Your questions answered.

[mumakai]

The forum is starting to be cluttered with to many topics relating to everyones personal questions im finding it hard to get to navigate. so i've started this subsidiary topic account for the question forum account  (yes accounting pun intended)

So shoot away on this topic please and i know i will endeavour to answer your questions.

[Rockim]

Benefits of a preparing a cashflow statement

[inspire]

to aid decision making by showing the change in bank balance.
to determine if the business is meeting its cash requirements without the funding of additional funds

[inspire]

two uses of a memo and order form?

[kakar0t]

two uses of a memo and order form?

1. To evidence results of a stock take
2. To evidence a drawing of a non-cash item from a business

i'm not sure for order forms though

Questions:

1. Outline a cash flow problem that GST could cause Jan's Pottery.

2. Explain how GST may affect the profitability of Jan's Pottery.

[LFTM]

How would you record this in the general journal?

200 dollars interest expense was incorrectly recorded as interest revenue.

i did

DR interest revenue
DR interest expense

this is obviously wrong?

[davyp3]

order forms can be used to ensure that the amount ordered is the amount supplied to ensure no stock losses

[davyp3]

RE: LFTM


Interest Expense Dr 200
Interest Revenue Dr 200
Cash at Bank Cr 400

would be my guess

[LFTM]

ok. can someone confirm


how about this:

explain why Di(business owner) claims dereciation for the vehicle in the business reports?

this is from tssm 2009 btw.

[inspire]

two uses of a memo and order form?

1. To evidence results of a stock take
2. To evidence a drawing of a non-cash item from a business

i'm not sure for order forms though

Questions:

1. Outline a cash flow problem that GST could cause Jan's Pottery.

2. Explain how GST may affect the profitability of Jan's Pottery.

If more more gst was collected/charged than paid/incurred the business will have a current liability. If the firm however has charged more gst than it has collected they will still have to pay to settlement to the ATO even thought they may not have received all the money from the debtor. Thus the firm may have to use their own funds which may create liquidity problems.

The profitability will not be directly affect by gst as it is neither a revenue or expense. However it may indirectly be affected due to their liquidity problem which may result in the firm being unable to buy stock to sell or to pay off their expenses.

[mojomojo]

What is the purpose of a subsidiary ledger? and what are the benefits?

Define negative non current asset.

Why is it necessary to charge depreciation?

Purpose of control accounts?

[inspire]

Define negative non current asset.

A negative non current asset is a reduction in a resource controlled by the entity which future economic benefit is expected to flow to the entity beyond 12 months. It represents a reduction of future economic benefit.

[mmmmm]

What is the purpose of a subsidiary ledger? and what are the benefits?

It is where all the individual debtors and creditors accounts are listed.  Every transaction is recorded separately in the subsidiary account and dates are all individual.

Benefits:
- Double checking mechanism: the balances of the control accounts should match the totals of the subsidiary ledger (via a schedule)
- Bulky detail is removed from the general ledger.

[mumakai]

Why is it necessary to charge depreciation?
the relevance QC states that all information that may influence the users of a report must be disclosed so that decision makers are properly informed. to not charge depreciation would mean that decision makers would not be properly informed which would contravene the relevance qc.
Purpose of control accounts?
its purpose is to keep the general ledger free of details as it is a summary account in the general ledger. the details that support the balance in the summary account are contained in the subsidiary ledger.

[LFTM]

Is this an appropriate answer for : why is bad debts an expense?

Bad debts is a reduction in an economic inflow which decreases assets(debtors control) leading to a decrease in owners equity.