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Total receipts adverse variance

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Total receipts adverse variance

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by John Moffat.
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  • October 31, 2016 at 5:04 pm #346875
    decent0013
    Member
    • Topics: 10
    • Replies: 13
    • ☆

    In below table, the question was to specify correct variance, whether adverse (A) or favourable (F). Below are the correct answers. Now my question is (which i don’t understand) why is total receipts variance adverse? compare to budgeted amount, actual receipt is more, as a result of more credit sale than budgeted, which should be favourable since we are having more receipts?

    If you could please clarify. Thanks

    Budgeted $ Actual $ Variance Value $ A/F
    Receipts 46300 51800 5500 A
    Payments 43000 49300 6300 A
    Net Cash flow 3300 2500 800 A

    November 1, 2016 at 6:04 am #346908
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    The receipts variance is not adverse – I can only assume that there is a typing error in your book.

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