Module 3 Flashcards

1
Q

Depreciation journal entry

A

Dr P+L depreciation expense

Cr Accumulated depreciation (plant and equip)

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2
Q

Capitalisation journal entry (bought something for 2000)

A

Dr Fixed Asset (e.g equipment) 2000

Cr Bank 2000

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3
Q

Other names for trade debtors?

A

Trade receivables

Sales ledger control account

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4
Q

Other names for trade creditors?

A

Trade payables

Purchase ledger control account

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5
Q

Definition of depreciation?

A

Economic consumption of value

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6
Q

Buy a motor vehicle on credit journal entry?

A

Dr Motor vehicle- asset

Cr trade payables

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7
Q

What are the two methods of depreciation?

A

Reducing balance

Straight line

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8
Q

Depreciable expense?

A

Aim to account for what estimate will get back in so many years

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9
Q

Depreciation is an example of what concept?

A

Accruals

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10
Q

What don’t you factor in the reducing balance method?

A

Scrap

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11
Q

Straight line method is

A

Depreciation the same every year

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12
Q

Reducing balance method is?

A

Depreciation is smaller every year

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13
Q

How is VAT accounted for with regards to net and gross?

A

Net 100%
VAT 20%
Gross 120%

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14
Q

Accrual is a what in the balance sheet?

A

Liability

You owe money

Accrued expense

Had work done/received goods but not been paid yet, e.g invoiced after year end

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15
Q

Accrued income is what in balance sheet?

A

Asset

Someone owes you money, asset for use, done work but not been paid yet

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16
Q

Prepaid expense (prepayment) is what in balance sheet?

A

Asset

So debit

17
Q

Deferred income is what in balance sheet?

A

Liability

Credit

Prepaid to me
We’ve been paid but not done the work, obligation to do so

18
Q

Cost of sales calculated how?

A

Opening inventory + purchases - closing inventory

19
Q

If you have accruals and prepayments in the trial balance where are they from?

A

Last year

20
Q

What to do with accruals and prepayments in trial balance?

A

Last years
Reverse opening accrual/prepayment
Process what’s actually paid
Calculate year end accrual or prepayment

21
Q

Accrued income goes where in balance sheet?

A

Asset

Debit
Asset for use, done work but not been paid yet

22
Q

Suspense accounts can’t be

A

In final account

Need to be fixed first

23
Q

How to correct something posted in wrong side by error?

A

Times it by 2 to fix

24
Q

Contra entry is

A

If someone buys off you in credit but is also a supplier

25
Q

Contra entry impact?

A

Always has the impact of reducing receivables and payable

26
Q

Journal entry for disposal with profit and depreciation

A

Dr bank (proceeds, sold for)
Dr depreciation
Cr cost
Cr profit/loss