Study guides, Class notes & Summaries

Asset Equation - Assets = Capital + Liabilities Capital (Equity) Equation - Capital = Assets - Liabilities Assets Equation (Long) - Assets = Capital + Liabilities + Profit - Drawings Profit Equation - Profit = Total Revenue - Total Cost Gross Profit Equation - Gross Profit = Sales Revenue - Cost of Sales Tax To Pay Equation - Tax to Pay = Output Tax (Sales) - Input Tax (Purchases) Cost of Sales Equation - Opening Inventory + Purchases - Closing Inventory Straight Line Deprec...

What are the 3+1 stages of absorption costing? correct answer: 1. Allocation 2. Apportionment 3. Absorption = Production Cost 4. Under/over = Non prod OH Why would you use Absorption Costing? correct answer: Valuing Inventory Pricing Decisions Establishing profitability What are pros and cons of absorption and marginal costing? correct answer: *Absorption* -Avoids varying profits if sales are seasonal -Consistent with accounting standards -Recognises Long Run variable costs -...

Main Accounting equation correct answer: PROFIT = INCREASE IN NET ASSETS + DRAWINGS - CAPITAL INTRODUCED Main Accounting equation - increase in net assets correct answer: CLOSING NET ASSETS - OPENING NET ASSETS Net Assets correct answer: Net assets = Total assets - Total liabilities Gross Profit formula correct answer: Gross Profit = Sales - Cost of Goods Sold COGS (Cost of Goods Sold) formula correct answer: Cost of Goods Sold = Opening Inventory + Purchases - Closing Inventory...

Organisation correct answer: A social arrangement which pursues collective goals, which controls its own performance and which has a boundary separating it from its environment. Public sector organisations correct answer: Organisations owned or run by central or local government or government agencies. Co-operatives correct answer: Business owned by their workers or customers. [one member, one vote] Mutual associations correct answer: Mutual associations are owned by their members s...

CHAPTER 4 - PROFESSIONAL ETHICS AND QUALITY CONTROL PROCEDURES correct answer: ° Professional ethics and ACCA code of ethics and conducts ° obtaining, accepting and continuing audit engagements Ethics correct answer: Ethics can be described as moral principles that govern a persons or groups behavior. Professional ethics Professional codes of ethics correct answer: relate to the standard of behavior expected from professional people. What is the current guidance on ethics for AC...

Objectives of Internal Control correct answer: RORCS Risk management: Manage and control risk appropriately rather than eliminate it. Operations: Effectiveness and efficiency of operations. Reporting: ensure the reliability of internal and external reporting. Compliance: Assist compliance with laws and regulations. Safeguarding assets: safeguard the shareholders' investments and the company's assets. Inherent limitations of internal control (only reasonable assurance on the achievemen...

Float correct answer: In the petty cash box there will normally be a small amount of cash available to make payments, this is called a float. Gains correct answer: This is non-standard income for the business. Their trade may be in selling clothing, but occasionally they may sell an asset, such as a van or piece of equipment, and it will give rise to a gain. This is gains income, and may also be called a profit on sale of a non-current asset. General ledger correct answer: a ledger cont...

Dividends correct answer: Are appropriations of profit after tax Paying dividends correct answer: Many companies pay dividends in 2 stages during the course of their accounting year -in mid year, after the half-year financial results are known, the company might pay an interim dividend -at the end of the year, the company might declare a further final dividend Interim dividend correct answer: Dividends declared and paid during the year -declared: Debit retained earnings Credit divi...

ACCA Practice Test Questions with Correct Answers Accountability of Internal audit - ANSWER CC 1 access all parts of th organization 2auditor can freely comment the performance of managent 3should be actioned at th highest level to ensure its effectice implementation Absolution - ANSWER FC one set of ethic rules should fits in all cultures without exception Accounting - ANSWER CC 1the transactions: book of primary entry 2analysed and posted to ledger 3sum...

ACCA Exam Questions with All Correct Answers Absorption costing - ANSWER focuses on the total cost of producing one unit of output, includes fixed production overheads in valuation cost of production Account - ANSWER Accounts receivablea location where all items relating to one particular group are recorded. For example cash items are recorded in the cash account. Account code - ANSWER a unique group of numbers and/or letters that is used to identify an item and cl...