All Matches
Solution Library
Expert Answer
Textbooks
Search Textbook questions, tutors and Books
Oops, something went wrong!
Change your search query and then try again
Toggle navigation
FREE Trial
S
Books
FREE
Tutors
Study Help
Expert Questions
Accounting
General Management
Mathematics
Finance
Organizational Behaviour
Law
Physics
Operating System
Management Leadership
Sociology
Programming
Marketing
Database
Computer Network
Economics
Textbooks Solutions
Accounting
Managerial Accounting
Management Leadership
Cost Accounting
Statistics
Business Law
Corporate Finance
Finance
Economics
Auditing
Ask a Question
Search
Search
Sign In
Register
study help
business
accounting and finance for non specialists
Questions and Answers of
Accounting And Finance For Non Specialists
Look back to Example 3.1 and assume that a trainee accountant had prepared the income statement. Subsequent checking by the chief financial officer revealed the following errors:1. Sales performance
The following information relates to Simonson Engineering as at 30 September 2021:
Refer to the statement of financial position of Brie Manufacturing shown earlier in Example 2.4. What would be the effect of revaluing the property to a figure of £110,000 in the statement of
The assets of Kunalun and Co., a large advertising agency, are as follows:Cash at bank;Fixtures and fittings;Office equipment;Motor vehicles;Property;Computers; andWork in progress (that is, partly
Do you think that incomplete financial information, or unverified financial information, should be presented to managers? Why?
Do you think that what is material for one business will also be material for all other businesses?
Ptarmigan Insurance plc (PI) is a large motor insurance business. Taking the user groups identified in Figure 1.1, suggest, for each group, the sorts of decisions likely to be made about PI and the
With which of the ideas discussed earlier in the chapter is this accounting treatment of impaired non-current assets consistent?
Why might it be a good idea to have impairment tests carried out by independent experts rather than by the managers of the business?
TT and Co. is a new business that started trading on 1 January 2019. The following is a summary of transactions that occurred during the first year of trading:At the end of the year it was clear that
How will the eventual payment of the outstanding sales commission (Example 3.4) and the electricity bill for the last quarter (Example 3.5) be dealt with in the accounting records of Domestic
Can you think of other expenses for a retailer that cannot be linked directly to sales revenue and for which matching will therefore be done on a time basis?
What about the statement of cash flows? Is it prepared on an accruals accounting basis?
Andrew Wu (Engineering) Ltd bought a new motor car for its marketing director. The invoice received from the motor car supplier showed the following:What is the total cost of the new car to be
The following is the statement of financial position of WW Associates as at 31 December 2019:During 2020, the following transactions took place:1. The owners withdrew equity in the form of cash of
Sparky Ltd is a business that employs a number of electricians. The business undertakes a range of work for its customers, from replacing fuses to installing complete wiring systems in new houses.In
Cottage Industries Ltd (see Example 7.1) expects to sell 500 baskets a month. The business has the opportunity to rent a basket-making machine. Doing so would increase the total fixed cost of
Assume that the operating profit is £70,000 rather than £50,000. What would be the effect of this on ROSF?
If shareholders gain from the tax-deductibility of interest on borrowings, who loses?
What do you deduce from a comparison of Alexis plc’s gearing ratios over the two years?
In practice, do you think that each piece of accounting information produced will be perfectly complete, neutral and free from error?
Accounting reports are aimed at users with a reasonable knowledge of accounting and business and who are prepared to invest time in studying them. Do you think, however, that accounting reports
Suppose an item of information is capable of being provided. It is relevant to a particular decision and can be faithfully represented. It is also comparable, verifiable, timely and could be
Which do you think is the harder to assess, the economic benefits of accounting information or the costs of producing it?
Why do you think financial accounting reports are subject to regulation, whereas management accounting reports are not?
It can be argued that non-financial measures provided by management accountants, such as those mentioned above, do not, strictly speaking, fall within the scope of accounting information. Thus, they
Can you think of any areas of overlap between the information needs of managers and those of other users?
How should the harmonisation of accounting rules benefit:(a) An international investor?(b) An international business?
