• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

PQ Awards Nominations

Please help us to win one of the PQ Magazine awards and send in the voting form >>
You can nominate us in any or all of the following categories: Online College of the Year, Study Resource of the Year, Private Sector Lecturer of the Year, and Accountancy Personality of the Year.

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

cut off

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › cut off

  • This topic has 2 replies, 2 voices, and was last updated 7 years ago by jingdong.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • October 19, 2015 at 11:24 am #277459
    jingdong
    Participant
    • Topics: 82
    • Replies: 102
    • ☆☆

    Dear Tutor, would you please help me about this question?
    …..date of…….GRN……..Supply’s…….Invoice… On purchase ledger…In purchase accruals
    …..GRN………Number…Invoice No….value………before year end…………at year end
    (1) 28.10.x6….1324………6254…………4642………..yes…………………………..no
    (2)29.10.x6…..1327………1372…………5164………..yes…………………………..yes
    (3)30.10.x6……1331……..9515………..7893…………no…………………………….yes
    (4)31.10.x6……1335……..4763………..9624…………no…………………………….no
    (5)1.11.x6………1340…….5624………..8243…………yes……………………………no
    (6)4.11.x6………1345…….9695………..6389…………no……………………………..yes
    (7)5.11.x6………1350…….2865………..7124…………no………………………………no
    you audit procedures on purchases cut-ff, which started from the goods received note(GRN),have revealed the above results.
    Assume that goods received before the year-end are in inventories at the year-end, and goods received after the year-end are not in inventories at the year-end.
    A purchase accrual is included in payables at the year-end for goods received before the year-end when the purchase invoice has not been posted to the trade payables ledger before the year-end.
    Identify the cut-off errors and produce a schedule of the adjustments which should be made to the reported profit, purchases and payable in the financial statements to correct the errors.

    October 19, 2015 at 4:17 pm #277573
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10199
    • ☆☆☆☆☆

    In purchases, if an item is in closing inventory you must also record that it has been purchased. To introduce the item into purchases, the normal double entry is:

    Dr Pruchases Cr Payables (purchase ledger).

    Sometimes the item might have arrived and be in closing inventory, yet the invoice is not received until after year end. Then the double entry would be:

    Dr Purchases Cr Purchase accruals.

    When the invoice arrives the amount is moved form accruals to the payables ledger.

    In the question above, if the GRN is dated before year end (ie 31/10 or earlier) the assumption is that the item has beenr eceived before year end and is in closing inventory. If the GRN is dated after year end the item will not be in closing inventory. Therefore treatment of the items is:

    1 In inventory (GRN 28/10); is in payables and purchases. So, OK
    2 In inventory; is in payables and purchases but they have also accrued. So, error
    3 In inventory; not in payables ledger, but they have made an accrual. So, OK
    4 In inventory; not in payables or accruals, but should be in accruals. So, error.
    5 Not in inventory, but they have put it into purchases and payables. So, error.
    6 Not in inventory, but they have put it into purchases and accruals. So, error.
    7 Not in inventory and it is not in purchases, payables or accruals. So, OK.

    October 19, 2015 at 10:36 pm #277683
    jingdong
    Participant
    • Topics: 82
    • Replies: 102
    • ☆☆

    thanks a lot for your help
    many thanks

  • Author
    Posts
Viewing 3 posts - 1 through 3 (of 3 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • chimporera on CIMA P2 Chapter 11 Test
  • chimporera on CIMA P2 Chapter 13 Test
  • Chong on Conceptual Framework – ACCA SBR lecture
  • mariyaaa on Foreign exchange risk management (1) Part 4 – ACCA (AFM) lectures
  • John Moffat on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy