IGCSE/GCSE/O & A Level/IB/University Student Forum
Qualification => Subject Doubts => IGCSE/ GCSE => Commerce => Topic started by: 7ooD on May 30, 2009, 05:32:52 pm
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Plz answer those questions 1 day is left for accounting
my first questionn it is a fast one on nov 2005 question 5 b)3) ebor's current a/c showed a credit balance of 10000 it was agreed that he should transfer half of this to his capital a/c in the mark scheme they debited the current account and credited the capital but on may june 2008 question 3) 4) the partners decided that the debit balance of 2200 on amina's current account should be transferred to her capital account. this had not been recorded in the mark scheme they debited the capital a/c and credited the current a/c for the correction of error of this entry i dnt understand this how can they be opposite while they look the same in the two papers
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For the first question, if you think of it, Bank balance can either be a debit (representing the amount of money left in the bank) or a credit balance (representing bank overdraft<more money withdrawn than allowed>). Ok, now, to find out the bank balance upto this year, you would add to the previous year's bank balance the receipts (the money you have earned) and take away the payments (the money going out of the business) to get whats now remaining in the bank. Lets say if 2005's bank balance was a credit balance, then you would simply put it as a negative figure in brackets in ur calculator. SO, (-3150)+(receipts)-(payments) to get the final bank balance.
Then, about the second part, Assets-Liabilities represents how much would've left with after the business pays its debts. Its basically like the working capital of a trading organisation I think, representing the available funds for day-to-day expenses, after debts have been cleared.
I hope this made any sense. I'll move onto ur second question and try to work it out. :)
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For the second question, Im assuming you asked about the Sales Ledger CONTROL ACCOUNT :) instead of the Sales Ledger. Ok, so, the Sales Ledger Control Account (a.k.a Debtors Ledger Control Account) always starts off with a debit balance (as the people you sell goods to are the debtors). The format goes like this:
Balances (Total of Debtors' balances) A debit balance
Balances (Debtors with credit balances) A credit balance
Credit Sales A debit balance
Sales Returns A credit balance
Cheques recieved from Debtors A credit balance
Dishonoured cheques A debit balance
Overpayments refunded A debit balance
Discounts Allowed A credit balance
Bad Debts written off A credit balance
Interest Charged to Debtors on overdue Accounts A debit balance (because this would INCREASE the amount the debtors owe)
Transfers (set offs) A credit balance
I hope you understand these transactions; any confusion, ask. I'll move onto your third question. :)
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hahahahaha!! Bani ur answering him here and i am answering him in the other thread!! hahaha!! 7ood!!
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hahahahaha!! Bani ur answering him here and i am answering him in the other thread!! hahaha!! 7ood!!
Haahahaha!!! 7ood,which thread do you want us to answer ur queries? :D ;D :)
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dude this lol
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now both of us answered the same question!! lol!! divide the work between us atleast!!lol!!
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ì have posted this in many threads cuz everyone come & say i will answer ur question and suddenly go out of charge or fuel :d
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ì have posted this in many threads cuz everyone come & say i will answer ur question and suddenly go out of charge or fuel :d
hahaha :D ok ;) Now, Monica, which one out of Q3 and Q4 do you want to answer? You choose one, I'll choose the other
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ì have posted this in many threads cuz everyone come & say i will answer ur question and suddenly go out of charge or fuel :d
hahaha :D ok ;) Now, Monica, which one out of Q3 and Q4 do you want to answer? You choose one, I'll choose the other
haha I just realised there are only 3 questions :D lets both answer this, it will be good practice for exam :)
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ok, lets both answer... :D
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ok, lets both answer... :D
haha and I just realised that the 2nd question was erased, the one about Sales Ledger Control Account. 700d, tell me if Im mistaken. Bec I remember answering that :)
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hey guys after u answer those questions i have a really hard one im scared it may come in the exam lol :P a blue house is made from blue bricks a red house is made from red bricks a yellow house is made from yellow bricks what a green house is made from?
