Comments

  1. Profile photo of nkmile64 says

    Wonderful lecture!
    Thank you Open Tuition and Sir Mike. I would like to ask though, would I miss one mark for accidentally deducting the URP from Revenue, instead of the preferred treatment of adding it to Cost of Sales? I mean the result for the Profit would be the same but Revenue would be underestimated.

  2. avatar says

    hi sir, thanks you for this great explanation. i just have a little problem, when we include the proposed dividend 5000 in income statement, we also need to include it in current liability in SOFP. but isnt this against IAs rule, (stating that we should not include proposed dividend)

    thank u for answering, :)

    • Profile photo of MikeLittle says

      @evanuom, Hi, I believe that the question specifies that the dividend HAS need declared / proposed BEFORE the year end and is therefore correctly accounted for as a liability.

      However, it’s a good point which you make and you need to watch out for this type of subtle nuance in exam questions

      • avatar says

        Hi Mike,
        What is this subtle difference?

        when should a proposed/declared dividend be accounted for as a liability and when not? Is there a difference between proposed and declared?

        Thank you

  3. avatar says

    hi sir, thanks you for this great explanation. i just have a little problem, when we include the proposed dividend 5000 in income statement, we also need to include it in current liability in SOFP. but isnt this against IAs rule, (stating that we should not include proposed dividend)

    thank u for anaswering, :)

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