Questions and Answers of Accounting A Smart Approach

Teek starts business with £5000 capital, paying this amount into a bank account (i) Bought fittings £600, paying by cheque. (ii) Bought goods on credit £2000. (iii) Bought van for £3000 paying
Aileen starts in business as a supplier of specialist art supplies by mail order on 1 May and makes the following transactions in the first few weeks: 1 May 2 May 3 May 4 May 5 May 6 May Opens a
How informative is the manual system? Can you answer the following questions without calculating further figures: / (i) | What did customer 2 owe on 22 November? (ii) What was the balance of the bank
Is there a problem when customer 1 pays £50.00? Should Azina be concerned?
How should the purchase return be treated?
Should the creditors for fixed assets be kept separate from other creditors?
What procedures should be followed before a supplier invoice is paid?
Create the following customer accounts: Account Reference Account Name SL001 SL002 Cardiff Timber Suppliers Micham & Micham Account Address South Dock Cardiff Docks Cardiff High Street Bristol BS22
On checking your work you discover that you need to make the following alterations: (i) SLOO1 Change Credit Limit to £9000 (ii) SLO02 Change post code to BS24 4TY (iii) SLO03 Change contact name to
Print a list of the customers accounts you have created (names and addresses). Study the sales ledger menu and select the correct option and follow the prompts.
Create the following supplier accounts: Account Reference Account Name Account Address Credit Limit Telephone No Fax No Contact Name PLO001 Mirage Computers Mirage House Singleton Swansea S42 6DJ
On checking your work you discover that you need to make the following alterations: (i) PLOOO1 Change post code to $42 8D] (ii) PLOO02 Change Credit Limit to £6,500 (iii) PLOOO3 Delete account
Print a list of the customer accounts you have created (names and addresses), Exercise relating to the setting up of the nominal ledger
Create the following nominal ledger accounts: Account number 1001 1050 1030 2150 4001 4002 4003 Account name Fixture and Fittings Building Society Computer Equipment Tax Due Sale of Computers Sale of
Make the following changes: (i) 6000 Mortgage Interest (ii) 6200 Sales Promotion (iti) 1050 Building Society Investment (iv) 2150 VAT
You have just created 16 nominal ledger accounts, state which ones are assets, liabilities, expenses or revenue.
Print a list of your nominal accounts. At this point after taking a backup on the disk marked ‘exercises’ inform your lecturer that you are now ready to set up all the accounts for the case study.
Using the chart of account you designed for the manual system and the names of your customers and suppliers, create all the necessary accounts on your computer system in preparation for the posting
The accountant has discovered that an electricity bill of £700 has been posted to the advertising account by mistake. Required Draft a journal entry in good form to correct the error. Post to the
What sort of errors, that can be common in a manual system, are eliminated by an integrated accounting system ?
Why are day books available after inputting in an integrated system rather than before processing as in a manual system.
Why should batches not exceed 20 documents?
Design a journal document which will be available pre-printed and pre-numbered.
Jean Sutherland had devised an exercise to test the students understanding of which ledger to access and how the double entry is completed. The exercise, although manual, is very similar to the way
Post the following invoices. Due to the fact that we have limited space to record detail, reference each transaction using the transaction number given in column one. Ensure that the total value of
A Post the following credit notes B_ Within the sales ledger examine each account you have posted to by using the menu option Transaction History. C Within the sales ledger examine the nominal
Post the following receipts in a manual system and then on to your computer system: Trans No 14 15 Date 190795 200795 16 210795 Customer SL0001 Amount () 350 SL0002 400 SL0003 140 B Within the sales
Identify who uses financial statements and what their needs are
Calculate and interpret ratios that enable you to comment on a business’ profitability, liquidity, and efficiency.
What is Just-in-Time inventory control?
Profitability ratios look at how effectively the short-term assets and liabilities of the business are being managed.
It is not useful to compare ratios with budgeted figures.
Return on capital employed is calculated by dividing operating profit by capital employed.
Stronger controls on credit may lead to a decrease in trade receivable days.
The working capital cycle is computed by adding inventory days to trade payable days and deducting trade receivable days.
Calculate and interpret ratios that enable you to comment on a business’ capital structure, investment returns, and performance
Discuss the limitations of ratio analysis.
