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Level 3 Accounting > Statements > Flashcards

Statements Flashcards

1
Q

Issue of shares for cash

A

Bank dr

Contributed equity cr

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2
Q

Issue of shares for asset

A

Asset account dr

Contributed equity cr

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3
Q

Shares issued to the public (2)

A

Bank dr
Applications cr

Applications dr
Contributed equity cr

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4
Q

Oversubscription of shares (3)

A

Bank dr
Applications cr

Applications dr
Contributed equity cr

Applications dr
Bank cr

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5
Q

Shares issued using a sharebroker (2)

A

Contributed equity dr
Bank cr

Bank dr
Contributed equity cr

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6
Q

What amount is used in the first journal entry for using a sharebroker?

A

Legal and prospectus costs

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7
Q

What amount is used in the second journal entry for using a sharebroker?

A

The total amount from shares minus the brokerage fee

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8
Q

Repurchase of shares

A

Contributed equity dr
Retained earnings (balance)
Bank cr

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9
Q

What amount is used for contributed equity when shares are repurchased?

A

Number of shares x initial sale price

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10
Q

What amount is used for bank when shares are repurchased?

A

Number of shares x repurchase price

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11
Q

How does a company pass the solvency test?

A

Must be able to pay its debts

Must have assets greater than liabilities

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12
Q

Revaluation of inventory

A

Cost of goods sold dr

Inventory cr

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13
Q

Revaluation of land

A

Land dr

Land revaluation surplus cr

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14
Q

Revaluation of buildings (3)

A

Depreciation on buildings dr
Accumulated depreciation on buildings cr

Accumulated depreciation on buildings dr
Buildings cr

Buildings dr
Buildings revaluation surplus cr

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15
Q

How do you calculate the revaluation amount for buildings?

A

Revaluation amount - (historical cost - accumulated depreciation)

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16
Q

Revaluation of shares/debentures (increase and decrease)

A

Shares/debentures dr
Increase in fair value of financial assets cr

Decrease in fair value of financial assets dr
Shares/debentures cr

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17
Q

Provisional tax payments throughout the year

A

Provisional tax paid dr

Bank cr

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18
Q

Actual tax payment (3)

A

Income tax expense dr
Income tax payable cr

Income tax payable dr
Provisional tax paid cr

Income summary dr
Income tax payable cr

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19
Q

What amounts are used in the three journal entries for actual tax payment?

A
  1. Actual tax amount
  2. Provisional tax paid (from estimated profit)
  3. Actual tax amount
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20
Q

Terminal tax

A

Income tax payable dr

Bank cr

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21
Q

What amount is used for terminal tax?

A

Actual tax amount - provisional tax paid

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22
Q

Payment of final dividends

A 
Final dividend (year) dr
Bank cr
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23
Q

Payment of interim dividends

A 
Interim dividend (year) dr
Bank cr
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24
Q

Payment of dividends (2)

A

Income summary dr
Retained earnings cr

Retained earnings dr
Final dividend (year) cr
Interim dividend (year) cr
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25
Q

What amount is used in the income summary/retained earnings journal entry for payment of dividends?

A

Profit for the year

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26
Q

What is the layout of the income statement? (12)

A
  1. Revenue
  2. Other income
  3. Total income
  4. Less Expenses (list; finance costs, COGS)
  5. Total expenses
  6. Profit before tax
  7. Income tax expense
  8. Profit for the year
  9. Other comprehensive income
  10. Gain on revaluation
  11. Other comprehensive income for the year
  12. Total comprehensive income for the year
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27
Q

Note 1

A

Revenue

Sales/fees

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28
Q

Note 2

A

Other income

list; includes increase in fair value of financial assets

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29
Q

Note 3

A

Auditor’s remuneration

list

30
Q

Note 4

A

Finance costs

list interest expenses

31
Q

What is the layout of the equity section in the statement of financial position?

A 
Contributed equity
Land revaluation surplus
Buildings revaluation surplus
Retained earnings
Total equity
32
Q

What is financial assets and where does it go?

A

Includes investments and debentures and goes under current assets

33
Q

What are the non-current assets?

A

PPE and intangible assets

34
Q

What is the contributed equity amount in the statement?

A

Amount calculated in note 9

35
Q

What is the retained earnings amount in the statement?

