What is the purpose of Statement of changes in equity?
Many students find it confusing that if we already have two financial statements, one covering the financial position of the business and the other telling about the financial performance then why do we need yet another statement with the name of Statement of Changes in Equity? And more interestingly, many think that its just a […]
Why closing inventory appears on the credit side of Trading account?
Closing stock or as it is also named as closing inventory is definitely an asset. But trading account is not the same as Inventory account. Inventory, being an asset, should have a debit balance in Inventory account. Trading account is a distinct account and both must not be mixed up together. The answer to the […]
What is meant by ‘line item’ in accounting standards?
Term line item basically refers to such piece of information which has its own weight and should be presented on a separate line on any document. In context of International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) line items simply means a category on the face of financial statements and in the notes […]
What is meant by Substance over form?
“Substance over form” if said in a complete phrase, from this term is extracted, then it will be something like this: Economic substance of the transaction will be preferred over the legal form of transaction for accounting purposes. Economic substance refers to the economic benefits and economic losses or any kind of economic implications related […]
Can we sit T5 T6 and T7 as CBE papers under transitional arrangement?
As CAT qualification is under a transition and all the CAT students will be transferred to new suit of qualifications Foundations in Accountancy FIA by ACCA, for this ACCA has arranged transitional arrangements for FIA students, MSER students and existing CAT students. Because of this transition existing CAT students are offered special option that they […]
What is the difference between “Selling costs” and “Cost of Sales”?
“Cost of sales” if said in a phrase then it basically is, manufacturing cost of units sold in a particular period or simply cost. On the other hand “selling costs” include such costs that are incurred to make things available for sale. Important thing to understand here is that even after incurring cost of sales, […]
