Your questions answered.

[TyErd]

I'll just give you all the questions and answers that I have compiled from the cambridge textbook.

[TyErd]

I know that its a bit too late but hopefully you guys can use the remaining 5-7 hours or so just going through them as a revision type exercise. You probably wont even need it haha

[Aqualim]

explain why the balance sheet is titled 'as at'

This is because the balance sheet is prepared at a particular date if the business were to prepare the balance sheet a day later the figures in the report may change.

What is meant by the term equities

Put simply. The amount the business owes, hence owners equity. If you didn't get it, Owner's Equity is the amount the business owes the owner.

[inspire]

I'll just give you all the questions and answers that I have compiled from the cambridge textbook.

WOW!

[TyErd]

i regret not posting it earlier

[Aqualim]

Uses of profit and loss statement.

- Can aid in decision making by measuring performance, allowing corrective action to be taken, and planning for the future
- Can assess gross profit, mark-up and calculate ratios
- Can measure the performance of management and staff

Uses of cashflow statement.

- Can aid in decision making by identifying types of cash flows and uses of cash
- Can determine whether the business is meeting its overall cash targets, in particular Operating Cash Flows
- Can determine the final bank balance at the end of the period
- Can help the business plan its cash targets for the future

Explain why the P/L statement identifies Gross Profit and Adjusted gross profit seperately?

Gross profit takes into account the average mark-up placed on the purchase price of stock, whilst the Adjusted Gross profit takes into account and stock losses/gains that have occurred throughout the period aswell, therefore they must be reported separately as they are different measures of performance.

Explain why GST recieved and GST refund must be reported seperately?

GST Received is the GST collected/received from Sales made during the current reporting period, Whilst GST Refund is the GST received from the Australian Tax Office from the previous reporting period (this was because during that period the GST paid or invoiced by suppliers exceeded the GST received or invoiced to customers)

[naved_s9994]

When preparing a cash flow statement, we only look at the CRJ and CPJ?

Or at all 4 special journals?

[Albeno69]

When preparing a cash flow statement, we only look at the CRJ and CPJ?

Or at all 4 special journals?

only crj and cpj cos the others dont effect then bank

[naved_s9994]

When preparing a cash flow statement, we only look at the CRJ and CPJ?

Or at all 4 special journals?

only crj and cpj cos the others dont effect then bank

thought soo

[Albeno69]

When preparing a cash flow statement, we only look at the CRJ and CPJ?

Or at all 4 special journals?

only crj and cpj cos the others dont effect then bank

what about for profit /loss
and balacne sheet

balance sheet and p@l look at all cos of the selling and purchase of stock.

[naved_s9994]

in profit and loss statement
can we have all sales together..as in cash/credit sales - just as sales.

[aposta28]

My teacher and Neville Box says to split if it has Credit Sales and Cash Sales.

[rudaid]

My teacher and Neville Box says to split if it has Credit Sales and Cash Sales.

I asked Neville Box and he said either..
(and so did my teacher!)

But there is probably less risk of error by posting them separately

[Aqualim]

I was just wondering how does "Payment to Creditors being less Cost of Sales" effect Net Profit and Cash?

I think you mean 'Payments to Creditors are either less than/greater than Cost of Sales', but think about it, If payments to creditors are higher than Cost of Sales, the Cash outflows in the Cash flow statement is going to be higher than the Cost of Goods Sold expenses in the Profit and Loss statement. This is why it can be used as an example for why a business incurred a cash surplus yet suffered a net loss.

Keep in mind you must state why Payments to creditors or Cost of Sales isn't classified in both the Cash flow statement or the Profit and loss, otherwise this can't be used as an example.

If that made absolutely no sense, I'll give you an example of what I would write for a question where this answer can be used.

Question;
Tim told his accountant on balance day that he can't work out why he incurred a Net Loss despite earning a Cash suplus for the period. Explain how this can occur.

Answer;
Under accrual accounting there is a difference between revenues earned and received and expenses incurred and paid for the period, thus they are two different sources of finance. e.g. Tim may have found that his Cost of Goods sold exceeded his Payments to creditors for the period thus displaying a greater loss in the P/L statement compared to the Cash Flow Statement. This is because Payments to Creditors is not classified as an expense as it doesn't decrease owners equity and therefore isn't included in the P/L statement and has No effect on profit.

That's just one example, generally you would have to give two examples.

[mojomojo]

What are the disadvantages of control accounts?