Look at Figure 1.5 and state, in broad terms, where an investment in:(a) UK government savings account; and(b) shares in an oil-exploration business should be placed on the risk–return
What other objectives might a business pursue? Try to think of at least two.
On Wednesday, Paul bought more wrapping paper for £460 cash. However, it was raining hard for much of the day and sales were slow. After Paul had sold half of his total inventories for £320, he
What forms might economic benefits take? Try to think of at least two.
Assume a business owns a 20 per cent stake in a gold mine. As this ownership stake will not give control over the whole of the gold mine, can this resource be regarded as an asset of the business?
From time to time, there have been attempts to place a value on the ‘human assets’ of a business in order to derive a figure that can be included on the statement of financial position. Do you
Indicate which of the following items could appear as an asset on the statement of financial position of a business. Explain your reasoning in each case.1. £1,000 owed to the business by a credit
Can you think of two additional items that might appear as assets in the statement of financial position of a typical business?
What would have been the effect on the statement of financial position if the inventories had been sold on 7 March for £1,000 rather than £5,000?
Can you think of two examples of assets that may be classified as non-current assets for an insurance business?
Can you think of one example of a current liability and one of a non-current liability?
Does this pose a problem for external users seeking to assess the business’s financial health?
Plumber and Company has a fleet of motor vans that are used for making deliveries to customers. The owners want to show these vans on the statement of financial position at their current values
What sort of poor decisions may be made as a result of overstating the financial strength of a business?Try to think of at least two.
In Chapter 1 we discussed neutrality as a desirable element of one of the major qualitative characteristics of financial information. Can you remember which one?
What are the two aspects of each of the following transactions?1. Purchasing £1,000 of inventories on credit.2. Owner withdrawing £2,000 in cash for her own use.3. Paying a supplier £1,000 for
Can you identify any of these resources? Try to think of at least two.
Try to identify two non-current assets with a finite useful life that can be classified as:1. Tangible; and2. Intangible.
Can you recall from Chapter 2 how a profit, or loss, for a period is shown in the statement of financial position?
The following information relates to the activities of H&S Retailers for the year ended 30 April 2021:Prepare an income statement for the year ended 30 April 2021. Motor vehicle running
Singh Enterprises, which started business on 1 January 2018, has a reporting period to 31 December and uses the straight-line method of depreciation. On 1 January 2018, the business bought a machine
A manufacturer produces and sells a standard product on credit, which is transported to customers using the manufacturer’s delivery vans. Managers believe there are four points in the
Although revenue for providing services is often recognised before the cash is received, there are occasions when it is the other way around: a business will require payment before providing the
Assume that the machine in Example 3.7 was owned by a business that made a profit before depreciation of £40,000 for each of the four years in which the asset was held.Calculate the profit for the
Why might output-based methods rather than input-based methods be more suitable to measure progress?
What judgements must be made to calculate a depreciation expense for a period?
Suppose that the 9,000 tonnes of inventories in Example 3.8 were sold for £15 a tonne.(a) Calculate the gross profit for the period under each of the three costing assumptions.(b) What do you note
Assume that prices are falling rather than rising. How would your observations concerning the portrayal of financial performance and position be different for the various costing methods?
Can you think of any circumstances where the net realisable value will be lower than the cost of inventories held, even during a period of generally rising prices? Try to think of at least two.
Reporting inventories in the financial statements provides a further example of the need to apply subjective judgement. For the inventories of a retail business, what are the main judgements that are
What would be the effect on the income statement, and on the statement of financial position, of not taking into account the fact that a debt is irrecoverable?
The accounting treatment of irrecoverable debts is a further example where judgement is needed to derive an appropriate expense figure.What will be the effect of different judgements concerning the
Why do we need accounting rules? Can you think of any arguments against the use of accounting rules?
Limited companies can set a limit on the amount of debts that they will meet. They tend to have reserves of cash, as well as share capital and they can use these reserves topay dividends to the
The fact that shareholders can limit their losses to that which they have paid, or have agreed to pay, for their shares, is of great practical importance to potential shareholders.Can you think of
Do you think that the auditors of a company should prepare the financial statements? Why?
The following information was extracted from the financial statements of I. Ching (Book sellers) plc for the year to 31 December 2020:Required:Prepare a statement of comprehensive income for the
Can you think why these restrictions on the withdrawal of equity are imposed?
