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Which of the following is a common cause of a discrepancy between head office branch trial balance ?
Anonymous Poll
31%
Debtors and cash in transit
39%
Creditors and cash in transit
19%
Stock and cash in transit
11%
Stock and prepayments
The total credit sales for a period can be extracted from the ?
Anonymous Poll
19%
Returns inward
32%
Petty cash book
44%
Sales day book
5%
Cash book
Types_of_Accounting
There are several types of accounting that range from auditing to the preparation of tax returns. Accountants tend to specialize in one of these fields, which leads to the different career tracks noted below:
♦ Financial accounting: This field is concerned with the aggregation of financial information into external reports. Financial accounting requires detailed knowledge of the accounting framework used by the reader of a company's financial statements, such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). Or, if a company is publicly-held, it requires a knowledge of the standards issued by the government entity responsible for public company reporting in a specific country (such as the Securities and Exchange Commission in the United States). There are several career tracks involved in financial accounting. There is a specialty in external reporting, which usually involves a detailed knowledge of accounting standards. There is also the controller track, which requires a combined knowledge of financial and management accounting.
♦ Public accounting: This field investigates the financial statements and supporting accounting systems of client companies, to provide assurance that the financial statements assembled by clients fairly present their financial results and position. This field requires excellent knowledge of the relevant accounting framework, as well as an inquiring personality that can delve into client systems as needed. The career track here is to progress through various audit staff positions to become an audit partner.
♦ Government accounting: This field uses a unique accounting framework to create and manage funds, from which cash is disbursed to pay for a number of expenditures related to the provision of services by a government entity. Government accounting requires such a different skill set that accountants tend to specialize within this area for their entire careers.
♦ Forensic Accounting: This field involves the reconstruction of financial information when a complete set of financial records is not available. This skill set can be used to reconstruct the records of a destroyed business, to reconstruct fraudulent records, to convert cash-basis accounting records to accrual basis, and so forth. This career tends to attract auditors. It is usually a consulting position, since few businesses require the services of a full-time forensic accountant. Those in this field are more likely to be involved in the insurance industry, legal support, or within a specialty practice of an audit firm.
♦ Management accounting: This field is concerned with the process of accumulating accounting information for internal operational reporting. It includes such areas as cost accounting and target costing. A career track in this area can eventually lead to the controller position, or can diverge into a number of specialty positions, such as cost accountant, billing clerk, payables clerk, and payroll clerk.
♦ Tax accounting: This field is concerned with the proper compliance with tax regulations, tax filings, and tax planning to reduce a company's tax burden in the future. There are multiple tax specialties, tracking toward the tax manager position.
♦ Internal auditing: This field is concerned with the examination of a company's systems and transactions to spot control weaknesses, fraud, waste, and mismanagement, and the reporting of these findings to management. The career track progresses from various internal auditor positions to the manager of internal audit. There are specialties available, such as the information systems auditor and the environmental auditor.
Join us👇
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There are several types of accounting that range from auditing to the preparation of tax returns. Accountants tend to specialize in one of these fields, which leads to the different career tracks noted below:
♦ Financial accounting: This field is concerned with the aggregation of financial information into external reports. Financial accounting requires detailed knowledge of the accounting framework used by the reader of a company's financial statements, such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). Or, if a company is publicly-held, it requires a knowledge of the standards issued by the government entity responsible for public company reporting in a specific country (such as the Securities and Exchange Commission in the United States). There are several career tracks involved in financial accounting. There is a specialty in external reporting, which usually involves a detailed knowledge of accounting standards. There is also the controller track, which requires a combined knowledge of financial and management accounting.
♦ Public accounting: This field investigates the financial statements and supporting accounting systems of client companies, to provide assurance that the financial statements assembled by clients fairly present their financial results and position. This field requires excellent knowledge of the relevant accounting framework, as well as an inquiring personality that can delve into client systems as needed. The career track here is to progress through various audit staff positions to become an audit partner.
