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Accountings helppppppppp

student8

student8

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lxelle said:
An electricity accrual of $375 was treated as a prepayment in preparing a trader's income profit and loss account. What was the effect on profit?

Answer says overstated of $750 why is that so?
Click to expand...
accruals decrease our profit while prepayments increase
inother words, we subtract accruals while add prepayments in our profit
now if we have added an amount instead of subtracting it...so firstly we have to subtract it from profit, to eliminate its effect, secondly we have todo original entry, subtract that amount again
henceforth is to be reduced by double of its the bill
this implies dat profit was overstated by double of the correct amount, ie 750

got it?
 
lxelle

lxelle

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student8 said:
accruals decrease our profit while prepayments increase
inother words, we subtract accruals while add prepayments in our profit
now if we have added an amount instead of subtracting it...so firstly we have to subtract it from profit, to eliminate its effect, secondly we have todo original entry, subtract that amount again
henceforth is to be reduced by double of its the bill
this implies dat profit was overstated by double of the correct amount, ie 750

got it?
Click to expand...
YESSSS. :)
 
student8

student8

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lxelle said:
http://papers.xtremepapers.com/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_s11_qp_13.pdf Question 8 and 5!!
Click to expand...
q8
first make an adjusted cash book .....balance carridge forward will be credit 14500(12500+2000)
then come to BRS
debt have not yet been recieved no add further 20000 and creditor has not yet declared his check, so subtract 3000

net result will be 12500+2000+20000-3000=-31500 (debit for the bank)
Q5: prepare a rought balance sheet or do like this
fixed assets + current assets - current liabilities-non curent liabilities= capital account + current account
42 + current assets- 7 - 15 = 36 + (-5)-----------------> becuase current account have a debit balance

hence current assets =110000
 
lxelle

lxelle

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student8 said:
q8
first make an adjusted cash book .....balance carridge forward will be credit 14500(12500+2000)
then come to BRS
debt have not yet been recieved no add further 20000 and creditor has not yet declared his check, so subtract 3000

net result will be 12500+2000+20000-3000=-31500 (debit for the bank)
Q5: prepare a rought balance sheet or do like this
fixed assets + current assets - current liabilities-non curent liabilities= capital account + current account
42 + current assets- 7 - 15 = 36 + (-5)-----------------> becuase current account have a debit balance

hence current assets =110000
Click to expand...
When current account is debit it's negative. What about capital account?
 
lxelle

lxelle

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Kushal lodha 5336 said:
ACCOUNTS MCQ P1 DOUBTS..
View attachment 47858
Click to expand...
May 2010 P12 No. 13, unrealized profit for opening stock 20/100 x 4000= 8000
Unrealized profit for closing 20/120 x 54000 = 9000
your factory profit is 48000
open up a provision for unrealized profit a/c, fill in those figures - opening & closing. balancing figure would be your figure going to P&L.
Hence, 48000 - (balancing figure) = your answer.
 
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