ADJUSTED NET PROFIT

INFLATION ACCOUNTING Definition. Inflation is that state of affair when money in circulation is more than the production of commodities and services and purchasing power of money comes down and prices of commodities and services increases.. Accounting for changing prices (Inflation Accounting) has become synonymous with accounting for inflation due to the unprecedented pressure of inflationary price rise

BATCH COSTING

SOURCES OF CASH

Net Profit as a source of cash. Net profit is obviously the most apparent source of cash in any period. For the purpose of preparing a Cash Flow Statement of a company, the starting point is Net Profit as disclosed by Profit and Loss Account, i.e. the profit before deduction of any corporation tax for the year, any dividends for the year or any RETIREMENT OF TREASURY STOCK THREE COLUMN CASH BOOK Explanation. The three column cash book (also known as triple column cash book) has three money columns on both debit and credit side – one on each side for recording discount, cash and bank amounts.If a business keeps a bank account and receipts and payments are frequently made through bank account than it is useful to maintain a three column cash book rather than a single DISPOSAL OF PROPERTY, PLANT OR EQUIPMENT Disposal of plant assets can occur through the retirement of discarded assets, sales, involuntary conversions, or trade-ins.No matter how the disposal is accomplished, the accounting procedures are quite similar. Depreciation must be recorded up to the date of disposal and, where appropriate, a gain or loss must be recorded on the disposal. ADJUSTING ENTRIES MCQS 2 Adjusting Entries MCQs 2. These Adjusting Entries MCQs will be helpful for the students to prepare their exams, interviews and viva. This MCQs test consists of Question 15 to 25. To Take MCQs 1 to 14 please click “ Adjusting Entries MCQs 1 “. If you feel any difficulty to answer these MCQs we advise you to read Adjusting Entries Chapter DIFFERENCE BETWEEN ACTUAL COSTING AND Normal Costing: Normal costing refers to a product costing system where actual direct material, actual direct labor and applied manufacturing overhead costs are added to work in process inventory.. Actual Costing: Actuar costing system refers to a product costing system where actual direct material and actual direct labor and actual manufacturing overhead costs are added to work in LIMITATIONS OF HISTORICAL COST ACCOUNTING Limitations of Historical Cost Accounting. Following are some limitations of historical cost accounting: (i) Failure to disclose current worth of the enterprise. The accounts presented on the basis of historical concept do not show many effects which are due to the inflation gap. Thus, the true and fair view is not shown.

ADJUSTED NET PROFIT

INFLATION ACCOUNTING Definition. Inflation is that state of affair when money in circulation is more than the production of commodities and services and purchasing power of money comes down and prices of commodities and services increases.. Accounting for changing prices (Inflation Accounting) has become synonymous with accounting for inflation due to the unprecedented pressure of inflationary price rise

BATCH COSTING

SOURCES OF CASH

Net Profit as a source of cash. Net profit is obviously the most apparent source of cash in any period. For the purpose of preparing a Cash Flow Statement of a company, the starting point is Net Profit as disclosed by Profit and Loss Account, i.e. the profit before deduction of any corporation tax for the year, any dividends for the year or any RETIREMENT OF TREASURY STOCK THREE COLUMN CASH BOOK Explanation. The three column cash book (also known as triple column cash book) has three money columns on both debit and credit side – one on each side for recording discount, cash and bank amounts.If a business keeps a bank account and receipts and payments are frequently made through bank account than it is useful to maintain a three column cash book rather than a single DISPOSAL OF PROPERTY, PLANT OR EQUIPMENT Disposal of plant assets can occur through the retirement of discarded assets, sales, involuntary conversions, or trade-ins.No matter how the disposal is accomplished, the accounting procedures are quite similar. Depreciation must be recorded up to the date of disposal and, where appropriate, a gain or loss must be recorded on the disposal. ADJUSTING ENTRIES MCQS 2 Adjusting Entries MCQs 2. These Adjusting Entries MCQs will be helpful for the students to prepare their exams, interviews and viva. This MCQs test consists of Question 15 to 25. To Take MCQs 1 to 14 please click “ Adjusting Entries MCQs 1 “. If you feel any difficulty to answer these MCQs we advise you to read Adjusting Entries Chapter DIFFERENCE BETWEEN ACTUAL COSTING AND Normal Costing: Normal costing refers to a product costing system where actual direct material, actual direct labor and applied manufacturing overhead costs are added to work in process inventory.. Actual Costing: Actuar costing system refers to a product costing system where actual direct material and actual direct labor and actual manufacturing overhead costs are added to work in LIMITATIONS OF HISTORICAL COST ACCOUNTING Limitations of Historical Cost Accounting. Following are some limitations of historical cost accounting: (i) Failure to disclose current worth of the enterprise. The accounts presented on the basis of historical concept do not show many effects which are due to the inflation gap. Thus, the true and fair view is not shown.

BATCH COSTING

Batch costing is nothing but a modified form of job costing in which cost is calculated of each batch of production. This method of costing is applicable in those manufacturing unit, where articles are manufactured in definite batches. This method is also known as ‘Lot Costing’ as products are produced in a lot, say, of 500, 1000 or so

on.

