Showing posts with label Accounting. Show all posts
Showing posts with label Accounting. Show all posts
Thursday, April 25, 2019
Monday, April 1, 2019
Accounting Journal Entries
Lecture on Journal Entries: This is Part 2 of 2 videos. Please check each of the transactions very carefully. Hopefully this video will be helpful for you. In the second part few more transactions will be uploaded.
Practice: Financial Transactions for January 2019
01/01/19 Mr. Z invested 50,000 in the business
02/01/19 Purchase of factory machinery worth 20,000 by issuing a
Note payable after 3 months
03/01/19 Purchase of inventories for cash 5,000
10/01/19 Sale of finished goods for cash 4,000 and on credit 2,000
13/01/19 Receipt of cash 1,000 on credit sale
8/01/19 Logistics company has submitted a bill worth 250 for shipping expenses
23/01/19 Partial payment of 2,000 for inventory purchased on credit
28/01/19 Wages, utilities, and rent paid in cash 1,000, 400, 600 respectively
30/01/19 Payment of annual insurance premium 10,000
31/01/19 Mr. Z withdrew 1,500 cash from the business for personal use
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Friday, March 29, 2019
Accounting Journal Entries
Lecture on Journal Entries. This is Part 1 of 2 videos. Please check each of the transactions very carefully. Hopefully this video will be helpful for you. In the second part few more transactions will be uploaded.
XYZ Inc.
Practice: Financial Transactions for January 2019
01/01/19 Mr. Z invested 50,000 in the business
02/01/19 Purchase of factory machinery worth 20,000 by issuing a
Note payable after 3 months
03/01/19 Purchase of inventories for cash 5,000
10/01/19 Sale of finished goods for cash 4,000 and on credit 2,000
13/01/19 Receipt of cash 1,000 on credit sale
8/01/19 Logistics company has submitted a bill worth 250 for shipping expenses
23/01/19 Partial payment of 2,000 for inventory purchased on credit
28/01/19 Wages, utilities, and rent paid in cash 1,000, 400, 600 respectively
30/01/19 Payment of annual insurance premium 10,000
31/01/19 Mr. Z withdrew 1,500 cash from the business for personal use
Solutions will be provided in Part 2 of this lecture video.
Find links to the comprehensive problems on Journal
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Sunday, March 3, 2019
Economic Entity Principle or Business Entity Assumption
- Recording of financial transactions of business entity should be kept separate from the owner’s personal financial transaction recording.
- The transaction should not be mixed.
- Asset, Liabilities, Cash transaction, Bank accounts should be kept separate.
- This should be maintained strictly as owner and business entity pays TAX separately.
The economic Entity principle is also known as business entity assumption.
Inventories
IAS 2 – Inventories
- Explain the requirements of how to account for different kind of inventories and which expenses should be recognized.
- • It requires to value the inventory at the lower of cost and estimated selling price less selling costs for each separate item or product (Net realizable value).
- • The cost of inventory includes all the costs of getting the item to the current location
- · It shows methods to value inventory.
- First in, first out (FIFO)
- Weighted average method
- The cost involved in the inventory:
- · Purchase Cost (including taxes)
- · Transport
- · Handling
- · Translation cost (Fixed and variable manufacturing overhead)
Cost should be avoided:
· Administrative overheads unrelated to production
· Selling costs
· Storage costs
· Abnormal waste
· Foreign exchange differences arising directly on the recent acquisition of inventories invoiced in a foreign currency
· Interest cost when inventories are purchased with deferred settlement terms.
Tags: inventories, inventory, IAS 2, IAS-2 inventories,
Ref: www.iasplus.com, www.ifrs.org
Saturday, March 2, 2019
IAS 1 – Presentation of financial statements
· Provides formats for the classification and presentation of financial information.
· How the financial statement should be structured.
Statements
· A statement of profit or loss and other comprehensive income for the period (Known as Income Statement)
· A statement of financial position (which was known as Balance Sheet previously) at the end of the period
· A statement of changes in equity for the period
· A statement of cash flows for the period
· Comprising a summary of significant accounting policies and Notes
· Comparative information prescribed by the standard.
Reference: Ref: www.iasplus.com, www.ifrs.org
This is part of a series of comprehensive accounting tutorial. This video is designed to help beginners in the field of Business Studies and specifically Accounting. After watching this video, the viewer will have comprehensive understanding of the Accounting Equation, how Assets, Liabilities, and Equity moves to Debit and Credit. The viewer will also be able to know about Double Entry System. At the end of the lecture there will be 10 transaction analysis problems and solution.
So keep watching, keep sharing knowledge, and lets together make knowledge free again...
Wednesday, February 27, 2019
Accounting principles
Accrual Principle: It is the theory of recording an accounting transaction in the time period in which they occurred. Not in the previous period or next period. Suppose, you may receive the money in the next period or during the previous period as buying and selling occur a whole year in business. But you have to record the transaction in that period in which your invoiced the customer or you have got an invoice from the supplier. You have to be careful about the dates.
The main reason for doing this is matching the revenue with expenses of that specific period.
For example, You have got a gas bill for the month of June and you have not paid this yet (in the month of July). Say, You are going to pay it in the month of August. Your accounting period is from July to June. You should not recognize this in the month of July or August. It should be recognized in the previous period (in 30'June)
Accrual accounting should apply to revenue, expenses, bad debt, depreciation, Commission and wages.
Know more about Accrual and Cash Basis Accounting Principle and Revenue recognition principle
Tags: Accrual Principle, accrued expenses, revenue recognition principle, accrual accounting examples, accrual booking, accruals accounting meaning, accrual accounting examples
Tuesday, October 30, 2018
Definition: The going concern assumption is the concept which assumes that, the business entity will be running for long time or foreseeable period. Which companies are gonna end soon or close in the near future are not going concern.
