F3 Brain Checkers - Season 1 Jan 08

[Acid]

Hi Acid

I cannot confirm on the time stated. I will be working at this time and would be difficult to confirm my availability at this time. Would it be possible we get a day to respond?

Await your reply

Regards
Vishwas

Vishwas , You will have to email me the answers by tomorrow at anytime . In the way as suggested to you in the private message. Its not necessary that you have to write at 3 pm. Just that Checkers would be up by 3 PM and you can answer anytime before the end of the day!

Regards.

[Sao]

Im with priyooooooo

best of luck priyo...

Sao~

[Acid]

Welcome Knights!


There is an increased threat for you ! Yesterday night another Knight entered into and took all the iron crates and bags and equipments. When I tried to stop her from doing so , she told me that either I give her entry to the Brain Checker compeition or she takes all the iron up!

So it's your chance to get as many iron as you can and be the most powerful Knight there can be on the forum!

Sunset Corniche is the new Knight who is ready to face you both!

Okay guys , The Battlefield is all ready and Iron crates are all ready.


See you tomorrow then!

Best of luck!


F3 Brain Checkers - Truly the Checkers.

[Acid]

Welcome to the F3 Brain checkers Battlefield.

Please follow the instructions which were sent to you . You answers should be professional and clearly show which question is it referring to.


The are 10 Checkers listed below which worth 1 IRON. There will be no deduction for wrong answer .

This week Knights are :

• PriYo
• Sunset corniche
• Vishwas1980

1. If you want to open up a business trading rats and lizards , and do not want to bear the risk of paying for any debt arising in the course of the business with the money in your personal pocket .. Then what kind of business are you most likely open?
2. If I ask you to tell me about your previous year business activities and you start telling me how wonderful your business went in the last month and the major client you won a day before , which qualities of information are you violating ?
3. You are the CEO of a Cow in exchange of Goat trading business . You own 2 cows and you report in your financial statements that you sold 3 cows and still have 1 left . Which accounting principle are you violating?
4. I sell you a case of Pepsi and you pay me for it after 2 weeks , would I record it in my Credit side of the account or on the debit side ? And how would you record the case of Pepsi you purchased from me in your books if thats what you use to feed your employees daily?
5. Can you tell me the process of accounting ? From where do the entries from the books of prime entry go next?
6. Would you use your petty cashbook to record a purchase of 2 Dell Inspiron and 4 Toshiba Satellite computers?
7. Why would you account for the closing inventory of the year?
8. Would you include the cost of the delivery man and the admin overheads and selling and storage expenses and Abnormal costs while valuing your inventory ? { Dont forget IAS 2 Rules! }
9. Straight line , Reducing balance , Unit or production ! Tired ? Can you tell me why do we depreciate our non current assets ? { I just bought my Dell Inspirion and would it lose its value after a year?? }
10. Liabilities = Assets + Capital .... True or false ? Your bet!?

Done ! Let's find out how about your Iron deficiencies and the Recommended daily dose of IRON.

Your answers should reach me before 5th Feb and the conditions mentioned to you should be adhered to.

Soon we shall know then IRONY of IRON GUY/GAL of the Forum!


Cheers ,

F3 Brain Checkers - Truly the Checkers...

[PRiYO]

Great Feel Like I m At the Zoo Doing a business. LOL You will get my answer in the pm soon. But why you bought so many Dells. They are no good :) Joke

[Snehal K]

All the best PriYo, Sunset corniche and Vishwas1980!! :) I support all the three and am sure they will do well,

[PRiYO]

PRiYO


1. If you want to open up a business for trading rats and lizards , and does not want to bear the risk to pay for any debt arising in the course of the business with the money in your personal pocket .. Then what kind of business is you most likely open?

Answer of the Question No: 1

As there are different business entities and according to ownership we divide them into:
Sole trader: One owner who has unlimited liability.
Partnership: Two or more owners again with unlimited liability.
Companies: Share holders own the company but as the company has separate legal entity from its owner and also have limited liability.
I most likely to open a limited liability company.


2. If I ask you to tell me about your previous year business activities and you start telling me how wonderful your business went in the last month and the major client you won a day before , which qualities of information are you violating ?

Answer of the question no: 2

Relevance: You asked me for last one years business activities I m telling you for last one months. It’s irrelevant to your question.

Neutrality: I m biased and trying to show you progress which occurred last months only and hiding for the whole year.

Completeness: As I have not told you about the whole one year business activity the information is incomplete regarding to your question.

3. You are the CEO of a Cow in exchange of Goat trading business . You own 2 cows and you report in your financial statements that you sold 3 cows and still have 1 left . Which accounting principle are you violating?

Answer of the question no: 3

Fair presentation: I am manipulating the financial statement with wrong figure which is violating “True and Fair View” as prescribed by the ISAB preparation of financial statements. And I am not presenting the actual accounts which is legal requirement and not following all the accounting standard

Faithful Representation: the concept of fair representation requires that the financial statements should represent the transactions and events that are expected from them while by manipulating the figure my company violating this concept.

Neutrality: As a CEO my duty should be free from biased but I have failed to do so and manipulated the figure which is misleading for the investor and share holder.

4. I sell you a pipe of Pepsi and you pay me for it after 2 weeks , would I record it in my Credit side of the account or on the debit side ? And how would you record the pipe of Pepsi you purchased from me in your books if thats what you use to feed your employees daily?