COMPANY FINAL ACOUNTS PRACTICAL PROBLEMS AND SOLUTIONS We have prepared Company Final Accounts Practical Problems and Solution paper for the ease of students to understand the concept of Final Accounts more clearly.. Problem No. 1. For the year ended 31st December 2019 the profit of Krebs Ltd. before changing depreciation on fixed assets and Managerial commission amounted to $300,000. Depreciation for the year amounted to $60,000 and a RETIREMENT OF TREASURY STOCK If the cost method is used, the entry is the same as for retirement except that the Treasury Stock account is credited instead of the Cash account. For example, assume that 1,000 shares of $20 par value common stock (originally issued for $25) are held in the treasury. If their cost is $22 per share and they are retired, this entry would be made:

SOURCES OF CASH

Net Profit as a source of cash. Net profit is obviously the most apparent source of cash in any period. For the purpose of preparing a Cash Flow Statement of a company, the starting point is Net Profit as disclosed by Profit and Loss Account, i.e. the profit before deduction of any corporation tax for the year, any dividends for the year or any FUTURE VALUE OF A SINGLE AMOUNT What is the future value of a single amount? – Definition. The value of a current single amount taken to a future date at a specified interest rate is called the future value of a single amount.. or

NON CASH INCOMES

Definition and Explanation. inflow and must, therefore, be excluded from the year’s profit. The two examples of non-cash incomes. are appreciation in value of a fixed asset arising out its revaluation, and profit on sale of a fixed asset. An appreciation in the value of a fixed asset arising out of its revaluation is obviously only a book

entry.

PROVISION FOR DEPRECIATION ACCOUNT Explanation. The use of a provision for depreciation account is an improvement over the accounting treatment of depreciation discussed on “accounting treatment of depreciation” page. This account is used to accumulate depreciation that is provided against a fixed asset. If a provision for depreciation account is used, the accounting entries are made as follows: ADJUSTING ENTRY FOR CLOSING STOCK OR ENDING INVENTORY At the end of the trading period, it may be possible that some of the merchandise purchased have not been sold and are still on hand. The stock in hand at the end of the trading period is known as closing stock or ending inventory. LIMITATIONS OF HISTORICAL COST ACCOUNTING Limitations of Historical Cost Accounting. Following are some limitations of historical cost accounting: (i) Failure to disclose current worth of the enterprise. The accounts presented on the basis of historical concept do not show many effects which are due to the inflation gap. Thus, the true and fair view is not shown. Q. 4. WHAT ARE FUNCTIONAL BUDGETS? WHICH FUNCTIONAL The budget satisfies different purposes. Thus different types of budgets are commonly used. The budget can be grouped as: 1. Time budget. Short period or long period budget.

ADJUSTED NET PROFIT

PROFIT AND LOSS ACCOUNT HOW TO PREPARE INCOME STATEMENT FOR A MANUFACTURING Introduction. The income statement for merchandising and manufacturing companies differs primarily in the reporting of the cost of the merchandise (goods) available for sale and sold during the period.. In this lecture, we will learn how to prepare the income statement for a manufacturing company. In a manufacturing company, there is a need to prepare a manufacturing account, statement THREE COLUMN CASH BOOK Explanation. The three column cash book (also known as triple column cash book) has three money columns on both debit and credit side – one on each side for recording discount, cash and bank amounts.If a business keeps a bank account and receipts and payments are frequently made through bank account than it is useful to maintain a three column cash book rather than a single COMPANY FINAL ACOUNTS PRACTICAL PROBLEMS AND SOLUTIONSSEE MORE ON

PLAYACCOUNTING.COM

ADJUSTING ENTRIES MCQS 2 Adjusting Entries MCQs 2. These Adjusting Entries MCQs will be helpful for the students to prepare their exams, interviews and viva. This MCQs test consists of Question 15 to 25. To Take MCQs 1 to 14 please click “ Adjusting Entries MCQs 1 “. If you feel any difficulty to answer these MCQs we advise you to read Adjusting Entries Chapter DISPOSAL OF PROPERTY, PLANT OR EQUIPMENT Disposal of plant assets can occur through the retirement of discarded assets, sales, involuntary conversions, or trade-ins.No matter how the disposal is accomplished, the accounting procedures are quite similar. Depreciation must be recorded up to the date of disposal and, where appropriate, a gain or loss must be recorded on the disposal. BALANCE PER CASH BOOK AND BANK STATEMENT Causes of difference in balances per cash book and bank statement. In practice, however, the balance is shown by the cash book seldom agrees with the balance disclosed by the bank statement. The following are the reasons for the difference between the two: (a). Some entries that may have been made by the bank in the Bank Statement may not JOURNAL ENTRY FOR PURCHASES RETURN (RETURNS OUTWARDSSEE MORE ON

PLAYACCOUNTING.COM

REDUCING BALANCE METHOD Reducing balance method is also known as reducing installment method. It is particularly useful for fixed assets whose value deteriorates faster in their earlier years of usage. Examples of such assets are motors vehicles, smaller machinery, office equipment, etc.

