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

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

TQM Chapter- First Intituiton questions

Forums › Ask CIMA Tutor Forums › Ask CIMA P2 Tutor Forums › TQM Chapter- First Intituiton questions

  • This topic has 3 replies, 2 voices, and was last updated 8 years ago by Cath.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • December 26, 2016 at 12:49 pm #364474
    abz12
    Member
    • Topics: 46
    • Replies: 44
    • ☆☆

    Hi Cath.

    Hope you had a nice xmas.

    Question:

    A company operates a JIT Purchasing system and production system and uses backflash accounting systems with a single trigger point at the point of sale. A summary of the transactions that took place in june (valued at cost)

    Conversion cost incurred 890,000
    finished goods purchased 1,795,000
    finished goods sold 1,700,000
    Conversion cost allocated 840,000

    two items debited to the cost of goods sold account in June would be:

    1) 890,000 and 95,000
    2)1,700,000 and 50,000
    3)1,700,000 and 95,000
    4) 1,795,000 and 50,000

    Cath- what is backflash accounting and how would one tackle this questions.

    thanks

    December 29, 2016 at 6:05 pm #364641
    Cath
    Participant
    • Topics: 0
    • Replies: 448
    • ☆☆☆

    Hi,

    Thanks for your message. Please see my previous post for a quick description of Backflush costing and its place on the P2 syllabus.

    Link here: https://opentuition.com/topic/backflush-accounting/

    The only bit to add to the linked description is the term trigger point – this is the point when the journal is posted to flush the costs back onto the product. There can be more than one trigger point depending on the company’s preference ( e.g. the manufacture of finished goods, the point of sale etc).

    If there is only one trigger point here -then only one journal will be posted which needs to correctly reflect cost of sales:

    Items debited to Cost of Goods Sold account will be:
    Finished goods sold £1,700,000
    Difference between conversion costs incurred and conversion costs allocated,
    that is, £890,000 – £840,000 = £50,000

    I will enquire directly with CIMA on the likelihood of Backflush accounting in the P2 exam – and will update our Open Tuition notes it is confirm that this topic is directly examinable on this paper.

    Kindest Regards,
    Cath

    January 1, 2017 at 2:20 pm #364758
    abz12
    Member
    • Topics: 46
    • Replies: 44
    • ☆☆

    thank you cath.

    you explained it very well. Please do let me know if it is examinable. 😉

    January 1, 2017 at 6:37 pm #364792
    Cath
    Participant
    • Topics: 0
    • Replies: 448
    • ☆☆☆

    Thank you – that’s kind of you to say. Yes I will do 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

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

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

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

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • mrjonbain on ACCA BT Chapter 6 – Some legal obligations – Questions
  • Ken Garrett on ACCA BT Chapter 6 – Some legal obligations – Questions
  • Ken Garrett on The nature and structure of organisations – ACCA Paper BT
  • OmarAlbeity on ACCA BT Chapter 6 – Some legal obligations – Questions
  • Salimbek909 on The nature and structure of organisations – ACCA Paper BT

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in