 pm
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this 2010 exam iz gna b da first time they wil use da new format...its nw 2 papers n limited companies are nw included in da syllabus..can any1 plz post any type of limited company questions for igcse levels c0z da A levels limited companies q r hard and i cnt fynd any to prac thanks ;)
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Yea, but in the old format, the Multiple Choice paper only used to be accounted for as part of your grade if your combined total across P2 &3 was less than a C.
Practice the principles of accounts paper 2 (gce o level) of O/N or M/J 09, can't remember which, but there was a good sum on PLC.
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I think the specimen paper has a question on company accounts.
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do you have any useful notes about the limited liability companies ? :S:S ???
im on the verge of panicing
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A couple of formats I put together to review before the exam. You can do whatever you want with the file. Just make sure you mention who made it :).
I will add more as soon as I get time.
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+rep Thanks man very helpful!!!!
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hey do u noe nything bout sole traders nd stock iventory statements cz they r in the syllabus nd i never heard of them ???
Thanks aloot
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Don't worry too much about it. The questions regarding stock rarely come. Solve question 4 in May 2006. Make sure you memorize this statement exactly: "Stock is valued at the lower of cost and net realizable value." This comes a lot and always worth 2-3 points.
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Thanks so much for the formats!! +rep :)
By the way, how are you guys practicing for tomorrow? Like is the format for the new P1 going to be similar to past papers 2 or 3 from before? I guess paper 2?
Im just doing some past papers, and going over deffenitions, ratios ect.
I think the new paper 1 will be a bit of the old ppr1 and 2.
And then the new ppr2 is going to be like the old ppr3.... if that made sence? ;)
Im just getting confused with the double entry system,, which isnt pleasing me! :P
Thanks for the notes By the way ;D
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Thanks ;)
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theres 1 ex of a limited liab. acc from pg 9 to 13 in this doc.
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Is bad debts recovered included in the Sales Ledger Control Account?
If yes, where and why ? :]
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Do we have LIFO FIFO & AVCO methods of stock valuation in our syllabus this year?
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theres 1 ex of a limited liab. acc from pg 9 to 13 in this doc.
omg ! thank you soooo much!!! :)
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When calculating capital for a firm do we minus LONG TERM LIABILITIES ?
Or is it just total assets - current liabilities.
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When calculating capital for a firm do we minus LONG TERM LIABILITIES ?
Or is it just total assets - current liabilities.
No love man.... :'( :-\
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Long term Liabilities are NEVER subtracted in the Financed By section - you can lose marks for that.
Okay heres a question :
I have $1000 as a long term loan from a friend.
Supposing I take a further $2000 long term loan,
What affect (if any) will this have on my CAPITAL ?
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Yeah your answer is correct. Your explanation made sense.
I have the same text book - if you read a few of the MS in 2003-2004 you will lose marks for showing Longterm Liabil. in the Financed By section.
Just deduct it from total assets.
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Can anyone explain to me why the answer to this question is $15000?
Amounts owed by a trader for electricity are given below:
1 January $2000
31 December $2500
The charge for electricity shown in the profit and loss account for the year ended 31 December was $15 500. What was the amount paid for electricity during the year?
Work backwards.
amunt payed for expense/income less amounts owing at the start of the year add amounts owing at the end of the year = P&L charge
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Can anyone explain to me why the answer to this question is $15000?
Amounts owed by a trader for electricity are given below:
1 January $2000
31 December $2500
The charge for electricity shown in the profit and loss account for the year ended 31 December was $15 500. What was the amount paid for electricity during the year?
31 December (end) - 1 January (beginning) = 2500 - 2000 = 500
amount shown in the p/l account - 500 = 15500 - 500 = 15000
I guess? I dont really know! :D
Can some one tell me, when you make a T account, when is it that you balence it, and when is it that you trasfer it?
I have had a few questions saying once you prepare it, either transfer it to the T/P/L account or balence it and bring it down ??? what do i do?
