ACA Accounting exam Flashcards
How should an increase in receivables be treated in a cash flow statement?
Bad impact on cash - so put in brackets.
How should an increase in payables be treated in a cash flow statement?
Good impact on cash - no brackets.
How should a decrease in borrowings be treated in a cash flow statement?
Bad impact on cash - so put in brackets.
How should a decrease in inventory be treated in a cash flow statement?
Good impact on cash - no brackets.
How should an increase in provisions be treated in a cash flow statement?
Good impact on cash - no brackets.
How should a decrease in receivables be treated in a cash flow statement?
Good impact on cash - no brackets.
How should a decrease in borrowings be treated in a cash flow statement?
Bad impact on cash - so put in brackets.
What is the calculation for wage expense?
cash paid to employees + PAYE +NI employees + NI employers
What is the calculation for net pay?
gross pay - income tax - NI employers
what is the calculation for wage cost to the business?
gross pay + NI employers
What is the calculation for gross wages?
Net wages + PAYE + NI employees
What is an error of omission?
failing to record a transaction at all
what is an error of principle?
A double entry is made in the correct accounts but the accounting entry breaks the rules of an accounting principle.
what is an error of comission?
An error of commission can occur when an item is entered to the correct type of account but the wrong account. For example is cash received of 3,000 from Customer A is credited to the account of Customer B the correcting entry would be.
What are compensating errors?
errors which are equal and opposite to each other and cancel each other out.
What is a transposition error?
when two digits on an amount are recorded in the wrong way round.
What are the fundemental characteristics in the conceptual framework
Relevance
Faithful representation
What are the enhancing characteristics in the conceptual framework
Comparability
Verifiability
Timeliness
Understandability
What is in the IESBA Code of Ethics
Integrity Objectivity Professional Competence and due care Confidentiality Professional behaviour
What is the straight line method of depreciation calculation
cost of asset - residual value / useful life of the asset
Cost of sales equation
opening inventory + purchase + delivery inwards - closing inventory
What goes into the tax paid t account
b/f income tax payable, income tax,,c/f income tax payable, calculate tax paid.
What goes into the interest paid t account
b/f interest payable, finance costs, c/f interest payable, interest paid.
What elements of financial statements are identified by the conceptual framework
Assets, liabilities, equity, income, expenses, cash flow