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yes i removed the questions answered so that u can concentrate more and nobody answer the question twice :P
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yes i removed the questions answered so that u can concentrate more and nobody answer the question twice :P
But I have answered question 1 too. Don't you wanna remove it too? :D
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Ok, for the now Q2, see, the 300 debit represents the money in the bank. Then, it says that the bank statement debited the business's bank account with 1050. Now, this means that for the bank, the business is the debtor (it owes the amount charged). therefore, it will have to be deducted from the current bank balance, which is 300. So, 300-1050= -750, indicating that its a bank overdraft now.
And for the question 5 in M/J 07 and for the question 1 , the debit balance again represents the money in the bank
I hope its cleared. If there is still any confusion regarding this question, please ask :) I'll be more than happy to clear it.
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it is related to question 3 cmon answer fast dude
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aha thanks i understood it u r the man of the match aside with monica the woman of the match u r heroes :d :d :d
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one question is left and this will show who is the winner of the fight if bani wins he gonna have a free trip to the guntanmo prison palm beach if monica wins she will see a picture of a cöol makeup collection :p
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ok wait give me time....i am a bit busy...BUT WAIT PLZ!!
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Ok, for your last question, in Oct/November 2005, the question says that half of the credit balance of the person's account needs to be transferred. Right now, its 10000 credit in the current account. We want 5000 credit balance in the current account. The rest of 5000 needs to be debited to the capital account. Therefore, we will debit the current account with 5000 (which would mean 10000 (credit)-5000(debit), leaving 5000 credit in the current account.)
In M/J 08 paper, the whole amount neds to be transferred to capital a/c from current a/c. This means that the right now 2200 debit balance in the current account should be credited with 2200, to get the balance to 0, as the WHOLE 2200 is needed to be transferred to the capital a/c. Consequently, the capital a/c will be debited with 2200.
I hope all is cleared. Any more confusion, met me know.
P.S Im a she :D So u better not call me dude :D :) ;D
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ok bani y did u answer??!! >:( >:(
lol just kidden thx anyway for answering him...lol i already answered 3 questions b4!!
thx 7ood these questions made me practice!!
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To make it more easier for you to understand, for the Oct/Nov question, once you understand why we debit the current account, then, just think that for every debit entry, there has to be a credit entry. Therefore, when we debit the current account with 5000, we will have to credit it somewhere else, which is obviously the capital account. And for the M/J 08 question, the same applies. We credit the current account (to get the a/c balance to 0). Then, for this credit entry, there has to be a debit entry, which is the capital account.
I hope this made it clearer :)
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ok bani y did u answer??!! >:( >:(
lol just kidden thx anyway for answering him...lol i already answered 3 questions b4!!
thx 7ood these questions made me practice!!
hehehe :P
Oh yeah, me too, thanks 700d, I also got more practice. If you have any more questions, please feel free to ask. We'll get more practice then :D ;D
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THANKZZZZ......Zzz...ZzZ ladies so much ya i have a small doubt that in provision for doubtful debts if we had been given last year provision which for example was 200 and this year 150 i memorized the enteries in the provision accöunt but never understood them the enterie r deßit balance c/d 150 and credit ßalance b/d 200 so do i have to memorize it or there is a point behind dat
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loool sry bani i thought u r a boy now this is an error of commision correction is debit female bani credit male bani :p
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ok when the provision for last year was 200 and now it is 150, this means u will decrease the provision which is an income for the business... so like this a balance b/d will 200 on the credit side of the provision account and then becuz u want to decrease it by 50., u will put P/L on the debit side as 50... now the balance c/d will be 150...... hope u got that.. :-\
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THANKZZZZ......Zzz...ZzZ ladies so much ya i have a small doubt that in provision for doubtful debts if we had been given last year provision which for example was 200 and this year 150 i memorized the enteries in the provision accöunt but never understood them the enterie r deßit balance c/d 150 and credit ßalance b/d 200 so do i have to memorize it or there is a point behind dat
Ok, provision for doubtful debts is simply recording the probable non-payments by the debtors. Now, using your example, the question would probably mention that On 1st May 2009(for example) a trader had a provison for doubtful debts amounting to $200 (meaning that the 200 is the last year's b/d balance.
provison for doubtful debts is a credit balance. I'll tell you the reason in a moment.