♦ Government accounting: This field uses a unique accounting framework to create and manage funds, from which cash is disbursed to pay for a number of expenditures related to the provision of services by a government entity. Government accounting requires such a different skill set that accountants tend to specialize within this area for their entire careers.
♦ Forensic Accounting: This field involves the reconstruction of financial information when a complete set of financial records is not available. This skill set can be used to reconstruct the records of a destroyed business, to reconstruct fraudulent records, to convert cash-basis accounting records to accrual basis, and so forth. This career tends to attract auditors. It is usually a consulting position, since few businesses require the services of a full-time forensic accountant. Those in this field are more likely to be involved in the insurance industry, legal support, or within a specialty practice of an audit firm.
♦ Management accounting: This field is concerned with the process of accumulating accounting information for internal operational reporting. It includes such areas as cost accounting and target costing. A career track in this area can eventually lead to the controller position, or can diverge into a number of specialty positions, such as cost accountant, billing clerk, payables clerk, and payroll clerk.
♦ Tax accounting: This field is concerned with the proper compliance with tax regulations, tax filings, and tax planning to reduce a company's tax burden in the future. There are multiple tax specialties, tracking toward the tax manager position.
♦ Internal auditing: This field is concerned with the examination of a company's systems and transactions to spot control weaknesses, fraud, waste, and mismanagement, and the reporting of these findings to management. The career track progresses from various internal auditor positions to the manager of internal audit. There are specialties available, such as the information systems auditor and the environmental auditor.
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https://t.me/Accountingfx
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FX $ | Accounting exit
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An entry with more than one debit is known as ?
Anonymous Poll
67%
Double entry
28%
Single entry
6%
Compound entry
1. What is the maturity value of a 90-day, 12% note for $10,000?
Anonymous Quiz
13%
A. $8,800
7%
B. $10,000
67%
C. $10,300
13%
D. $11,200
Basic_Accounting_Equation
The relationship among the accounting elements can be expressed in a single mathematical form known as the accounting equation or the basic accounting equation (balance sheet equation)
Eguities are claims against the asset of a business.
Assets=Equities
Claims are divided into two categories:
Creditor claims that are called liabilities and Owner's claims that are called equity.
Assets=Liabilities +Owner's Equity
A=L+OE
If a company goes bunikrupt, liabilities are paid off first to creditor while owner's equity i last to be distributed. Therefore, owners' equity is also called residual equity.
Business Transactions
Any activity that changes the value of assets, liabilities, owner's equity, revenue or expenses is called transaction. Business transaction is an exchange of economic consideration between two
Parties/ event of occurrence or condition that must be recorded.
E.g. Hiring an cmployee does not change the value of any assets, liabilities and owner's equity, so it is not a transaction.
Transaction can be created internally or external
Internal transaction: internally created
E.g. Salary payment, Depreciation, Supplies, Allowance for uncollectible
External transaction: transaction related to outsiders
E.g. Purchase of asset on account, cash payment to a creditor, receipt of cash for service rendered, payment of rent and collection of accounts receivable.
Debit (Dr) and Credit (Cr) Rule
For Assets👇
Increase in Assets Dr
Decrease in Assets Cr
For Liabilities👇
Decrease in Liabilities Dr
Increase in Liabilities Cr
For Capital👇
Decrease in Capital Dr
Increase in Capital Cr
For Revenue👇
Decrease in Income Dr
Increase in Income Cr
For Expense👇
Increase in Expense Dr
Decrease in Expense Cr
Withdrawal👇
Increase in Drawing Dr
Decrease in Drawing Cr
For Stock 👇
Increase in Stock Dr
Decrease in Stock Cr
#fx
#forex
#crypto
Join us👇
https://t.me/Accountingfx
The relationship among the accounting elements can be expressed in a single mathematical form known as the accounting equation or the basic accounting equation (balance sheet equation)
Eguities are claims against the asset of a business.