;D
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Okay
Start with P&L charge :15500
Minus amount owing at year end 2500 I minus since we are working BACKWARDS
= $13000
THEN add amt. owing at beginning of year 2000
= 15000 Hope you got it :) form a formula with X if you dont get it ;)
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i'm going to lose marks on theory :( i just know it :(
same here :(
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Can you tell me which paper that question came from anyway?
I will try and have a go at it now i understnd it better! :)
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In the specimen 2010 paper 1...How do we do Q3 b). I got $590 on the "expected balance..." but the mark scheme says $710.
Please explain..
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Accounting Paper 3, M/J 2007 Q2.
The Bad Debt Recovered A/c
The mark scheme says "cash" on the credit side. Should it not be W.Blanco, who is the debtor?
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When bad debts are recognized, the debtors account is closed by Posting PnL as a loss on the credit side of the debtor (in this case W.Blanco)
Accepting that, W. Blanco's account no longer exists in your books of accounts.
However, later on, when you have recovered the money lost, it comes in as a way of cash / bank, in this example it is Cash.
Hence the journal entry: Cash Dr.
Bad Debts Rec A/C : Cr.
At the end of the year, the Bad Debts Rec account balance will transfer into the profit and loss account as an income, just the way discount received does.
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Accounting Paper 3, M/J 2007 Q2.
The Bad Debt Recovered A/c
The mark scheme says "cash" on the credit side. Should it not be W.Blanco, who is the debtor?
There are two ways to reinstate a debt - read the MS (scroll down a bit) and you'll see what I mean.
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Thanks to you both. :)
One more thing, what is the difference between owner's capital & capital employed?
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Thanks to you both. :)
One more thing, what is the difference between owner's capital & capital employed?
Owner's capital + Long Term Liabilities = Capital Employed.
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When a LOAN is provided by a PARTNER :
we debit bank a/c
and CREDIT what ? the partner's current/capital account ?
PLEASE HELP !!!!!!!
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You are talking about Partnership yes?
When a partner takes a loan there is an interest.
So Interest on partner's loan to firm :
Profit/loss acc Dr
Partners current acc Cr
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You are talking about Partnership yes?
When a partner takes a loan there is an interest.
So Interest on partner's loan to firm :
Profit/loss acc Dr
Partners current acc Cr
When the Loan is first obtained we DEBIT BANK and Credit PARTNERS ACCOUNt (I am not talking about interest) - which account is CREDIETD ?? Current or Capital ??
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According to me, a new account called loan will be opened and the partner will be treated as an external creditor. However the loan interest will be shown in the partner's current account.
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According to me, a new account called loan will be opened and the partner will be treated as an external creditor. However the loan interest will be shown in the partner's current account.
When the Loan is first obtained we DEBIT BANK and Credit PARTNERS ACCOUNt (I am not talking about interest) -
which account is CREDIETD ?? Partner's Current or Capital ??
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Hey Ari, the pm I sent you...checked it. It says it cannot be credited to the capital account...so current it is i guess.
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Post a question about this.
Loan will not be entered in Partner's current or capital account, only interest on loan.
Loan from Partners
Loans from partners are treated in the same manner as loans from an external source. If one of the partners makes a cash loan to the firm quite apart from the capital that he has already contributed, the Loan Account is credited and the Cash Book is debited. The loan from any partner should not be credited to the partner's Capital Account as priority is given to the repayment of loans over repayments of capital.
An interest is payable to the partner who makes the loan. This interest is credited to the partner's Current Account to increase his equity and debited to a Loan Interest Account as an expense to the partnership business. At the close of the trading period, the amount from the Loan Interest Account is transferred to the debit side of the Profit and Loss Account.
If the interest is paid in cash to the partner, the Cash Book would have been credited and the Loan Interest Account debited. It will then not appear in the Current Account of the partner since this interest is no more owing to him.
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I got it.
Short thank you, but I really have to sleep now.