Presented below is a draft set of financial statements for Chips Limited.The following additional information is available:1. Purchase invoices for goods received on 29 June 2021 amounting to
If, as mentioned earlier, the change in ownership of shares does not directly affect a particular company, why do many public companies seek to have their shares traded on a recognised Stock Exchange?
Rose Limited operates a small chain of retail shops that sells high-quality teas and coffees. Approximately half of sales are on credit. Abbreviated and unaudited financial statements are as
Can you think of a reason why directors pursuing their own interests may be a problem for society as a whole?
Why might this be an important sanction against a non-compliant company?
The initial financial requirement for a new company is £50,000. There are to be two equal shareholders. Would you advise them to issue two shares of £25,000 each? Why?
Can you think why a company might want to make a bonus issue if it has no effect on shareholder wealth? Try to think of at least one reason.
Why are limited companies required to distinguish different parts of their shareholders’ equity, whereas sole proprietorship and partnership businesses are not?
Can you recall the circumstances in which the non-withdrawable part of a company’s equity could be reduced, without contravening the law? This was mentioned earlier in the chapter.
Can you think of a reason why the directors may wish to make a transfer to general reserves from retained earnings?
Would you expect a company to pay all of its revenue reserves as a dividend?
Can you remember this example?
It can be argued that the publication of financial statements is vital to a well-functioning private sector. Why might this be the case? Try to think of at least one reason.
The following financial statements for Blackstone plc are a slightly simplified set of published accounts. Blackstone plc is an engineering business that developed a new range of products in 2016.
You have overheard the following statements:(a) ‘A budget is a forecast of what is expected to happen in a business during the next year.’(b) ‘Monthly budgets must be prepared with a column
Will the garage, in Activity 7.4, seek to sell the car with its reconditioned engine for £4,000?Data from Activity 7.4A garage business has an old car that it bought several months ago. The car
A garage business has an old car that it bought several months ago. The car needs a replacement engine before it can be driven. It is possible to buy a reconditioned engine for £500. This would take
The financial statements for Harridges plc are given below for each of the last two years ended 31 December. Harridges plc operates a large chain of retail stores.Dividends were paid on ordinary
Set out below are ratios relating to three different businesses. Each business operates within a different industrial sector.Required:State, with reasons, which one of the three businesses is:(a) A
What do you think are the main qualitative characteristics that information contained in a management commentary should possess?
We have already come across some IASs and IFRSs in earlier chapters. Try to recall at least two topics where they were mentioned.
The following is a list of business/accounting events. In each case, state the immediate effect (increase, decrease or none) on both profit and cash: 1 Repayment of borrowings 2 Making a profitable
At the end of its reporting period, Zeneb plc’s statement of financial position included the following items:1. A bank deposit account where one month’s notice of withdrawal is required.2.
The following information has been taken from the financial statements of Juno plc for last year and the year before last:Required:What is the figure for cash generated from operations for Juno plc
What might be included as cash inflows from financial investments? Try to think of at least one example.
Torrent plc’s income statement for the year ended 31 December 2020 and the statements of financial position as at 31 December 2019 and 2020 are as follows:During 2020, the business spent £67
What might be included as cash inflows from financing activities? Try to think of at least one example.
Chen plc’s income statements for the years ended 31 December 2019 and 2020 and the statements of financial position as at 31 December 2019 and 2020 are as follows:Included in ‘cost of sales’,
Last year’s statement of cash flows for Angus plc showed a negative cash flow from operating activities. What could be the reason for this and should the business’s management be alarmed by it?
What information contained within the income statement and statement of financial position for a business can help us deduce the cash inflows from sales?
In deriving the cash generated from operations, we add the depreciation expense for the period to the profit before taxation. Does this mean that depreciation is a source of cash?
Why might this be the case? What has been the impact of these changes on the long-term financing of the business?
Both Ali plc and Bhaskar plc operate wholesale electrical stores throughout the UK. The financial statements of each business for the year ended 31 December last year are as follows:Required:For each
Which of one the above category of ratios should be of most value for short-term lenders?
Showing 200 - 300
of 414
1
2
3
4
5