TERMS

Question 1

WHAT IS AN ACCURALS?

Answer 1

IS A LEGAL OBLIGATION / LIABILITY THAT IS INCURRED IN THE CURRENT ACCOUNTING PERIOD WITH HIGH LEVEL OF CERTAINTY AND PAID CERTAINTY IN THE IMMEDIATE COMING ACCOUNTING PERIOD .

Question 2

WHAT ARE PROVISIONS?

Answer 2

IS AN OBLIGATION EITHER LEGAK OR CONSTRUCTIVE THAT IS INCURRED WITH CERTAINITY BUT THE VALUE OR ESTIMATE REQUIRED A PROFESSION THAT FIELD TO ASCERTAIN . THE TIMING OF PAYMENT IS NOT OFTEN.

Question 3

WHAT IS A CONTINENCY?

Answer 3

IS A POSSIBLE LIABILTY THAT MAY OCCUR BUT REQUIRES A THIRD PARTY CONFIRMATION AND VALUE CANNOT BE ESTIMATE BY A PROFESSIONAL BUT RELY ON THAT THIRD PARTY.

Question 4

WHAT IS THE EFFECT ON PROFIT WITH OVER PROVISON ?

Answer 4

PROFIT IS UNDERSTATED.

Question 5

WHAT WILL HAPPEN WHEN THE OVER PROVISION IS CLEARED?

Answer 5

WHEN CLEARED WILL REDUCE THE NEXT YEAR EXPENSE VALUE.

Question 6

WHAT ARE ADJUSTING ENTRIES ?

Answer 6

TRANSACTIONS THAT OCCUR PRIOR TO THE END OF ACCOUNTING PERIOD BUT EVIDENCE IS NOW ARISING.

Question 7

NON- ADJUSTING EVENTS

Answer 7

TRANSACTION/EVENTS THAT OCCUR DURING THE POST BALANCE SHEET PERIOD BUT IS SUCH OF MATERIAL SIGNIFICANT THAT IT REQUIRES A DISCLOSURE NOTE TO PREVIOUS YR A/C.