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32 Cards in this Set
- Front
- Back
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2011
Explain clearly what is meant by the term Accumulated Fund |
The difference between the assets and the liabilities of a not for profit organisation
OR The capital of a not for profit organisation |
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2011
Explain clearly what is meant by the term Subscriptions |
The annual amount paid to become a member of a club or society
OR The amount paid annually to a club or society which will enable individuals to use their facilities |
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2011
Explain clearly what is meant by the term Honorarium |
The amount received annually by a Treasurer or Secretary of a club or society to than them for their unpaid/voluntary work
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2011
What is the purpose of a Trial Balance |
To check the aritmetical accuracy of the double entry system prior to preparing the final accounts
OR If an account has a debit balance it is entered in the debit colum and if a credit balance it is entered in the credit column. The 2 columns should balance when totalled |
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2011
Which Account is created if a Trial Balance does not agree? |
A suspense account is created if a Trial Balance does not agree
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2011
What is an Error of Commission |
This occurs when an error is made when entering transactions into the ledger accounts. e.g. debiting one person's account instead of another's
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2011
What is an Error of Principle |
This is when an entry is made in the wrong type of account e.g. if the purchase of a fixed asset is entered into a revenue account (Purchases Account debited instead of the Fixed Asset account)
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2011/2012
Explain the following term Piece Rate |
Workers are paid for each piece of work they produce
OR Total earnings are the number of pieces multiplied by the price paid per unit |
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2011
Explain the following term Time Rate |
Used to calculate wages on the basis of the amount of time worked (per hour per week etc)
OR The formula for the amount of wages paid is : hours worked x rate per hour |
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2011
Explain the following term Commission |
Workers may be paid on a commission only basis where the more sales they make the more they earn
OR Commission can also be paid on top of a basic salary where specific targets have been met OR Based on value of Sales |
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2011
State 2 commonly used methods of calculating overhead absorption rates |
Machine Hours
OR Units produced OR Direct Labour Hours |
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2011
What is a formulae which would be used to claculate the Overhead Absorption Rate |
For example:
Production Department (Overheads) (total Department) machine hours/units/labour hours |
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2011
Explain two advantages of using spreadsheets in the preparation of accounting statements |
Speed and accuracy - caluclations carried out quickly
Formulae & data can be copied from one part to another Changes can be made to date and recalculations made automatically Templates can be preperare What if scenarios can be prepared easily & quickly Can use multiple worksheets & can generate charts/graphs |
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2011
Explain one disadvantage of using spreadsheets in the preparation of accounting statements |
Staff need to be trained on the spreadsheet package
OR if computer crashes will be unable to access information OR Danger of viruses corrupting files OR Information may be hacked by unauthorised personnel |
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2012
What is the ratio that would be used for a business to compare their PROFITABILITY performance |
Gross Profit
OR NET Profit OR Return on Capital |
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2012
What is the ratio that would be used for a business to compare their LIQUIDITY performance |
Current Ration
OR Acid Test Ration |
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2012
What is the ratio that would be used for a business to compare their EFFICIENCY performance |
Rate of Stock Turnover
OR Debtors Collection Period OR Creditors Payment Period |
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2012
How would the VARIABLE COST PER UNIT be calculated |
Direct Materials
+ Direct Labour + Variable Overheads |
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2012
How would the CONTRIBUTION PER UNIT be calculated |
Selling Price
- Total Variable Cost |
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2012
How would the CONTRIBUTION PER MACHINE HOUR be calculated |
Total Contribution
Divided by Machine Hours |
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2012
How would you calculate the TOTAL CONTRIBUTION and PROFIT EARNED |
Contribution
- Fixed Costs =total Profit |
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2012
Expalin 2 advantages and 2 disadvantages of using a computerised accounting system |
speed - transactions much faster than manual system
Accuracy - if correct double entry will be automatically entered Reduction in costs - large number of transactions with less staff Initial costs may be high Technical issues Security |
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2012
Explain the following term BONUS |
given to those workers who exceed a predetermined target
OR An incentive to encourage employees to produce more OR Given to those who work well, exceptional work |
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2012
Explain the following term OVERTIME RATE |
Is the extra amount paid for each hour worked over the basis working week
OR The amount of overtime pay will depend on when the extra hours are worked -.e.g. time and a half or double time if working on a Saturday or Sunday |
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2013
Explain clearly what is meant by the term Prime Cost |
Refers to the direct or vaiable costs used in manufacturing, these vary directly with output e.g. Raw materials, Direct Wages, Royalties
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2013
Explain clearly what is meant by the term Indirect Costs |
also known as factory overheads, are necessary to support production e.g. factory heat, light, insurance, factory manager's salary
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2013
Explain clearly what is meant by the term Work in Progress |
is the value of the partly completed units in manufacturing. The difference between opening and closing WIP is added to the cost of manufacture
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2013
If a company updates its bank account prior to preparing a bank reconciliation statement what are 3 entries that the company may have made in order to update the bank account? |
CREDIT TRANSFER received by the bank
Payment of a STANDING ORDER made by the bank Payment of a DIRECT DEBIT made by the bank INTEREST RECEIVED from the bank BANK CHARGES |
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2013
Explain clearly what is meant by the term FIFO |
The PRICE/VALUE of the stock issued is based on the assumption that issues are made ons trict order of receipt
OR Issues to production will be charged at the first PRICE paid until all units are used up |
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2013
Explain clearly what is meant by the term LIFO |
The PRICE/VALUE of the stock issued is based on the last batch of stock purchased
OR Issues to production will be charged at the last PRICE paid until all units are used up |
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2013
Give one advantage of using FIFO rather than LIFO as a method of stock valuation |
Satisfactory method when prices are relatively stable
The balance of stock is a true and fail valuation for financial accounting purposes Is accepted by the Inland Revenue for tazation purposes Easy method to operate |
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2013
State 3 bases of apportioning overheads among cost centres |
Number of Employees
Area Value of Buildings Kw Hours Value of machinery |
