Senior Finance Officer
1. Yes
2. a. in the next fiscal period
b. With in short period of time monthly only
3. Internal Control purpose
4. a. Physical inventory
b. Book inventory
5. a. No/Yes
b. No/Yes
6. Branch account & Home office account
7. Responsibility of replay: _ responsibility clearly, Conformity Comparability
8. Fund accounting for non profit making organ is managing recording of
Source of fund for
Specified Purpose
9. - Expenditure
- Inventory
10. Collectability Probability is very den
11. Share holders stock, in par & amount
- % tag of profit of loss a dividend distribute
12. Differed liability
- Legal Contingence
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13. Cash on hand
Cash at Bank
- Current
- Loin Treasury bill
- Paper
- Change
- Fixed deport
14. System of Internal control and a managerial function which implement
a control mechanism by segregation of duties and with the procedure
- Patty Cash appear
15. as a liability
16. Significance of a/R analysis in financial position.
17. Aging of account receivable
- Use of aging a/R
- Dullest full account
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Answer for Senior Finance Officer
1. Yes because every adjusting entry affects expenses and revenues.
2. A. Accrual expense is an accounting expense recognized in the book before it is
Paid for. On another way accrued expense is paid after recorded on the book.
Accrued expense are typically periodic and are documents on company
Balance sheet as Current Liability.
B. Accrued Revenue:_ are a revenue that are earned in one accounting period,
but cash is not received until another accounting period.
- Accrued interest receivable are that is to be reported on the balance sheet.
3. The Responsibility of maintaining the accounting records should be separated
from the responsibility for operations so that the accounting records serve as an
independent check on operations
- To Determine internal control which insures Continuous reliability of
accomplishment of companies objectives related to operations financial
reporting and conformity lauls and regulations.
4. A - Physical inventory:_ A process of taking inventory that actually involves
Counting or weighing each kinds of inventory on hand.
B. Book inventory:- is the cost of inventory on hand as stated in organization’s
Accounting records. This amount is compared to the actual inventory on
hand to see if other are any discrepancies in the accounting records.
5. A. No
B. No, but use MACRS for tax purpose
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6.
- Eliminate intra company account
- Eliminate home office profit from cost of good sold
- Eliminate unrealized intra company profit from inventory
- Eliminate un realized intra company profit from the ending inventory.
7. Responsibility Reporting:_ Provides report to different Levels of management
is a system that involves identifying responsibility centers and their objectives,
developing performance measurement schemes and preparing and analyzing
Performance report of
8. Fund Accounting non profits use fund accounting to focus on accountability and
the use of separate “funds” with their own ledger allows non profit
Organizations to more easily assess each fund individually.
-
Depending on the nonprofit, a separate fund is typically established for each of
the organization’s various programs as well as its overhead, general
administrative, and fund raising activities.
9. Account payable
10. Shows the Company is taking longer to collect money that lead to Cash flow
Problems.
- Indicate a Company with poor collection procedures and customer who are
Unable or unwilling to pay for their purchases.
- High day sales are unable to convert sales ratio in to cash quickly as a firms with
Lower ration.
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11. The first Notes to Financial statement is Summary of the company significant
Accounting policies for the use of estimates, revenue recognition inventories
Property and equipment good will and other intangible asset fair value
Measurement discount operation, foreign Currency transaction.
- The Remain Contain the detail (include schedules of amount) for item such as
inventories accrued liabilities, income taxes, employee benefit plan, leases,
business segment information’s fair value measurement, derivative instrument
and hedging, Stock options, Commitment and Contingency options and more .
The First type of event
12. Recognize subsequent event:_ All information available prior to the issuance of
the financial statement helps investors and creditors to evaluate estimates
Previously made To ignore these subsequent event is to pass up an opportunity
to improve the accuracy of A statements.
- This first type of event encompasses information that an account would have
recorded in the accounts had the information been known at balance sheet date.
Example:- if a loss on Account Receivable result from customers bankruptcy
subsequent to the balance sheet date the company adjusts the financial statements
before their issuance. The bank raptly system from the customers poor financial
health existing at the balance sheet date.
- The same enterer applies to settlement of litigation .
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The Second type of event
Non- recognized subsequent event Thus adjustment of the financial statement is
not necessary. A company should not recognized subsequent events that provide
evidence about conditions that did not exist at the date of balance sheet date but
arose after the balance sheet date.
Example of non – recognized subsequent event
- Sales of bold or capital stock issued after B/Sheet
- A business Combination after the balance sheet date
- Settlement of Litigation.
- Loss of plant or inventories as a result of natural as aster that occurred after
balance sheet date.
- Losses on receivables resulting from condition.
- Changes in the quoted market prices of securities or foreign exchange rate after
the balance sheet date.
- Entering to significant commitments or contingents liability after the balance
sheet bate.