Because of Mony and Nid I can rest in pecae.
Thanks PEople ;)
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hey guys, is the collection period for debtors formula is it
Debtors
_______ x 365 ?
sales
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hey guys, is the collection period for debtors formula is it
Debtors
_______ x 365 ?
sales
Credit Sales *
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would they specify whether it's credit sales or not?
and if it's not then it would just be debtor turnover ratio?
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Long term Liabilities are NEVER subtracted in the Financed By section - you can lose marks for that.
Okay heres a question :
I have $1000 as a long term loan from a friend.
Supposing I take a further $2000 long term loan,
What affect (if any) will this have on my CAPITAL ?
They are not subtracted.. they are added. Assets-Liabilites=Capital or Capital+Liabilities=Assets. I like subtracting from the assets better.
The $2000 loan will not change your capital because assets and liabilities are changing equally. No net change. (If you get 2000 check, you will add 2000 to bank ad then subtract 2000 in the liabilities.
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They are not subtracted.. they are added. Assets-Liabilites=Capital or Capital+Liabilities=Assets. I like subtracting from the assets better.
The $2000 loan will not change your capital because assets and liabilities are changing equally. No net change. (If you get 2000 check, you will add 2000 to bank ad then subtract 2000 in the liabilities.
Capital Employed = Long term liabilities + Owner's Capital
So wouldn't an increase in Loan increase Capital Employed? :S
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Capital Employed = Long term liabilities + Owner's Capital
So wouldn't an increase in Loan increase Capital Employed? :S
Long term loan, yes. Short term, no.
Long term loan will also increase bank or cash balance.
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What topics do you guys think will be covered on Accounting Paper 2 on MONDAY, JUNE 7??? I guess Limited Liability Companies are a must?
DAMN RIGHT YOU ARE !!! ;D
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lol so what else?
Prvt Ltd, Manufacturing, Partnership, some regular double entry etc.
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I have a feeling that it'll be similar to the Principles of Accounts P2, (GCE-O-Level) that took place on June 3rd. I did P1(2), IGCSE CIE, which is variant 2 FYI.
According to the predictions my friends and I laid out, these topics are most likely to appear in the Paper 2 :
Limited Liability Company (Like DUH!! :P)
Non-Trading Organisations
Incomplete Records (involves preparation of SL Control & PL Control)
PettyCash / Cashbook (Not Really sure on that one)
Manufacturing
Asset Disposal Maybe?
A Simple Sole Trader's PnL & Balance Sheet (With those adjustments of Prepayments & Outstandings)
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I'm not sure which variant you do and the differences between the two, but I did variant 2, and there wasn't any real journal error correction questions or such, like usual, but there were indirect journal entry questions (like making an entry in the journal for bad debts, or provision for doubtful debts), so do you think a journal entry would come? No, right?
In that trial balance question there was something to do with errors, If I recall clearly..
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Wait, by non-trading organizations, you basically mean Clubs and Societies, right?
Yep!
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Can someone please help me find sums on BRS please
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Hmm...you're right actually, that's a really good list. (I did Variant 2 too, fyi)
I was trying to remember the topics that came in P1 but I'm failing miserably..lol.
So I remember there was a trial balance, I think Partnership was there too?
Wasn't there a really long account we had to make or something? Or like a long calculation?
Did we have to make a Provision for Depreciation account? I don't think so, right?
We did have to make a Provision for Doubtful Debts... and a Bad Debts?
What else?
(That way we know what WON'T come on Paper 2..)
Depreciation was tested upon in the last question involving the capital and revenue expenditure remember? However, there was no Prov. For Dep. A/C. There was something to do with provision for bad debts and bad debts, Partnership came and there were two ratios (RoST & CPP).
That list was made by some friends and me, right after the paper 1[v2], so we made sure we remembered everything that came.
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The way we've been taught is to start off with the balance as per the updated cashbook.
i.e: This is the format we've been taught.