ADJUSTED NET PROFIT

PROFIT AND LOSS ACCOUNT HOW TO PREPARE INCOME STATEMENT FOR A MANUFACTURING Introduction. The income statement for merchandising and manufacturing companies differs primarily in the reporting of the cost of the merchandise (goods) available for sale and sold during the period.. In this lecture, we will learn how to prepare the income statement for a manufacturing company. In a manufacturing company, there is a need to prepare a manufacturing account, statement THREE COLUMN CASH BOOK Explanation. The three column cash book (also known as triple column cash book) has three money columns on both debit and credit side – one on each side for recording discount, cash and bank amounts.If a business keeps a bank account and receipts and payments are frequently made through bank account than it is useful to maintain a three column cash book rather than a single COMPANY FINAL ACOUNTS PRACTICAL PROBLEMS AND SOLUTIONSSEE MORE ON

PLAYACCOUNTING.COM

ADJUSTING ENTRIES MCQS 2 Adjusting Entries MCQs 2. These Adjusting Entries MCQs will be helpful for the students to prepare their exams, interviews and viva. This MCQs test consists of Question 15 to 25. To Take MCQs 1 to 14 please click “ Adjusting Entries MCQs 1 “. If you feel any difficulty to answer these MCQs we advise you to read Adjusting Entries Chapter DISPOSAL OF PROPERTY, PLANT OR EQUIPMENT Disposal of plant assets can occur through the retirement of discarded assets, sales, involuntary conversions, or trade-ins.No matter how the disposal is accomplished, the accounting procedures are quite similar. Depreciation must be recorded up to the date of disposal and, where appropriate, a gain or loss must be recorded on the disposal. BALANCE PER CASH BOOK AND BANK STATEMENT Causes of difference in balances per cash book and bank statement. In practice, however, the balance is shown by the cash book seldom agrees with the balance disclosed by the bank statement. The following are the reasons for the difference between the two: (a). Some entries that may have been made by the bank in the Bank Statement may not JOURNAL ENTRY FOR PURCHASES RETURN (RETURNS OUTWARDSSEE MORE ON

PLAYACCOUNTING.COM

REDUCING BALANCE METHOD Reducing balance method is also known as reducing installment method. It is particularly useful for fixed assets whose value deteriorates faster in their earlier years of usage. Examples of such assets are motors vehicles, smaller machinery, office equipment, etc.

JOB COSTING

Job No. 201 = $3,21,580. Job No. 202 = $1,41,865. A certificate of completion was obtained for Job No. 201; of the balance of this account standing on 30th Nov. 2019, $61,500 was in respect of plant and machinery, the remainder consisting of wages and materials. A machine costing $5,500 specially brought for this contract, was sold

during

PROFIT AND LOSS ACCOUNT Net Profit or Net Loss is the difference between the total revenue of a certain period and the total expenses of the same period. Net profit is made when the total revenues exceed the total expenses. If the total of revenues is less than the total expenses, the net loss is incurred. The balance of Profit and Loss Account which represents

either

JOB ORDER COSTING EXAMPLES, PRACTICAL PROBLEMS AND Actual Factory Overhead Costs. $6,000. $12,000. Actual direct labour hours. 15,000. 20,000. During this two month period one customer sent in an identical order each month, calling for the production of 1,000 units, requiring 400 direct labour hours at $1.00 per hour and

material $750.

RETIREMENT OF TREASURY STOCK If the cost method is used, the entry is the same as for retirement except that the Treasury Stock account is credited instead of the Cash account. For example, assume that 1,000 shares of $20 par value common stock (originally issued for $25) are held in the treasury. If their cost is $22 per share and they are retired, this entry would be made: ACCOUNTING FOR LEASES How to define a lease? A lease is a contractual agreement between the lessor (the owner of the property) and the lessee (the user of property) that gives the lessee the right to use the lessor’s property for a specific period of time in exchange for stipulated cash payments.Accounting for leases has long been a controversial subject. The basic controversy centers on the classification and BONDS ISSUED AT A PREMIUM Accounting for bonds issued at a premium. To show how to account for bonds issued at a premium, we wül now assume that on January 2, 2020, the Valenzuela Corporation issues $100,000, 5-year, 12% term bonds. Interest is payable semiannually on January 2 and July 1. In this case, however, the bonds are issued when the prevailing market interest rate for such investments is 10%. WHAT IS THIRD-PARTY LIABILITY? Definition. For various reasons, a company may find that it has liabilities to an agency or other organization with which it has had no direct transaction.. Example. For example, as a third party to transactions between its employees and the federal government, the firm withholds income and social security taxes from paychecks. ADJUSTING ENTRY FOR CLOSING STOCK OR ENDING INVENTORY At the end of the trading period, it may be possible that some of the merchandise purchased have not been sold and are still on hand. The stock in hand at the end of the trading period is known as closing stock or ending inventory. Q. 4. WHAT ARE FUNCTIONAL BUDGETS? WHICH FUNCTIONAL The budget satisfies different purposes. Thus different types of budgets are commonly used. The budget can be grouped as: 1. Time budget. Short period or long period budget. SALE OF BONDS PRIOR TO MATURITY Explanation. Investors often sell bonds prior to their maturity. The sale is recorded by debiting Cash for the net proceeds received (sale price less commission and fees), The Investment in Bonds account is credited for the net carrying value of the bonds, and a gain or loss is recorded for the difference between the cash proceeds and the carrying value of the bonds.