13. Usual Component of Cash
- Bank and Cash balance
- Bill Receivable or payable in the course of collection and discounted bills
- Cash equivalents
- Other cash components
14. Internal Control system:_ a set of rules, Policies and procedures an
organization’s implements to provide directions, increase efficiency and
strength adherence to policies.
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Structural of a company consist of the policies and procedures established to
provide reasonable assurance that specify entity objectives will be achieved.
15. Cash over draft it should record the amount of the over draft as short term
Liability.
- When Preparing balance sheet bank over draft accounting would be recorded a
negative cash balance as current bank over draft liability.
- As an increase in cash flow an increase as bank over draft asset while also
being reputed on the other side of the general Ledger as increase short term
liability.
- Ledger loan is Paid of a bank over draft double entry will be made to decrease
short term liabilities as well as decrease cash flow.
16. Significance of A/R in analysis of financial statement
- To analysis account receivable turn over ration
- To analysis Day Sales Out standing
- To analysis Average collection period
- To meare Liquidity ration to estimate the numbers of the days before receivable
will be collected.
- To determine the short term liquidation of the company
- To analysis Account receivable turn over average
- To analysis inventory turn over ratio
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17. Aging Account Receivable is the process of sorting receivables by their due
dates. In an effort to estimate the amount of un collectible account.
Use of aging of account receivables
- Is help full in laying out credit and selling prices.
- Use full to estimate the total amount to be written – off
- To estimate the amount of bad debts to report the company’s financial
statement.
- To estimate the amount of uncollectible account.
Work Out
18. Metal Enterprise sales account for year 2010
Revenue ------------------------------------------------ 30,000,000
(+) Cost of goods Manufactured ----------- 500,000
Beginning inventory finished 908 --------- 80,000
Cost of good available------------------------ 580,000
(-) Ending inventory finished good -------- 63,000
Beginning Finished good used --------------77,000
Ending finished good used -------------------98,000
238,000
Cost of good sold ------------------------------------------- 342,000
Gross Profit --------------------------------------------------
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2. Moha Soft Drink S.c
Hamle 1/Years Deferred income tax
Year 1 income tax expense 400,000×35%=140,000
Differed income tax 400,000×35%=140,000
Cash ------------------- 140,000
Long term liability ---------------------140,000
Long term liability --------------------------140,000
Deferred income tax ---------------------------140,000
Year 2 Income tax expense – 500,000×35%=175000
Deferred income tax ex - 450,000 ×35%=157,500
Cash --------------175,000
Long term liability 157,500
Long term Liability ----------157,500
Deferred expense -------------------- 175, 00
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Lead Finance Officer
1. Accounting Policy of the Co.
- To Show the un used balance of the account
2. System analysis objects use are
1. To check the correct functionality of the system
2. To Check the compliance of the system as per the interred program.
3. To correct if there exist familiarity in the symptom
4. ----------3. Internal Control
- Segregation of duties and responsibility
- To serve fastly our custom
4. A. LIFO
B. FIFO
C. Weighted average
5 The fluctuating dollar affect on the business can be known under disclosure or
under Preparing special attachment with the convened statement.
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Not necessary
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Profit of the branch
Branch
Profit Income Branch ×
H/O
××
Branch
××
Income
8 8.1 statement of affects
Financial statement which consider cases which could not be shown in the
financial statement.
1
8.2 Liquidation realization
Liquidation – clearly of creditor right
Realization – recognition of value of a net which could be on hand
9 balance sheet statement of affair
Balance sheet:_ financial position of the co at specific point in time.
Statement affairs specific point position and additional non recorded but critical
to the co. point.
10 2 methods to record transaction of point vent state consideration.
11 Inventory cost from other cost
Inventory cost - not expired cost
Other cost – expired cost expenditure
12 Valuation of Inventory is ethical because it has an effect on the estimation of
liquidation of the enterprise and its current status
13 Inventory taking power
- Prepare list of inventory with specific location and category
- Count and fill quantity presented in on the Shelly in the count a heil.
- Take stock ledger balance and fill in the count what compare if there exist a
different b/n count and book balance.
14 Different b/n Weight average & Moving average
15 Different b/n Liability & Commitment
2
16 Denting b/n
- Definitely Measurable Lab
- Liability dependent on operating result
- Estimated Liability
- Lon contingency give one on more example
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Lead finance officer
1.Reversing accruals are optional and can be implemented any time because
they don’t affect financial statement.
Reversing entries are made because previous year accrual and prepayments
will be paid cause previous year
Accrual and pre payments will be paid off. Used during the new pear and
Longer need to be recorded as a Liabilities and asset. These entries optional
depending on wither or not there are adjusting journal entries that need to be
reversed.
- When you reverse on accrual, you debit accrued expense and credit expense
account to which you recorded the account payable.