So, first write down the balance $200 in the credit side. Then the question mentions that the provison for doubtful debts was reduced to $150 (this means that at te end of the year, the provision for doubtful debts will have a credit balance of $200) Now, its a credit balance because its going out of the account and being debited (subtracted from gross profit) in the trading account. Now, you know that the balance at start is $200 credit and the balance at the end is $150, what amount needs to be debited to lower the credit balance to 150?
(200-150=50), so, you would debit the provison for doubtful debts with $50 after entering the opening balance of $200, to get the bredit balance of $150.
Now, in this case, if u see, the prov for doubtful debts has decreased. Which, means this would be an income in the trading account; the decrease of $50 would be added(credited) to the gross profit. The decrease is an income because the business would be transfering some of the provision back into the firm's revenue
I hope this helped. Any confusions regarding this, please feel free to ask. :)
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ok when the provision for last year was 200 and now it is 150, this means u will decrease the provision which is an income for the business... so like this a balance b/d will 200 on the credit side of the provision account and then becuz u want to decrease it by 50., u will put P/L on the debit side as 50... now the balance c/d will be 150...... hope u got that.. :-\
hahaha :) I just saw you replied after I had posted my long description hmmmmmmm
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loool sry bani i thought u r a boy now this is an error of commision correction is debit female bani credit male bani :p
Hahahahahaha :D We all are too full of Accounting, aren't we ;)? hehehehe I like ur sense of humour ;D keep it up, by practicing more for Accounting :P ;D
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No Bani dont worry girl...ur a very helpful person keep it up!! here is a +rep for u!! :-* :-* :-*
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hehe thanks :D umm do u have any link for definitions and uses of relevance comparability reliability understandability cuz i dnt have them in my book lol i asked many questions sry :D
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ya there r many websites...go to godfather thread which is called notes and go to the website cliffnotes and type accounting....
and no its really ok ask as much questions as u want it really helps us too!!
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http://www.cliffsnotes.com/WileyCDA/
here i got it from godfather thread!! u should go and +rep him!!lol!!
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thanks sherif hey man r u egyptian it is relly confusing to kno nationalities on here :D
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hahahaha!! oh my god 7ood!! see its not sherif its MONICA BAS ANA i changed my name to sherry....lol!!
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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
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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
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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
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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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Thankyouuu ..
In Motor vehicle >> provision for depriciation of motor vehicles account >> Disposal of motor vehicle account
What are the Essential steps required to solve this ... in the year O/N/2006 page 12 and 13 and 14 .
Actually , I didnt had a teach from a very long time just the past four months of my IGCSE she came and she tought me the very little and totally Escaped the These parts that i am asking right now ..
It is going to be very hard for me as i have both accounting and chemistry to study them on the same day ..
Saiki you could talk to me Online if you wish .. ^-^ "
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Motor vehicle- u add the vehicles u buy, n the day ur sellling it, u remove that vehicle from that a/c (at cost price) as if it never existed - this u add in disposal...
Provision- u add provision every year for all vehicles. n when ur selling one of them, again remove all traces of that vehicle (remove the depn charged for it for all years) - this u add in disposal... ( n dont forget to charge depn for remaining vehicles at the end of that year.)
disposal- add motor vehicle cost, add depn, balance of that will be the net book value... then enter the selling price n if its above the balance then u made profit in the book or else made loss in the book... then transfer the balance to pnl n close that a/c (make it 0)
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*censored* hell accounts and chem tommorow chem is fine but a/c im screwed!!
sm1 please help me with the entries of good will pls!!
