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I know basics of both but want to know in context of f8 that why do we need to apply different procedure to both?
Can you explain difference in transaction and balances with examples?
and for example in SOPF do we do procedures for both balance and transactions or only “balance”?
thank u
A balance is the end position. For example, non-current assets cost = $5million.
Transactions are things that happen in the period. For example:
B/f Non-current assets cost = $4.5 million
Disposals = $0.2 million
Addition = 0.7 millionFor SOFP you need to verify: existence, completeness, valuation etc.
For transactions you need to verify: were the assets sold, were others bought, what was the Profit/loss on sale.
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