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AAT L3 SYNOPTIC > Formula > Flashcards

Formula Flashcards

1
Q

Contribution per unit

A

Selling price (per unit) - variable cost (per unit)

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2
Q

Cost per unit

A

Total cost / Number of units

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3
Q

High low method

What does it give you? & What do we do with it?

A

(Highest cost – lowest cost) / (Highest output – lowest output)

=Variable cost per unit

We can then use the VC Per unit to calculate FIXED COSTS

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4
Q

Break even – units

A

Total fixed costs/contribution per unit

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5
Q

Breakeven – sales revenue

A

Total fixed costs/contribution per unit X selling price

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6
Q

Margin of safety percentage

A

[current output – breakeven output/current output] X 100

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7
Q

Target profit – units

A

(Total fixed cost + target profit) / Contribution per unit

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8
Q

Contribution to sales ratio

A

Contribution £ /selling price £

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9
Q

Cost per unit of expected output

A

(Input cost – scrap value of normal cost) / expected output

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10
Q

Economic order quantity

A

Square root of (2 x annual demand x order cost) / Annual inventory holding cost for one unit

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11
Q

% difference

A

Difference / gross or retail x 100

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12
Q

Sustainability is

A

Is ability to last

Meeting the needs of the present without compromising the needs of the future

The three elements of sustainable development are plant profit and people

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13
Q

PLCA- which side is purchases on

A

Right side

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14
Q

SLCA which side is sales on

A

The left side

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15
Q

VAT CA which side is the purchases and sales on?

A

Opposites to PLCA and SLCA

Purchases on left
Sales on right

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16
Q

Structure of SOFP

A

NON C ASSETS

CURRENT ASSETS

CURRENT LIABILITIES

(Current assets-current liabilities) = NET CURRENT ASSETS

NON C LIABILITIES

(Non current assets - NET current assets - non current liabilities) = NET ASSETS

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17
Q

If you discover that the client has been money laundering who do you report it to

A

The National crime agency

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18
Q

Mark up profit is calculated as a % of _____

A

Mark up profit is calculated as a percentage of the cost (COS)

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19
Q

Margin profit is calculated as a % of ___________

A

Margin profit is calculated as a percentage of selling price

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20
Q

Margin what is treated as 100%

A

Selling price

21
Q

Mark-up what is treated as 100%

A

Cost (COS)

22
Q

Structure of SOPL

A

Sales rev

Op inv
+Purchases
-Clos inv
= cost of goods sold

(Sales rev-COS) =Gross profit

Add any income

Less any expenses
Total expenses

= Profit/Loss for year

23
Q

Ownership:

Sole trader
Partnership
Limited liability partnership 
Limited company 
Charity
A

Sole trader- sole trader owns
Partnership- partners own
Limited liability partnership - members own (separate legal entity)
Limited company - owned by shareholders (separate legal entity)
Charity - owned by trustee

24
Q

Management:

Sole trader
Partnership
Limited liability partnership 
Limited company 
Charity
A

Sole trader - manages
Partnership - all partners can manage
Limited liability partnership - all members can manage
Limited company - run by directors on behalf of shareholders
Charity - trustee

25
Q

Responsibility for debts:

Sole trader
Partnership
Limited liability partnership 
Limited company 
Charity
A

Sole trader - fully liable
Partnership - fully liable
Limited liability partnership - loose up to investment
Limited company - loose up to investment
Charity - for an unincorporated charity trustees are liable

26
Q

Taxation of profits:

Sole trader
Partnership
Limited liability partnership 
Limited company 
Charity
A

Sole trader - income tax on profits by owner
Partnership - each partner liable for income tax on their share
Limited liability partnership - each member liable for income tax on their share
Limited company - cooperation tax on profits
Charity - exempt on tax if income is used for charity

27
Q

Ownership terminology:

Sole trader
Partnership
Limited liability partnership 
Limited company 
Charity
A 
Sole trader - Capital
Partnership - Capital
Limited liability partnership  - Capital
Limited company - Equity
Charity - Net assets form funds
28
Q

Distributions terminology:

Sole trader
Partnership
Limited liability partnership 
Limited company 
Charity
A 
Sole trader - drawings
Partnership - drawings
Limited liability partnership - drawings
Limited company - dividends
Charity - distributions
29
Q

Accounting regulations:

Sole trader
Partnership
Limited liability partnership 
Limited company 
Charity
A 
Sole trader: 
No regulations 
financial statements a private
Partnership: 
Partnership act 1890
Partnership agreement
Financial statements are Private
Limited liability partnership :
Limited liability partnership act 2000
Limited liability partnership agreement
Financial statements visible on companies house
Limited company : 
Companies act 2006
Financial reporting standards
Financial statements are on companies house
Charity :
Charities act 2011
Charity regulations
Financial statements are available to the public via charity commissions
30
Q

Definition of material mistake

A

When information contained in financial statements is untrue

31
Q

Provide an example of material mistake

A

Where profit is overstated in order to encourage investors to buy a stake in the business

Where assets are overvalued a lender may find that security for a loan is less than expected

Profit is understated and therefore a lower amount of tax is paid to HMRC then should be

Sales turnover is overstated therefore more VAT is paid to HMRC then should be paid

32
Q

Define whistleblowing

A

A person who tells and authority about misconduct of a genuine concern in good faith

33
Q

The definition of bribery

A

Giving or receiving something of value with intention of influencing receipt to do something favourable to the giver of the bribe

34
Q

Bribery:
You can be fined up to
You have a prison sentence up to
It must be over what amount to classify as bribery

A

Define it’s for bribery is unlimited

The maximum penalty in prison is 10 years

It doesn’t have to be over a set amount

35
Q

What is sustainability

A

Sustainability is meeting the needs of the present without compromising the needs for the future

36
Q

Identify responsible long-term management for sustainability

A

Plant profit people

37
Q

What is integrity

A

Being straightforward and honest

38
Q

What is objectivity

A

Being non-biased and levelheaded

39
Q

What is professional competence and due care

A

Professional knowledge and skill to be at level required

Ensure client or employer receives a full professional service

Keep within practice and legal guidelines and legislation

To act in accordance with AAT standards

40
Q

What is confidentiality

A

Respect information

Do not disclose information unless there is a professional right or duty to disclose or proper authority is given to disclose that information

Do not use personal information for your own advantage

41
Q

What is professional behaviour

A

To comply with laws and regulations avoiding bringing profession into dispute

42
Q

Over head absorption rate calculation

A

Budgeted production overhead / budgeted activity levels

43
Q

Prime cost

A

?

44
Q

Full absorption cost

A

?

45
Q

Marginal production cost

A

?

46
Q

Over head absorption rate calculation

A

Budgeted production overhead / budgeted activity levels

47
Q

Prime cost

A

?

48
Q

Full absorption cost

A

?

49
Q

Marginal production cost

A

?

AAT L3 SYNOPTIC (1 decks)

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