ACCA P2

THIS SECTION provide you with all materials falling under corporate reporting subject (ACCA P2) AND THEIR RELATED PRACTICE QUESTIONS.

pexels photo 3769714

Four (4) factors that contribute to depreciation of fixed asset.

Depreciation is the allocation of the Depreciable amount of an asset over its estimated useful life. This allocated amount is charged against the income statement/Profit and Loss Account.

Factors that contribute to depreciation of a Fixed asset are:

  • Physical deterioration/Expected physical wear and tear.
  • Obsolescence/Economic factors.
  • Depletion (Natural resources such as mines)
  • Legal limit/Time factor.
Read the rest
4 signs of over trading

4 signs of over trading.

Over trading arises when company expands its sales revenue fairly rapidly without securing additional long term capital adequate fro its needs.

The signs/symptoms of over trading are:

  • Payable increasing rapidly
  • Cash and liquid assets declining at fairly alarming rate
  • Receivable increasing, possibly more than proportionately to sales revenues.
  • Inventory increasing , possibly more than proportionately to sales revenue



The … Read the rest

pexels photo 1194408 1

Revision question on financial accounting (IPSAS)



 In a move to improve the capacity of government to provide the legislative bodies, citizens, media and other stakeholders with understandable, relevant, reliable, and comparable financial statements, the government of Rwanda has taken the path of adopting the International Public Sector Accounting Standards (IPSAS).

REQUIRED:

Discuss any four benefits that will be achieved by the … Read the rest

pexels photo 1314584 1

5 benefits a country can obtain by adopting IPSAS.



The International Public Sector Accounting Standards (IPSAS) are developed by the IPSAS Board (IPSASB), a non-UN entity. According to their publications, “The objective of the IPSASB is to serve the public interest by developing high-quality accounting standards and other publications for use by public sector entities around the world in the preparation of general purpose financial reportsRead the rest

pexels photo 3755707

4 key characteristics of accounting information.

All accounting information produced by businesses should have some key qualitative characteristics.

The following are qualitative characteristics of good accounting information;

Relevance: accounting information is relevant if it has the ability to influence the economic decisions of users and is provided in time to influence those decisions. Information that is relevant has both predictive value and confirmatory values. Relevancy implies the … Read the rest

pexels photo 2228561

IAS 8 revision question (NBAA C2 NOV 2018)



Due to the complexity of International Financial Reporting Standards (IFRSs), judgements used at the time of transition to IFRSs have often resulted in prior period adjustments and changes in estimates being disclosed in financial statements. The selection of accounting policies and estimation techniques are intended to aid comparability and consistency in financial statements.
However, IFRSs … Read the rest

pexels photo 936133 1

6 main qualitative characteristics of financial statements.

If financial information is to be  useful, it must be relevant and faithfully represent what it purport to represent. The usefulness of financial information is enhanced if it is comparable, verifiable, timely and understandable with the fundamental qualitative characteristics being relevance and faithful representation.

Relevance

To be useful information must be relevant to the decision making needs of the user. The information … Read the rest