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May 27, 2022 at 12:43 pm
what is the journal entry posted for the profit for the year. cannot see it in the trail balance either ?
John Moffat says
May 28, 2022 at 7:18 am
The trial balance is the list of all the balances before the profit has been calculated.
The profit for the year is the balance on the profit or loss account as prepared in the lecture.
October 5, 2021 at 6:59 pm
will there be a COGS account?
October 6, 2021 at 3:16 pm
There could be if the business produced their own goods (as opposed to buying them ready made). However it is not something to worry about for the Paper FA exam.
October 6, 2021 at 8:20 pm
Thanks Alot Sir!!!
October 7, 2021 at 9:00 am
You are welcome 🙂
December 20, 2020 at 5:24 am
Is it a requriment to sort Non-current ones first, or it’s just a convention (or de-facto standard)?
And the same question but not asking about Non-current/Current instead Equity/Liabilities?
Because I studied accounting in high school in Japan. I used to do Current first and Liabilities first.
December 20, 2020 at 10:28 am
If you are referring to the Statement of Financial Position, then the layout is required by the accounting standard.
December 3, 2020 at 12:05 pm
Can you please explain “Tidying up the owner” with an example as It is a bit hard for me to solve it up.
December 3, 2020 at 3:29 pm
It means transferring the balance on the the SOPL to the credit of the capital account, and transferring the balance on the drawings account to the debit of the capital account, and then taking the new balance on the capital account.
However you cannot be required to do this in the exam.
September 17, 2020 at 1:55 pm
I just finished Double entry series, and listened to a lecture from MA…my mind is a bit fuzzy from all the absorption ?
As a result, I cant now exactly recall if you already mentioned the “Tidying up the owner” section from your Notes within the Double Entry lectures.
Would you be kind enough to let me know if you have and where can I refer for it. I found the notes section confusing. And if you haven’t then can you please elaborate on it ?
September 17, 2020 at 1:56 pm
Confusing in the sense – regarding its explanation. I need elaboration.
September 18, 2020 at 12:13 am
I have finally understood it !
Since drawings belongs to the debit side of equation, so to make it zero, and transfer its withdrawing effect to the Capital Account which is on Credit side of Equation, we credited Drawings of the Debit side of Equation to thus turn its balance to zero and close account, and Debited the Capital Account of Credit side of the Equation to reduce the Capital. So both resulted in reducing the amount in their Accounts.
Same method applies for Statement of Profit and Loss T-Account (in short: the Profit ). Since this belongs on the Credit side of the Equation along side Capital. We debited this Statement of Profit and Loss Account on the Credit Side of the Equation to close its account, and Credited the Capital Account which is originally on the Credit side of the Equation, to further increase its balance.
And thus, we tidy up the Owner side of the story.
I was confused before, because the concept was not elaborated (in normal language) but briefly summarized in the notes in accounting language. I have now tried elaborating for others to understand as well if they are confused, and if I have made any mistakes in understanding myself, or need additional points of wisdom to be considered from your side, please do assist.
September 15, 2020 at 12:20 am
Thank you. Explained very clearly.
September 15, 2020 at 8:57 am
Thank you for your comment 🙂
June 20, 2020 at 5:01 pm
Regarding example 9 – tidying up the owner – where do you put the final two transactions? Do we put them above the Balance c/f line and either knock off the balances or have to recalculate them, or below the Balance b/f line? I am assuming the latter, but would just like to confirm.
June 20, 2020 at 5:47 pm
They go below the balance b/f and then we recalculate the new balance.
However there is no real need to worry about it – you cannot be asked to write up the t-account in the exam 🙂
June 20, 2020 at 6:51 pm
Nevermind the above, answer shown in lectures for the following chapter.
June 20, 2020 at 7:16 pm
Whoops – wires crossed. Thanks John!
June 21, 2020 at 8:50 am
No problem 🙂
June 12, 2020 at 8:09 am
What are the errors that will not be revealed from the Trial Balance?
June 12, 2020 at 10:20 am
The errors that I explain in the previous lecture on this chapter!!!!
April 15, 2020 at 9:08 pm
Thank you John l now understand fully
February 26, 2020 at 10:49 am
I have one question regarding double entry.
What would be the double entry for the opening inventory i.e when the goods are received from the supplier ?
I know that after receiving goods, when invoice is received there will be double entry in payable and purchases account ( debit purchases and credit payables) but know sure what would be the double entry for opening inventory when goods are received.
June 20, 2020 at 4:37 am
You’re really confused. There is no double entry for the opening inventory.
Opening Inventory = Cost of Goods Sold + closing inventory – purchases
An opening inventory is closing inventory from the previous accounting period.
October 17, 2019 at 5:53 pm
do you have to list the owner drawing on the financial statement, thanks
October 18, 2019 at 7:29 am
For a sole trader, yes (just as I show in the lecture).
June 20, 2019 at 2:28 pm
hi. thank you for explaining. i am foreign and sorry for my english. at last you added payables to 5300. (200+5300). Why? i thought we have to 5300-200 because we must pay 200, it is our liability. am i wrong?
June 20, 2019 at 4:42 pm
The 5,300 and the 200 are both liabilities.
The 5,300 is owing to the owner, and the 200 is owing to Mr A.
Did you watch the lectures for the previous chapters before watching this one?
June 20, 2019 at 5:14 pm
oh i understand, thank you very much. Yes, i watched all previous chapters and i look also notes and try to solve examples by myself. Thank you very much. And you speak so understandable i can understand easily.
May 29, 2019 at 7:46 pm
Please why is it balances and not actual entries that put on the financial statements?
*that are put on the financial statements?
May 30, 2019 at 8:36 am
The SOFP is simply showing the assets and liabilities at the end of the period – not each individual transaction.
Have you watched the earlier lectures?
April 18, 2019 at 2:33 am
thank you for your assistance. i really appreciate it.
April 18, 2019 at 5:57 am
March 27, 2019 at 4:43 pm
Hi, i just want to thank you for this. This is a chapter i have struggled to get my head around for a while but this is put so simply and well explained. Many thanks 🙂
March 28, 2019 at 7:40 am
October 24, 2018 at 12:10 pm
Would I be right in saying that when we produce our statement of financial position, for the capital and liabilities we subtract if it is on the debit side (e.g. the drawings) and add if it is on the credit side. But for assets, it’s the other way round and we add it if it is on the debit side (e.g. the car) and subtract if it is on the credit side?
Any feedback would be highly appreciated.
January 25, 2019 at 12:52 pm
To put simply, If Capital,Liability and Revenue Increases we Credit it and if it decreases we Debit it. Vice versa applies to an Asset and Expense, If it increases we Debit it and if it decreases we credit it. Hope you got my point.
November 22, 2019 at 6:19 pm
Drawings cannot be on the credit side as personal drawings are expenses.
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