Topic 2 - Incomplete records

Question 1

Statement of Affairs (as at)

Answer 1

ASSETS X
LIABILITIES X
NET ASSET XX

Question 2

Advantages and Disadvantages to Comparison of Capital

Answer 2

+ Quick and easy
+ Gives a specific answer to a specific question

• Provides no details to explain how the profit or loss has occurred

Question 3

Trade Payables/ Trade Receivables Control Account also include:

Answer 3

TR:
Bad debts
Discount allowed

TP:
Discount received

Question 4

Key information about Overhead Control Accounts

Answer 4

B/D:
If prepaid DR
If accrued CR

Question 5

Key information about Depreciation and Disposals

Answer 5

If acquisition or disposal occurred it would show in BANK

No acquisition or disposal means that change in asset value is because of depreciation

Question 6

Profit Mark-up formula

Answer 6

Profit/Cost (x100)
Cost + Profit = Revenue
100% + 25% = 125%

Question 7

Profit margin formula

Answer 7

Profit/Revenue (x100)
Cost + Profit = Revenue
75% + 25% = 100%

Question 8

The losses in the final accounts

Answer 8

If the loss is UNINSURED
IS= Overhead cost of “Stolen Inventory” & cost in cost of sales
BS= Show actual closing inventory

If the loss is INSURED
IS= Show as Other Income as “Compensation”
BS= Show actual closing inventory and “Insurance claim”