Flashcards in Missing Info Deck (14)
What is the logical pattern to finding missing information?
1 - Gather the information given;
2 - Be sure about what you want to find out;
3 - Establish the usual process (e.g. Gross Profit - Expenses = Net Profit or Assets - Liabilities = Capital);
4 - Fill the information you have;
5 - Work out any missing pieces of information by deduction.
How is a Cash Book constructed from bank statements?
1 - Total all receipts from credit customers;
2 - Stratify payments into:
Credit Supplier payments
Payments for Expenses
3 - Find the opening balance;
4 - Draw a summary Cash Book Account.
5 - Work out the information you need from what you have by balancing the account.
What warrants special attention when dealing with Cash Books?
Overdrawn opening and closing balances.
What is the opening debtors figure?
The amount paid to us during the current year appertaining to sales made in the previous period.
It is subtracted from Trade Receivables receipts.
What is the closing debtors figure?
The amount owed to us at the year-end but that will only be paid in the following period. It is added to Trade Receivables receipts.
How are Credit Sales records completed?
Trade Receivables receipts
Opening debtors amount
Closing debtors amount
Ps: If cash sales were made, they can be added to the figure to find the total sales figure for the year. VAT should be accounted for when appropriate.
How are Credit Purchases calculated from incomplete records?
Opening Creditors figure
Closing Creditors figure
Ps: mind VAT if the business is VAT registered. For total purchases add cash purchases.
If we want to deduce Inventory information, which financial document should we use?
The first part of the SPL;
which shows that
Sales - Cost of Sales = Gross Profit
Cost of Sales = Opening Inventory + Purchases - Closing Inventory.
Which equation do you use to find missing information about Assets, Liabilities and Capital?
Assets - Liabilities = Capital
What must be noted about non-current assets when trying to find out missing information?
Only the carrying amount should be used i.e. subtract any accumulated depreciation from the original cost.
What is the equation for closing capital?
What is the general idea in finding missing accounting information?
If you know the basic accounting equations then you can use the information you have to deduct the missing elements.
How are missing VAT amounts determined?
By completing a VAT Control account with known information and finding the missing info or balancing the account.