1
, INDEX
INDEX ............................................................................................................................................................................................................ 2
ANALYSIS AND INTERPRETATION............................................................................................................................................................. 3
FIXED ASSETS .............................................................................................................................................................................................. 4
Theory and formats ............................................................................................................................................................................ 4
Past paper theory ................................................................................................................................................................................ 5
STOCK ............................................................................................................................................................................................................ 8
Past paper theory .............................................................................................................................................................................. 12
MANUFACTURING COMPANIES .................................................................................................................................................................17
Past paper theory .............................................................................................................................................................................. 21
RECONCILIATIONS ..................................................................................................................................................................................... 26
Theory and formats .......................................................................................................................................................................... 26
Past paper theory .............................................................................................................................................................................. 26
BUDGETS ..................................................................................................................................................................................................... 32
PAST PAPER THEORY......................................................................................................................................................................... 33
VAT ..............................................................................................................................................................................................................45
Theory and formats ..........................................................................................................................................................................45
Past paper theory ..............................................................................................................................................................................46
2
, ANALYSIS AND INTERPRETATION
Average Debtors Collection Period
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐷𝑒𝑏𝑡𝑜𝑟𝑠
× 365
𝐶𝑟𝑒𝑑𝑖𝑡 𝑠𝑎𝑙𝑒𝑠
• Debtors must pay debts within 30 days - the faster the payment, the better the cash flow situation.
• How to get them to pay.
Allow discount for early payment
Charge interest on overdue accounts
Average Creditors Payment Term
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐶𝑟𝑒𝑑𝑖𝑡𝑜𝑟𝑠
× 365
𝐶𝑟𝑒𝑑𝑖𝑡 𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑠
• Debt repaid after 60/90 days - the longer, the better cash flow
• Bargaining power is gained from creditors by:
Bulk purchases
Good credit/repayment record
Long-term relationship
Inventory turnover rate
𝐶𝑜𝑠𝑡 𝑜𝑓 𝑆𝑎𝑙𝑒𝑠
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑆𝑡𝑜𝑐𝑘
• Number of times during the year that inventory was replaced/purchased.
• Compare with previous year to see improvement/deterioration.
• The bigger the better, unless it means there isn't enough available for the customers.
Period when enough stock was on hand/Stockholding period.
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑠𝑡𝑜𝑐𝑘
× 12 (𝑓𝑜𝑟 𝑚𝑜𝑛𝑡ℎ𝑠) 𝑜𝑟 × 365(𝑓𝑜𝑟 𝑑𝑎𝑦𝑠)
𝐶𝑜𝑠𝑡 𝑜𝑓 𝑆𝑎𝑙𝑒𝑠
Number of months where sufficient stock was available.
𝐸𝑛𝑑 𝑠𝑡𝑜𝑐𝑘
× 𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑑𝑎𝑦𝑠 𝑡ℎ𝑎𝑡 𝑠𝑡𝑜𝑐𝑘 𝑤𝑎𝑠 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒
𝐶𝑜𝑠𝑡 𝑜𝑓 𝑠𝑎𝑙𝑒𝑠
3
, FIXED ASSETS
THEORY AND FORMATS
Asset sales
+ Sales - Asset disposal
1) CP CP
+ Depreciation - + Acc Depreciation -
2)
Pro-rata Pro-rata
3) + Acc Depreciation - Asset disposal
Total Acc Depreciation of Totale Acc
asset sold (+pro-rata) Depreciation
(+pro-rata)
Bank/CC/DC/Drawings/Donations Asset disposal
4)
SP/ CV SP/ CV
(Drawings/donations)
- Profit + Asset Disposal
5)
*
- Loss + Asset Disposal
*
+ Depreciation - + Acc Depreciation -
6) Old+New Old+New
4
, INDEX
INDEX ............................................................................................................................................................................................................ 2
ANALYSIS AND INTERPRETATION............................................................................................................................................................. 3
FIXED ASSETS .............................................................................................................................................................................................. 4
Theory and formats ............................................................................................................................................................................ 4
Past paper theory ................................................................................................................................................................................ 5
STOCK ............................................................................................................................................................................................................ 8
Past paper theory .............................................................................................................................................................................. 12
MANUFACTURING COMPANIES .................................................................................................................................................................17
Past paper theory .............................................................................................................................................................................. 21
RECONCILIATIONS ..................................................................................................................................................................................... 26
Theory and formats .......................................................................................................................................................................... 26
Past paper theory .............................................................................................................................................................................. 26
BUDGETS ..................................................................................................................................................................................................... 32
PAST PAPER THEORY......................................................................................................................................................................... 33
VAT ..............................................................................................................................................................................................................45
Theory and formats ..........................................................................................................................................................................45
Past paper theory ..............................................................................................................................................................................46
2
, ANALYSIS AND INTERPRETATION
Average Debtors Collection Period
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐷𝑒𝑏𝑡𝑜𝑟𝑠
× 365
𝐶𝑟𝑒𝑑𝑖𝑡 𝑠𝑎𝑙𝑒𝑠
• Debtors must pay debts within 30 days - the faster the payment, the better the cash flow situation.
• How to get them to pay.
Allow discount for early payment
Charge interest on overdue accounts
Average Creditors Payment Term
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐶𝑟𝑒𝑑𝑖𝑡𝑜𝑟𝑠
× 365
𝐶𝑟𝑒𝑑𝑖𝑡 𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑠
• Debt repaid after 60/90 days - the longer, the better cash flow
• Bargaining power is gained from creditors by:
Bulk purchases
Good credit/repayment record
Long-term relationship
Inventory turnover rate
𝐶𝑜𝑠𝑡 𝑜𝑓 𝑆𝑎𝑙𝑒𝑠
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑆𝑡𝑜𝑐𝑘
• Number of times during the year that inventory was replaced/purchased.
• Compare with previous year to see improvement/deterioration.
• The bigger the better, unless it means there isn't enough available for the customers.
Period when enough stock was on hand/Stockholding period.
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑠𝑡𝑜𝑐𝑘
× 12 (𝑓𝑜𝑟 𝑚𝑜𝑛𝑡ℎ𝑠) 𝑜𝑟 × 365(𝑓𝑜𝑟 𝑑𝑎𝑦𝑠)
𝐶𝑜𝑠𝑡 𝑜𝑓 𝑆𝑎𝑙𝑒𝑠
Number of months where sufficient stock was available.
𝐸𝑛𝑑 𝑠𝑡𝑜𝑐𝑘
× 𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑑𝑎𝑦𝑠 𝑡ℎ𝑎𝑡 𝑠𝑡𝑜𝑐𝑘 𝑤𝑎𝑠 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒
𝐶𝑜𝑠𝑡 𝑜𝑓 𝑠𝑎𝑙𝑒𝑠
3
, FIXED ASSETS
THEORY AND FORMATS
Asset sales
+ Sales - Asset disposal
1) CP CP
+ Depreciation - + Acc Depreciation -
2)
Pro-rata Pro-rata
3) + Acc Depreciation - Asset disposal
Total Acc Depreciation of Totale Acc
asset sold (+pro-rata) Depreciation
(+pro-rata)
Bank/CC/DC/Drawings/Donations Asset disposal
4)
SP/ CV SP/ CV
(Drawings/donations)
- Profit + Asset Disposal
5)
*
- Loss + Asset Disposal
*
+ Depreciation - + Acc Depreciation -
6) Old+New Old+New
4
