Practical Accounting
In practice for financial accounting, we ever knew cost of goods sold ( for merchandising company) or cost of products sold ( for manufacturing company) that are shown in income statement, but we rare saw cost of service ( for service company) in income statement. Below are forms of income statement for each company: Example 1-Income Statement for Merchandising Company
Continue reading Chart of Account for Merchandising or Import and Export Company Chart of Account is important process to record financial transactions and show financial statements. Below are charts of account for merchandising or import and export company. Chart of Account for Income Statement INCOME Sale Income Sale-Cars Sale- Computers Sale –Other items Sale Discount COST OF GOODS SOLD COGS -Cars COGS
Continue reading Which entities should use IFRS for SMEs | What is an SME ? Note: Public Accountability Companies use full IFRS while SME companies use partial IFRS or IFRS for SME. What is an SME? There is no universally agreed definition of an SME( small- or medium-sized enterprise). No single definition can capture all the dimensions of a small- or medium-sized
Continue reading IFRS | IAS not be relevant for SME financial statements In July 2009, the International Accounting Standards Board (IASB) issued the IFRS for Small and Medium-sized Entities (IFRS for SMEs). This standard provides an alternative framework that can be applied by eligible entities in place of the full set of International Financial Reporting Standards (IFRSs). The IFRS ( International Financial
Continue reading How to Prepare Master Budget ( Budgeting) There are 10 steps to prepare master budget as follows: 1.Sale budget and schedule expected cash collections 2.Production budget 3.Direct materials budget and expected cash disbursements 4.Direct labor budget 5.Manufacturing overhead budget 6.Ending finished goods inventory budget 7.Selling and admin. budget 8.Cash budget 9.Budgeted income statement 10.Budgeted balance sheet Example fore preparing master
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PRACTICAL CHART OF ACCOUNT, FINANCIAL STATEMENT FORMAT AND ACCOUNTING POLICY For Questions: Question 1 Company purchases car (fixed asset) of 20,000 on 23 November 2016. Required: You are required to make accounting policy for depreciation time of this transaction Question 2 Company bought a photocopy machine on 1 December 2016; company is required to pay installment for $300 each month
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PRACTICAL CHART OF ACCOUNT, FINANCIAL STATEMENT FORMAT AND ACCOUNTING POLICY Leaning Objectives I. Introduction II. Chart of Account III. Financial statement Format IV. Accounting Policy ……………………………………….. I. Introduction In practice, financial statement format, chart of account for financial statements and accounting policy are different from companies to other companies, accounting standards to other accounting standards and countries to other countries.
Continue reading PRACTICAL ERROR OR FRAUD ANALYSIS FOR FINANCIAL STATEMENTS Learning Objectives: I. Comparative Figures from Prior Periods II. Unusual change in amount III. New Account Types or Transactions IV. Relevant Ratios Analysis V. Analytical Procedures ……………………………………………….. In practice, draft financial statements are submitted by subordinates to their managers, these draft financial statements may be checked the following steps to identify errors or
Continue reading Accounting Differences between Public Accountability Company & SME (Small and Medium Entity) In July 2009, the International Accounting Standards Board (IASB) issued the IFRS (International Financial Reporting Standards) for Small and Medium-Sized Entities. There is no universally agreed definition of SME (small and Medium Entities). No single definition can capture all the dimensions of a small or medium-sized business, or
Continue reading HOW TO PREPARE PRACTICAL FINANCIAL STATEMENTS To prepare practical financial statements, accountant should understand the following issues: Make chart of account- what kind of business that company runs. Material or immaterial types of transactions or events in company. Accounting policy for company Which transaction use accrual or cash basis In practice, financial statement formats, chart of account for financial statements
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