Importance of insurance for businesses

Importance of insurance for businesses Transfers the risk from the business/insured to an insurance company/insurer. Transfer of risk is subject to the terms and conditions of the insurance contract. Protects businesses against dishonest employees. Protects businesses against losses due to death of a debtor. Protects the business against theft/loss of stock and/or damages caused by …

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Aspects that should be included in employment contract

Employment contract is an agreement between the employer and the employee and is legally binding. Aspects that should be included in an employment contract  Personal details of the employee.  Details of the business/employer e.g. name/address, etc.  Job title/Position  Job description e.g. duties/ working conditions  Job specification e.g. formal qualifications/willingness to …

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Difference between financial accounting and bookkeeping

Distinction between Book-keeping and Accounting 1. Output of book-keeping is an input for accounting while Output of accounting permit informed judgements and decisions by the user of accounting information. 2. Purpose of book-keeping is to keep systematic record of transactions and events of financial character in order of its occurrence while Purpose of accounting is …

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Difference between fixed budget and flexible budget

Fixed budget is the budget that does not take into account any circumstance resulting in the actual level of activity achieved beibg different from those on which the original budget was based. flexible budget on the other hand is the budget that adjust to activity or volume levels of the entity.flexible budget continously flexes with …

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JOB COSTING – meaning, features, advantages and disadvantages

Job costing involves the accumulation of costs of materials, labour and overhead for specific job. this approach is an excellent tool for tracing specific costs to individual jobs and examining them to see if the cost can be reduced in the later jobs. jobs might include one off customer undertaking, manufacturing new products or delivering …

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Describe how you would test a client’s bank reconciliation

The following test should be carried out on the bank reconciliation Obtain standard bank confirmation from each bank with which the client conducted business during the period. Test arithmetic of bank reconciliation by recasting. Trace cheques shown as outstanding from the bank reconciliation to the cash book prior to the year-end and to the after-date …

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conditions that can lead to qualification of audit report

Most auditor’s reports are positive and with a statement expressing the auditors’ opinion that the financial statements show a true and fair view and comply with statutory requirements. However, some auditors express this opinion with reservations or express a conversed opinion. Conditions that can lead to qualification of audit report. Where proper accounting records have …

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