ADJUSTED NET PROFIT

PROFIT AND LOSS ACCOUNT HOW TO PREPARE INCOME STATEMENT FOR A MANUFACTURING Introduction. The income statement for merchandising and manufacturing companies differs primarily in the reporting of the cost of the merchandise (goods) available for sale and sold during the period.. In this lecture, we will learn how to prepare the income statement for a manufacturing company. In a manufacturing company, there is a need to prepare a manufacturing account, statement COMPANY FINAL ACOUNTS PRACTICAL PROBLEMS AND SOLUTIONSSEE MORE ON

PLAYACCOUNTING.COM

THREE COLUMN CASH BOOK Explanation. The three column cash book (also known as triple column cash book) has three money columns on both debit and credit side – one on each side for recording discount, cash and bank amounts.If a business keeps a bank account and receipts and payments are frequently made through bank account than it is useful to maintain a three column cash book rather than a single ADJUSTING ENTRIES MCQS 2 Adjusting Entries MCQs 2. These Adjusting Entries MCQs will be helpful for the students to prepare their exams, interviews and viva. This MCQs test consists of Question 15 to 25. To Take MCQs 1 to 14 please click “ Adjusting Entries MCQs 1 “. If you feel any difficulty to answer these MCQs we advise you to read Adjusting Entries Chapter DISPOSAL OF PROPERTY, PLANT OR EQUIPMENT Disposal of plant assets can occur through the retirement of discarded assets, sales, involuntary conversions, or trade-ins.No matter how the disposal is accomplished, the accounting procedures are quite similar. Depreciation must be recorded up to the date of disposal and, where appropriate, a gain or loss must be recorded on the disposal. BALANCE PER CASH BOOK AND BANK STATEMENT Causes of difference in balances per cash book and bank statement. In practice, however, the balance is shown by the cash book seldom agrees with the balance disclosed by the bank statement. The following are the reasons for the difference between the two: (a). Some entries that may have been made by the bank in the Bank Statement may not JOURNAL ENTRY FOR PURCHASES RETURN (RETURNS OUTWARDSSEE MORE ON

PLAYACCOUNTING.COM

REDUCING BALANCE METHOD Reducing balance method is also known as reducing installment method. It is particularly useful for fixed assets whose value deteriorates faster in their earlier years of usage. Examples of such assets are motors vehicles, smaller machinery, office equipment, etc.

ADJUSTED NET PROFIT

PROFIT AND LOSS ACCOUNT HOW TO PREPARE INCOME STATEMENT FOR A MANUFACTURING Introduction. The income statement for merchandising and manufacturing companies differs primarily in the reporting of the cost of the merchandise (goods) available for sale and sold during the period.. In this lecture, we will learn how to prepare the income statement for a manufacturing company. In a manufacturing company, there is a need to prepare a manufacturing account, statement COMPANY FINAL ACOUNTS PRACTICAL PROBLEMS AND SOLUTIONSSEE MORE ON

PLAYACCOUNTING.COM

THREE COLUMN CASH BOOK Explanation. The three column cash book (also known as triple column cash book) has three money columns on both debit and credit side – one on each side for recording discount, cash and bank amounts.If a business keeps a bank account and receipts and payments are frequently made through bank account than it is useful to maintain a three column cash book rather than a single ADJUSTING ENTRIES MCQS 2 Adjusting Entries MCQs 2. These Adjusting Entries MCQs will be helpful for the students to prepare their exams, interviews and viva. This MCQs test consists of Question 15 to 25. To Take MCQs 1 to 14 please click “ Adjusting Entries MCQs 1 “. If you feel any difficulty to answer these MCQs we advise you to read Adjusting Entries Chapter DISPOSAL OF PROPERTY, PLANT OR EQUIPMENT Disposal of plant assets can occur through the retirement of discarded assets, sales, involuntary conversions, or trade-ins.No matter how the disposal is accomplished, the accounting procedures are quite similar. Depreciation must be recorded up to the date of disposal and, where appropriate, a gain or loss must be recorded on the disposal. BALANCE PER CASH BOOK AND BANK STATEMENT Explanation. If deposits made by an account-holder exceed his withdrawals from the bank: His cash book would show a debit balance (debit side exceeding credit side, resulting in a net asset); The bank statement received by him would show a credit balance (credit column exceeding debit column, resulting in a net liability for the bank). JOURNAL ENTRY FOR PURCHASES RETURN (RETURNS OUTWARDSSEE MORE ON

PLAYACCOUNTING.COM

REDUCING BALANCE METHOD Reducing balance method is also known as reducing installment method. It is particularly useful for fixed assets whose value deteriorates faster in their earlier years of usage. Examples of such assets are motors vehicles, smaller machinery, office equipment, etc.

