Forum Replies Created
- Posts
Sir how do i deal with is question which opposite? How do we deal with the other payables/ Accrual. Does it affect anything hence just like the prepayment did.
Summary reports for the month of October 20X3 from Ghaint Co’s general ledger are as follows:
Administrative expenses general ledger account
Description Dr $ Description Cr $
Opening amount 650
Trade payables 6,250
Other payables 150 Profit or loss 7,050
Total 7,050 Total 7,050
Other income general ledger account
Desription Dr $ Description Cr $
Opening amount 3,000
Bank 9,000
Profit or loss 12,000Total 12,000
Total
12,000which of the following shows the correct amounts to be presented in the financial statements for the year ended 31 October 20X3?
A. Administrative expenses $7,050
Other income $12,000
Accruals $150
B. Administrative expenses $7,050
Other income $12,000
Accruals $6,250
C. Administrative expenses $6,400
Other income $9,000
Accruals $6,250
D. Administrative expenses $6,400
Other income $9,000
Accruals $150
when they ask u to find the profit of marginal and you are given absorption profit or the other way round i use this formular
F.OAR = marginal profit – absorption profit / opening stock – closing stock
sometimes they give u production and sales instead of opening stock and closing stock
just replace with them
F.OAR = marginal profit – absorption profit / sales – production
When they ask u for profit difference, you can calculate both profits and find the difference or
you can justprofit difference = change in inventory multiply by F.OAR
This is what i use i dont know if it will be helpful for you.
Also note ; increase in stock level, profit from absorption increases
decrease in stock level, profit from marginal increases