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  5. Dear sir,

    After listening to all lectures of chapter 1 and 2, i went through practice questions. The practice questions for chapter 2 contain 5 questions to be solved on computer. What i noticed was that these questions seem a bit untouched in lectures such as opening net asset or closing net asset or question no 5.
    Is it because the lectures are outdated or i have to better understand the topics.

    Thanks for very peciouse lectures, i learned alot. these are comprehensive yet very simple to understand

    • The lectures are certainly not outdated – they are reviewed every three months.

      The questions you refer to are covered in the lectures. If you look at examples 1 and 2 at the end of chapter 2 in the lecture notes (and the lecture that works through them) then there should be no problem with them
      (Opening net assets simply means net assets at the start, and closing net assets simply means net assets at the end)

    • What do you mean by ‘explain revenue’?

      Of course I explain what it is – it is another word for ‘sales’ or ‘turnover’.

      If your are referring to the accounting standard then again of course I explain in later lectures.

      Why are you asking?
      If you watch our lectures in order then they go through everything you need to be able to pass F3 well – they are a complete course.

  8. sorry, question 3 page 14, i got confused question 3 page 14 at the part where it said 31st August and 24the december 2007. I wasn鈥檛 sure if I should鈥檝e calculated by (960 x 5) or (960 x 12)

    Thanks! Have a nice day.

  9. The purpose of a statement of financial position is to show a clear and definite estimate of what the business is really worth. Is that statement correct sir?

    • No – it is not correct. (For example, the non-current assets are unlikely to be worth the amount that is shown in the statement).

      I assume you are asking because of the test question at the end of the chapter. The answers to all of the test questions are at the end of the lecture notes – the contents page will tell you which page.

  10. Hello, many thanks for ensuring that someone like me have access to this lecture.
    Please could you help me, to explain test question 3 on page 14 of the course note.

    Thank you.

    • The profit for the year is 30,600; there is capital introduced of 7,200; and there are drawings of (12 x 960) + 840 = 12,360.

      Using the accounting equation you can then calculate the increase in the net assets over the year.

      You know the net assets at the end of the year (64,800) so if you subtract the increase over the year you can calculate the net assets at the start of the year (1 Feb 2007).

      (The answers to all the tests are at the end of the course notes).

    • It is the accounting equation: increase in net assets = capital introduced + profit – drawings

      The capital introduced is 7,200. The profit is 30,600. The drawings are (12 x 960) + 840 = 12,360.

      So you can now calculate the increase in net assets.

      You know the net assets at the end of the year (64,800) so if you subtract the increase then you know the net assets at the start of the year.

      (I hope you do realised that the answers are at the end of the lecture notes)

      • sorry, i do realise it, but i got confused at the part where it said 31st August and 24the december 2007. I wasn’t sure if I should’ve calculated by (960 x 5) or (960 x 12)

        Thanks John.

  12. Hello,

    Please help, I try to solve the question 1 of page 14 of Chapter 2 and I missed it.
    I choose “D” but the correct answer is “A”. Please can you explain why?

    Thank you.

    • You will know from the lecture that:

      Increase in net assets = capital introduced + profit – drawings

      So…closing net assets – opening net assets = cap int + profit – drawings

      If you subtract cap int from both sides, and add drawings to both sides, you get:

      closing net assets – opening net assets – cap int + drawings = profit (which is answer A)

      • Thank for the quick response to my question, I really do appreciate.

        Could you please explain further, what net asset is? because am a little bit confuse about closing net assets and opening net assets… am new to this please.

        Thanks

    • The lectures are what we cover on a 5 day course and cover more than enough to be able to pass the exam well. We do not claim to deal with every single topic in the syllabus nor do we claim to replace a Study Text.

      The exam will contain very little on either corporate governance or on the conceptual framework (and what is needed is covered within other lectures and lecture notes anyway). All of the examinable IFRS’s are covered in the lectures (most are still referred to as IAS’s) in chapters 5, 7, 9, 13, 14, 19, 20, 21, 22, and 27 of the lecture notes (and the lectures that go with them)!

    • The Statement of financial position does not try to show the ‘true’ value of a business.
      The main reason is because of the non-current assets. In the example statement on page 9 for example, land and buildings are shown at 100,000. This will be what we paid for them (although as you will see in a later chapter, in fact we reduce that amount gradually and call it depreciation). They might however be actually worth a lot more than 100,000 – buildings usually tend to go up in value (or of course they could be worth less).

      All the statement does is list all the assets and liabilities, but again it does not show the ‘true’ value.

  16. Kindly help with this question

    Here is an extended trial balance extract:
    Initial trial Adjustments Accruals and Income Statement of
    balance prepayments statement financial position
    Dr Cr Dr Cr Accruals Prepmnts Dr Cr Dr Cr

    Cell 1 Cell 2 Cell 3 Cell 4

    AT PT

    AT = accruals total
    PT = prepayments total
    To where should AT and PT be transferred?

    A- AT to Cell 3; PT to Cell 4
    B- AT to Cell 1; PT to Cell 2
    C- AT to Cell 4; PT to Cell 4
    D- AT to Cell 2; PT to Cell 1

    • The answer at the back of the notes is correct – but the letter is wrong.

      Accruals appear in the Statement of financial position – cell 4.
      Prepayments appear in the Statement of financial position – cell 3

      (Please do not ask these questions under a lecture for F3 – it confuses everyone. I know there is no Ask the Tutor Forum for FA2, so please ask them in the FA2 forums)

  18. Hello, please help!
    Where I can find the answers to chapter 2questions, q3 I am during as mentioned in the comment above, but can’t get the answer c.

    Please help.

    Many thanks. J

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