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In a centralised organisation, heat office takes decisions and tells branches/departments/subsidiaries what to do. This at least means all the sub0units should be acting in coordination, but also means that HO might be making decisions where it has little information or expertise. There’s also likely to be delays in the communication process.
Once decentralisation is introduced, the sub-units can become un-coordinated. For example, the sales department wants to sell 10,000 units but the production department has decided to make only 8,000 units. Certainly, lateral communication is needed.
However, the sub-units should ultimately be acting in the best interests of the organisation overall. Eg head office might have noticed that cash-flow is tight so will require all sub-units not to incur capital expenditure. Therefore, downward communication is needed for both coordination and to ensure everyone is aimed at the strategic objectives of the organisation.
I think the difference stems from the word ‘instrument’.
An instrument can be traded and its value can vary. A bank deposit is not an instrument, but is part of the money market.
There are two things going on here – process costing, and accounting for joint and by-products.
Process costing: the cost per unit is calculated as though everything goes to plan. If input is 100kg at $10/kg and 20% is the normal loss with the lost material selling for $2/kg, then the cost per unit is:
(100 x 10 – 20 x 2)/80 = $12
If there are only 79 units made (an abnormal loss of 1 unit) the cost of that abnormal loss like taking a good unit down from the shelf and scrapping it for $2, so the cost is £12 – $2 – 10.
Joint cost/by products. This is where there is a common process to start with then the initial product (precursor) splits into, say, two in a subsequent process. You need to know how to split the initial, joint costs and feed them into the two resulting products.
So, continuing my example, if 80kg were made as expected at $12 each the total cost of 12 x 80 = 960 has to be split ie apportioned between the two resulting products. You were told in your question do to the split according to the output volumes of the two final products.
I agree with you.
‘Flexing’ is always performed by relation to volume: volume produced for cost variances or volume sold for sales revenue variances.
So if budgeted sales is 1000 units at a budgeted sp of $10 per unit, budgeted revenue is $10,000.
If actual sales are 1100 units at $11 per unit, actual revenue is $12,100 and the total revenue variance is $2,100 F.
The sales price variances is 1100 x (11 – 10) = 1,100F
The sales volume revenue variance is (1100 – 1000) x 10 = 1,000FNote 1000 + 1100 = 2100, the total revenue variance.
To me the phrase “What is the total sales revenue variance comparing actual revenue against the flexed budget” must mean the price variance. In the example, above the actual revenue is 12,100 and the flexed budget revenue is 1,100 x 10 = 11,000 so the difference is the price variance 1,100 F
Generally, sales tax is not recoverable on cars so the sales tax is part of the cost of the asset.
Sales tax is recoverable on vans, so is not part of the cost of the asset?
The 70/30 business/private spilt is irrelevant.
The question should have specified the sales tax rate to be used.
The profit sharing ratio always applies to residual profits ie after salaries and interest on capital. However, salaries, interest on capital and the PSR are all components if the profit sharing agreement. Generally, if there is interest and/or salaries the profit share is likely yo refer to residual profits.
When receipt of the invoice was recorded the entry would have been, Dr Purchases, Cr Accounts payable. If the goods were returned immediately the next entry would be Dr Accounts payable Cr Returns outwards.
However, a cheque was issued before the goods were returned, so Dr Accounts Payable Cr Bank. When the cheque is cancelled and the goods returned, the entry should be Dr Bank, Cr Returns outward.
I think the model answer is incorrect. I think it’s OK to Dr Accounts payable before the credit note is received. That would stop the amount being inadvertently paid.
The problem is that the process is not complete. After writing off the irrecoverable debts, either your way or the answer’s way at some point a new allowance for receivables has to be established. If the firm wanted the balance on that account to be, say, $1000, your method would require a larger journal to bring the balance up to $1,000 with the Dr going to the irrecoverable debts expense.
So, the total amount posted to that account will end up being the same whichever method is used.
It depends on hom much time you have available in the month. Eg, are you working during the day leaving only evenings and weekends for study? If you can study full time you could prepare in a month.
The most important part of your study is question practice. Do not spend too long reading a study text. Instead, practice questions.
Technical articles are not dated so it is not easy to tell which are newest.
Tucker’s Five Step Approach is not specifically mentioned in the syllabus, so is not something that can be specifically asked.
However, if faced with a question involving an ethical conflict you might find it a useful framework to suggest for resolution of the conflict.
You would need to be driven by the information in the scenario. Eg if a course of action is illegal, then end ofnthe conflict! Fairness and moral rectidude might require more discussion.
Any would work, but it depends very much on your learning style.
I would be wary of trying to learn too much detail at the start. Try our notes and lectures
for an overview. It is very important that buy a revision kit to give you lots of question practice. If you do not understand a question and it’s answer then use one of the resources you mention to research it.The BT syllabus is very wide, but not deep.
As you say, at the end of each chapter there is a short test of around 5 questions relating to that chapter.
After you have studied all chapters you can attempt the 50 mark test here:
https://opentuition.com/acca/bt/acca-business-and-technology-bt-revision-mock-exam/
This covers the whole syllabus.
There are control CSFs and building CSFs:
Control = what we have to do in the short-term
Building = what we must do in the long term.Your CSF is fine as a control CSF and should get marks. The innovation csf of the model answer is a building csf.
There can be more csf’s than items mentioned in the mission. Eg, controlling cash flow might be a csf but would not usually be mentioned in the mission statement.
We do not provide practice papers, though there are some questions on our site.
For a large number of questions (essential for your attempt) you will need to buy a revision kit from BPP. There is a 20% discount if ordered through this site.
With regard to C, if the cheque receipts had been recorded the previous month then with respect to those sales invoices, no amount would due be recorded as the debts had been paid:
Dr Cash, Cr Customer’s account in the sales ledger.
If the receipt is now recorded again, their would presumable be a repeat of that entry. Although cash would be too high there would now be an amount showing as owing to the customer so an increase in liabilities and I don’t think that is window-dressing Profit is not affected . Also, C does not contain an implication that this posting is deliberate. It could be a simple error and that would not qualify as fraud. Fraud is defined as something like:
“Fraud” is any activity that relies on deception in order to achieve a gain. Fraud becomes a crime when it is a “knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment.
The current account consists of visible trade (export and import of goods), invisible trade (export and import of services), unilateral transfers, and investment income (income from factors such as land or foreign shares).
The components of the capital account include foreign investment and loans, banking, and other forms of capital, as well as monetary movements or changes in the foreign exchange reserve. The capital account flow reflects factors such as commercial borrowings, banking, investments, loans, and capital.
1 If trading partners buy more from Eland this will increase the current account surplus. Capital account is unaffected.
2 If interest rates rise in Eland this will mean foreign entities will move money to Eland to enjoy higher income. So the capital account moves towards surplus. However, high interest rates reduce consumer expenditure and this will imply fewer goods are imported, The current account also moves towards surplus.
3 No effect on the current account. Capital has been moved into the country through investment so the capital account moves towards surplus.
4 This income being remitted abroad is part of the current account and money leaving will move this towards deficit. No effect on the capital account
Lynn is a director of ABC and on the remuneration committee of DEF + on the risk committee of DEF
Rodney is a director of DEF and on the remuneration committee of ABC + on the audit committee of ABC.Lynn and Rodney will be colleagues on the audit committee of AB and I think it is this, above all that would mean they should not serve on each other’s remuneration committees as there will be a risk of inadequate independence.
Complicated question: don’t worry too much about it.