Balance as per updated cashbook : XXX
+ UnPresented Cheques XXX
- Bank lodgments (XXX)
______
Hence Balance as Per Bank Statement XXXX
I remember our teacher saying something about another method, but she told us to use the method I documented above.
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The way we've been taught is to start off with the balance as per the updated cashbook.
i.e: This is the format we've been taught.
Balance as per updated cashbook : XXX
+ UnPresented Cheques XXX
- Bank lodgments (XXX)
______
Hence Balance as Per Bank Statement XXXX
I remember our teacher saying something about another method, but she told us to use the method I documented above.
the other method is starting with the bank balance..bt this time you rather add uncredited cheques and less Unpresented cheques....
Limited Company will by all means come for sure in p2...also i hv a STRONG feeling manufacturing and BRS will come in our p2 c0z they came for the yr 08 bt didnt come in 09...
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to be honest...i hv always been confused bout the sets off in control ac/s t0o...
this is hw i know it..sets off in sales ledger control a/c is always on the credit side
and in the purchases ledger control a/c its in the debit side
this is what i always do n nerver gotten it wrong b4...
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Look at a purchase ledger control account as a one big creditors account.
So, now, One Big Creditor is also your Debtor. Now you agree to set off the monetary value of what he provides you in Purchases against what you sold him.
So you post the amount ($90 in your case) on the Debit side of the purchases account as "Set off against sales ledger"(so it reduces the amount you owe him for purchases), and post that amount ($90) on the Credit side of the sales ledger (so it reduces the amount he owes you for sales [to him]).
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Look at a purchase ledger control account as a one big creditors account.
So, now, One Big Creditor is also your Debtor. Now you agree to set off the monetary value of what he provides you in Purchases against what you sold him.
So you post the amount ($90 in your case) on the Debit side of the purchases account as "Set off against sales ledger"(so it reduces the amount you owe him for purchases), and post that amount ($90) on the Credit side of the sales ledger (so it reduces the amount he owes you for sales [to him]).
ooh..kk Thanks nw i undrstnd it better lol
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ooh..kk Thanks nw i undrstnd it better lol
Glad I could be of help! :)
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Ok lets see.....
Supposing I sell goods on credit to you, I become your Creditor Right?
The same way, I also buy goods (on credit) from you, I become your Debtor Right?
Now I want to compensate for what I bought from you against what I sold you. WHY would I do it the other way, as in increase what I owe you and Increase what you owe me? That'd be like selling you more stuff and buying more stuff from you at the same time.
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@aangel42
Read through this booklet:
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Your welcome :)
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What are all the things we need to know about Limited Liability companies?
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In limited liability in profit and loss appropriation account : Credit NET PROFIT and Balance b/d
Debit:General reserve(at the end of the year) and DIVIDENDS Interim and proposed :)
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oh thats it! Thanks :)
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is goodwill in our syllabus this year?! its very confusing ???
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If a question asks you to calculate the rate of stock turnover, without any further information specified, how do we know which formula to use?
Do we use the one for the number of times stock is replaced every year (COGS/average stock) OR the one for the number of days stock is held before it must be replaced (avg stock/COGS x 365)??
???
COGS/average stock
the question is asking how many times the stock "turns over" not how long it needs to be kept before replacement so yea...
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is goodwill in our syllabus this year?! its very confusing ???
yes it is!
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yes it is!
ugh okaay :( -diapointed look-
thanx =P
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ugh okaay :( -diapointed look-
thanx =P
Theres a question in October/November 2009. Its basically everything you'll be tested on when it comes to goodwill. Good luck!
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yes it is!
NO ITS NOT !!!!!!!!
CHECK YOUR SYLLABUS !!!!!
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NO ITS NOT !!!!!!!!
CHECK YOUR SYLLABUS !!!!!
Oh right my bad! Theres no need for the red capital letters! Chill...
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If given these questions in the exam tomorrow (for 3 marks each), how would you answer them?
Explain the meaning of the term understandability.
