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Adjustments to Profit and Suspense Accounts (part a)
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Hi ,Does anyone know the procedure how to prepare consolidated balance sheet,I need any example how to follow the steps .
Try watching my lecture on the consolidated statement of financial position (used to be called balance sheet) on this website!!!
Hi. I found question (d) in example 1, trickier than it actually was. My initial reaction was that it would have no effect on profit as it was a prepayment BUT, presumably prepayments just affect the Balance Sheet and NOT the Income Statement. Am I correct, even though I got the answer wrong initially? Kindest P.
Prepayments affect the income statement as well. If part of the payment was for next year, then the expense for this year is lower than what was actually paid (and therefore the profit is higher).
Also. Why are long term liabilities added to capital to calculate ROCE? Why wouldn’t they be subtracted to get net assets. Maybe it’s to to with the Assets = Liabilities + capital equation and/or Assets’ debits and credits are (sort of) reversed? Best P.
Just heard in a later lecture LT Liabilities are loans which answer’s my question above.
Fantastic lecture. Lecturer’s sense of humour would make me pay attention 100% while sitting in class. Keep it up. Thank you so much.
@munico1. The sale has been made but, the customer has not yet confirm the sale and because we would like to match the profit to the exact year, we did have to remove the profit until it is being confirmed.
That is what i think.
@akinfenwa,Yes – you would remove the sale, but you would also have to increase the inventory. So..the net effect is to lose the profit!
Hi admin, in relation to example 1, entry c) in adjustment to profits, could you please explain why it is only the profit removed yet the sale in effect hasn’t been made. Shouldn’t the sale figure also be removed?
Thanx
@munico1, i guess its bcuz qs says “no confirmation of sale had been received”
so customer may actually confirm the sale in future.if we removed it now , it can be prob later
in relation to entry c) could someone please explain why it is only the profit removed yet the sale in effect hasn’t been made and the sale figure should in my opinion be also removed.
Thanx
when an entry is omitted it does not effect the trail balance… but still it is entred in the suspence account..??
@dexter34, If an entry is completely missed out (no debit and no credit) then it does not affect the suspense account.
how would the profit be adjusted if the cost was 7930 and NRV 8920. Are we still deducting 990. Someone should help me please.
@markadi, The profit would not be adjusted because inventory would have been valued at the lower of cost and NRV. In this case, an adjustment would only be necessary, as in the example if inventory had been valued at the higher of cost and NRV.
Is the difference between the error of commission and error of principle that, the error in commission is between similar nature accounts and the error in principle is between different nature accounts? admin?
@Shiraz, Yes – you are correct.
hi thank for help
sir please give the answers of test Questions
@masood022, The answers to the test questions are at the back of the Course Notes
pliz heeeeeelp! cnt access da video guyz
Great lectures, Feels the same heat as we are sitting in class and interacting with lecturers on his questions/queries. These new lectures are more interactive than the old ones.
Million of thanks for all this.
@mehmoodhamid, I do not know how you get to watch these lectures… please I need help
@bonifaceb, Switch to another browser. You should be able to watch this. There is some thing wrong with your computer or web browser.
I have taken all the lecturers and last week appeared in CBE. I got 84%. Really appreciate Opentuition. The whole credit goes to them. To be honest, I am totally speachless.
Sir, people are facing problems in watching the video as i have tried different browsers for it. Kindly next time manage to put a video which resolution and compatibility is easier and accessible to all the users computers.
@certifiedca, I’m afraid people with problems are in a minority!
as lecture works fine,
you need someone to help you with your PC! or your settings,… how are we to know why you have problems? ask someone in your office/college for help
i like it)
Your PC is the problem, try another browser
@admin,Hi admin, in relation to example 1, entry c) in adjustment to profits, could you please explain why it is only the profit removed yet the sale in effect hasn’t been made. Shouldn’t the sale figure also be removed?
Thanx
please the newly uploaded videos are not opening. what coud be the problem.
nice