:o
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Motor vehicle- u add the vehicles u buy, n the day ur sellling it, u remove that vehicle from that a/c (at cost price) as if it never existed - this u add in disposal...
Provision- u add provision every year for all vehicles. n when ur selling one of them, again remove all traces of that vehicle (remove the depn charged for it for all years) - this u add in disposal... ( n dont forget to charge depn for remaining vehicles at the end of that year.)
I didnot understand it >> could you please do it with examples or use the question in the paper Page 12 ..
how did they get the 9000 as a balance in the provision for depreciation in Page 13 year O/N/06 .. what is the formula ??
what are the formula's used in these ??
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Motor vehicle-
oct 1 2004 bought 2 vehicle (20000 n 16000) hence debit motor vehicle a/c since asset increase.
sept 30 2005 depreciate the 2 vehicles- 25% of 20000 + 25% of 16000 = 5000+4000=9000 -> credit since negative asset a/c
disposal->
remove vehicle VWU from motor vehicle a/c -> credit 16000 (the cost of that car)
remove prov depn -> remove 4000 from the a/c since until now the total dep charged is 4000 for that car... debit 4000
enter both of them in disposal a/c-> debit 16000, credit 4000, hence balance is 12000 dr which is net book value...
then it is sold at 12500 hence credit 12500 n balance now is 500cr, n since sold higher then NBV, it is a profit.
then at end of year, transfer the balance of the a/c to pnl n close disposal a/c (make it 0)....
also at the end of year, dont forget to charge depn in provision for depreciation a/c for the remaining vehicle KUA at 25% of cost =5000
hope thats more clear
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where did the 10000 came from ??? its killing me ???
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lol
in prov for depn a/c
sept 30, depreciate the 2 vehicles at 25 % = credit 9000
apr 1, remove the depreciation of the vehicle being sold = debit 4000 (transfer to disposal) n balance is 5000 cr
sep30, depreeciate the remaining vehicle at 25% of its cost = 25% * 20000=5000, cr 5000, hence bal 10000 cr
remember he bought 2 cars, sold 1, still has 1 left that needs to be depreciated.
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Hey saiki .. I really sorry for bothering you ...
actually I used to get 10000 but something is wronge with me I couldnt see it ... I havent slept in days .. I am getting teh right answers but I cannot see it .. I am thinking the whole time that i am wronge and whatsoever .. Jsut now i realised that i have did ALMOST everything you told me .. but I could not think properly .. I have did everything already but i couldnt see it .. Damn it >> i didnt knew that NO SLEEP will do this to me .
I really should get some sleep havent slept since past 2 days .. ** actually i cannot sleep ** when i am nervous or in stress ,Tension.
Anyhow .. Thanx 1000 times for your help .. I will definitly read your posts for me Again :-* (+rep) for you
HUGS
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hey anyone can help with the mark up quesiton for october november 2008 question 3C? how the hell do we do the mark up thing?
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this one is on general....i expalined it yesterday under the thread called accounting..
gross profit margin= gross profit mark up( by subtracting one from the dominator)
so if gross profit=20%=20/100= 1/5
so the gross profit mark up = 1/4(becuz i subtracted one from the dominator)
now gross profit mark up= Gross Profit/ cost of sales
cost of sales= 9500+22000 -17500=14000
mark up= GP/14000
1/4= GP/14000
GP=3500
NOW GET THE SALES EASILY BY= 3500+14000= 17500
HOPE U UNDERSTOOD ANYTHING!!LOL!!
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and here is the rest of the explanation go under the thread accounting on the next page by shan and ull see the questions he asked!!
gross profit mark up= gross profit margin( by adding 1 to the dominator)
mark up= 20%= 20/100= 1/5
so gross profit margin will be 1/6 (remember that i added one)
now gross profit margin= gross profit/sales
1/6 = GP/60000
GP = 10000
u can then get the closing stock....
