[Muhammadi]

Thanks sir!

This is question 6.35 of Ma1 Revision Kit. I checked the answer yet I did not understand.

Correct me if I am wrong:

Total Labour cost means Direct Labour cost + Indirect Labour cost. So, in this case, $2000 is Direct Labour Cost( Direct workers Basic pay) and $500 is Indirect Labour cost(Direct workers Idle time hours) and 2500 is total labour cost. From your explanation , now I know why the correct answer is 2500.

But I still don’t know why we divide 200 by 80%?
I have problem in calculation.

[Muhammadi]

Sorry sir. The sales were 325010. Ok! you mean B is right and you also mean that they want net result in this question which is net debit here and therefore the closing balance is Dr 175535.OK How do I know that they want net result in a question? Because If they didn’t want net result, then closing balance would be on the credit side.

[Muhammadi]

Yes sir. I watched your video on balancing accounts. I know balance carried down is carried forward to the opposite side of the T account, but my confusion here is that what do they mean by the closing balance? Does closing balance mean the opening balance of next year(balance b/f)?

I also answered the following question incorrectly because of this confusion:

An accountant has inserted all the relevant figures into the trade receivables account, but has not yet balanced off the account.

TRADE RECEIVABLES ACCOUNT

Balance b/d 100,750 Cash at bank 250225
Sales 325

Assuming there are no other entries to be made ,other than to balance off the account, what is the closing balance on the trade receivables account?

A. $425,760 DR
B. $175,535 DR
C. $425760 CR
D. $175,535 CR

My answer was D ,but book says B is right. Why? My answer is correct in amount ,but wrong in side. In this question, balance c/d is on the credit side. Right?? So, that should be the closing balance, because closing balance and balance c/d are equal. So the closing balance or balance c/d should be on the credit side,not debit.

Need help!!!

[Muhammadi]

Ok! I will ask in ask the tutor form from now on.
Why does 2720 appear on the credit side when the question clearly says that the closing balance is on the debit side? I learned in FA1 that Closing balance , balance carried down and balance carried forward are all equal.

Doesn’t closing debit balance mean that the closing balance is on the debit side?

I put the closing balance on the debit side and the answer was different.

[Muhammadi]

Hi!
Can anyone hear me?
Is anyone there?
Hello!
This seems scary to me.
Where are you?

[Muhammadi]

I do follow your lectures sir. They are quite helpful, but this is the only question I can’t tackle in sales tax. I solved all the other questions of sales tax correctly. Can you help me with this one? I have found the answer as well,but it does not match to the book answer. Can you give me your answer for this question? I want to confirm that my answer is right. I reckon the book is wrong.

[Muhammadi]

I totally got what you said.

Thanks for your help!

[Muhammadi]

Hello,

I wanted to take RI exam from home.The problem is when I clicked on ( add an exam) and selected (Remote) option, I couldn’t find FA1, FA2, MA1, FFA basic papers’ exams. There were only 3 exams (FAU, FTX, FFM). I wanted to take FA2 exam, but there was no FA2 exam in remote options.

Can anyone help?

Thanks

[Muhammadi]

Can I get an answer?

[Muhammadi]

Thanks Sir Kim Smith and Mr.Jonbain
for helping me stay positive and motivated. I thank you for your sympathy and affection.

I wish both of you happiness and prosperity.

Yes Mr. jonbain, it really is astounding.

I am still trying to leave the country.

[Muhammadi]

Thank you so much!

Sadly, There isn’t a reliable internet in Afghanistan. I, including majority students, may not be able to take invigilated exam. The only way is to leave Afg. I have been trying to get passport for so many days, but I can’t. There are a lot of people trying to get passports and Taliban give passports only to serious patients and previously registered Applicants. They don’t give passports to new applicants.

I can neither study here nor leave this country coz of Passports.

Don’t know what to do. I have lost my way.

[Muhammadi]

Thank you Mr.Jonbain!

[Muhammadi]

Ok I See!

Thanks for invaluable advise.