Answer of the qustion no:4

For me:
After purchase: Dr Purchase Cr Payables.
After two week: Dr Payables Cr cash/bank
Basic entry going to be: Dr Purchase CR cash/bank

For you:
After transaction Dr receivable Cr Sale
After two week: Dr Cash/Bank Cr Receivable
Total entry: Dr Cash/Bank Cr Sale






5. Can you tell me the process of accounting? From where does the entries from Book of prime entry goes next?

Answer of the question no: 5

Accounting process:

1. Identifying transactions:
Original source document like Collecting invoices, receipts, vouchers etc

2. Recording transaction:
In Books of prime entry E.g. recording credit purchase in purchases day book.

3. Analyzing transactions:
Posting transaction into ledger account. E.g. posting credit purchase to purchase ledger account

4. Summarizing and reporting transaction to users:
Preparing the trail balance then statement of comprehensive income and statement of financial position. E.g. summarizing all credit purchases on trail balance then in statement of comprehensive income and statement of financial position.

The entries from book of prime entry go to ledger account. E.g. the credit sale in sale day book will go to sales ledger account.






6. Would you use your petty cashbook to record for a purchase of 2 Dell Inspiron and 4 Toshiba Satellite?

Answer to the Question No 6

No I would not. Because either purchases of 2 Dell Inspiron and 4 Toshiba is my capital expenditure or part of my trading activity.
Petty cash book is to record small expenses occur daily basis. So I will not record it on my petty cash book.

7. Why would you account for the closing inventory of the year?

Answer of the question no 7

As we know according to matching principle goods sold in current year should be included in the statement of comprehensive income. So the good which left as closing inventory has not been sold in current year have to be excluded from the statement of comprehensive income. And closing inventory is a current asset they will become opening inventory on next year and will be resource for inflow of economic benefit.


8. Would you include the cost of the delivery man and the admin overheads and selling and storage expenses and abnormal costs while valuing your inventory? {Don’t forget IAS 2 Rules!}

Answer of the question no 8

As IAS 2 Carriage inward is included in inventory valuation so cost of delivery man is included.
Administrative overhead is an expense which is not a part of purchase of the materials. Also is the selling, storage expenses and abnormal cost is my revenue expenditure. This will not be included in inventory valuation as it’s not permitted as IAS 2.

9. Straight line, Reducing balance, Unit or production! Tired? Can you tell me why do we depreciate our non current assets? {I just bought my Dell Inspirion and would It lose its value after a year??}

Answer of the question no 9

We depreciate our non current asset to comply with the accruals concept. Non current asset are acquired at a cost. We can not charge the whole cost in the first year. As we will get economic benefit from the non-current asset over its useful life so its cost should be allocated over the same number of year. So we charge the cost of an non current asset to revenue over the useful life of the asset which is called depreciation.
Your dell inspiron will lose its value after a year because you will be getting economic benefit out it. This is a part the acquiring cost and should be allocated over the useful life of the laptop.

10. Liabilities = Assets + Capital.... True or false? Your bet!

Answer of the question no 10

False
As we know:
ASSET = LIABILITIES+CAPITAL
So, LIABILITIES= ASSET- CAPITAL

[vishwas1980]

1. In this case the most likely option to open a business is with limited partnership. Limited partnerships are usually created by one person or company (the "general partner"), who will solicit investments from others (the "limited partners").The general partner controls the limited partnership's day-to-day operations and is personally liable for business debts (unless the general partner is a corporation or an LLC). Limited partners have minimal control over daily business decisions or operations and, in return, they are not personally liable for business debts or claims.

2. Relevance quality is violated in this case. This implies that, to be useful, accounting information must assist a user to form, confirm or maybe revise a view - usually in the context of making a decision

3. Fair presentation

4. The accounting entry for this will be Refreshments for staff account debit and Vendor account credit

5. The following steps need to be followed
• STEP 1: Each transaction is analyzed to determine the accounts involved
• STEP 2: A journal entry is entered into the general journal for each transaction
• STEP 3: Periodically, the journal entries are posted to the appropriate general ledger pages
• STEP 4: From the Ledger , Trail Balance is drawn up
• STEP 5: Financial Statements are prepared

6. No, Petty cash is kept on hand for the purchase of small items such as coffee, envelopes, or postage and not for high value items

7. Closing inventory is recorded as it a direct impact on the profitability of the company. Overstatements of closing inventory cause overstatements of income, while understatements of closing inventory cause understatements of income.

8. No. Inventory should include all costs that are "ordinary and necessary" to put the goods "in place" and "in condition" for their resale. This means that inventory cost would include the invoice price, freight-in, and similar items relating to the general rule. Conversely, storage costs, abnormal costs should not be included in inventory accounts; instead those costs would be expensed as incurred

9. A variety of approaches can be used to calculate depreciation. They all produce the same "final outcome" over the life of an asset, and that outcome is allocating the depreciable cost of the asset to the asset's service life. If the useful life, which in this case is 1 year, the whole amount should be written off in the Income Statement

10. False. Accounting equation is Assets = Liabilities + Owners' Equity

[sunset_corniche]

1. Limited Company

2. Information should be Complete

3. Accruals

4. a)The entry for sales would be
Recievables A/c DR
Sales A/c CR
In sales account, receivables will be credited and in receivables account
sales will be debited.

The entry for the payment would be
Cash A/c DR
Receivables A/c CR
In receivables account, cash a/c will be credited and in cash a/c
receivables will be debited.

b)It would be recorded as a petty expense in the petty cashbook in my
books of accounts.

5. Nominal Ledger

6. No, petty cashbook is used to record petty expenses like
postage,stationery etc.

7. Closing inventory is valued so that the cost of the goods sold can be
matched with their sales value. The closing inventory is carried forward to
the next period to match its cost with its sales in the next period.

8. Only the cost of the delivery man will be included.

9. Assets are depreciated to account for the wear and tear of the asset.

10. False. Assets = Liabilities + Capital

[PRiYO]

Done check the answer. Its Up there