Accounting 2.0 Notes

Question 1

name all of the 7 accounting concepts and define

Answer 1

1. entity concept
2. going concern
3. accounting period concept
4. money reuirement concept
5. matching concept
6. accrual basis
7. dual aspect:pp,

Question 2

accounting conventions

Answer 2

disclosure

conservatism

consistency

materiarity

Question 3

types of ledgers

Answer 3

general

sales

purchases

Question 4

types of accounts

Answer 4

personal account

real tangible

nominal

Question 5

financial statements ias?

Answer 5

1.10 (4 types)

Question 6

5 important elements and define

Answer 6

income

expense

asset: resource controll

liability: obligation

capital: residual interest

Question 7

INTERNATIONAL FINANCIAL REPORTING STANDARD USED FOR; 5

Answer 7

NATIONAL REquirement - direct borrowing

basis of national requirement

international benchmark

as an international benchmark regularity authorities

companies themselves

Question 8

pillars that support dual aspect concept (7)

Answer 8

pp

credit

arithmetic

money
commerce

capital

writing

Question 9

accounting cycle (5)

Answer 9

source doc (credit sale = ci , sr,,, cn
credit purchase - good received not ,,, supplier invoice ,, purchase receipt, debit note

book of orignal entityt (3)

ledgers (3)

trial balance

financial statements

Question 10

bad debts reason

Answer 10

1. dead
2. bankrupt
3. insane

Question 11

determination if the amount of B and d of debts policies

(Acd)

Answer 11

debt ageing analysis

% of credit sales

% if debt outstanding

Question 12

bank reconciliation 5

6 timing differences

Answer 12

Bank sends the clients to account in the bank statement

Shows money credits and debits (out and in money(

Business record bank transactions in the bank column

If the difference is due to an error in bank or business or time-lag

A BR reconciles these differences

Question 13

accounting entries for advocates’ accounts (6) 2 odd

Answer 13

1. to record funds received on behalf of the client
   dr- cash book - client column
   cr- client a/c - client colum
2. to record payment for client with sufficient funds
   dr- client account - client column
   cr - cashbook - client account
3. to record payment for client with insufficient funds
   dr- client account - office column
   cr- cashbook - office column
4. to record fees charged to the client
   dr- client account - office column
   cr- fees income
5. to record cash received from the client e.g fees charged and disbursements
   Dr- cashbooks - office column
   cr- client account - office column
6. to record office expenses
   dr- expenses
   cr. cashbook - office column

Question 14

client account

Answer 14

means a current or deposit accoun at an insitution in the name of the advocate but in the title of which either the word client or trust appears

Question 15

clients money - def

type of money -2 (rr)

does not include - 2 (aa)

Answer 15

money held or recived by an adviocated on behlf of the client as an advocate, bailee, trutee or any other capacity

type of money:
1. money helf or reived by advicate by deposit against fee to be earned or disbursmenet to be incurred
2. money held or recived as or on account of a trustee, whther r not the advicate is sole trustee or trustee with others

does not include:
money which the advicate is th eonly one entitled to parners in firm

2. money held or recived by an advcate in payment of or on account of an agreed fee in any matter

Question 16

circumstances where advocate may pay money into client account (rule 5)
Tmcs

Answer 16

1. trust money
2. such money beloning tot he advocate as may be necessary for the prupose of mainiting the account
3. money to replace any sum drawn from the account in contrvention of these rules
4. a cheque or draft recived by the advocate which under rule 6 he is entitled to split butwhich he does not split

Question 17

advocate need not pay into an account client’s money held or received: (r.8) 3 of them

Answer 17

1. recoved in cash and is without delay paid in cash in the ordinary court of business to the client or to a third party
2. he pays in, without delat, to the credit or a seperate account opened or to be opened in the name of a client, trust, or estate or of some person nominated by the client
3. is recived by him in the form of a chequre or draft and is, without delay endorsed over and delivered in the ordinary courtse of business to the client or to a 3rd paty for or on behlf of or to the used of the client and is not cashed or passed through a bank account by the advocate