Accounting 0452 help HERE only!

[angell]

Hey

All Accounting doubts here please

And i have one regarding the paper 2

is provision for depreciation an asset or liability? and for the repayment to creditors, do we use the quick or current ratio??

[Monica]

For me i did provision for depreciation an asset and repayment i said quick ratio...i proved my point abt the asset thing in one of the threads but still i may be wrong. by da way its monica but i changed my nick...

[angell]

i wrote asset, n current ratio :S lets see!

[angell]

OK, here goes..

Relevance
Financial statements provide info about a business's financial performance and position. These can b used as the basis for financial decisions. It is important that the info is provided in time for these decisions to be made : info not available whn it is required is of little use.

Reliability:

The info provide in financial statements can be reliable if it is:
- capable of being depended upon by users as being a true representation of the underlying transactions n events which it is representing
- capable of being independantly verified
- free from bias
- free from significant errors
- prepared with suitable caution being appiled to any judgements and estimates which r necessary

Comparability

The info contained in financial statements can b useful if it can b compared with similar info about the same bizniz for another accounting period or at another point in time it is also useful to be able to compare the info with similar info about other businesses.
In order to make comparisons, it is necessary to be aware of any different policies used in the preparation of the financial statements, and changes in these policies and effects of such changes. It is imprtant to b able to identify similarities n differences between the info in the financial statement and the info relating to other accounting periods or other businesses.

Understandability

It is important that financial statements can b understood by the users of those statements. The depends partly on the clarity of the ino provided.
It also depends on the abilities of the users of the financial statements. It is normally assumed that users of financial statements have a reasonable knowledge of business and economic activities and accounting and that they wil be reasonably diligent when studying the financial statement. However info should not be omitted from financial statements becuz it is decided that it is too difficult for users to understand.

Hope that helped

Plus, refer Section 2.1 (Supplement part) of the accounting syllabus, for a shorter brief overwiew.

[7ooD]

omg guys did anybody notice this in accounting 2003 may june paper 3 in the mark scheme here is the answer for the bank reconcillation statement check it with the answer of another bank reconcillation question appeared in 2006 may june

2003 answer
3 (a)
Mary
Bank Reconciliation Statement as at 31 January 2003
Balance as per cash book (1780) (1)
Plus cheque not yet presented – David 270 (1)
(1510)
Less amount not yet credited 800 (1)
Balance as per bank statement (2310) (1)

2006 answer

Tarek Wahid
Calculation of bank statement balance at 30 April 2006
$
Balance as per cash book (1363) (1) O/F
Plus cheque not yet presented – Salma Abbas 546 (1)
(817)
Less amount not yet credited 2175 (1) O/F
Balance as per bank statement (2992)

how they wrote plus and subtracted the unpresented cheques in both the cases also the uncredited cheques they wrote less and added in both the cases

[Monica]

7ood calm down... listen the second one is an overdraft, that is why we put it in brackets(negative)...thats all when it is an overdraft just follow the same steps but only keep it in negative.

[7ooD]

yes i kno it was an overdraft but the 2006 one was a normal balance and he did the same!!!

[Monica]

tell me the question numbers please....

[7ooD]

ok here is the full questions so that u dnt look for them

2003 may june

3 (a) On 31 January 2003 Mary, a trader, obtained a statement from her bank and
compared it with the bank account in her cash book.
The bank balance shown in the cash book was an overdraft of $1780. This differed from
the balance shown on the bank statement because–
1. a cheque for $270 payable to David had not yet been presented for payment
2. cash paid into the bank amounting to $800 had not yet been credited to Mary’s
account.
Prepare a bank reconciliation statement to show the balance which appeared on the
bank statement on 31 January 2003.

2006 may june
part one


1 Tarek Wahid is a sole trader who keeps full double entry records including a three column Use
cash book.
On 1 April 2006 his cash book showed the following debit balances:
Cash
Bank
$
125
6750
Tarek’s transactions for the month of April 2006 included the following:
April 5 Cheque for $230, received from Asmaa El Zein in March, was dishonoured by
the bank.
10 Received a cheque from Mohammed Riyas in settlement of his account of
$480, after deducting cash discount of 2 ½ %.
16 Paid cheques totalling $9980 for a new motor vehicle costing $9900, and
repairs to existing motor vehicle costing $80.
24 Paid Salma Abbas a cheque for $546 to settle the amount due, after deducting
cash discount of $14.
29 Cash sales amounted to $2150.
30 Paid all the cash into the bank except $100.
REQUIRED
(a) Enter the above transactions in Tarek Wahid’s cash book on the page opposite.
Balance the cash book at 30 April and bring down the balances on 1 May 2006.

part two

On 30 April 2006 Tarek Wahid obtained a statement from his bank and compared it with Use
the bank column in his cash book.
The bank balance shown in the cash book differed from that shown on the bank
statement because:
1 the cheque paid to Salma Abbas had not yet been presented for payment;
2 the cash paid into the bank had not yet been credited to Tarek’s account.



at the end of the cash book the balance which appeared in the bank as debit balance c\d 1363

[Monica]

here!! u said it


at the end of the cash book the balance which appeared in the bank as debit balance c\d 1363

it is c/d SO when u bring it down b/d it will be on the credit side....

[Monica]

we take the b/d not the c/d...they tried to confuse u...thats all

[7ooD]

sa7!! u mean it is an overdraft too as there is a shortage in the debit side right

[Monica]

u take the balance brought down b/d which is  the balance carried down  c/d from the previous month...

so if balance c/d is debit, balance b/d will be credit

and if balance c/d is credit, balance b/d will be debit

[saiki]

done accounting- paper is different compared to past papers (plz dont ask me nythin unless uve aalredi done the paper too) .... if nyone has also done it, plz send me a msg since i need to clarify a question in the paper

[saiki]

ive done it, gosh, has nyone else done it yet??