Thursday, May 01, 2008
I remembered weeks ago, I mentioned about finding podcasts and audio products for Accounting. Right now, I had a good website that issue podcasts on various accounting topics every two weeks. The website address is http://www.stevebragg.com/Podcast_Sign_Up.html . The various topics he talked about include Controls for Payroll, Fixed Assets, Journal Entries and many more great accounting topics.
The author of this website, Steven Bragg, is one of the top-selling and most prolific accounting authors in the world, has been quoted in Business Week and CFO Magazine, and has spoken internationally on a variety of accounting management issues. He is currently the Chief Financial Officer of a public company, and has been the CFO or controller of four companies. He holds an MBA from Babson College, a Master of Finance degree from Bentley College, a BA from the University of Maine, and has been a consulting manager with Ernst & Young and an auditor with Deloitte & Touche. He also holds the CPA, CMA, CIA, and CPIM certifications. Steve is the author of more than 30 business books, including the best sellers Accounting Best Practices, Accounting Control Best Practices, The New CFO Financial Leadership Manual, Controllership, Fast Close, Just-in-Time Accounting, and The Ultimate Accountant's Reference. He is also a co-author of the Wiley GAAP Guide, which is the standard accounting industry guide to the most recent GAAP issuances. With more than 17,000 copies sold each year, it is a perennial favorite among practicing accountants.
More on Accounting in Business.
More on Management Accounting.
More on Financial Accounting.
The author of this website, Steven Bragg, is one of the top-selling and most prolific accounting authors in the world, has been quoted in Business Week and CFO Magazine, and has spoken internationally on a variety of accounting management issues. He is currently the Chief Financial Officer of a public company, and has been the CFO or controller of four companies. He holds an MBA from Babson College, a Master of Finance degree from Bentley College, a BA from the University of Maine, and has been a consulting manager with Ernst & Young and an auditor with Deloitte & Touche. He also holds the CPA, CMA, CIA, and CPIM certifications. Steve is the author of more than 30 business books, including the best sellers Accounting Best Practices, Accounting Control Best Practices, The New CFO Financial Leadership Manual, Controllership, Fast Close, Just-in-Time Accounting, and The Ultimate Accountant's Reference. He is also a co-author of the Wiley GAAP Guide, which is the standard accounting industry guide to the most recent GAAP issuances. With more than 17,000 copies sold each year, it is a perennial favorite among practicing accountants.
More on Accounting in Business.
More on Management Accounting.
More on Financial Accounting.
Labels: accountancy, accountant in business, accounting, accounting tools, business accounting, financial accountancy, financial accounting, management accountancy, managerial accounting
what we could have been, 6:33 PM.
Saturday, April 26, 2008
I am tired, really tired. You can see that I am still up at 1am blogging. Anyway, here is my summary for today's lecture.1. Why a need for regulation?
- separation of ownership and management
- limited liability status
- economic power
2. Objectives for General Purpose Financial Statements (GPFS)
- financial position
- performance
- cash flow position
3. Components of financial statements
- Balance Sheet
- Income Statement
- Statement if changes in Equity
- Cashflow statements
- notes to account
4. Format for IAS1.
Revenue XX
Cost of Sales (XX)
Gross Profit XX
Other Income XX
Distribution Expense (XX)
Admin Expense (XX)
Finance Cost (XX)
Profit before tax XX
tax (XX)
Net Profit XX
5. Finance Cost are basically interest payables.
That's all for now!!!
Labels: accountancy, accountant in business, accounting, business accounting, financial accountancy, financial accounting
what we could have been, 1:25 AM.
Friday, April 18, 2008
In accounting, there will bound to be errors and many errors.In this topic, the lecturer classified errors into two different parts- One that affects the trial balance and one that does not.
The one that does not affect the trial balance is further classified into seven different categories:
1. Errors of Omission (complete omissions): ie. Cash sales for $100 is completely omitted.
2. Errors of Commision: correct amount is involved but in the wrong person account. (ie. K. Green Vs G. Green (confusion in personal a/c)
3. Errors of Principle: confusion bwteen revenue and captial expenditure. (ie. repairs to motor van a/c was put into motor van a/c)
4. Compensating Errors: erros which cancel out each other. ie sales and purchase overcast by $200.
5. Errors of original entry: Original figure was in correct but double entry is observed.
6. Complete reversal: ie. 200 paid to Williams (supplier) which Cr William, Dr Bank.
7. Transposition Error: Wrong sequence of individual chracters which a number was entered. (ie. 142 ->124, 89-> 98)
The other errors will not balance trial balance. They are classified into three categories:
1. In correct additions in any one a/c. (overcast/ under cast)
2. Making an entry on only one side of the a/c meaning one entry or a single entry has taken place.
3. Entering a different amount on debit than the credit. These means keying the a different figure for either debit or credit.