JOB COSTING

Job No. 201 = $3,21,580. Job No. 202 = $1,41,865. A certificate of completion was obtained for Job No. 201; of the balance of this account standing on 30th Nov. 2019, $61,500 was in respect of plant and machinery, the remainder consisting of wages and materials. A machine costing $5,500 specially brought for this contract, was sold

during

PROFIT AND LOSS ACCOUNT Net Profit or Net Loss is the difference between the total revenue of a certain period and the total expenses of the same period. Net profit is made when the total revenues exceed the total expenses. If the total of revenues is less than the total expenses, the net loss is incurred. The balance of Profit and Loss Account which represents

either

JOB ORDER COSTING EXAMPLES, PRACTICAL PROBLEMS AND Actual Factory Overhead Costs. $6,000. $12,000. Actual direct labour hours. 15,000. 20,000. During this two month period one customer sent in an identical order each month, calling for the production of 1,000 units, requiring 400 direct labour hours at $1.00 per hour and

material $750.

RETIREMENT OF TREASURY STOCK If the cost method is used, the entry is the same as for retirement except that the Treasury Stock account is credited instead of the Cash account. For example, assume that 1,000 shares of $20 par value common stock (originally issued for $25) are held in the treasury. If their cost is $22 per share and they are retired, this entry would be made: REDUCING BALANCE METHOD Reducing balance method is also known as reducing installment method. It is particularly useful for fixed assets whose value deteriorates faster in their earlier years of usage. Examples of such assets are motors vehicles, smaller machinery, office equipment, etc. ACCOUNTING FOR LEASES How to define a lease? A lease is a contractual agreement between the lessor (the owner of the property) and the lessee (the user of property) that gives the lessee the right to use the lessor’s property for a specific period of time in exchange for stipulated cash payments.Accounting for leases has long been a controversial subject. The basic controversy centers on the classification and BONDS ISSUED AT A PREMIUM Accounting for bonds issued at a premium. To show how to account for bonds issued at a premium, we wül now assume that on January 2, 2020, the Valenzuela Corporation issues $100,000, 5-year, 12% term bonds. Interest is payable semiannually on January 2 and July 1. In this case, however, the bonds are issued when the prevailing market interest rate for such investments is 10%. WHAT IS THIRD-PARTY LIABILITY? Definition. For various reasons, a company may find that it has liabilities to an agency or other organization with which it has had no direct transaction.. Example. For example, as a third party to transactions between its employees and the federal government, the firm withholds income and social security taxes from paychecks. ADJUSTING ENTRY FOR CLOSING STOCK OR ENDING INVENTORY At the end of the trading period, it may be possible that some of the merchandise purchased have not been sold and are still on hand. The stock in hand at the end of the trading period is known as closing stock or ending inventory. Q. 4. WHAT ARE FUNCTIONAL BUDGETS? WHICH FUNCTIONAL The budget satisfies different purposes. Thus different types of budgets are commonly used. The budget can be grouped as: 1. Time budget. Short period or long period budget.

SOURCES OF CASH

Net Profit as a source of cash. Net profit is obviously the most apparent source of cash in any period. For the purpose of preparing a Cash Flow Statement of a company, the starting point is Net Profit as disclosed by Profit and Loss Account, i.e. the profit before deduction of any corporation tax for the year, any dividends for the year or any

ADJUSTED NET PROFIT

THREE COLUMN CASH BOOK Explanation. The three column cash book (also known as triple column cash book) has three money columns on both debit and credit side – one on each side for recording discount, cash and bank amounts.If a business keeps a bank account and receipts and payments are frequently made through bank account than it is useful to maintain a three column cash book rather than a single RETIREMENT OF TREASURY STOCK

BATCH COSTING

NON CASH INCOMES

Definition and Explanation. inflow and must, therefore, be excluded from the year’s profit. The two examples of non-cash incomes. are appreciation in value of a fixed asset arising out its revaluation, and profit on sale of a fixed asset. An appreciation in the value of a fixed asset arising out of its revaluation is obviously only a book

entry.

MATERIAL COSTING METHODS: MULTIPLE CHOICE QUESTIONS (MCQS Material costing methods – MCQs. April 27, 2021. October 17, 2017 by Abbas Ahmad. Take a quick Multiple Choice Questions (MCQs) test about Material costing methods. These MCQs can help you to prepare for your exams, interviews and different tests. Just click the “start quiz” button and start material costing methods MCQs quiz. LIMITATIONS OF HISTORICAL COST ACCOUNTING Limitations of Historical Cost Accounting. Following are some limitations of historical cost accounting: (i) Failure to disclose current worth of the enterprise. The accounts presented on the basis of historical concept do not show many effects which are due to the inflation gap. Thus, the true and fair view is not shown. BALANCE PER CASH BOOK AND BANK STATEMENT Causes of difference in balances per cash book and bank statement. In practice, however, the balance is shown by the cash book seldom agrees with the balance disclosed by the bank statement. The following are the reasons for the difference between the two: (a). Some entries that may have been made by the bank in the Bank Statement may not TREATMENT OF UNPRESENTED CHEQUES IN BANK RECONCILIATION Treatment of unpresented cheques/checks in bank reconciliation statement. It has been learned that due to unpresented cheques or outstanding checks, Cash Book shows less bank balance as compared toBank Statement. It is a temporary difference because ultimately the cheque will be presented that’s why we will not alter our Cash Book.