AND
Explain the meaning of the term comparability.
Understandability :
Financial statements must be capable of being understood by the users of those statements, by ensuring that the statements are prepared in a standard, non-confusing format, and are easy to read. Information should not be omitted from these statements because it is believed that it is too complex for people to understand.
Comparability:
The information provided by the financial statements must be comparable with previous financial statements and statements of other similar businesses. This is ensured by following a certain format of presentation of these results. Hence, the users of the financial information must be made aware of the policies used in the preparation of these financial statements, any change in those policies and the effects of those changes.
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What is the journal entry for when The owner uses his personal funds for the purchase of business stationery?
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it is as good as an introduction of further capital, i guess..
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What is the journal entry for when The owner uses his personal funds for the purchase of business stationery?
In a partnership, it would be credited to the partner's current account.
In a sole trader business, it would be credited to the capital account.
In both cases, you'd debit either the Stationery Account, or Office Expenses.
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KEEPING IN MIND THAT WE HAD QUITE A LOT OF RANDOM JOURNAL ENTRY QUESTIONS IN PAPER 1, DO YOU GUYS THINK WE'LL HAVE A JOURNAL ENTRY QUESTION TOMORROW IN PAPER 2????????
(Do you think we will have to make a Suspense account?)
I don't think so, but just go over the suspense account chapter, its better to be prepared...
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In a partnership, it would be credited to the partner's current account.
In a sole trader business, it would be credited to the capital account.
In both cases, you'd debit either the Stationery Account, or Office Expenses.
Thanks a ton!
Also, do you know how the markscheme of the Specimen P1 arrives at the answer of the BRS question? :/
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Thanks a ton!
Also, do you know how the markscheme of the Specimen P1 arrives at the answer of the BRS question? :/
The MS is wrong ;) Dont think too much about it.
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i have a question... in specimen paper 2 question 3 about clubs...can some1 explain why r wages and depreciation included in the trading account although they should be included in the profit and loss account??
thx in advance
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i have a question... in specimen paper 2 question 3 about clubs...can some1 explain why r wages and depreciation included in the trading account although they should be included in the profit and loss account??
thx in advance
They are the expenses relating to the shop in the club and not the entire club as a whole. In the Club's Income and Expenditure account, under "Incomes" this would appear as profit from shop.
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Best of luck to all doing their Accounting Paper 2 tomorrow, Hopefully it will be a good paper, and we will all do well! :)
Just another 5 days and the exams are done! I personally can't wait for Summer '10 to start, its gonna be awesome!
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What do "C/F" and "O/F" mean on the mark schemes?
I've always wondered but never bothered to ask
Own figure and Correct figure.
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This is a General Notice to all SF users :
I would like to remind all of you that discussions may not begin until the 24 hour period has passed by.
Thank You aangel42 for noting that point.
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can u plz help me in questions no. 6,11, 16,22,23,24,30,32,33,39 Nov.06 ppr1
Thanx in advance.
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can u plz help me in questions no. 6,11, 16,22,23,24,30,32,33,39 Nov.06 ppr1
Thanx in advance.
6) B
Capital, opening balance 23 000
Add Capital introduced 2 500
Less Drawings (1 500)
Closing Balance 24 000
11) B
Trade discount is decided before transaction takes place, and isn't included in accounting records.
Cash discount given to consumers is considered as an expense, and is recorded => Only if customers pay before a predetermined time period will they receive the cash discount, else not.
16) C
She owes 482. She buys more, she owes more (+260). She pays part of her due, she owes less (-137).
22) B
Bank Interest Credited > The Bank has paid interest to its customer. It will increase his bank balance. Bank Interest received isn't recorded in the Cash Book, until that person has received his bank statement.
Dude, those questions are pretty easy... and I have to admit, I fail to provide explanation for they're so simple. :-\
Don't mind, but, you need revision. I will advise you to revise your concepts first, and then, try those questions again. If you really cannot, then, I will help.