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Please explain this to me!

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Please explain this to me!

  • This topic has 3 replies, 2 voices, and was last updated 4 years ago by P2-D2.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • August 9, 2020 at 7:29 pm #579766
    AshleyMarc1997
    Member
    • Topics: 48
    • Replies: 24
    • ☆☆

    I’m having problem with the Chapter9 (eg 1) prior period error Q [pg 40). In this Q it states that $500,000 in excess of their recoverable amount BUT why it is has to do with the COST of year 2008 as it was added back when restated?

    Can anybody tell me why?

    August 15, 2020 at 9:53 am #580642
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7149
    • ☆☆☆☆☆

    Hi,

    It is because it says that the amounts were included in the December 2008 accounts. To get them correct we will need to adjust it in that year first.

    Thanks

    August 25, 2020 at 2:12 pm #581927
    AshleyMarc1997
    Member
    • Topics: 48
    • Replies: 24
    • ☆☆

    Thanks for the reply.

    Please tell me this since the NCA of $500,000 was found in 2009 that was a previous year error included in the records of 2008, therefore the $500,000 needs to be added back in 2008 cost of sales but why the $500,000 was not deducted from the 2009 cost of sales as it was from the error that happened in 2008 and was already in the 2009 cost of sales.

    This is confusing me!
    Hope that you’ll clear this up!

    August 25, 2020 at 4:47 pm #581972
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7149
    • ☆☆☆☆☆

    Hi,

    If the error relates to 2008 it will have been made in that year and so we make the correction in that year. There would be no need to adjust the figures in the current year apart from the adjustment to opening retained earnings in the SOCIE.

    Thanks

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    Posts
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