From now on, I may ask questions in both FA2 and FA Forums as I will take both FA2 and FA exams after 3 months.

Happy to be a part of Opentuition Family!

How good your services are!

[Muhammadi]

Thank you Sir!

Your reply means a lot.

I reply late cause we have power just at night. There is no power during the day. No power, No wifi and so No internet.

With your support and Opentuition, my concept of lessons is very clear. I got 94% in FA1. I was about to take FA2, but our country faced total chaos and disorder. I was confident enough that I could get more than 90% in FA2 as well.
I really really appreciate the efforts OpenTuition put through to help students pass their exam papers.

I intend to study FA/F3 in these 3 months, but then I think If I start studying FA/F3, I will forget FA2. I can’t take FA2 exam until Dec. I want your opinion.

1. What should I do in these 3 months?

2. Can ACCA help me get out of this country permanently If I strive and become affiliate or member?
Afghanistan is no longer a place for living, Self-improvement and education.

3. I am a part-time English teacher. I save money for tuition Fee of advanced papers. I save money for exam fee. I save money for annual account Fee. I Put mental, physical and financial efforts to study this Field (ACCA) . Does it worth it? Will I get a good job with a handsome salary in the future? I am very hopeless now at this turbulent time.

Everything is shut in Kabul now.

It is worse than Quarantine.

I emailed to ACCA as you said.

Thanks!

[Muhammadi]

You mean:

If invoice is received sooner in next year, then the issue of financial statements can be suspended until the invoice is received and the accurate amount for accruals is shown.

Or

if the invoice is received in the next year, but too late. Then financial statements will be issued and estimate will be made for accrual.

[Muhammadi]

Ok!
Got it.

In practice, do we always make estimations when we try to find the amount of accrued expenses?

[Muhammadi]

Ok.
I see.

1. But why is the estimate for accrual
made based upon last invoice?

We could have received several invoices
during the year. Why isn’t the estimate
made based upon those invoices?

2. Do we always make estimations when we try to find the amount of accrued expenses?

[Muhammadi]

Thank you!

[Muhammadi]

Thank you!

[Muhammadi]

This is the complete question :

While carrying out the reconciliation of the balance on the payables control account in the general ledger with the list of balances from the payables ledger,
Celine discovered the following errors:

(i) A payment of 1700 in full settlement of a balance of 1714 was correctly recorded on the supplier’s account but only 1700 was posted to the control account.

(ii) The total of the purchase day book was understated by 900.

(iii) A supplier’s credit note was incorrectly recorded the day book as invoice.

(iv) No entries were made to record an arrangement to offset a balance of $620 against a balance in the receivables ledger.

Which of the above require a correcting entry in the general ledger?

A. (i) and (ii) only

B. (ii) and (iii) only

C. (iii) and (iv) only

D. (i), (ii), (iii) and (iv)

Now, isn’t the first part (i) wrong?

Thanks Sir!

[Muhammadi]

If the amount of payment is 1700 and the posting to the control account is 1700, then there is no error.

[Muhammadi]

Hmm!
I see!
I was about to cry when I saw the question.

I didn’t believe that they will make such a huge mistake.

So surprising!

Thanks Sir!

You are always there to help us.

[Muhammadi]

Thanks Sir!

[Muhammadi]

Got it!
Thanks!

It it OK not to maintain drawings account and just simply DR and CR capital account for receipts and payments?

[Muhammadi]

Ok!
If the owner invests money in the business. Then, what would be the appropriate entry to make?

Dr Bank
Cr Capital

Or

Dr Bank
Cr Drawings

As You said both are linked. If the capital is increased or the drawings are deducted with the amount of receipts,there is no problem.

It’s like:

Capital (4) less drawings (1)=3

Receipts = 1

Capital (4+1) less drawings(1)= 4

Or

Capital (4) less drawings (1 minus 1)= 4

The result is same for both.

Either the capital should be increased with the amount of receipts or drawings should be reduced with the amount of receipts. It does not matter.

Am I right?

[Author]

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