Formula

Question 1

Contribution per unit

Answer 1

Selling price (per unit) - variable cost (per unit)

Question 2

Cost per unit

Answer 2

Total cost / Number of units

Question 3

High low method

What does it give you? & What do we do with it?

Answer 3

(Highest cost – lowest cost) / (Highest output – lowest output)

=Variable cost per unit

We can then use the VC Per unit to calculate FIXED COSTS

Question 4

Break even – units

Answer 4

Total fixed costs/contribution per unit

Question 5

Breakeven – sales revenue

Answer 5

Total fixed costs/contribution per unit X selling price

Question 6

Margin of safety percentage

Answer 6

[current output – breakeven output/current output] X 100

Question 7

Target profit – units

Answer 7

(Total fixed cost + target profit) / Contribution per unit

Question 8

Contribution to sales ratio

Answer 8

Contribution £ /selling price £

Question 9

Cost per unit of expected output

Answer 9

(Input cost – scrap value of normal cost) / expected output

Question 10

Economic order quantity

Answer 10

Square root of (2 x annual demand x order cost) / Annual inventory holding cost for one unit

Question 11

% difference

Answer 11

Difference / gross or retail x 100

Question 12

Sustainability is

Answer 12

Is ability to last

Meeting the needs of the present without compromising the needs of the future

The three elements of sustainable development are plant profit and people

Question 13

PLCA- which side is purchases on

Answer 13

Right side

Question 14

SLCA which side is sales on

Answer 14

The left side

Question 15

VAT CA which side is the purchases and sales on?

Answer 15

Opposites to PLCA and SLCA

Purchases on left
Sales on right

Question 16

Structure of SOFP

Answer 16

NON C ASSETS

CURRENT ASSETS

CURRENT LIABILITIES

(Current assets-current liabilities) = NET CURRENT ASSETS

NON C LIABILITIES

(Non current assets - NET current assets - non current liabilities) = NET ASSETS

Question 17

If you discover that the client has been money laundering who do you report it to

Answer 17

The National crime agency

Question 18

Mark up profit is calculated as a % of _____

Answer 18

Mark up profit is calculated as a percentage of the cost (COS)

Question 19

Margin profit is calculated as a % of ___________

Answer 19

Margin profit is calculated as a percentage of selling price

Question 20

Margin what is treated as 100%

Answer 20

Selling price

Question 21

Mark-up what is treated as 100%

Answer 21

Cost (COS)

Question 22

Structure of SOPL

Answer 22

Sales rev

Op inv
+Purchases
-Clos inv
= cost of goods sold

(Sales rev-COS) =Gross profit

Add any income

Less any expenses
Total expenses

= Profit/Loss for year

Question 23

Ownership:

Sole trader
Partnership
Limited liability partnership 
Limited company 
Charity

Answer 23

Sole trader- sole trader owns
Partnership- partners own
Limited liability partnership - members own (separate legal entity)
Limited company - owned by shareholders (separate legal entity)
Charity - owned by trustee

Question 24

Management:

Sole trader
Partnership
Limited liability partnership 
Limited company 
Charity

Answer 24

Sole trader - manages
Partnership - all partners can manage
Limited liability partnership - all members can manage
Limited company - run by directors on behalf of shareholders
Charity - trustee

Question 25

Responsibility for debts: ``` Sole trader Partnership Limited liability partnership Limited company Charity ```

Answer 25

Sole trader - fully liable Partnership - fully liable Limited liability partnership - loose up to investment Limited company - loose up to investment Charity - for an unincorporated charity trustees are liable

Question 26

Taxation of profits: ``` Sole trader Partnership Limited liability partnership Limited company Charity ```

Answer 26

Sole trader - income tax on profits by owner Partnership - each partner liable for income tax on their share Limited liability partnership - each member liable for income tax on their share Limited company - cooperation tax on profits Charity - exempt on tax if income is used for charity

Question 27

Ownership terminology: ``` Sole trader Partnership Limited liability partnership Limited company Charity ```

Answer 27

``` Sole trader - Capital Partnership - Capital Limited liability partnership - Capital Limited company - Equity Charity - Net assets form funds ```

Question 28

Distributions terminology: ``` Sole trader Partnership Limited liability partnership Limited company Charity ```

Answer 28

``` Sole trader - drawings Partnership - drawings Limited liability partnership - drawings Limited company - dividends Charity - distributions ```

Question 29

Accounting regulations: ``` Sole trader Partnership Limited liability partnership Limited company Charity ```

Answer 29

``` Sole trader: No regulations financial statements a private Partnership: Partnership act 1890 Partnership agreement Financial statements are Private Limited liability partnership : Limited liability partnership act 2000 Limited liability partnership agreement Financial statements visible on companies house Limited company : Companies act 2006 Financial reporting standards Financial statements are on companies house Charity : Charities act 2011 Charity regulations Financial statements are available to the public via charity commissions ```

Question 30

Definition of material mistake

Answer 30

When information contained in financial statements is untrue

Question 31

Provide an example of material mistake

Answer 31

Where profit is overstated in order to encourage investors to buy a stake in the business Where assets are overvalued a lender may find that security for a loan is less than expected Profit is understated and therefore a lower amount of tax is paid to HMRC then should be Sales turnover is overstated therefore more VAT is paid to HMRC then should be paid

Question 32

Define whistleblowing

Answer 32

A person who tells and authority about misconduct of a genuine concern in good faith

Question 33

The definition of bribery

Answer 33

Giving or receiving something of value with intention of influencing receipt to do something favourable to the giver of the bribe

Question 34

Bribery: You can be fined up to You have a prison sentence up to It must be over what amount to classify as bribery

Answer 34

# Define it’s for bribery is unlimited The maximum penalty in prison is 10 years It doesn’t have to be over a set amount

Question 35

What is sustainability

Answer 35

Sustainability is meeting the needs of the present without compromising the needs for the future

Question 36

Identify responsible long-term management for sustainability

Answer 36

Plant profit people

Question 37

What is integrity

Answer 37

Being straightforward and honest

Question 38

What is objectivity

Answer 38

Being non-biased and levelheaded

Question 39

What is professional competence and due care

Answer 39

Professional knowledge and skill to be at level required Ensure client or employer receives a full professional service Keep within practice and legal guidelines and legislation To act in accordance with AAT standards

Question 40

What is confidentiality

Answer 40

Respect information Do not disclose information unless there is a professional right or duty to disclose or proper authority is given to disclose that information Do not use personal information for your own advantage

Question 41

What is professional behaviour

Answer 41

To comply with laws and regulations avoiding bringing profession into dispute

Question 42

Over head absorption rate calculation

Answer 42

Budgeted production overhead / budgeted activity levels

Question 43

Prime cost

Answer 43

?

Question 44

Full absorption cost

Answer 44

?

Question 45

Marginal production cost

Answer 45

?

Question 46

Over head absorption rate calculation

Answer 46

Budgeted production overhead / budgeted activity levels

Question 47

Prime cost

Answer 47

?

Question 48

Full absorption cost

Answer 48

?

Question 49

Marginal production cost

Answer 49

?