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I got some answers here:
https://www.book-keepers.org.uk/t53583057/interest-receivable-means/Remember REACT for accruals and prepayments.
R…..Reverse
E……Enter
A……Adjust
C.T. ..Close T-accountsIn detail..
For prepayments each year we go through 4 steps:
1 reverse prepayments brought forward…..dr expense cr prepayments
2 enter payments during period………………dr expense cr cash
3 enter any prepayments at the end of the period..
dr prepayments (and balance goes to SFP) cr expense
4 close of accounts, transfer to IS……………dr IS cr Expenseand same 4 steps for Accruals:
dr accruals cr expense
dr expense cr cash
dr expense cr accruals (goes to SFP)
dr IS cr expenseKeep in mind that when making entries for allowance, it is only when the allowance is increased or decreased that the double entry is made.
I think this is the key that makes it all work out but I’m revising this now so maybe can give better answer a bit later.
I think this is for when the customer overpays. Not when they return goods. And when the mistake/overpayment occurs after the “Dr Rec Cr Sales” entries have been made. So when the following entry is made:
Dr Cash 100
Cr Receivables 100Lets say the customer has overpaid by 90, they should have paid 10.
So we refund them 90 and make the entry:
Dr Receivables 90
Cr Cash 90As for it not making sense because the receivables asset is increasing, (my mind gets stuck like this too on dr/cr logics ^^) remember that when we receive cash for credit sales then receivables decreases (and cash asset increases), but if the cash we received was a mistake, then when we correct this, receivables will increase back to its former state because we have received less cash so are still owed what we were owed before.
Hope this is right!
Replacement cost is irrelevant when valuing stock, so no we don’t take it into account
Yes thanks.
So if a sales return t account is used its simply:
dr returns in
cr cash/receivablesAnd the balance of this account is deducted form the Sales balance to get the revenue figure?
well the link i gave is the lectures that go with those.
the 3 go together. the course notes, the revsion notes, and those lectures.
at least that is how it seems to me on this page: https://opentuition.com/acca/f3/when it says “To fully benefit from these notes please access our F3 free lectures.” it means those lectures i originally linked to are for both the course AND revision notes.
I am becoming your personal tutor lol
..I must be lonely from all the self studyFirstly know what the correct entries should have been:
Dr DA Cr receivables
and
Dr Payables
Cr DRThen make t accounts of the wrong entries, and you will see that a dr of 880 to Discounts allowed and a dr of 880 to Discounts Received is needed to correct the accounts to what they should be.
That also means the suspense account entry must have been 880 x 2 = 1760 dr to compensate, so this is reversed after the corrections are made.
so
Dr DA 880
Dr DR 880
Cr Suspense 1760Answer B
You can ignore depreciation in this question simply because it has nothing to do with actual cash in and out. And you have the original cost values. Accumulated depreciation is not a cash expense, no cash is moving out of your bank account. Use this figure only if you have to to calculate original costs (afaik).
Remember when you are calculating cash flows you are usually working from the final figures given in the income statement and balance sheet. Sometimes these give you too much information, so you need to know what to ignore, or how to work backwards to get a cashflow figure.
Like when you calculate cash generated from operations using the indirect method, you start with the net profit figure from the income statement and then add depreciation back on to this.. Why? because when considering profit for the income statement we take depreciation into account so depreciation decreases profit, but we haven’t acutally lost any cash, so for cashflow purposes we add it back on.
Cash flow chapter is not that hard, but it is the time to go back and revise and make sure you know the previous topics (like depreciation) that come up.
they go with these notes: https://opentuition.com/acca/f3/acca-f3-notes/
If these are not what you mean link me what ones you do mean please.
If you have original costs then ignore depreciation and net book value.
Firstly add back on the orignal cost of any sold PPE. Which was 90,000.
So total cost of PPE went from 600,000 to 750,000 + 90,000
So 240,000 must have been purchased, so this is outflow.
Inflow is simply the proceeds from sales = 30,000
so I get Answer C as well, = 210,000 outflow.I get +990,000 too.
Check you copied the question correctly, otherwise it may be a printing error since the question is straightforward, unless we are both a making funny mistake..you dont need to give your email, and best not to write it publicly on forums becasue it will be used be people to spam you..
the lectures are here:
https://opentuition.com/acca/f3/acca-f3-lectures/I mean the sales revenue figure on the income statemtent, where does this come from?
I think now it is simply taken form the sales t account.
And does not include the deduction of bad debts.
But is adjusted by deducting sales returns.
Is this correct?Your welcome, it helps me revise :p
I worked through the kaplan F3 text which went ok, but then did the kaplan exam kit and found that the kaplan text didnt prepare me properly and kept getting stuck on questions, so I started working through the opentuition free lectrue videos and they are ideal. With hindsight if you have zero bookkeeping or accounting knowledge to begin wiht then the way to go is watch the videos first then use the kaplan study text to fill in any gaps afterwards, then work though an exam kit.
The opentuiton lecture for for this chapter is very useful.
https://opentuition.com/acca/f3/acca-f3-lectures/We do take 50% of 6500 for the specific allowance. To clacluate the general allwoance we disregard 100% of the 6500, because that debt is dealt wiht by the specific allowance.
Think of it this way:
76350 is the total debts owed to us.
Break this down into the 6500 from jon and the remaining debts is then 69850.
For the 6500 debts we have to make a specifc allowance of 50% which is 3250. In other words, what the question is saying is that we doubt that jon will pay 50% of the money he owes us so we have to make specific allowance for that.
Then we also have to make a general allowance for the remaining debts, so 69850 x 2%.I havent taken the exam yet for F3 but have finished studying it pretty much.
If you are still stuck let me know where and I will go over it in more detail.
Make the t accounts yourself for allowance and IDE and you should see how it works out.
1. For the recovered write off. dr cash cr IDE 7750
2. Deal with the specific allowance. = 3250
3. Calculate total of remaining receivables (this is where I went wrong first time round, by only deducting 3250 from 76350, but it says the remaining debts so the whole 6500 should not be included in calculating the general allowance)
= 76350-6500
4. Calculate the general allowance for the remaining receivables = (76350-6500) x 0.02 = 1397
5. So total allowance = 3250 + 1397 = 4647This goes to Allowance t acc and needs a dr of 603 to make the adjustment so: dr allowance 603 cr IDE 603
So IDE has 2650 dr and 7750 + 603 cr, so to close and balance this account we dr To IS 5703.
This would be a credit on the Income Statement, and is seen as a negative expense.thanks, I just ordered it because someone else said they rotate the old questions each year plus add a few new ones..
so the 252 practise questions in section 1 are the same in your books?
The kaplan books at least could be written on half the number of pages, the text is big and there is loads of blank space on every page.
Can anyone link the part of acca website where it states you have to take f4 before f7-9 to be able to get the degree?
Seems like its f4 if you like theory and no calculations, and F5 if you like numbers.