Summary FFA Financial Accounting - Study Text

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ISBN-10 0857327275 ISBN-13 9780857327277
266 Flashcards & Notes
3 Students
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This is the summary of the book "FFA Financial Accounting - Study Text". The author(s) of the book is/are Kaplan Publishing. The ISBN of the book is 9780857327277 or 0857327275. This summary is written by students who study efficient with the Study Tool of Study Smart With Chris.

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Because Irrecoverable Debt is an Expense in which Financial Statement is it placed?
Income Statement
Define amortisation:
the reduction of the value of an asset by prorating its cost over a period of years
Name the two main types of depreciation and give a short description.
Straight line = Depreciation charge is the same each year. Useful for assets which provide equal benefit each year. e.g. machinery.
Reducing balance = A reducing amount of depr is charged each years. Useful for assets which provide more benefit in earlier years (cars/IT).
What happens if inventory is undervalued?
Assets are understated in the SFP
and
Profit is understated in the IS (as cost of sales is too high)
What happens if inventory is overvalued?
Assets are overstated in the SFP
and
Profit is overstated in the IS (as cost of sales is too low)
What is tax on purchases called? and on sales?
Input tax and output tax
What are the two accounting equations?
Assets = Equity + Liabilities (Main used for exam questions)
Assets - Liabilities = Equity
what is the definition of Corporate Governance according to the Cadbury Report 1992?
The system by which companies are directed and controlled.
This may be extended with: In the interests of shareholders and in relation to those stakeholders beyond the company boundaries.
What is the UKs national financial reporting authority regarding accounting? and what are they part of?
The Accounting Standards Board (ASB) (Part of the Financial Reporting Council (FRC).
Describe Current Liabilities and give an example.
Those liabilities payable within 12 months of the reporting date. Payables, bank overdrafts, short term loans.