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For december 2014 exam, question on PLASTIK
Regarding transaction (iv) on intercompany balances,
We have to assume the cash in transit of 400 is received by plastik . Therefore we need to
+ 400 to cash balance &
– 400 from receivablesRight ? But in the answer key, instead of adding 400 to cash balance they have deducted the 400 from the bank overdraft.
If we do either one of this adjustment, will the answer vary on the SOFP ?
May be on the balance sheet they have overdraft which i think takes priority when adding cash to the bank or reducing the bank debt (whichever way you look at it).
Probably, I am wrong, would be interesting to know.
vishal – I have asked this before and I’m asking you again – and I shouldn’t need to! If you wish to answer questions from students, start your own blog!
This is unbelievably rude and ignorant of you to answer questions specifically addressed to me – that’s what Ask ACCA Tutor means! I am an ACCA tutor ….. and you’re not
You even have the audacity to answer and then disclaim any responsibility with the incredible “Probably, I am wrong”!
STAY OFF THIS PAGE unless you have your own questions to ask
Anuja, please tell me “What’s the difference between balance at bank asset and balance at bank credit?”
Apart from the obvious that one is an asset and the other a liability, they are both correctly titled “Balance at bank”
If you personally have an overdraft and you receive some money order, do you open a separate account to pay the money in or would it be more natural to set the money against your overdraft?
Even if you DO have both an overdrawn account and an account in credit, if they’re with the same bank and if there is a set-off agreement with the bank for the sake of calculating overdraft interest, you would net them off when preparing the financial statements
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