Errors which will not balance trial balance can by corrected using journal entries. Otherwise, a suspense account can be opened which is later cleared by a journal entry.
A suspense account can also be used not only to correct some errors, it can also be opened when an entry does not known where to post the amount. When the mystery is solved, the account will then be close and the correct amount will be posted using a journal entry.
A point to note that suspense account are only temporary accounts. They should not exist when it comes to drawing up a finance statements at the end of the accounting period.
However, based on the ACCA lecture book, they classfied both errors that affect and not affect the trial balance into five different categories:
1. Errors of transposition: Wrong sequence of individual chracters which a number was entered. (ie. 142 ->124, 89-> 98)
2. Errors of Omission: failing to record a transaction at all, or making a debit or credit entry but not the corresponding double entry.
3. Errors of principle: making an double entry in the belief that the transaction is correctly entered but subsequently found out that the entry breaks the 'rules' of accounting principle or concept.
4. Errors of Commission: bookkeeper makes a mistake in carrying out his or her task of recording transactions in the accounts.
5. Compensating Errors are errors which are coincidentally, equal and opposite to one another.
Notice that there is a distinction between the meanings of each errors as stated between the textbook and my lecturer's lessons. There is no hard or fast rules in defining the errors but the concept of correction of errors remain the same and the accounting principle still applied. However, a point ot note is that the distinctions between the meaning of errors as stated between the textbook and my lecturer's lessons will mean different sets of accounting applications. The texbook did not differentiate between the errors that affect and not affect the trial balance, therefore, you need to distinguish that before you introduce a journal entry or a suspense account followed by a journal entry.
Labels: accountancy, accounting, financial accountancy, financial accounting
what we could have been, 9:23 PM.
Sunday, April 13, 2008
1. Define Inventories as per IAS 2.
- Inventories must be valued at the lower of cost and NRV.
2. Make a ledger accounting for Inventories
- Closing Inventories: Dr Inventory a/c, Cr Trading a/c
- Opening Inventories: Dr Trading a/c, Cr Inventory a/c
3. Define Cost and NRV as applied to inventory.
- Cost: purchase (import duties, trade discounts) + cost of conversion (DL + DM + production OH) + other costs (inwards cost)
- NRV: Amount fall below cost due to damaged, obsolete or cost of completion increased to make a sale. SP - cost to completion - cost to make a sale.
4. Determine Cost of Sales.
- When inventories are sold,
a. The carrying amount is recognised as an expense in the period in which related revenue is recognised.
b. The amount of any write-down of inventories to NRV and all losses of inventories are recognised as an expense in the period the write downs or loss occurs.
c. The amount of any reversal write-down of inventories, arising from an increase in NRV, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which reversal occurs.
5. Define fixed and variable production overheads
- Fixed production overheads are indirect cost of production that remain relatively constant regardless if the volume of production (ie. factory management and administration)
- Variable production overheads are indirect cost of production that vary directly or indirectly with the volume of production (ie. indrect materials and labour)
6. Distinguish between perpetual and periodic inventory.
- Perpetual inventory system updates inventory accounts after each purchase or sale.
- Periodic inventory system records inventory purchase or sale in "Purchases" account.
- Inventories must be valued at the lower of cost and NRV.
2. Make a ledger accounting for Inventories
- Closing Inventories: Dr Inventory a/c, Cr Trading a/c
- Opening Inventories: Dr Trading a/c, Cr Inventory a/c
3. Define Cost and NRV as applied to inventory.
- Cost: purchase (import duties, trade discounts) + cost of conversion (DL + DM + production OH) + other costs (inwards cost)
- NRV: Amount fall below cost due to damaged, obsolete or cost of completion increased to make a sale. SP - cost to completion - cost to make a sale.
4. Determine Cost of Sales.
- When inventories are sold,
a. The carrying amount is recognised as an expense in the period in which related revenue is recognised.
b. The amount of any write-down of inventories to NRV and all losses of inventories are recognised as an expense in the period the write downs or loss occurs.
c. The amount of any reversal write-down of inventories, arising from an increase in NRV, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which reversal occurs.
5. Define fixed and variable production overheads
- Fixed production overheads are indirect cost of production that remain relatively constant regardless if the volume of production (ie. factory management and administration)
- Variable production overheads are indirect cost of production that vary directly or indirectly with the volume of production (ie. indrect materials and labour)
6. Distinguish between perpetual and periodic inventory.
- Perpetual inventory system updates inventory accounts after each purchase or sale.