Assets=Equities
Claims are divided into two categories:
Creditor claims that are called liabilities and Owner's claims that are called equity.
Assets=Liabilities +Owner's Equity
A=L+OE
If a company goes bunikrupt, liabilities are paid off first to creditor while owner's equity i last to be distributed. Therefore, owners' equity is also called residual equity.
Business Transactions
Any activity that changes the value of assets, liabilities, owner's equity, revenue or expenses is called transaction. Business transaction is an exchange of economic consideration between two
Parties/ event of occurrence or condition that must be recorded.
E.g. Hiring an cmployee does not change the value of any assets, liabilities and owner's equity, so it is not a transaction.
Transaction can be created internally or external
Internal transaction: internally created
E.g. Salary payment, Depreciation, Supplies, Allowance for uncollectible
External transaction: transaction related to outsiders
E.g. Purchase of asset on account, cash payment to a creditor, receipt of cash for service rendered, payment of rent and collection of accounts receivable.
Debit (Dr) and Credit (Cr) Rule
For Assets👇
Increase in Assets Dr
Decrease in Assets Cr
For Liabilities👇
Decrease in Liabilities Dr
Increase in Liabilities Cr
For Capital👇
Decrease in Capital Dr
Increase in Capital Cr
For Revenue👇
Decrease in Income Dr
Increase in Income Cr
For Expense👇
Increase in Expense Dr
Decrease in Expense Cr
Withdrawal👇
Increase in Drawing Dr
Decrease in Drawing Cr
For Stock 👇
Increase in Stock Dr
Decrease in Stock Cr
#fx
#forex
#crypto
Join us👇
https://t.me/Accountingfx
Telegram
FX $ | Accounting exit
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When the carrying amount higher than recoverable amount what happened and the reverse that will happen?
When the carrying amount is higher than the recoverable amount, it means that the asset is impaired. In this case, the company will need to recognize an impairment loss on the asset in its financial statements.
On the other hand, when the recoverable amount is higher than the carrying amount, it means that the asset is not impaired. In this case, no impairment loss needs to be recognized in the financial statements.
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When the carrying amount is higher than the recoverable amount, it means that the asset is impaired. In this case, the company will need to recognize an impairment loss on the asset in its financial statements.
On the other hand, when the recoverable amount is higher than the carrying amount, it means that the asset is not impaired. In this case, no impairment loss needs to be recognized in the financial statements.
Join us👇
https://t.me/Accountingfx
Telegram
FX $ | Accounting exit
📈 Your Source for Reliable Trading Insights
Receive timely trade signals, in-depth market analysis, and proven risk management techniques to support consistent trading success.
Receive timely trade signals, in-depth market analysis, and proven risk management techniques to support consistent trading success.
Practice Problems Financial Management
1️⃣ Simple Interest: How much interest would be paid on a $50,000 loan at an interest rate of 6% per year for a period of two years?
🔑 Solution: Interest = Principal x Rate x Time = $50,000 x 6% x 2 years = $6,000
2️⃣ Present Value: What would be the present value of a $5,000 payment received in five years at an interest rate of 8% per year?
🔑 Solution: PV = FV / (1 + r)^n = 5,000 / (1 + 0.08)^5 = $3,300.14
3️⃣. Future Value: What would be the future value of a $10,000 investment at an interest rate of 4% per year for a period of 10 years?
🔑 Solution: FV = PV x (1 + r)^n = $10,000 x (1 + 0.04)^10 = $14,802.46
4️⃣. Net Present Value: If an investment costs $30,000 to acquire and generates cash flows of $12,000 per year for five years, with a required rate of return of 6%, what would be the net present value of the investment?
🔑 Solution: NPV = (CF0 + CF1/(1+r) + CF2/(1+r)^2 + ... + CFn/(1+r)^n) - C0 = ($12,000/(1+0.06)^1 + $12,000/(1+0.06)^2 + $12,000/(1+0.06)^3 + $12,000/(1+0.06)^4 + $12,000/(1+0.06)^5) - $30,000 = $14,126.95
5️⃣ Payback Period: If an investment requires $100,000 upfront and generates cash flows of $25,000 per year, what would be the payback period?
