ACT 110 Is EASY POP!

1. Our Confession ACT 110 Is EASY POP! Because, Finals is Easy!

2. Final Exam Revision

3. Final Exam Revision Date and Time • December 20, 2011 • 9:00am Topics • Sole Proprietorship’s Financial Statements • Trading Profit and Loss A/c – Vertical Format • Balance Sheet – Vertical Format • Cash books • Bank Reconciliation Statements

4. Final Exam Revision Format of Exam • Multiple Choice Questions • 15 Questions from all three topics • Calculations • Three questions and required to answer 2 • Trading and Profit and Loss is compulsory • Choose between Cash Book and bank reconciliation

5. Final Exam Revision What to Study? • Handout – Pages 22 -26 • Work sheets 5 – 7 • Power Point Slides 7 – 11 • Power Point Slides – Question 1 & 5 Answers

6. Final Exam Revision Financial Statements • Accrued Expenses – Added to respective Expense and recorded as a current Liability • Prepaid Expenses – Deducted from respective expense and recorded as a Current Assets • Provision for bad debt • Depreciation – Recorded as an Expense and Deducted from Respective Asset’s at cost figure. • Stock in TB is Opening Stock and Stock in Notes is Closing Stock. • Everything in notes is recorded twice.

7. Final Exam Revision Bank Reconciliation • Reconciliation of the Cash Book bank column Balance with the Bank Statement balance • There are three (3) reasons why they wouldn’t agree with each other: • Items Recorded by the bank and not by the cash book • Items recorded by the cash book and not by the bank • Errors made by either the bank or the cash book.

8. Final Exam Revision Possible Errors • Understated Cheque – Deducted from either balance • Overstated Cheque – Added to either balance • Understated Deposit – Added from either balance • Overstated Deposit – Deducted from to either balance Items not recorded by either • Must know how to treat items not recorded by Cash book or bank. • To do so must know how an items is treated by the other party and record the same

9. Final Exam Revision Items not recorded by either • Example – How would this affect the bank: • Bank Charges • Standing Order. • Dividends received and banked • Payment to creditor • Item previously written off as bad debt, cheque received and banked • Debtor paid direct into Roger’s bank account • Drawings in the form of a cheque • Cheque previously banked now dishonoured.

10. Final Exam Revision Cash Book • Records Cash Receipts and Cash Payment. • Receipt of Cash and Cheques are recorded in Receipts Side Cash Column until banked. • Deposits Directly to the bank by the Customers or the Business are recorded in the Bank Receipts Side Bank Column. • Cash Payments are recorded in Payments Side Cash Column • Cheque Payments are recorded in Payments Side Bank Column.

11. Final Exam Revision Cash Book - Discounts • Discounts Allowed are recorded on Receipts Side Discount Column. • Discount Received are recorded on Payments Side Discount Column. Cash Book – Balancing off • Bank Column Receipts should be balanced with Bank column payments • Cash Column Receipts should be balanced with cash column payments.

12. Final Exam Revision Cash Book – Balancing off • Discount Columns and added and totals put at the bottom.