- The objective of system analysis is
1. To determine specific needs of system
2. Evaluate tools and techniques
3. Discuss approaches and tasks of system
4. Use appropriate method and techniques to design software.
- It will decrease the chance some one will try to embezzle Limit fraud and help
prevent errors. If you assign different people task dealing with the asset it
would be hard for one person to take control of them unless they worked to
gather with other employees.
Under which method of cost flow are:_
A. The earliest lost assigned to inventory:- when price are the cost assigned to
the units in ending inventory are higher the cost assigned to units that are
sold. Conversely when price are deckling cost assigned to units in ending
inventory are lower than the costs assigned sold.
B. The most recent cost assigned to inventory when prices are
the costs
assigned to the units ending inventory are lower than the host assigned to
units sold. Universally where price are falling the lost assigned to units
ending inventory higher than the lost assigned to units sold.
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C. Average lost assigned to inventory? This method assign accounting period
to the unite are doled as well as to units that leman ending inventory
In the accounting period
Total cost good
Weighted Average
available for seek
Cost per unit
Total units available for sale
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5. Year to year changes foreign wrrency based a balance sheet value reflect both
changes in underlying Asset/Liability and change in exchange rate used for the
transaction.
- Gain or loss attributable to currency moves may be disclosed separately.
- Company’s are exposed to three type of risk caused by currency fluctuation. \
5.1 Transaction Exposure:- This arised from the effect that exchange rate
fluetuation have no a company obligation to make or recive payment
denominated in foreign currency This types of exposure medium – term to
long term.
5.2 Transaction exposure:- This exposure arises from the effect of currency
fluctuations on a company’s consolidated financial statement. Parrticulary
when it has foreign subsidiaries.
5.3 Economic (operating) Exposure:- This is lesser known than privios two but
it is a significant risk never the less it caused by the effect of un expelted
currency fluctuations on company’s future cash flows and market value and
long term in nature.
6. For partner ship to cease to exit It need to be dissolved The prooss known as
dissolution of partner ship involves The sate or disposal of all asset of the
partner final settlement of all of its liabilities and settling of allounts partnership
may be dislontinued and with approval of all partner or by lontract. Why?
Because dissolution may also result from a court judgment or dictated by state
low. One partner ship is dissolved the business must under go liquidation.
Compuse any unfinished business such as, canceling contract the business.
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7. Home office in taking up profit of branch.
The entry is:- Investment in Branch ------------×××
Income Branch ---------------------------×××
Explain the theory:- Investment in Branch account reflect
The equity method accounting. This decision based on the principle that net
income measured by matching expired cost with realized revenue is debited
cash merchandise and service provide to branch by home office and net
income reported by branch.
Home office in taking up loss:-
Income branch (Loss) --------------××
Investment in Branch -------------------×××
Why the reason? The reason is Realized Revenue less than operation lost.
The Statement of Realization and Liquidation reports the actual
Liquidation results in contracts the statement of affairs a performance, and
is based on estimated rather than actual result
8. Statement of Realization and liquidation provides an ongoing exporting the
trustee’s activities and is updated throe the liquidation process’s. The statement
of affairs is a summary of the estimated results of a completed liquidation.
- A deficiency is of an account supplementing the balance sheet financially weak
enterprise showing estimated realization a use of asset and their insufficiently to
mate creditor’s claims and occasionally indicating the causes of difficulty and
realization profit and loss is actual gain or loss hat occurs when asset at a fair
market value in an arm length transaction.
9. Balance sheet is a very important part of financial statement but statement of
affairs is not a part of financial statement.
Balance sheet prepared on the basis of double entry system of Book keeping.
Statement of affairs is prepared on the basis of incomplete record.
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- Statement of affairs is prepared on either opening or closing date there as
balance sheet is presented to specific date.
- Balance sheet is prepared to present financial position of business statement of
affairs is presented on find out other the amount opening capital or closing
capital.
10.The main method of recording the joint venture transaction are separate set of
book. Generally the following account are opened.
10.1 Joint Bank account:- a separate bank account is open This account is used
for recording cash transaction contributation by the co-adventures are
deposited in this account payment on account of joint venture are made this
book.
10.2 Account of co-venture:- the account of each co-venture is opened in the
same manner capital account. The method recording in this book of one coventure only.
- All The Joint venture frame section are recorded by are of the co-venture’s.
11. A deferred cost is a cost that you have alredy incurred but which you will not
charge to expense until a later reporting period in the mean time it appears on
the balance sheet as an asset the reson for deferring recognition of lost as an
Expense is that you have not year consumed the item you may also defere
recognition of lost it you recognized it at the same time as related levenlse is
recognized under maching principle.
Expired cost is a cost that has been recognized as an expense this happen when
an entity fully consumes for receives benefit from a cost same the resulting in
the generation of revenue an expired cost may also be construed as total loss
involve of an asset and a portion has been recognized as an expense can be
considered a partially expired lost.