🔑 Solution: Payback period = Initial investment / Annual cash inflow = $100,000 / $25,000 = 4 years
6️⃣. Discounted Payback Period: Using the same investment as above, if the investment has a required rate of return of 8%, what would be the discounted payback period?
🔑 Solution: PV of Cash Flows = $25,000/(1+0.08)^1 + $25,000/(1+0.08)^2 + $25,000/(1+0.08)^3 + $25,000/(1+0.08)^4 = $79,599.66
Discounted Payback Period = year 3 + $20,400/$25,000 = 3.816 years
7️⃣. Internal Rate of Return: If an investment costs $50,000 and generates cash flows of $20,000 per year for five years, what would be the internal rate of return?
🔑 Solution: IRR = 14.87%
8️⃣. Weighted Average Cost of Capital: If a company has a debt-to-equity ratio of 2:1, a debt cost of 8% and equity cost of 12%, what would be the weighted average cost of capital?
🔑 Solution: WACC = (2/3 x 8%) + (1/3 x 12%) = 9.33%
9️⃣. Capital Budgeting: A company is considering investing in a new project that will cost $150,000 upfront and generate cash flows of $50,000 per year for four years. What would be the NPV of the investment if the company's cost of capital is 10%?
🔑 Solution: NPV = -$150,000 + $50,000/(1+0.10)^1 + $50,000/(1+0.10)^2 + $50,000/(1+0.10)^3 + $50,000/(1+0.10)^4 = $10,381.89
🔟. Financial Planning: A family's monthly budget consists of $5,000 in income and $4,500 in expenses. What would be the family's monthly cash surplus/deficit?
🔑 Solution: Cash surplus/deficit = Income - Expenses = $5,000 - $4,500 = $500
1️⃣ 1️⃣. Break-Even Analysis: A company is considering launching a new product with a selling price of $100 per unit and variable costs of $60 per unit. What would be the break-even point in terms of units sold?
🔑 Solution: Break-even point = Fixed costs / (Selling price per unit - Variable costs per unit) = $50,000 / ($100 - $60) = 1,250 units
1️⃣ 2️⃣. Risk Management: A company is considering investing in a new project that has a 50% chance of generating $100,000 and a 50% chance of generating -$50,000. What would be the expected value and standard deviation of the project
🔑 Solution: Expected value = (0.50 x $100,000) + (0.50 x -$50,000) = $25,000
Standard deviation = sqrt[(0.50 x ($100,000 - $25,000)^2) + (0.50 x (-$50,000 - $25,000)^2)] = $60,621.77
1️⃣ 3️⃣. Ratio Analysis: A company has sales of $500,000 and net income of $50,000. What would be the company's profit margin ratio?
Solution: Profit margin ratio = Net income / Sales = $50,000 / $500,000 = 10%
1️⃣ 4️⃣. Liquidity Analysis: A company has current assets of $300,000 and current liabilities of $200,000. What would be the company's current ratio?
🔑 Solution: Current ratio = Current assets / Current liabilities = $300,000 / $200,000 = 1.5
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1️⃣ Simple Interest: How much interest would be paid on a $50,000 loan at an interest rate of 6% per year for a period of two years?
🔑 Solution: Interest = Principal x Rate x Time = $50,000 x 6% x 2 years = $6,000
2️⃣ Present Value: What would be the present value of a $5,000 payment received in five years at an interest rate of 8% per year?
🔑 Solution: PV = FV / (1 + r)^n = 5,000 / (1 + 0.08)^5 = $3,300.14
3️⃣. Future Value: What would be the future value of a $10,000 investment at an interest rate of 4% per year for a period of 10 years?
