revision questions

Revision question on IASB conceptual framework and qualities of financial information

The IASB’s conceptual framework for financial reporting states that the qualitative characteristics of financial statements are the attributes that make financial information useful.

Required: Explain the fundamental qualitative characteristic Relevance”.                               Read the rest

Revision question on how to calculate break-even point and margin of safety.

Bonne Bia limited is a newly formed company in the catering business founded by Kate and Paul Johnson. Kate and Paul have considerable experience in the food industry and saw an opportunity to establish a food/beverage business to service the tourist market during the four months from May to August. The business will be located in Wexford and permission has … Read the rest

Revision question on how to perform the bank reconciliation

The following is a summary from the cash book of BW Ltd for July 2015:

Opening balance 1,530
Receipts 23,104
Payments (23,005)
Closing balance 1,629

On investigation, it was discovered that:

i)   Bank charges of TZS 15 shown on the bank statement have not been entered into the cash book.

ii)  A cheque … Read the rest

Revision question on activity based costing (ABC)

(A)     XX glass limited has been in operation for the past seven years and manufactures shower doors. Since its establishment, the company has used a traditional overhead absorption costing system. However, the managing director, Peter Kenny, is considering making a change.

Over the past few years, Peter has streamlined the production process and reduced … Read the rest

Revision question on IFRS 5 – non-current assets held for sale and discontinued operations.

Atta Kay Ltd has the following assets which it would like to classify under IFRS 5 Non- Current Assets Held for Sale and Discontinued Operations today:

  Carrying Amount today (GH¢million) Open market value today (GH¢million) Estimated selling costs (GH¢million)
Investment properties (at fair value through profit or loss) 62.3 30.9 0.5
Land used as company car park
Read the rest