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September 16, 2020 at 4:47 am
Excellent, excellent lecture sir !
Now I understand the logic about the background of T accounts (two sides of a physical page), nominal ledger (the entire book of accounts – I love how you showed a physical example of a book ), ledger = another word for book, and double entry (how you used cash account as the basis to relate to the results in other accounts)
Other tutors would not go to such lengths or rather would lack your wisdom and capabilities to get the point across in such an easy and nice way.
Although I do wonder, why would would someone waste an entire two pages for a Car account – not much activity can be expected from it in the future. Why not just create a single non asset account including all such future non asset purchases such as cars etc within them to save space.
John Moffat says
September 16, 2020 at 8:55 am
Given that these days the ‘pages’ will be on computer, then there is no waste 🙂
June 12, 2020 at 5:07 am
Thank you I have been struggling to understand this for a long time
June 12, 2020 at 10:16 am
I am glad that you found it useful 🙂
May 16, 2020 at 10:34 am
Wish I had found this before I had paid for totally useless course with an online provider. Thank you, interesting and easy to follow
May 16, 2020 at 11:31 am
Thank you for your comment 🙂
April 22, 2020 at 6:39 pm
I like the way you make it simple. And then I think your going to build up the concepts, one top of the other. Thank you.
April 23, 2020 at 11:14 am
November 3, 2019 at 1:10 pm
In real life, I would say -Motor Vehicles.
September 27, 2019 at 4:59 pm
Respected sir .
there are lot of topics which are missing in lecture from chater 2 and 3 like dayBooks etc ?
September 28, 2019 at 9:42 am
They are covered in a later lecture (Books of Prime Entry), because day books are not actually part of the double entry.
There is nothing missing – the lectures are a complete free course and cover everything needed to be able to pass the exam well.
September 18, 2019 at 3:39 pm
Hi sir, good day to you!!
Thank you for your lecture!
Just a small question: In real life, when we prepare for a T account if we purchase a car, will we call it ‘car account’ or ‘asset account’? Thank you!!
September 18, 2019 at 4:37 pm
It doesn’t matter – they can call it what they like. However they will almost certainly call it a car account in order to distinguish it from all the other assets that the business will own.
September 19, 2019 at 3:17 am
Ah.okay, I see. Thank you sir!
September 19, 2019 at 7:57 am
You are welcome 🙂
November 3, 2019 at 1:03 pm
September 13, 2019 at 6:32 pm
Where on earth were you when I started learning accounting? Thank you sooooo much! Your explanations are so clear and you are so easy to follow.
September 19, 2019 at 11:14 am
sir, help me.
a company does not manage to get all of its WIP processed before the end of the period. the followings are introduced into process 1.
raw materials 1500 units $12000
closing WIP 50 units completed as below
raw materials 100% complete
there were no losses.
how to prepare appropriate ledger accounts and the statement of equivalent units. thankyou sir in advance. please reply ASAP
September 19, 2019 at 5:26 pm
Firstly, this is a question that could be asked in Paper MA but not in Paper FA.
Secondly, you must ask this sort of question in the relevant Ask the Tutor Forum and not as a comment on a lecture.
July 28, 2019 at 12:21 pm
Thank you so much for the simplicity
July 28, 2019 at 3:17 pm
March 18, 2019 at 6:53 am
narminsaid: When we buy goods we call them purchases. If any are unsold at the end of the period we then refer to them as inventory. This is explained in later lectures.
March 18, 2019 at 9:06 am
But using the extended accounting equation, if you’ve bought inventory, it is a + (debit) to the inventory account, and you would just take away (credit) the amount of goods actually sold, and the amount of goods actually sold becomes the cost of sales no?
November 3, 2019 at 12:41 pm
Don’t forget to include the inventory balance b/f from the previous year.
Cost of goods sold (COGS) or Cost of Sales = Beginning of Inventory + Purchase – Closing Inventory.
Yes, Inventory is an asset always goes to debit side.
I hope it helps.
March 17, 2019 at 7:06 pm
Hi! Firstly thanks in advance for clear explanation. This site is very good opportunity for the students who prepare “ACCA” self-study.
So, I have one question from this lecture (double entry part A). In the last lecture you have mentioned that ” Buys goods for resale” means that this is inventory account. But in this lecture you said that in the third transaction: ” Buy goods for resale for 500$ cash” this will be “purchase” account. I am confusing in this part. Is this “inventory” account or “purchase” account?
If you answered this question i will be very happy:)
In any case i highly appreciate your effort and very grateful to your team 🙂
November 20, 2019 at 12:24 pm
A purchase account is a general ledger account where we record the inventory purchases of a business. Remember the Cost of Sales = Beginning of Inventory + Purchase – Closing Inventory.
October 16, 2018 at 2:54 pm
Sir, why are drawings from the business recorded as a Debit to the drawings account and not as a Credit to the capital account since the owners financial interest in the business is now reduced?
October 16, 2018 at 4:21 pm
The capital account is a credit balance – the amount owing to the owner – and so crediting the account would increase the amount owing, which is not what is happening!
We would debit the capital account instead of debiting drawings – the net effect would be the same. However, it is better practice (and certainly for the exam) to record drawings separately so that on the SOFP we can show the capital less the drawings (plus the profit) so as to explain why the total amount owing to the owner has changed over the year.
October 21, 2019 at 5:48 pm
October 21, 2019 at 6:12 pm
November 3, 2019 at 12:50 pm
Because drawings are expenses.
In Ledger A/C
Increase Expenses Debit Decrease Expenses Credit
B/S Capital Cr Drawings Dr
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