🔑 Solution: FV = PV x (1 + r)^n = $10,000 x (1 + 0.04)^10 = $14,802.46
4️⃣. Net Present Value: If an investment costs $30,000 to acquire and generates cash flows of $12,000 per year for five years, with a required rate of return of 6%, what would be the net present value of the investment?
🔑 Solution: NPV = (CF0 + CF1/(1+r) + CF2/(1+r)^2 + ... + CFn/(1+r)^n) - C0 = ($12,000/(1+0.06)^1 + $12,000/(1+0.06)^2 + $12,000/(1+0.06)^3 + $12,000/(1+0.06)^4 + $12,000/(1+0.06)^5) - $30,000 = $14,126.95
5️⃣ Payback Period: If an investment requires $100,000 upfront and generates cash flows of $25,000 per year, what would be the payback period?
🔑 Solution: Payback period = Initial investment / Annual cash inflow = $100,000 / $25,000 = 4 years
6️⃣. Discounted Payback Period: Using the same investment as above, if the investment has a required rate of return of 8%, what would be the discounted payback period?
🔑 Solution: PV of Cash Flows = $25,000/(1+0.08)^1 + $25,000/(1+0.08)^2 + $25,000/(1+0.08)^3 + $25,000/(1+0.08)^4 = $79,599.66
Discounted Payback Period = year 3 + $20,400/$25,000 = 3.816 years
7️⃣. Internal Rate of Return: If an investment costs $50,000 and generates cash flows of $20,000 per year for five years, what would be the internal rate of return?
🔑 Solution: IRR = 14.87%
8️⃣. Weighted Average Cost of Capital: If a company has a debt-to-equity ratio of 2:1, a debt cost of 8% and equity cost of 12%, what would be the weighted average cost of capital?
🔑 Solution: WACC = (2/3 x 8%) + (1/3 x 12%) = 9.33%
9️⃣. Capital Budgeting: A company is considering investing in a new project that will cost $150,000 upfront and generate cash flows of $50,000 per year for four years. What would be the NPV of the investment if the company's cost of capital is 10%?
🔑 Solution: NPV = -$150,000 + $50,000/(1+0.10)^1 + $50,000/(1+0.10)^2 + $50,000/(1+0.10)^3 + $50,000/(1+0.10)^4 = $10,381.89
🔟. Financial Planning: A family's monthly budget consists of $5,000 in income and $4,500 in expenses. What would be the family's monthly cash surplus/deficit?
🔑 Solution: Cash surplus/deficit = Income - Expenses = $5,000 - $4,500 = $500
1️⃣ 1️⃣. Break-Even Analysis: A company is considering launching a new product with a selling price of $100 per unit and variable costs of $60 per unit. What would be the break-even point in terms of units sold?
🔑 Solution: Break-even point = Fixed costs / (Selling price per unit - Variable costs per unit) = $50,000 / ($100 - $60) = 1,250 units
1️⃣ 2️⃣. Risk Management: A company is considering investing in a new project that has a 50% chance of generating $100,000 and a 50% chance of generating -$50,000. What would be the expected value and standard deviation of the project
🔑 Solution: Expected value = (0.50 x $100,000) + (0.50 x -$50,000) = $25,000
Standard deviation = sqrt[(0.50 x ($100,000 - $25,000)^2) + (0.50 x (-$50,000 - $25,000)^2)] = $60,621.77
1️⃣ 3️⃣. Ratio Analysis: A company has sales of $500,000 and net income of $50,000. What would be the company's profit margin ratio?
Solution: Profit margin ratio = Net income / Sales = $50,000 / $500,000 = 10%
1️⃣ 4️⃣. Liquidity Analysis: A company has current assets of $300,000 and current liabilities of $200,000. What would be the company's current ratio?
🔑 Solution: Current ratio = Current assets / Current liabilities = $300,000 / $200,000 = 1.5
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FX $ | Accounting exit
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Receive timely trade signals, in-depth market analysis, and proven risk management techniques to support consistent trading success.
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