Sep 9, 2007

Third opposition-FA

ABFA2014 Financial Accounting

The second paper to be taken, it is.
A must pass paper, favorably score paper for accounting students.

This is the most preferable paper for me.
As it is less theory, more calculation....*phew...rest for awhile*

Most probably will be on the paper:

FRS107 Cash Flow Statement [both direct and indirect method]
* for the direct method, if the question does not request you to open reconciliation account, you can just omit the reconciliation.

Financial Statement-external reporting
* there are two ways for preparing Income Statement, which are by function and by nature method, practice both...However, by function seems to be more popular.
* as for Balance sheet, you need to know how to prepare the notes and transfer the total figure to the balance sheet. Most commonly it asks us to prepare the note for property, plant & equipment.
* SOCIE too must be practiced. Bear in mind, if you put retained profit c/f in it, you no need to put dividend paid+dividend proposed for both perference and ordinary shares.

Ratio Analysis
* Remember the formula to calculate the ratios
* Interpretation of the ratios- rationale and information that the ratios convey

Shares and debentures
* make sure you know the double entry for bonus shares, rights shares, debentures
* remember the formula to calculate the amount of shares issued

Goodwill
* notice the difference between the recoding for: goodwill account to be opened & not to be opened

Dissolution of partnerships
* realisation account, bank account, capital account
* Garner vs Murray rule
* Piecemeal Realisation of Assests [most unlikely to be asked in section B, as it is a very tedious working. Bear no harm to understand, so don't be lazy. If it comes out, you will still be able to work out the answers still.]
* Take over by Limited Liablity Companies-what entries to be made

Manufacturing Account
* The format itself
* What to do if factory profit to be inserted- additional items on the manufacturing account and income statement.
* Allowance for unrealised profit account and the effect in the Income statement and balance sheet

Appropriation Account
* understand the format [it may not be asked in exam]

Statement of division of profit
* too easy, may not be out.

Good Luck to all Accounting Students^^

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