ADJUSTED NET PROFIT

THREE COLUMN CASH BOOK Explanation. The three column cash book (also known as triple column cash book) has three money columns on both debit and credit side – one on each side for recording discount, cash and bank amounts.If a business keeps a bank account and receipts and payments are frequently made through bank account than it is useful to maintain a three column cash book rather than a single

BATCH COSTING

SOURCES OF CASH

Net Profit as a source of cash. Net profit is obviously the most apparent source of cash in any period. For the purpose of preparing a Cash Flow Statement of a company, the starting point is Net Profit as disclosed by Profit and Loss Account, i.e. the profit before deduction of any corporation tax for the year, any dividends for the year or any RETIREMENT OF TREASURY STOCK

NON CASH INCOMES

Definition and Explanation. inflow and must, therefore, be excluded from the year’s profit. The two examples of non-cash incomes. are appreciation in value of a fixed asset arising out its revaluation, and profit on sale of a fixed asset. An appreciation in the value of a fixed asset arising out of its revaluation is obviously only a book

entry.

MATERIAL COSTING METHODS: MULTIPLE CHOICE QUESTIONS (MCQS Material costing methods – MCQs. April 27, 2021. October 17, 2017 by Abbas Ahmad. Take a quick Multiple Choice Questions (MCQs) test about Material costing methods. These MCQs can help you to prepare for your exams, interviews and different tests. Just click the “start quiz” button and start material costing methods MCQs quiz. LIMITATIONS OF HISTORICAL COST ACCOUNTING Limitations of Historical Cost Accounting. Following are some limitations of historical cost accounting: (i) Failure to disclose current worth of the enterprise. The accounts presented on the basis of historical concept do not show many effects which are due to the inflation gap. Thus, the true and fair view is not shown. BALANCE PER CASH BOOK AND BANK STATEMENT Causes of difference in balances per cash book and bank statement. In practice, however, the balance is shown by the cash book seldom agrees with the balance disclosed by the bank statement. The following are the reasons for the difference between the two: (a). Some entries that may have been made by the bank in the Bank Statement may not TREATMENT OF UNPRESENTED CHEQUES IN BANK RECONCILIATION Treatment of unpresented cheques/checks in bank reconciliation statement. It has been learned that due to unpresented cheques or outstanding checks, Cash Book shows less bank balance as compared toBank Statement. It is a temporary difference because ultimately the cheque will be presented that’s why we will not alter our Cash Book. INFLATION ACCOUNTING Definition. Inflation is that state of affair when money in circulation is more than the production of commodities and services and purchasing power of money comes down and prices of commodities and services increases.. Accounting for changing prices (Inflation Accounting) has become synonymous with accounting for inflation due to the unprecedented pressure of inflationary price rise

CORPORATION

What is a Corporation? – Definition. A corporation is a separate body, authorized by law, owned by one or more persons and having its own rights, privileges, and obligations distinct from those of its owner(s).. In effect, under the Constitution, a corporation is a separate legal entity with a continuous life that has rights and obligations similar to those of an individual in the United States. INVENTORY CONTROL SYSTEM What is an inventory control system? Inventory Control system is critical to business enterprise because of the importance of the inventory which is a major asset. It is through inventory that most of the operating activities take place. Therefore, there is a need to establish better control systems to safeguard the inventory, i.e., to prevent fraud, theft, damages to physical units, and GOODWILL - DEFINITION, EXPLANATION, VALUATION AND EXAMPLES What is Goodwill? – Definition. Goodwill is the future benefits that accrue to a firm as a result of its ability to earn an excess rate of return on its recorded net assets.. Explanation. Goodwill is reported in financial statements only if its valuation can be supported by a transaction involving the purchase of a firm. However, the existence of this unidentifiable asset should not be PERPETUAL INVENTORY SYSTEM What is a Perpetual Inventory System? – Definition: Perpetual inventory system is a method of accounting for inventory where transactions are recorded and reported as soon as they take place. Usually, in this inventory system, computerized systems and software are used to immediately record the sales and purchases.. Explanation: BONDS ISSUED AT A PREMIUM Accounting for bonds issued at a premium. To show how to account for bonds issued at a premium, we wül now assume that on January 2, 2020, the Valenzuela Corporation issues $100,000, 5-year, 12% term bonds. Interest is payable semiannually on January 2 and July 1. In this case, however, the bonds are issued when the prevailing market interest rate for such investments is 10%. ADJUSTING ENTRY FOR CLOSING STOCK OR ENDING INVENTORY At the end of the trading period, it may be possible that some of the merchandise purchased have not been sold and are still on hand. The stock in hand at the end of the trading period is known as closing stock or ending inventory.