Capital structure ratios look at how good the returns and performance of shares in a company are and help investors and potential investors to assess the likely success rate of the company.
Gearing measures the extent to which a business is financed by sales rather than equity capital.
The higher a company’s interest cover, the more difficulty it is likely to have in meeting its interest obligations.
Acompany with gearing of 80% would be considered to be highly geared and to carry low level of risk.
PEratios will not be affected by the market price of the share.
If acompany’s EPS figure is gradually increasing year by year, this shows that the company is making more profit per share every year.
Explain the difference between management accounting and financial accounting
Distinguish between fixed and variable costs
Use break-even analysis as a decision-making tool
Calculate and understand contribution, the break-even point, and margin of safety
Discuss the limitations of break-even analysis.
Can all costs be clearly categorized as fixed or variable?
Why is contribution different from profit?
Management accounting has set formats for statements, determined by regulation.
The break-even point is useful for decision-making purposes to help businesses know the point at which they are making neither a profit nor a loss.
|fa product hasa selling price of £15, with raw material costs of £6 per unit and labour costs of £3 per unit then the contribution per unit would be £6.
Ifabusiness has a high margin of safety then it is likely to be high risk.
Anassumption of break-even analysis is that fixed costs remain static over the relevant range.
Understand why overheads need to be included when costing products
Calculate a simple ‘blanket’ overhead rate
Apply absorption costing methods to fully cost out a range of products
Understand the limitations of traditional costing methods
Calculate a simple activity-based cost.
|f there are two service departments (such as canteen and maintenance departments) that use the services of each other, how could their costs be apportioned across the manufacturing departments?
Will the total overhead cost each year calculated by ABC be the same as that for absorption costing? If not, why not?
What are the advantages and disadvantages of investing in an ABC system?
In absorption costing, if the actual volumes are greater than forecast and the actual costs are less than estimated, there will be an under recovery. of overheads.
Inabsorption costing, if the actual volumes are less than forecast and the actual costs are more than estimated, there will need to be an adjustment to increase profit.
In absorption costing, costs are reapportioned from service departments to manufacturing departments.
Amachine-hour rate is likely to be used for a manufacturing department with a high-speed production line.
Activity-based costing only includes manufacturing costs.
Understand why a business needs to prepare a budget
Explain the process of preparing a budget
Prepare a simple budget
Understand the problems of budgeting
Explain the purpose of simple variance analysis.
What conflicts might occur as a result of the different objectives of budgeting? |
Understand how various methods of costing can impact on pricing
Calculate prices using cost-plus, sales-margin, and discount methods
Consider how various pricing strategies can be used, including how target and life-cycle costing can affect product pricing
Calculate internal transfer prices in a variety of ways.
|fthe selling price is calculated from the cost of goods sold, a price based on 20%sales margin will result in a lower selling price than cost plus 20%.
Aprice-skimming strategy will result in low prices.
Target costing ensures that the product specification is changed to meet the desired selling price.
Life-cycle costing includes the costs of a product through its research and design, manufacturing, and post-sales support phases.
Atransfer price should be set to minimize tax liabilities.
Understand which costs are relevant in short-term decision making
Assess whether an organization should make or buy products
Decide which products should be prioritized if there are limited resources
Assess whether upgrading a process would be financially beneficial
Determine if a product should be discontinued or a location closed.
Asunk cost is one that has been committed but not paid for.
Companies considering whether they should make a product or buy it in from another supplier must consider their fixed costs in the short term.
Decisions to discontinue a product must take into account allocated overheads, such as head office costs.
Anexample of an opportunity cost is the contribution lost by not being able to sell one product as a result of selling another.
Relevant costs are always those which will be incurred in the future and result from a specific decision.
Discuss the nature and significance of appraising long-term investments
Use a range of investment appraisal techniques to assess and compare projects
Understand the advantages and limitations of each method.
The payback period of a project is a measure of how long it is expected to take for cash inflows from a project to cover all the outflows.
The payback period treats all the cash flows arising from a project as being of equal value, regardless of when they are expected to arise.
Assuming that a business expects to generate a return of 20% on sums invested, it should be equally happy to receive £2,000 now or £2,200 in one year’s time.
The ARR takes no account of the relative size of potential projects, as it is expressed as a percentage.

Showing 100 - 200 of 291