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12. The significancy of inventory accounting is under lined by The presence of
inflation and by implication for tax payment and cash flow. Inventory valuation
regarding the flow of goods and has nothing to do with ctual order in which
product are sold. The cost flow assumption is made in order to mach the cost
product sold during the accounting period to Revenue generated from the sales
and assign a dollar ralue to inventory remaining for sales at the end of the
accounting.
13.13.1 For income tax reporting:- inventory is neded to calculate lost of good sold
on a business tax form.
13.2. ominimize Loss and the ft:- Keeping track of inventory for allows you to
spot losses from and theft.
13.3 To get rud of obsolete and out of date inventory itmes:- If item in your
inventory are not ever going to be sold you need to geet rid to make room fore
more salable item.
13.4. To evaluate movement of specific items:If a product in your inventory is not moving out the door may be it’s time to
keep.
14.Weighted average method is calculated for all purchase in a given time period
and moving weighted average is calculated after every transaction and the
calculation only takes current inventory stapes in to consideration .
- The weighted average method is used to assign the average lost of production to
product.
15.Liability is a condition of being Liable while commitment is the act or an
instance of committing in charge keeping or trust, especially.
- Commitment is a part of liability
-
Commitment has intention to give up future economic benefit the difference
between liabilities and commitment is “present obligation b/c commitment is
lacks of present obligation.
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16. Definitely measurable wability?
Such as Account payable not dividends payable accrud liabilities and the
current portion of long term debt can be measured exactly account must stile be
not over look existing Liabilities in these categories
16.2 Liability Dependction operating result?
Short term Liablities resulting from the primary business opearation of a
firm they are non interest bearing and comparise of account payable
accrued expense and income tax payable. Operating Liabilites are
deducted from total asset to determine the net operating asset.
16.3 Estimated Liability:- Such as Liabilites for Income taxes property taxes,
product warranties definitely exist but the amount most be estimated and
record properly.
16.4 Loss contingency given one more example
Loss Contingency:-- is incurred by the entity based on the out come of future event
such as litigation due to conservation accounting principles loss contingencies are
reported on the balance sheet and fot notes on the FLS. It they are probable and
there quantity can be reasonably estimated.
Examples of contingentloss situations are
- Injuries that may be caused by a company’s product such as when it is
discovere that lead-based paint has been used on toys sold by the business.
- The threat of asset expropriation by foreign government where compensation
will be less than the carring amount of the asset that will probably be
expropriated.
- A threatened Law suit.
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TCA=TA-TNCA
=432,00-294,000.00
=138,00
TCA= Cash + TA/R +Inventory
First To find the amount of Inventory?
The information based on Turnover of ending inventory?
Sales+ 15
ET= sales
EI
15
CUS + 10.5
ET= CGS
ET
10.5
Sales + CGS
15
105
10.5 sales + 15 CGS
Sales = 15/10.5 CGS
CGS= 10.5
15 sales
Sales – GP = 0.7 Sales
Sales – 315,000.00+0.7 sales
0.3 sales = 315,000.00
0.3
0.3
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Sales = 10,50.001.00
ET= Sale
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ET= 1050,000.00
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Answer A ET= 70,000.00
Then, TCA= Cash + TA/R + Inventories
138,000.00= 25,000 + TA/R+70,000.00
TA/R = 138,000.00 – 95,000.00
TA/R = 43,000.00
Answer B
Current ration
TCA= 1.5
TCL
TCL= 138,000.00
1.5
TCL= 92,000.00
TA/P= 92000.00 – 25,000.00
The Answer (C) TA/p = 67,000.00
RI= TEQ – common stock
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= Total Liability = 0.8
TE9
TL= TE 9×0.8
TL+TE9 = 432,000.00
0.8 TE9+TE9 =432,000.00
0.8 TE+TE9= 432,000.00
1=8TE9
432,000.00
1.8
1.8
TE9 = 240,000.00
Retained earning+ 240,000.00-300,000.00
The Answer (D) RI= (60,000.00) deficit
TL+ TE9 ×0.8
= 240,000.00 × 0.8
=192,000.00
Long term
Date= 192,000 – 92000,00
Long term = 100,000.00
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Sun Rise Enterprise
Balance Sheet
Sene 30, Year 3
Asset
Liability and stock holder’s equity
Cash ----------------- Br. 25,000.00
Trade Account payable ----- 67,000.00
Trades account Liable (Net) 43,000.00
Income taxes payable currency 25,000.00
Inventories ------------------ 70,000.00
Plant Asset net -------------- 294,000.00
Total
Long term dest ------------- 100,000.00
Common stock, Br.per --------- 3000,000.00
432,000.00
Retained earning deficit -------60,000.00
Total Land Stock Hholdrs
Equity 432,000.00
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