PREFERENCE SHARES

What are Preference Shares? Preference shares form a part of the share capital, but their holders do not possess the same status as ordinary shareholders.Though in theory both ordinary and preference shareholders are owners of the company, preference ACCOUNTING FOR ACQUISITIONS OF INTANGIBLE ASSETS Purchased identifiable intangibles. There are no significant accounting problems related to purchased identifiable intangible assets that are not also encountered for tangible assets. For example, when a patent was acquired by the Sample Company by giving 10,000 shares of its $10 par value common stock known to be worth S18 per share, this journal entry would be made: COMPOSITE DEPRECIATION Explanation. The effort of calculating depreciation expense for a large collection of assets often can be reduced without sacrificing a material amount of accuracy by aggregating the assets and treating them as if they are a single asset. The group approach to aggregation is applied to collections of assets that share similar service lives and other attributes.

SOURCES OF CASH

Net Profit as a source of cash. Net profit is obviously the most apparent source of cash in any period. For the purpose of preparing a Cash Flow Statement of a company, the starting point is Net Profit as disclosed by Profit and Loss Account, i.e. the profit before deduction of any corporation tax for the year, any dividends for the year or any

ADJUSTED NET PROFIT

Definition and Explanation. After the adjustments shown above, we arrive at the Adjusted Net Profit which appears as the first item on the sources side of the Cash Flow Statement.One can show these adjustments within the body of the Cash Flow Statement, or prepare a separate statement to compute the Adjusted Net Profit and then show only the Adjusted Net Profit as a source in the Cash THREE COLUMN CASH BOOK Explanation. The three column cash book (also known as triple column cash book) has three money columns on both debit and credit side – one on each side for recording discount, cash and bank amounts.If a business keeps a bank account and receipts and payments are frequently made through bank account than it is useful to maintain a three column cash book rather than a single RETIREMENT OF TREASURY STOCK

BATCH COSTING

Batch costing is nothing but a modified form of job costing in which cost is calculated of each batch of production. This method of costing is applicable in those manufacturing unit, where articles are manufactured in definite batches. This method is also known as ‘Lot Costing’ as products are produced in a lot, say, of 500, 1000 or so

on.

NON CASH INCOMES

Definition and Explanation. inflow and must, therefore, be excluded from the year’s profit. The two examples of non-cash incomes. are appreciation in value of a fixed asset arising out its revaluation, and profit on sale of a fixed asset. An appreciation in the value of a fixed asset arising out of its revaluation is obviously only a book

entry.

MATERIAL COSTING METHODS: MULTIPLE CHOICE QUESTIONS (MCQS Material costing methods – MCQs. April 27, 2021. October 17, 2017 by Abbas Ahmad. Take a quick Multiple Choice Questions (MCQs) test about Material costing methods. These MCQs can help you to prepare for your exams, interviews and different tests. Just click the “start quiz” button and start material costing methods MCQs quiz. LIMITATIONS OF HISTORICAL COST ACCOUNTING Limitations of Historical Cost Accounting. Following are some limitations of historical cost accounting: (i) Failure to disclose current worth of the enterprise. The accounts presented on the basis of historical concept do not show many effects which are due to the inflation gap. Thus, the true and fair view is not shown. BALANCE PER CASH BOOK AND BANK STATEMENT Causes of difference in balances per cash book and bank statement. In practice, however, the balance is shown by the cash book seldom agrees with the balance disclosed by the bank statement. The following are the reasons for the difference between the two: (a). Some entries that may have been made by the bank in the Bank Statement may not TREATMENT OF UNPRESENTED CHEQUES IN BANK RECONCILIATION Treatment of unpresented cheques/checks in bank reconciliation statement. It has been learned that due to unpresented cheques or outstanding checks, Cash Book shows less bank balance as compared toBank Statement. It is a temporary difference because ultimately the cheque will be presented that’s why we will not alter our Cash Book.

SOURCES OF CASH

Net Profit as a source of cash. Net profit is obviously the most apparent source of cash in any period. For the purpose of preparing a Cash Flow Statement of a company, the starting point is Net Profit as disclosed by Profit and Loss Account, i.e. the profit before deduction of any corporation tax for the year, any dividends for the year or any

ADJUSTED NET PROFIT

Definition and Explanation. After the adjustments shown above, we arrive at the Adjusted Net Profit which appears as the first item on the sources side of the Cash Flow Statement.One can show these adjustments within the body of the Cash Flow Statement, or prepare a separate statement to compute the Adjusted Net Profit and then show only the Adjusted Net Profit as a source in the Cash THREE COLUMN CASH BOOK Explanation. The three column cash book (also known as triple column cash book) has three money columns on both debit and credit side – one on each side for recording discount, cash and bank amounts.If a business keeps a bank account and receipts and payments are frequently made through bank account than it is useful to maintain a three column cash book rather than a single RETIREMENT OF TREASURY STOCK

BATCH COSTING

Batch costing is nothing but a modified form of job costing in which cost is calculated of each batch of production. This method of costing is applicable in those manufacturing unit, where articles are manufactured in definite batches. This method is also known as ‘Lot Costing’ as products are produced in a lot, say, of 500, 1000 or so

on.