- Periodic inventory system records inventory purchase or sale in "Purchases" account.
Labels: accountancy, accounting, financial accountancy, financial accounting
what we could have been, 8:15 PM.
Saturday, April 12, 2008
Today, the lecturer is a little fast and I was literally fed with information after information with no time to reflect or evaluate. Hence, for many sub topics, it was not focused. Never mind about that, here is the summary of the lecture.1.Definition of a limited liability company.
- shareholders enjoy a limited liability.
2. Types: Private or Public Limited.
3. Key factors of companies:
- separate legal entity
- separation of ownership & management
- limited liability
- formality
4. Companies Finance
Equity
- Ordinary Shares
- Preference Shares (non equity)
- Differed Shares
Debt
- Debenture (Bonds)
5. Issue Price
par value (nominal -> share capital) + share premium = issue price
6. market price of a share = price earning ratio * earnings per share
7. Financial Statements (internal and external uses)
8. Dividends in terms of cash and bonus (script issues)
9. Rights Shares: Shares sold to existing shareholders at a price cheaper than market price of a share.
10. Bonuses Shares: Shares given to existing shareholders by using reserves.
11. Reserves:
- revenue reserve (from profit)
- capital reserve (gain) (ie. share premium)
12. Types of Share Capital
- authorised: maximum capital a company can raise
- issued: portion of authorised that has been sold to investors.
- called in: amount already collected.
- paid in share capital: money already collected or paid by shareholders.
I am still not so sure about the IAS 2 so I probably have to revise on that.
Labels: accountancy, accountant in business, accounting, business accounting, financial accountancy, financial accounting
what we could have been, 6:57 PM.
Friday, April 11, 2008
Today, I learned about contingencies and events after Balance Sheet, this is the summary:
IAS 10: Events after B.S Date
1. The events are events that occur after the B.S date but will affect the financial statement that has already been authorised for issue.
2. Types of events that is taken into account under IAS 10 are adjusting events (debtor closing down a business) and non adjusting events (fire, flood)
3. Dividends: Proposed dividends should not be recognised as a liability but shown as a not to F.S.. Notice that I stated proposed meaning that it has not been confirmed.
4. Disclosure must include:
a. nature of event
b. estimate of the financial effect or a statement that such an estimate cannot be made.
IAS 37: Provisions & Contingencies
1. A provision is a liability of uncertain timing or amount.
2. A liability is an obligation of entity to transfer economic benefits as a result of past transactions or past events.
3. Contingent Liability: A possible obligation that arises from past events and whose existence will be confirmed only by occurence or non-occurence of one or more uncertain future events not wholly within the entity's control. (example: pending legal suit)
4. Contingent Asset
5. Virtually certain (more than 95%): C.L- provision, C.A-recognise
Probable (50% to 95%): C.L- provision, C.A- Note
Possible (5% to 50%): C.L- Note, C.A- No disclosure
Remote (less than 5%): C.L-No disclosure, C.A- No disclosure
6. Disclosure by Nature:
- nature of contingency
- uncertain factors
- estimate of finacial effect or statement that it cannot be estimated
Double Entry for Provision will be to Cr Provision a/c as it is a contra assest account.
IAS 10: Events after B.S Date
1. The events are events that occur after the B.S date but will affect the financial statement that has already been authorised for issue.
2. Types of events that is taken into account under IAS 10 are adjusting events (debtor closing down a business) and non adjusting events (fire, flood)
3. Dividends: Proposed dividends should not be recognised as a liability but shown as a not to F.S.. Notice that I stated proposed meaning that it has not been confirmed.
4. Disclosure must include:
a. nature of event
b. estimate of the financial effect or a statement that such an estimate cannot be made.
IAS 37: Provisions & Contingencies
1. A provision is a liability of uncertain timing or amount.
2. A liability is an obligation of entity to transfer economic benefits as a result of past transactions or past events.
3. Contingent Liability: A possible obligation that arises from past events and whose existence will be confirmed only by occurence or non-occurence of one or more uncertain future events not wholly within the entity's control. (example: pending legal suit)
4. Contingent Asset
5. Virtually certain (more than 95%): C.L- provision, C.A-recognise
Probable (50% to 95%): C.L- provision, C.A- Note
Possible (5% to 50%): C.L- Note, C.A- No disclosure
Remote (less than 5%): C.L-No disclosure, C.A- No disclosure
6. Disclosure by Nature:
- nature of contingency
- uncertain factors
- estimate of finacial effect or statement that it cannot be estimated
Double Entry for Provision will be to Cr Provision a/c as it is a contra assest account.
Labels: accountancy, accounting, financial accountancy, financial accounting
what we could have been, 11:05 PM.