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Hey can anyone explain me question 5 - o/n/2003
error no. 2
Thanks
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remember the prudence concept- not overstate assets, n understate liabilities - stock valued at lower of cost or net relisable value (selling price) - n in error 2, the stock has been valued at selling price which is higher than cost hence is an error
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and it is a closing stock and closing stock is directly proportional to net profit which means when it increase net profit increase over here it decreased so net profit is decreased
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hey can anybody give me the journal entries for income
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and here is the rest of the explanation go under the thread accounting on the next page by shan and ull see the questions he asked!!
gross profit mark up= gross profit margin( by adding 1 to the dominator)
mark up= 20%= 20/100= 1/5
so gross profit margin will be 1/6 (remember that i added one)
now gross profit margin= gross profit/sales
1/6 = GP/60000
GP = 10000
u can then get the closing stock....
thanx a lot you're a lifesaver!!! haha.. now i can rest assured that im prepared for almost everything in paper 3! thanx again! oh and whoever is taking accounting and chem tomoro good luck.. I only haev 15 minutes break between the papers.. which is ugh... thanx again + rep! :D
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7ood- what u talking about? wat u mean by income?
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ok in the clubs and societies accounts subscription accounts any subscription recieved is credited in the subscription account that's why i want the journal entry behind that for example the journal entry for rent paid is rent 300 debit
cash 300 credit
and is entered in the rent account as a debit cash 300
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subscriptoon =revenue... if u recieve money from it ->
dr bank xx
cr subscription xx
n then in bank a/c u enter dr subscription xx... in sub a/c u enter cr bank xx
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thanks man one last thing i don't understand how they corrected this error in 2008 nov paper page 8 the question is
4 On 15 September 2008, $50 had been received from W Lee. This amount was
incorrectly debited to the bad debts account and credited to W Lee’s account.
W Lee’s account had been written off as a bad debt on 30 June 2008.
and the correction is cash 50 (debit) bad debt recovered 50 (credit)
W lee 50 (debit) bad debts 50 (credit)
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1. a bad debt that was previouly written off is now re-instated -> increase bad debt recovered by 50 -> cr 50 in bad debt recov
2. if bad debt is recovered then ur debtors increase, hence dr wlee 50
3. error that they debited bad debt -> so undo it -> credit bad debt 50
4. they recieved 50 -> assets go up -> cash dr 50
5. if debtor pays, u credit his a/c -> cr wlee 50 BUT This is alredi done!
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I would really appreciate If nyone can help me solveing question 1 a) in P3 accounting June04..
I got the answer, but I don't understand how did we get the figure "$258"??
plzz ppl pleeeeeez??
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to AL*Eagle...
luk...the insurance is an expense rite?! so u shud noe the layout for the account wen it cums to accrued and prepaid..
u hve the prepaid b/d....60...so v debit tht as bal b/d...thn they sed paid insurance...meanin thts bank...so v debit bank by 264....now thz account if for the year till 31 march 2004...but the dude paid 264 till june 30 2004....tht means he paid 3 months xtra....so thts prepaid...so 3/12 multiplied by 264...thts ur prepard c/d which goes to ur crdit side...thn the difference will b ur p&l..
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neone else need help!? feel free to ask...
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Why in M/J 2006 Q3 the amount 65 is regarded as an asset if the difference is on the credit side? Shouldn't it be an overdraft?
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to AL*Eagle...
luk...the insurance is an expense rite?! so u shud noe the layout for the account wen it cums to accrued and prepaid..
u hve the prepaid b/d....60...so v debit tht as bal b/d...thn they sed paid insurance...meanin thts bank...so v debit bank by 264....now thz account if for the year till 31 march 2004...but the dude paid 264 till june 30 2004....tht means he paid 3 months xtra....so thts prepaid...so 3/12 multiplied by 264...thts ur prepard c/d which goes to ur crdit side...thn the difference will b ur p&l..
thank u very much dude!!
+REP!!