NON CASH INCOMES

Definition and Explanation. inflow and must, therefore, be excluded from the year’s profit. The two examples of non-cash incomes. are appreciation in value of a fixed asset arising out its revaluation, and profit on sale of a fixed asset. An appreciation in the value of a fixed asset arising out of its revaluation is obviously only a book

entry.

MATERIAL COSTING METHODS: MULTIPLE CHOICE QUESTIONS (MCQS Material costing methods – MCQs. April 27, 2021. October 17, 2017 by Abbas Ahmad. Take a quick Multiple Choice Questions (MCQs) test about Material costing methods. These MCQs can help you to prepare for your exams, interviews and different tests. Just click the “start quiz” button and start material costing methods MCQs quiz. LIMITATIONS OF HISTORICAL COST ACCOUNTING Limitations of Historical Cost Accounting. Following are some limitations of historical cost accounting: (i) Failure to disclose current worth of the enterprise. The accounts presented on the basis of historical concept do not show many effects which are due to the inflation gap. Thus, the true and fair view is not shown. BALANCE PER CASH BOOK AND BANK STATEMENT Causes of difference in balances per cash book and bank statement. In practice, however, the balance is shown by the cash book seldom agrees with the balance disclosed by the bank statement. The following are the reasons for the difference between the two: (a). Some entries that may have been made by the bank in the Bank Statement may not TREATMENT OF UNPRESENTED CHEQUES IN BANK RECONCILIATION Treatment of unpresented cheques/checks in bank reconciliation statement. It has been learned that due to unpresented cheques or outstanding checks, Cash Book shows less bank balance as compared toBank Statement. It is a temporary difference because ultimately the cheque will be presented that’s why we will not alter our Cash Book. INFLATION ACCOUNTING Definition. Inflation is that state of affair when money in circulation is more than the production of commodities and services and purchasing power of money comes down and prices of commodities and services increases.. Accounting for changing prices (Inflation Accounting) has become synonymous with accounting for inflation due to the unprecedented pressure of inflationary price rise

CORPORATION

What is a Corporation? – Definition. A corporation is a separate body, authorized by law, owned by one or more persons and having its own rights, privileges, and obligations distinct from those of its owner(s).. In effect, under the Constitution, a corporation is a separate legal entity with a continuous life that has rights and obligations similar to those of an individual in the United States. INVENTORY CONTROL SYSTEM What is an inventory control system? Inventory Control system is critical to business enterprise because of the importance of the inventory which is a major asset. It is through inventory that most of the operating activities take place. Therefore, there is a need to establish better control systems to safeguard the inventory, i.e., to prevent fraud, theft, damages to physical units, and GOODWILL - DEFINITION, EXPLANATION, VALUATION AND EXAMPLES What is Goodwill? – Definition. Goodwill is the future benefits that accrue to a firm as a result of its ability to earn an excess rate of return on its recorded net assets.. Explanation. Goodwill is reported in financial statements only if its valuation can be supported by a transaction involving the purchase of a firm. However, the existence of this unidentifiable asset should not be PERPETUAL INVENTORY SYSTEM What is a Perpetual Inventory System? – Definition: Perpetual inventory system is a method of accounting for inventory where transactions are recorded and reported as soon as they take place. Usually, in this inventory system, computerized systems and software are used to immediately record the sales and purchases.. Explanation: BONDS ISSUED AT A PREMIUM Accounting for bonds issued at a premium. To show how to account for bonds issued at a premium, we wül now assume that on January 2, 2020, the Valenzuela Corporation issues $100,000, 5-year, 12% term bonds. Interest is payable semiannually on January 2 and July 1. In this case, however, the bonds are issued when the prevailing market interest rate for such investments is 10%. ADJUSTING ENTRY FOR CLOSING STOCK OR ENDING INVENTORY At the end of the trading period, it may be possible that some of the merchandise purchased have not been sold and are still on hand. The stock in hand at the end of the trading period is known as closing stock or ending inventory.

PREFERENCE SHARES

What are Preference Shares? Preference shares form a part of the share capital, but their holders do not possess the same status as ordinary shareholders.Though in theory both ordinary and preference shareholders are owners of the company, preference ACCOUNTING FOR ACQUISITIONS OF INTANGIBLE ASSETS Purchased identifiable intangibles. There are no significant accounting problems related to purchased identifiable intangible assets that are not also encountered for tangible assets. For example, when a patent was acquired by the Sample Company by giving 10,000 shares of its $10 par value common stock known to be worth S18 per share, this journal entry would be made: COMPOSITE DEPRECIATION Explanation. The effort of calculating depreciation expense for a large collection of assets often can be reduced without sacrificing a material amount of accuracy by aggregating the assets and treating them as if they are a single asset. The group approach to aggregation is applied to collections of assets that share similar service lives and other attributes.

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