Theory MC1 Flashcards
Which Section of FRS 102 deals with accounting for leases and hire purchase?
Section 20
Why is depreciation always added back to accounting profit to calculate tax adjusted profit?
because it is capital in nature
when accounting for an operating lease, we must
include rental payments made under the lease in the SCI
when accounting for a finance lease we must
include the amount owed under the lease as a liability in the SFP
Human capital is not included in the SFP due to the concept of
money measurement
according to the relevant section of FRS 102, inventory should always be accounted for at
lower of cost or NRV
when new shares are issued by a company, any amount over and above the par value is credited for to which account
share premium
when a transfer is made from the revaluation reserve to retained earnings, the journal entry is
DR Revaluation Reserve
CR Retained Earnings
which one of the concepts is the basis of the accounting treatment of a finance lease
substance over form
which party claims capital allowances under a finance lease agreement
lessor
when a company issues debentures they will be redeemed at a fixed time in the future. Where debentures are redeemable in 10 years from the SFP date, they are included as
Non current liabilities
modifying a building to install a new item of P&M is disallowed when calculating tax adjusted profit because
it is capital in nature
when a property is revalued upwards in the accounts, an amount is credited to which account
revaluation reserve
