A2 Commerce Group |Post your doubts here (Accounts, Eco, B.Std & Stats 2)

[Echelon94]

I think it was getting difficult finding A2 stuff on the other threads so heres one for A2 specifically...
Post your queries & difficult/tricky questions & help each other out...!

P.S.: please try to post the links for the question papers & the marking schemes for any problem you have...

 

[Echelon94]

heres one, question 19, I know how the answer (D) came but I dont get the logic...
Accounts, Nov 2003, P3

 

[Echelon94]

what's the formula for income gearing ratio?

INCOME GEARING RATIO is Interest Expense / Operating Profit

i applied this formula but it was wrong
i used in P43 oct/nov 2011 qns 2!
you can check if you want coz this formula doesn't work there!

yeah well the thing is the syllabus had the opposite formula for Income Gearing until 2010 (.i.e. the same formula as for Interest Cover), but still I think if it changed for the 2011 syllabus, the papers should have been marked with the new syllabus & hence the answers should have been the percentages... Anyways heres the 2010 Syllabus (with the old formula)...

 

[wajiman]

heres one, question 19, I know how the answer (D) came but I dont get the logic...
Accounts, Nov 2003, P3

well my teacher told that this mcq was not correct :/

 

[mimiswift]

yeah well the thing is the syllabus had the opposite formula for Income Gearing until 2010 (.i.e. the same formula as for Interest Cover), but still I think if it changed for the 2011 syllabus, the papers should have been marked with the new syllabus & hence the answers should have been the percentages... Anyways heres the 2010 Syllabus (with the old formula)...

ok Thanks alot

 

[Echelon94]

well my teacher told that this mcq was not correct :/

yeah man my teacher said the same thing, but the funny thing is that the examiner report specifically mentions this question & gives a bit of explanation. & if this question was wrong, I guess the CIE couldnt figure it out cuz it was repeated again in Nov 2006, question 21

 

[mimiswift]

yeah well the thing is the syllabus had the opposite formula for Income Gearing until 2010 (.i.e. the same formula as for Interest Cover), but still I think if it changed for the 2011 syllabus, the papers should have been marked with the new syllabus & hence the answers should have been the percentages... Anyways heres the 2010 Syllabus (with the old formula)...

thanks

 

[mimiswift]

heres one, question 19, I know how the answer (D) came but I dont get the logic...
Accounts, Nov 2003, P3

we just take 400/2000 of every item!
take full figures for material.......labour and overheads(50%based on labour) take 50% of their value then we get it!

 

[mimiswift]

To follow that method we will have to ignore the concept of equivalent production figure, the omission of which is technically incorrect.

sorry but i didn't get you?

 

[mimiswift]

do you know what Equivalent Production is?

nope

 

[youzair]

Hey LUCK why you dont come with me in Examination Hall!! ​

 

[mimiswift]

Hey LUCK why you dont come with me in Examination Hall!! ​

who are talking to?

 

[mimiswift]

oh, never mind then, just use the method you're taught...

ok

 

[mimiswift]

Hey LUCK why you dont come with me in Examination Hall!! ​

i get it now
i didnt read properly in the begining!

 

[hitmAn2]

Whats crowding effect and fiscal drag?

 

[mimiswift]

Whats crowding effect and fiscal drag?

say what?
which subject is this?

 

[hitmAn2]

economics

 

[mimiswift]

economics

then i have no idea
where did'ya come across these words?

 

[Echelon94]

Whats fiscal drag?

Fiscal Drag is one of the problems of Automatic Fiscal Policy Stabilizers. Fiscal drag is a situation where a government's net fiscal position (equal to its spending less any taxation) does not meet the net savings goals of the private economy. This can result in deflationary pressure attributed to either lack of state spending or to excess taxation. For example: One cause of fiscal drag is the consequence of expanding economies with progressive taxation. When people's money income rises, dragging them into higher tax brackets. Fiscal drag is therefore referring to the effect inflation has on average tax rates. If tax allowances are not increased in line with inflation, and people's incomes increase with inflation then they will be moved up into higher tax bands and so their tax bill will go up. However, they are actually worse off because inflation has cancelled out their pay rise and their tax bill is higher. The greater tax burden can lead to less consumer spending.​

​

Source: bized.co.uk & investopedia.com​

 

[Echelon94]

Whats crowding out effect?

Crowding Out is a phenomenon occurring when Expansionary Fiscal Policy causes Interest Rates to rise, thereby reducing investment spending. Governments often borrow money (by issuing bonds) to fund additional spending. Increased govt. borrowing tends to increase the market interest rates. The problem is that the govt. can always pay the market interests rates, but there comes a point where corporations & individuals can no longer afford to borrow due to high interest rates. The govt. debt 'crowds out' private companies & individuals from the lending market.

Source: wikipedia.org & investopedia.com