A

Profit for the year - amount calculated in note 10 + retained earnings from trial balance

36
Q

Note 5

A

Accounts receivable

Less allowance for doubtful debts

37
Q

Note 6

A

Financial assets
Balance at the beginning of the year
Increase/decrease in fair value of financial assets
Balance at the end of the year

38
Q

What is written at the bottom of note 6

A

The financial assets comprise … with a fair market value of …

39
Q

Note 7

A 
PPE
Opening carrying amount
Additions 
Disposals 
Depreciation
Revaluations
Closing carrying amount

Cost or valuation
Accumulated depreciation
Closing carrying amount

40
Q

What amount is used for cost or valuation in the PPE table?

A

The adjusted/revalued amount from trial balance

41
Q

What must be remembered for buildings in PPE

A

Accumulated depreciation is 0

42
Q

Note 8 (3)

A

Loan
Secured over…
Rate of interest
Due for repayment

43
Q

Note 9

A 
Contributed equity
Balance at ...
Shares issued
Shares repurchased
Balance at ...
44
Q

Note 10

A 
Distributions
Final dividend
Interim dividend
Total dividend
Share repurchase
Total distributions
45
Q

What is written at the bottom of note 10? (5)

A

On (date) director’s proposed a final dividend for (year) of (amount per share) totalling (amount) to be paid on (date)

46
Q

What sections are in the cash flow?

A

Cash from operations
Cash from investing
Cash from financing

47
Q

What are each of the cash flow sections split into?

A

Cash was provided from
Cash was applied to
Net cash inflow/outflow from (operating/investing/financing)

48
Q

How is the last section of the cash flow structured?

A

Net increase/decrease in cash held
Bank at start of the period
Bank balance at end of period

49
Q

Cash from operating; provided from

A

Accounts receivable

Other income

50
Q

Cash from operating; applied to

A

Accounts payable
Expenses paid
Interest paid
Tax paid

51
Q

Accounts receivable

A

Last years + sales - bad debts - discount allowed - this years

52
Q

Which amounts must be used for last/this years accounts receivable in the equation?

A

The amount in note 5, BEFORE allowance for doubtful debts is removed

53
Q

Other income

A

Amount from income statement - accrued revenue from this year + accrued income from last year + income received in advance this year - income received in advance from last year

54
Q

Purchases

A

COGS + inventory this year - inventory last year

55
Q

Accounts payable

A

Last years + purchases - discount received - this years

56
Q

Interest paid

A

Interest expense from income statement + last years accrued expenses - this years accrued expenses

57
Q

Tax paid

A

Tax expense from income statement + last years tax payable - this years tax payable

58
Q

Expenses paid

A

Add trial balance expenses + this years prepayments + last years accrued expenses - last years prepayment - this years accrued expenses

59
Q

Cash from investing; provided from

A

Sale of non current asset

60
Q

What amount is used for sale of non current asset

A

The sale amount or the carrying amount adjusted by gain/loss

61
Q

Cash from investing; applied to

A

Purchase of non current asset

62
Q

How do you know if a non current asset has been purchased?

A

Compare last years amount with this years amount; if the difference is the same as the revaluation amount there has not been a purchase

If they’re not the same, the difference is the amount used

63
Q

How do you calculate the amount if a non current asset has been sold and purchased?

A

This years historical cost - (last years historical cost - historical cost of asset sold)

64
Q

Cash from financing; provided from

A

Share issues

Loan/mortgage increase

65
Q

How do you calculate the share issues amount for cash provided from financing?

A

Difference between this year and last years contributed equity

66
Q

How do you calculate the increase in loan/mortgage amount for cash provided from financing?

A

The increase from last years to this years loan/mortgage

67
Q

Cash from financing; applied to

A

Share repurchase
Loan/mortgage repayment
Dividends paid

68
Q

How do you calculate the share repurchase amount for cash was applied to financing?

A

Number of shares x repurchase price

69
Q

How do you calculate the loan/mortgage repayment amount for cash was applied to financing?

A

The decrease from last years to this years loan/mortgage

70
Q

How do you calculate the dividends paid amount for cash was applied to financing? (if share repurchase has occurred)

A

Last years retained earnings + profit for the year - this years retained earnings balance ( - retained earnings portion of the share repurchase)

71
Q

How do you calculate the retained earnings portion of the share repurchase to go into dividends paid?

A

Share repurchase amount - share sales amount

Level 3 Accounting (2 decks)

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